Clause 78
Climate Change Bill [Lords]
5:00 pm
Gregory Barker (Shadow Minister, Environment, Food & Rural Affairs; Bexhill and Battle, Conservative)
I understand from the Minister that the clause is an enabling clause that allows the Government and the Departments to buy carbon credits to offset their emissions. If my reading of the amendment is correct, it enables Departments to sell carbon credits, as well as purchase them. That might be a rather cursory summary, but if that is the principle behind the amendment, we support it.
A few questions still need to be answered. First, the amendment will add to the ability to dispose of carbon credits the power to acquire them. This might simply be a matter of legal language, but will the Minister explain if anything is meant by disposing of the units, other than selling them? If the Government had the power to dispose of them in some other way, such as by nullifying or invalidating them, that could seriously affect the carbon market. If Departments had the power to acquire and invalidate units of reductions, it could cause a level of uncertainty in the carbon markets and contribute to unwanted volatility in the price of carbon. Will the Minister be clear that by “dispose” he exclusively means sell?
Similarly, Government amendment No. 28 seems superficially innocuous. If it simply clarifies that when the Treasury buys units, it owns them, it seems wholly reasonable. However, that poses an interesting question about what the Treasury’s involvement in the carbon market will be. Is it the Government’s intention to trade in carbon units? Will amendment No. 28 give the Treasury the power and scope to intervene in the carbon markets in a similar fashion to the way it speculates on gold? As hon. Members know, the Treasury’s speculation on gold has cost the country billions and billions of pounds. Indeed, the decision to sell gold reserves has cost the Treasury more money than any single financial decision by any Chancellor on record.
If amendment No. 28 will open the door to similar speculation in the carbon markets, we will have to address it in more detail. Perhaps the amendment is not even required for that. Will the Minister clarify whether the Treasury has the power or the intention to trade—or speculate, as some of his old Labour colleagues might say—in the carbon market? If the amendment is for clarification only and the Minister can assure the Committee categorically that it is not even the thinnest end of a very thin wedge that could lead to speculating in the manner of the gold reserves, I apologise for being alarmist. I am sure hon. Members share my concern, given that the stakes are so high.