New Clause 15 — Advice on emissions from international aviation and international shipping

Orders of the Day – in the House of Commons at 3:28 pm on 28th October 2008.

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'(1) It is the duty of the Committee to advise the Secretary of State on the consequences of treating emissions of targeted greenhouse gases from—

(a) international aviation, and

(b) international shipping,

as emissions from sources in the United Kingdom for the purposes of Part 1.

(2) The duty applies if and to the extent that regulations under section 29 do not provide for such emissions to be so treated.

(3) Advice given by the Committee under this section must also contain the reasons for that advice.

(4) The Committee must give its advice under this section—

(a) when it gives its advice under section 33 for the budgetary period 2023-2027, and

(b) when it gives its advice under that section for each subsequent budgetary period.

(5) The Committee must, at the time it gives its advice under this section to the Secretary of State, send a copy to the other national authorities.

(6) As soon as is reasonably practicable after giving its advice to the Secretary of State, the Committee must publish that advice in such manner as it considers appropriate.'.— [Joan Ruddock.]

Brought up, and read the First time.

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

With this it will be convenient to discuss the following:

New clause 14— International aviation and shipping emissions

'(1) The Secretary of State shall lay before Parliament a report including—

(a) a projection of the level of emissions he expects to arise from international aviation and shipping which are the result of UK economic activity,

(b) an explanation of the methodology used to make this emissions projection, and

(c) the way in which any carbon budgets have been adjusted to take account of such projections.

(2) When making the above projection, the Secretary of State shall have regard to international carbon reporting practice.

(3) The projection shall cover any year for which a carbon budget has been set, and may include any other years that the Secretary of State considers appropriate.'.

Amendment No. 68, in clause 10, page 6, line 26, at end insert—

'(i) the emission of greenhouse gases from international aviation or international shipping that the Secretary of State expects to arise during the budget period, as reported pursuant to section 15(5A).'.

Amendment No. 72, page 6, line 26, at end insert—

'(i) the emissions of greenhouse gases from international aviation or international shipping that the Secretary of State expects to arise during the budget period.'.

Amendment No. 69, in clause 27, page 15, line 24, at end insert—

'(5A) If emissions of a greenhouse gas from international aviation or international shipping are not required to be included in the statement by virtue of subsection (2), it must state the level of such emissions that the Secretary of State expects he will have to report in accordance with international carbon reporting practice for each budget period for which a budget has been set.'.

Government amendment No. 36.

Amendment No. 3, in clause 29, page 16, line 9, leave out out from 'Kingdom' to end of line 13.

Government amendments Nos. 42, 43 and 50.

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

Before setting out my reasons for tabling the new clause, I should like to pay tribute to my hon. Friend Mr. Woolas, who led on all the earlier stages of the Bill, and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, who led the discussions in Cabinet.

International aviation and shipping have long been contentious issues in relation to climate change and the subject of much Back-Bench interest, as illustrated by the huge support for the early-day motion tabled by my hon. Friend Nigel Griffiths. The Government agree that action to reduce emissions from international aviation and shipping will be vital to global efforts to tackle climate change, which is why we are taking forward a range of measures to reduce the impact of international aviation and shipping on the environment.

Discussions on including international aviation and shipping in a post-2012 regime under the Kyoto principle have begun, and the UK is actively lobbying for support within the international community. Following pressure from the UK, legislation to include aviation in the European Union's emissions trading scheme has been signed off in Europe, and it is expected to save about 200 million tonnes of carbon dioxide by 2020. We are also working with the International Civil Aviation Organisation on international aviation and climate change to try to reach agreement on targets that will drive increased action on emissions in the aviation sector. We continue to press for an international emissions trading scheme for the maritime sector under the International Maritime Organisation.

