Low-carbon Growth Links (China)

Luciana Berger Excerpts

Thursday 18th April 2013 Westminster Hall

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

This afternoon’s debate has been very lively and informative. Once again, I commend the hon. Member for South Suffolk (Mr Yeo), the Chairman of the Select Committee, for how he introduced the debate, and I thank all the members of the Committee for the work that they have done in producing another excellent report.

As many hon. Members have noted in their contributions, China is key to the fight against climate change. China’s carbon emissions have risen rapidly during the past decade; they are up by more than 171% since 2000, growing to be 48% larger than the USA’s output of carbon emissions. As China is now responsible for 29% of the world’s carbon emissions and, on current trajectories, is predicted to become responsible for 50% of global emissions by 2030, it is clear that no effort to tackle climate change will be successful without its engagement. Therefore, as the Chairman of the Committee alluded to, it is welcome that China’s latest five-year plan is the greenest yet.

My hon. Friends the Members for Brent North (Barry Gardiner) and for Southampton, Test (Dr Whitehead) gave a number of examples that showed the investment and support that China is extending to its wind power sector, as well as its general commitment to increase renewable generation, which is happening alongside plans to draft a new climate law and to trial a carbon trading scheme.

The Committee’s report highlights the huge opportunities that this Chinese low-carbon transition could provide for British business. According to the latest report from the Department for Business, Innovation and Skills on this sector, “Low Carbon and Environmental Goods and Services”, UK exports to China are currently worth £795 million, which makes China by far our largest export market in this sector; it can be compared with our next largest export market in the sector, Hong Kong, which is currently worth £595 million.

I do not know whether the Minister has had an opportunity to read the Committee’s report in full. It argues that there is a huge opportunity to increase trade links, but says that that opportunity could be missed because of the Government’s current inaction. One of the major criticisms that the report made was that a lack of progress on the low-carbon agenda here at home was damaging our reputation abroad. The exact phrase that the Chairman of the Committee used at the time of the report’s publication was:

“The UK’s image is unfortunately in danger of becoming tarnished by a reputation of being more talk than action when it comes to climate change.”

We know from independent analysis by Bloomberg New Energy Finance that investment in renewable energy has fallen by half since this Government came to power, and figures published in November 2012 by Ernst and Young on attractiveness for investment in renewable energy showed that the UK has fallen to sixth place, slipping below France, which, as has been pointed out in the two debates this afternoon, is a country that generates nearly 80% of its electricity from nuclear.

In the earlier debate, I spoke about the incredible frustration that is felt about the fact that the Government are refusing to include an explicit commitment in the Energy Bill to decarbonise our power sector by 2030 that would provide businesses with the certainty and confidence in the Government’s green agenda that they are crying out for. That reluctance to commit resources and support at home is, as the report identifies, damaging our reputation abroad. The report notes:

“The UK’s ability to influence policy in China and to compete for business in low-carbon development depends on the reputation of the UK as a credible leader… However, the UK has not been as effective as other countries at showing China what the UK has to offer.”

So, while it is welcome to note in the Government’s response to the Committee’s report that the UK’s presence in China has increased, those efforts will be undermined if the Government do not rapidly improve their performance at home.

The report also raised concerns that the UK Trade & Investment team’s efforts on the ground in China could be better targeted. The Committee was not convinced that the UKTI arm of BIS is currently focusing on the right areas to deliver high-value opportunities for British business. The report’s summary says:

“There are too many projects, focusing on too many different areas, rather than a coordinated effort to achieve key objectives.”

The report says that the UK Government should instead focus on a smaller number of “strategic interventions” and that

“Projects should be tailored to appeal to Chinese priorities and to build on UK strengths. For policy, this means a focus on…carbon pricing and accounting, where the UK has experience to offer.”

The Committee calls on the Government to undertake a systematic assessment of the sectors where the UK could have such an advantage. One of the ways that the report suggests the Government’s focus could be improved is to

“adopt a clearer set of high-level objectives”—

high-level cross-Whitehall objectives and actions—

“with regard to low-carbon cooperation with China”.

That was recommendation 9 of the report. On that, the Government said:

“We agree with the committee that strategic coordination across Whitehall is important”,

but then they go on to reject the Committee’s recommendation that a formal cross-departmental Committee should be set up to develop this strategy. The impression that I took from that was that, in effect, nothing will change. Will the Minster tell us in detail what action has been taken since the Committee’s report to develop cross-Whitehall objectives for low-carbon co-operation with China?

I will draw my remarks to a close. The Committee’s report underlines the key strategic importance of China in efforts to reduce global carbon emissions. It reminds us of the importance of China as Britain’s largest overseas market for low-carbon goods and services, and it highlights the numerous opportunities that China’s low-carbon transition presents for the UK to develop these links further. However, the report warns that, as a result of the Government’s lack of progress in securing investment in this country and in progressing towards our carbon reduction commitments, these opportunities may slip away from us. The Committee recommends that to prevent that from happening the Government’s work in China needs to improve its strategic focus, as well as shifting its attention to areas where Britain has experience to offer, such as carbon capture and storage and carbon pricing and accounting. The report makes sensible and practical suggestions that I hope the Government will act on, and I look forward to hearing the Minister’s response to the debate.