King’s Speech

Lord Stern of Brentford Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Stern of Brentford (CB)]

My Lords, the Government’s backsliding on climate action is a deeply damaging mistake, damaging for the UK, the world and the future of us all. It is a mistake founded on a whole series of muddled and incorrect arguments.

First, on the science, the Government speak as if the issue is simply about achieving net zero at mid-century, when what matters is the path to net zero and the total of emissions over time. Rapid reduction is crucial. The Government speak of “maxing out” from the North Sea, and thus appear to fail to understand that the Paris goals imply that much of the fossil fuels already discovered must be left in the ground. The Government also leave the impression that they have not understood the immense dangers of delay. I argued 17 years ago in the Stern review that the science told us that inaction was costly and dangerous. Let us not waste any more time.

Secondly, on energy, any actions on exploration which started now would lead to the production of oil and gas primarily in the next decade. For the Paris goals, the world’s consumption of oil would need to be around 60 million barrels a day 10 to 15 years from now, relative to the 100 of today. I refer, for example, to the work of the International Energy Agency. If oil consumption reduces, as it must, higher-cost producers will be forced out of the market; that would include most of UK production. Gas consumption must fall rapidly too. The alternative to these arguments is to claim that oil and gas would not be so reduced—in other words, to bet on the failure of Paris. That outcome would be disastrous for our children and grandchildren.

Thirdly, on security, the Government appear to believe that extracting oil and gas from the North Sea would deliver energy security—yet another confusion. That production is by the private sector and sold on world markets, as has already correctly been argued. It would, in large measure, be refined outside the UK. That it could be commandeered for UK use is simply not credible. We should also be clear that UK output has a negligible effect on world prices. Energy insecurity has come from dependence on fossil fuels, much of it produced in unstable parts of the world. Energy security will come from a rapid replacement of those sources. Renewables, with storage, already produce cheaper electricity than fossil fuels.

Fourthly, on health, the Government’s prolonging of the use of the internal combustion engine prolongs the killing and maiming of many in our towns and cities through air pollution. We kill in the UK around 35,000 people a year from air pollution, 20 times the deaths from road accidents. Children are especially vulnerable. Indeed, the president of the Royal College of Paediatrics and Child Health has shown clearly that the Prime Minister’s policies involve a serious threat to the lives and health of our children.

Fifthly, on our reputation internationally, the UK’s backsliding reduces the confidence of Governments and investors around the world. As many noble Lords know, I work a lot on the international action in these areas, and I have been asked by many investors and policymakers in the United States, India, China, Africa, Europe and beyond what the UK thinks it is doing. Our actions encourage those opposed to climate action around the world to strengthen their efforts. They encourage the oil companies of the world to argue that their products can be phased out over a much longer period than is required for Paris. The Guardian reports today on a study that indicates that 96% of oil companies are planning expansion and exploration. Our hard-won leadership and respect, established through our climate legislation, emissions reductions and our successful COP 26, are being eroded or thrown away.

The growth opportunities of the 21st century lie in clean and efficient technologies and not the destructive methods of the 20th century. With strong investment in these technologies, the UK can be in the vanguard of the new growth story, but not through the increasingly backward-looking policies for energy and environment set out in the gracious Speech. Vacillation creates uncertainty, raises the cost of capital, reduces investment and is anti-growth. The proposed policies are founded in bad economics, confusion on the science, misunderstanding of energy markets and energy security, negligence on health and a failure to understand our global role and reputation.