The Government recognise the need to give serious consideration to how emissions from international aviation and shipping are approached in the Climate Change Bill. That is why we agreed to the approach proposed by the other place: that either those emissions should be included in the Bill's targets and budgets within five years of Royal Assent or an explanation should be laid before Parliament stating why that has not been done. I want to attach as much certainty and transparency as possible to this requirement, and amendment No. 36 would do exactly that. It would change the deadline for inclusion or explanation from within five years to 31 December 2012. That definite date is nearly a year sooner than what is currently provided for in the Bill. Furthermore, in response to the views of the shadow Committee on Climate Change, new clause 15 places a new duty on the committee to advise the Secretary of State on the consequences of including emissions from international aviation and emissions from international shipping in the targets and budgets. The committee would be required to provide that advice at the same time as it provides its advice on each carbon budget. That requirement would begin in 2011, when the committee advises on the level of the 2023 to 2027 budget, and would apply every time it advises on carbon budgets thereafter. The duty would remain in place to the extent that emissions from international aviation and shipping were not included within the Bill's targets. If emissions from international aviation were included in the future, the committee would still be under a duty to provide advice on international shipping emissions, but if, at some point, all emissions were included, the advice duty would no longer apply.

Photo of Bill Cash Bill Cash Conservative, Stone

Would the Minister care to comment on a problem that could easily arise if, on the one hand, the committee has a legal duty to give effect to the provisions that she has mentioned and, on the other, clause 6 gives the Secretary of State a power to amend in the light of European law? What would happen if European law said one thing and the committee, which had a duty to give advice to the Secretary of State, said another? Which would prevail?

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I know that the hon. Gentleman has some difficulty with European law, but I assure him that the committee would undoubtedly make proposals that would be consistent with European law.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

Could the Minister help the House by telling us what the Government are doing to further these discussions, particularly in respect of shipping? Some indication has been given, particularly by the Danes, that we might not have been as advanced as some other countries in trying to find a suitable way to handle the difficult issue of shipping emissions. Can she assure the House that the Government will lead on this matter? The UK is historically a shipping country, so we would like to see that happen.

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I agree with the right hon. Gentleman about how important it is for the UK to be in the lead. I do not know what the Danish opinion of us is, but there is competition between our countries at times, not least in respect of offshore wind. I understand that we have been very active in the International Maritime Organisation, that we have made proposals and that we have made funds available to assist in this process. We want to do our best, and I take the right hon. Gentleman's comments seriously.

I was explaining how the duty would cease to exist if all the emissions were included in an international agreement. The shadow committee has been considering this question in some depth. Lord Turner's recent letter to the Secretary of State gave his view that

"the scope of the Climate Change Bill should not be extended to include international aviation and shipping".

His reason was that it was

"not clear how international shipping emissions could be sensibly included in UK budgets".

He added that although

"there are methodologies that could sensibly allocate emissions to the UK level (e.g. bunker fuels), these differ from the methodology that has been proposed for entry of aviation into EU ETS. We do not believe that the EU ETS methodology is an appropriate basis for inclusion of international aviation in UK".

Photo of Michael Weir Michael Weir Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

Did not Lord Turner also say that aviation and shipping should be included in the 80 per cent. target? If they are not to be included in the budget, how will that be reflected in the 80 per cent. target, and what will be the impact of that?

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

The hon. Gentleman is correct in that Lord Turner made reference to the 80 per cent. target and to shipping and aviation emissions, but there has been considerable misunderstanding on this point. I will explain precisely what he has said and how we have responded positively to that.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

Does the Minister agree that Lord Turner's assessment is for the short term and, as he goes on to say, we need to look at this important issue in the long term, as it needs a deliberate policy?

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

It is apparent to all of us that we have to have short-term solutions and answers to the problems of climate change, and we also always have to plan for the long term. My hon. Friend is absolutely right about that.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I am slightly confused about this issue. Last Monday, the Prime Minister said that we needed a constantly rising supply of oil, notwithstanding the use of renewables. Does the Minister have any idea of whether our oil consumption is expected to fall over time—whether or not aviation and shipping are included—and in which year would we first see a fall?

Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I shall not speculate on the extraneous matters that the hon. Gentleman has raised.

