Lord Teverson
Main Page: Lord Teverson (Liberal Democrat - Life peer)
Lord Teverson
My Lords, I very much welcome this debate. This House has had great debates about climate change and energy and I am glad to see that we will focus on it in this Parliament as well. I would say that it is one of the most important subjects—even more important than the UK budget rebate in Europe, which we were discussing earlier, although I am sure that the noble Lord who follows me will probably disagree. Anyway, let us move on with energy and climate change.
One thing that I want to do in my introductory remarks is to say how much I appreciated the work of the noble Lord, Lord Hunt of Kings Heath, in the latter part of the Labour Government. I appreciate his commitment to these issues and what he worked hard to achieve. However, I remind the noble Lord, Lord Grantchester, that the previous Government’s successes in this area are perhaps rather more measured than he might think.
Let us take something as important as the Climate Change Act, a great milestone in addressing climate change for this Parliament and the UK. The previous Government were good at setting out targets and their aspirations for what they wanted to do, but it was rather more difficult to achieve those targets and aspirations. The Labour Party had its own manifesto targets on the carbon footprint, which it failed to meet. From 1997 to just prior to the last year of the previous Government, the United Kingdom’s carbon footprint very much flat-lined and we did not achieve the targets. We met them in the last year, but that was due more to international economic meltdown than to anything else. We had a lot of talk about renewables and some investment in the latter stages, but all we have done so far in relation to the 27 member states is to progress from overtaking Malta to moving ahead of Luxembourg as well. As for carbon capture and storage, we had tenders, we talked about it and we were enthusiastic about it, but we still do not have any commitments on it. Smart meters and feed-in tariffs were delivered in the last Energy Act, which was a great move forward, but it was rather beyond the 11th hour in terms of making the changes that are required for this agenda.
I want to spend my time today looking at the poor relation in energy and climate change—energy savings. I am not saying for a moment that the other areas are not important but I want to concentrate on this one. It is a Cinderella subject that is left out too regularly. Energy prices are currently higher than they have ever been. In fact, retail prices seem to be moving further than they have ever been from wholesale prices, perhaps due to a lack of reform in the way in which the industry was regulated over the past few years. I was speaking two weeks ago with some representatives of the industry, who told me that energy costs in most of industry are still a sufficiently small percentage of the overall costs that the management does not really concentrate on them. That is true of a number of households—though not all households—as well. I will come back to that issue.
The fact is that buildings account for some 40 per cent of our electricity and energy costs. It is one of the biggest challenges that we have. I absolutely agree with one thing that I read in the previous Government’s White Papers—that energy savings are the most efficient and economic way of tackling climate change. Investment in this area produces a bigger return than any other tool for meeting the strategy of decarbonising our economy.
I was in India last month and in China last year. Energy savings are the big headline in climate change there and what people are trying to do. It is an exciting subject. In the previous five-year plan, China had a 20 per cent reduction target from energy efficiency, which I believe it is just about to achieve. Under the Copenhagen accord, the decarbonisation of its economy is largely met through energy efficiency and there is a target of 40 per cent savings by 2020. In the global context, that is a big deal and a major way of moving forward. I think that in the UK and Europe we sometimes understate it. If we look at Europe, under the 2020 package, we had a target of 20 per cent renewables and a 20 per cent reduction in carbon footprint. Both are statutory European targets, but the third 20 per cent— 20 per cent energy reduction by 2020—is only an indicative target. Again, even within the European context, that shows that it is the poor relation.
Here in the UK, we had the important Warm Front scheme, which we debated briefly last week, and the carbon reduction commitment, which was a strange way of moving around what was originally an energy target. I congratulate the Government because over the summer they rather contentiously started to stop the free issue of units under the CRC scheme. That is an important move forward. We had the CERT scheme, under which several years ago we used to receive 10 energy-saving light bulbs in our post nearly every day. We put the energy companies in charge of saving energy, which was rather like putting Dracula in charge of the blood bank or perhaps the bishops in charge of Lords reform. It seemed quite inappropriate and something that would not work. I hope that there will be changes in that area.
To me, energy saving is not just a virtuous circle; it is a virtuous spiral. Let me explain why. We have estimates from Ofgem that we need £230 billion-worth of investment in our generating and electricity supply industry over the next few years to meet our energy gap. It is obvious that the more we meet our energy savings targets and go beyond them, the less we need of that investment. In terms of energy savings, we have the planning system, which was mentioned earlier. We do not have to ask for planning permission for energy saving. It can go ahead without delays. In fact, energy saving is one of the ways in which we can meet targets without the great changes that we need otherwise.
Let me take one or two other issues. One of the ironies about carbon leakage is that, although we are about to meet our Kyoto targets at the end of 2012, as measured by carbon production, we will increase our carbon consumption by some 19 per cent over that time in comparison with 1990 levels. By saving energy, we do not have that conflict; indeed, we reduce it. On renewables, I am in favour of them, but we have a problem with intermittence in wind power. Yet with energy saving, we have a completely non-intermittent way of meeting our energy requirements.
However, there are two other much more important areas. The first is fuel poverty. One of the great problems in the past two years was that, with energy prices rising, more people were entering fuel poverty. I know that these figures have been quoted before, but something like 4.5 million households are now in energy poverty. By energy saving, we can tackle that problem head on. Perhaps an even more important question than that in terms of a strategic view and energy security, which the Minister rightly emphasised, is this: what is more secure than not needing energy, or needing less of it and so having to import less of it?
I say to the Minister that the Government should not ignore this poor relation but make sure that they keep focused on it, as well as on the many other technological solutions. I look forward very much to the energy Bill that will be coming through this House, the green deal, which I know is targeted to meet a number of these issues, and the green investment bank, which could provide investment in the right sectors. Energy saving is not a very sexy subject, but it could really help us to meet our climate change targets. It is one area where perhaps we could follow the developing world rather than trying to lead it.