Climate Change: Targets

Lord Oates Excerpts

Thursday 27th May 2021 Grand Committee

[Lord Oates (LD)]

My Lords, I thank my noble friend Lady Sheehan for initiating this important debate and underlining, as other noble Lords have, the lack of alignment between policy and legislation on the one hand and our ambitious climate targets on the other.

In the short time I have, I want to focus on taxation and regulatory policy. Today’s Financial Times reports that the Chancellor has commissioned work on a carbon border tax. Can the Minister tell us when this work will be completed and how the Treasury will consult stakeholders? Can he also tell us what discussions the Treasury is having with our friends in the EU who are currently working on the same issue?

Secondly, can he tell us what consideration the Government are giving to fiscal measures to incentivise energy efficiency in homes, such as a stamp duty rebate for home owners who raise the efficiency band of their home within a certain period of purchase, as the Liberal Democrats have proposed?

Thirdly, can the Minister explain how the Government’s 2017 decision to scrap the graduation in vehicle excise duty by fuel efficiency—except for the first year—and their current proposal to scrap air passenger duty on domestic flights align in any way with our net-zero policy?

Fourthly, will the Government look at reforming the renewable transport fuel obligation so that not just green hydrogen produced from electrolysers directly connected to a renewable source but green hydrogen produced with electricity from renewable-only contracts qualifies? Will the Government consider waiving grid fees for electrolysers and scrapping VAT on green hydrogen? This is an important area, as the noble Baroness, Lady Meacher, said.

Finally, will the Government look again at how the regulatory system prices the cost of capital in relation to climate change risks? At present, we have the absurd situation where funding loans for new fossil fuel exploration and exploitation is often significantly cheaper than financing the new industries and technologies that we need to tackle climate change. If the Minister does not have time to answer all these questions and those from other Peers in his response, I would be grateful if he could write to us.