The central point of what Lord Turner actually said was that policies are needed to constrain aviation and shipping emissions, but—despite these—it is unlikely that emissions in these sectors will be reduced by 80 per cent. in 2050. The consequence is that more effort is likely to be required from those sectors covered by the Bill. Government amendments Nos. 42, 43 and 50 are consequential to Government new clause 15, and ensure that appropriate references are made throughout the Bill to the proposed new clause.

Amendment No. 69 and new clause 14 would both require the Government to publish regular projections for emissions from international aviation and shipping. We already publish projections of future CO2 emissions for international flights from UK airports and intend to continue to do so. The last reports were published in 2003, 2004 and 2007. I am happy to commit the Government to publish at least one forecast of international aviation emissions for each budgetary period sufficient to inform decisions on setting carbon budgets. Publishing projections of aviation emissions any more frequently would not deliver any benefits, as the long term drivers of the forecasts do not change significantly on an annual basis.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

There is a danger that we will get caught up in technical minutiae and lose sight of the big picture. The Minister has just said that it is unlikely that we will be able to reduce aviation emissions by 80 per cent. by 2050, so because we will not get tough on aviation, the rest of the economy will have to take the hit on carbon. Surely it is time that policies such as the expansion of Stansted and Heathrow came to the top of the Government's agenda, as we might then stand a better chance.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change) 4:00 pm, 28th October 2008

The hon. Gentleman cannot accuse the Government of just ignoring the issue. As he must know, we have been very active within the EU in ensuring that those emissions become part of the European trading scheme. That is the way we will deal with those emissions in the first instance. We hope, in the long term, that we shall do so through some global agreement. As the hon. Gentleman knows perfectly well, if within a trading agreement some sectors are allowed to grow and as a consequence some cannot grow so much, that is a principle of trading. The cap that is set, which repeatedly goes down, will ensure that overall emissions are reduced. We have to have that in sight; it is the long-term goal. The bigger picture is to get an 80 per cent. reduction by 2050.

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J

Steve Webb is right to point out that any failure to reduce aviation emmissions by 80% will necessitate a larger hit for other sections of the economy. It is a pity that Joan Ruddock and the Government have not recognised that it would make strategic sense not to build more runways so that other sectors of the economy have to go into reverse. They should also recognise that oil is a depleting resource and that aviation will therefore need to contract before...

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Photo of Andy Reed Andy Reed Labour, Loughborough

Do we have to be so pessimistic about the contribution that aviation could make to the trading scheme? In the foreseeable future, other technologies may come along. For example, Loughborough university is looking at a variety of ways of replacing aviation fuels. Will the Minister try to ensure that there is some flexibility to allow those technologies to come forward to help to reduce the figure for aviation?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I was, of course, paraphrasing what Lord Turner had said. It was not my personal view that emissions from aviation might continue to grow and could not be reduced by 80 per cent. by 2050. We can be optimistic, can we not? My hon. Friend makes a good point—there is new technology and we are very supportive of that. We know that new aircraft are producing lower emissions than existing ones. Much can be done in that field, although I am sure that much more will eventually have to be done, too.

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Photo of Jo Swinson Jo Swinson Shadow Minister (Foreign and Commonwealth Affairs)

May I draw the Minister back to her remarks about the reporting on different sectors? She has mentioned the publication that the Government intend to produce on aviation emissions, but she has not so far said what publication will be produced on shipping emissions. Surely there is sometimes a danger that aviation is focused on as the real problem, when in fact emissions from shipping are considerable and are predicted to as much as treble by 2050 if left unchecked.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I understand the hon. Lady's point, and I shall come on to that eventually. The reason why aviation gets so much attention is that most of us have direct experience of flying, while fewer of us have experience of shipping. I shall explain what we are doing about shipping, too.

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Photo of Tim Yeo Tim Yeo Chair, Environmental Audit Committee

The Climate Change Bill has been used as an example of British leadership in the field of climate change, and quite rightly so. Britain is a leading maritime nation, too. I believe that the shipping industry is also looking for a lead from the British Government, which at the moment it is not getting. Ships being ordered today have a 30-year life, so that takes us three quarters of the way to 2050. If there is no sign of urgency about the inclusion of maritime emissions in the British Government's approach, that will be an unfortunate missed opportunity. The Chamber of Shipping gave evidence to the Select Committee on Environmental Audit this morning and made the point that its members are looking to the Government for some suggestions about how maritime emissions might be counted and included.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

Obviously, the hon. Gentleman has an advantage over me in that he was present in his Committee meeting this morning and I was not. However, we will investigate all options for reducing emissions from international and domestic shipping. That includes considering improved technology and better operator practices, which, as I am sure he is aware, can make a considerable difference. We also support the development of a global emissions trading scheme through the International Maritime Organisation. We have said clearly that should progress within the IMO prove too slow, we will consider other options, including those proposed at an EU level, to reduce greenhouse gas emissions from ships. That includes investigating the feasibility of including shipping emissions in the EU ETS. We are not at all inactive on those issues, but the fact is that they are extremely difficult to deal with.

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Photo of Bob Spink Bob Spink UKIP, Castle Point

Let me take the Minister back to a technical minutia. Is she convinced that the methodologies for measuring emissions, particularly on the international scale, will be robust enough in the longer term?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I am sure the hon. Gentleman may know a little more about the technical minutiae of this matter than I do, but the Government are very conscious of the problem. We are always in discussions and seeking to improve the methodologies, but the fact that there is no agreed methodology at the moment means that we would face difficulties if we followed some of the amendments and simply included the present levels of emissions.

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

I am grateful to my hon. Friend for giving way, and the whole House will welcome the direction in which the Government are moving on this matter. I was interested to hear her say that the reason for the much greater focus on aviation than on shipping was that we tend to fly. That may be true, but it had never occurred to me. Does she agree that we in this country are still making far too many short flights—for example, from Edinburgh to Manchester? Clearly, the way forward must be to put much more investment into the railway, and to ensure—not necessarily through taxation, but by some other means—that there are not so many flights over short distances within the UK.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I have, dare I say it, some sympathy with what my right hon. Friend says. The Department for Transport is developing a climate change strategy of its own and, as I said earlier, we are clear that a growth in emissions in one sector of the economy will eventually have to result in more emission reductions elsewhere. If we get to the point where all journeys are included, that mechanism will have an effect. Furthermore, all domestic flights are already included in our emissions calculations.

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Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

The Minister said that there was no agreed methodology, and that has been the argument all along, right back to the Joint Committee that considered the draft Bill. However, does she agree that any methodology that we adopt, even unilaterally, is sure to be closer to the end result than doing nothing would be? If we adopt a reasonable methodology now, we will have a smaller adjustment to make in the future.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

If I were allowed to make some progress with my speech, I might be able to make the counter-argument. However, I do not accept the hon. Gentleman's point because, although we could adopt a methodology now, it might have various undesirable effects, not least in the international negotiations.

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Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I am grateful to the Minister for giving way; she has been extremely generous. Will she share with the House what she expects the cumulative impact of aviation and shipping emissions to be between now and 2050, as currently measured by the Government? She will know that, in any long-term policy to reduce emissions, the important thing is the cumulative budget between now and then. What amounts are we talking about, and what share would they take of the overall budget allowed for the UK?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I think I would be very unwise to answer that question directly. I am sure I could find some projections, but the amounts involved are a long way ahead and will depend on global agreements, if we get them, and on emissions trading. We cannot honestly predict the extent to which aviation might or might not grow, as that will depend on the decisions that will be taken—here, in the whole of Europe and, I hope, globally. I might be able to produce a figure for the hon. Gentleman, but I am not sure that it would advance any of the arguments that are being made.

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Photo of John Redwood John Redwood Conservative, Wokingham

When the Government came to office, they inherited a fairly easy win on the Kyoto targets with the dash for gas from power generation. They strengthened their target, but why did they fail to hit that strengthened target?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

At the time, we made a prediction about what would happen to our economy, which in fact has since grown massively—

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

Of course, we are currently in some difficulties, but we have been able to grow our economy massively over the period to which Mr. Redwood alludes. At the same time, we have reduced our emissions to such an extent that not only will we meet our Kyoto commitments but we will do so more than twice over. That shows that this Government have done rather well in this particular field.

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Photo of Justine Greening Justine Greening Shadow Minister (Treasury), Vice-Chair (Youth), Conservative Party

I am grateful to the Minister for giving way. Will she clarify how the Government will track emissions? As she knows, an important decision on Heathrow is coming up. According to the Government, the emissions associated with that policy will include emissions only from outgoing flights, not from incoming flights. Common sense should tell us that extra incoming flights would not be able to land if the airport were not expanded. Will she accept that what is important in Government policy is the decisionable part of emissions? How will she approach issues such as Heathrow? In such cases, if emissions are not calculated correctly, we will take the wrong decision.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

As the hon. Lady will know, a decision has not yet been taken on Heathrow. When I continue with my speech, I will make it very clear how we are approaching the issue of emissions. I will also make it clear that if emissions are contained within the EU trading process, for example, the cap will determine what the emissions are and how the matter will be dealt with. If she will let me continue, our position will become much clearer.

To answer an earlier question, there are currently no UK Government forecasts of emissions from UK international shipping. The nature of the shipping industry makes recording shipping emissions particularly difficult, and there are a number of data constraints. The Government continue to seek improvements to the evidence base on international shipping emissions, principally through our role at the IMO. I therefore cannot accept amendment No. 69 or new clause 14, but I hope that the House will accept my firm commitment that we will continue to publish our projections on aviation emissions regularly.

Amendments Nos. 68 and 72 would require the Government and the Committee on Climate Change to take into account projected greenhouse gas emissions from international aviation and shipping when making any decisions relating to carbon budgets; that answers an earlier question. Amendment No. 68 makes specific reference to the projections that would be required by amendment No. 69. As I have explained, we do not agree that it is right to legislate for the publication of those projections.

However, I am pleased to say that we can accept amendment No. 72 in the name of my right hon. Friend Mr. Morley. The Government believe that when setting or advising on budgets, due regard should be given to emissions from international aviation and shipping; my right hon. Friend and the shadow Committee on Climate Change have made that clear. We are saying that we will have due regard to emissions from aviation and shipping, as the Committee recommended, but we cannot account for them domestically at present. There are a few technical problems with amendment No. 72; for example, it refers to "budget" rather than budgetary periods, and refers not to the Committee on Climate Change, but only to the Secretary of State. It does not refer to "targeted" greenhouse gases, which is how such gases are defined in the Bill. The Government will therefore return, before final consideration in the Lords, with a version of the amendment that has benefited from parliamentary counsel's redrafting; I hope that all parties can agree to that.

Amendment No. 3 would simply require emissions from international aviation and shipping to be included in the Bill's targets and budgets within five years of Royal Assent. That would have to be done, and nothing else could be done. We all agree that we are talking about global issues, and that a global solution would be the best way forward; I hope that I have made that clear. Such a solution would be much more difficult if we had a domestic deadline for deciding what the UK's fair share was. It is possible for us to reach international agreement, through the United Nations framework convention on climate change, the IMO or the International Civil Aviation Organisation, that the best way to deal with international aviation or shipping emissions is through a sectoral approach, rather than through allocating such emissions to individual countries. In fact, that is one of the approaches already under discussion. The point is about methodologies. We could end up with a completely different proposal, so it would not be appropriate for us to make a unilateral decision. Indeed, we are already starting to see such an approach at EU level, where it is likely that under the EU emissions trading scheme, aviation emissions will be allocated to airlines rather than to individual member states.

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Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs

I thank the Minister for giving way, perhaps at the right part of her speech now. If we in the UK take the lead, will we not shape the international debate and push the final solution of the problem to a position closer to what is in our interests, rather than in other countries' interests, whereas if we leave the negotiations to others we will not do that?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I have to tell the hon. Gentleman that there is no question of our leaving the negotiations to others. We are right there in the forefront of the negotiations. It is the UK Government who pushed for the inclusion of international aviation and shipping emissions in the EU trading scheme. We succeeded in persuading other member states that that should be done, and it will be done. Adopting a measure in the Bill that could be completely out of line, as the amendments suggest, with what we are negotiating in Europe is obviously the wrong thing to do.

The questions concerning shipping emissions are even more complex. If we were to include shipping emissions in any of the existing agreements or future agreements such as global agreements, we would have even more problems than we clearly have with airlines. I have outlined how we might deal with aviation through the European trading scheme, but the difficulty with ships is that they can go for many weeks without refuelling, and can take on fuel from tankers in international waters. If we based our calculations only on fuel that has been sold in the UK, it would appear that shipping emissions declined over the past 10 years and then began to rise again. However, we know that that is not the case. We know that shipping has continued to increase, so we must assume that emissions have increased as well. Clearly, relying on bunker fuels is not the answer.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal 4:15 pm, 28th October 2008

I am sympathetic to the concept that the Minister advances: that her hands should not be tied by writing into the Bill of answers that may well be the opposite of what will be in our interests or in the interests of reducing emissions. Does she agree, however, that the concomitant is that the Government must be extremely loud about the negotiations, making sure that people realise that we are taking the lead and that there is no excuse for delay on this front? Shipping is hugely important to the United Kingdom and hugely important if we are to do something about emissions.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

The right hon. Gentleman is correct. We want to remain in the forefront and I am sure he will keep us up to the mark.

Finally, and especially if we are acting alone, there is the risk of perverse impacts, such as planes and ships filling up elsewhere and coming to the UK with a heavier fuel load, of air traffic simply diverting from Heathrow to Amsterdam or Paris, or of some ships with UK-bound cargo diverting to a continental port from where the cargo is delivered to the UK by another ship or another mode of transport. All those scenarios could increase emissions, rather than reduce them.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

Can the hon. Lady assure us that despite her distinguished lifetime career advocating unilateralism, nothing in the measure will unilaterally hamstring our aviation or maritime industries if other countries do not follow suit?

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I have just explained the complexity of including shipping emissions, whether unilaterally or within the EU emissions trading scheme. There are real difficulties. I gave the example of the calculations based on bunker fuels purchased in the UK and the fact that they gave a totally incorrect reading of what has been happening to UK shipping. The right hon. Gentleman should understand the complexity of the matter. It has to be sorted out and we have to find a way forward. That means that it is not sensible to adopt a measure today on our own behalf.

As I have said, we need a flexible approach to the evolving international context. I hope people understand that we are anxious to make progress on international aviation and shipping emissions, but we need to do that first in a European context and then in the global context. We will do what we can to take account of the necessary factors. I hope that amendment No. 3 will not be pressed to a Division.

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Photo of Gregory Barker Gregory Barker Shadow Minister (Energy and Climate Change)

We warmly welcome the Government's change of heart and measured response in including emissions from international aviation and shipping in the Bill. We support new clause 15 and its accompanying amendments Nos. 36, 42, 43 and 50, which I understand are important tidying measures. Although we also recognise the real and practical difficulties, which the Minister has explained, of including aviation and shipping and although we acknowledge the danger of perverse incentives if we get the issue wrong, we think it right that aviation and shipping are included.

Conservative Front Benchers have consistently argued that aviation and shipping should not be exempt from accounting for the pollution for which their sectors are responsible. Furthermore, as the Minister said, not including aviation in the Bill would have perverse incentives. For example, it would incentivise an individual passenger, from a carbon point of view, to take a short-haul flight to Paris rather than the Eurostar. That cannot be right.

We should also be mindful of the positive way in which the shipping sector and certain responsible airlines have contributed to the debate: they have made important and constructive suggestions on the way forward. We must not forget that shipping is among the most carbon-efficient forms of heavy transport. Sea freight emits between 30 g and 90 g of CO2 per tonne of freight per kilometre, whereas the equivalent figure for road freight is between 130g and 190g, and that for aviation is obviously much, much more.

We must therefore be cautious about always twinning aviation and shipping in this debate, as their carbon efficiency profiles contrast and they face different challenges specific to their sectors. We all acknowledge that there are difficulties with the measurement and apportionment of these emissions. However, it is important that we do not allow such issues of methodology, complex as they are, to let us lose sight of the principal aim of the Bill: to achieve a net reduction in emissions across the whole UK economy in sufficient proportion for us to play our fair part in keeping man-made global warming below the dangerous 2° level.

The necessity of eventually including all sectors of our economy in that task was reconfirmed to us earlier this month by the advice of Lord Adair Turner's Committee on Climate Change. Mindful of that advice, we are sympathetic to amendments Nos. 68 and 69, tabled by Nigel Griffiths. We are also sympathetic to amendment No. 3 and new clause 14, tabled by Steve Webb.

Methodology is crucial, so the Government need to publish their methodology for making their aviation and shipping emission projections, as would be required by new clause 14. That is particularly important to us. We welcome the announcement just now that the Government have taken on board the intent embodied in amendment No. 72. Mr. Morley has done a great deal of work: he has campaigned outside the House and brought together a large consensus on the measure. We welcome the fact that the Government are prepared to take the issue on board and, having redrafted it with the help of parliamentary counsel, bring it back to the House of Lords. That is typical of the spirit in which the Bill has gone through the House.

Having made our support for this proposal clear, I should like to sound a note of caution regarding the definition of aviation and shipping that the Government have chosen. Although we welcome the fact that they intend to include emissions from aviation and shipping, the measurement of emissions from the movement of goods and passengers should account for all stages of the journey rather than merely singling out the carbon footprint of flights and sea journeys to and from the United Kingdom. In that way, we could avoid unintended consequences such as encouraging more polluting methods of travel outside the UK. My party is committed to working with the Government in their efforts to secure the all-important international agreements on aviation and shipping emissions that are crucial if we are to crack this problem.

The Bill has come a long way since it was first introduced in another place last year. Now, on Report, one of the last outstanding totemic issues is finally being dealt with. If we can come to an agreement on this, it will turn the Bill from good legislation into world-class legislation. However, the caveats on definitions that Conservative Members spoke about at length in Committee and in the other place still remain. Although we are concerned about the definition of aviation and shipping, rather than our chosen definition of international trade and transport, we are not opposed to including aviation and shipping in the carbon budgets from the outset. Our concern is rooted in our wish to ensure that we do not, through well-meaning but poorly designed legislation, offer a perverse incentive to use more carbon-intensive modes of transport, such as road freight, over the more efficient moving of goods by sea. For example, if shipping becomes heavily regulated, particularly unilaterally, there might be an incentive for ships to dock at Rotterdam—or worse still, Istanbul—and then drive across the continent to enter this country via the channel tunnel. That is why we argued in Committee for aviation and shipping to be described as international trade and transport. We wish to prevent any system of measurement from being skewed in favour of more carbon-intensive methods of transport, which could happen if shipping and aviation are included without reference to other modes of transportation.

Let me give some practical examples. If one were importing oranges from Spain into the UK and sent them over on lorries, only the short leg of the journey, by ferry, would be included in the UK's carbon allowance. If one sent them by sea, the whole journey would be counted, making transporting oranges from Spain by sea far more carbon-expensive. That would create a significant incentive for the use of road freight over sea freight, despite its being many times more carbon-intensive. If national-level emissions trading schemes were in existence through the transit states, the disincentive to use road freight would be strong enough to deter that, but if we introduced our system before some or all of our neighbouring European transit states, Britain would perversely incentivise the movement of goods away from direct shipping and towards the more polluting form of road transport. Similarly, when importing goods from China, the best way in terms of cost and the environment is for the container to be shipped directly to the UK. If we define only aviation and shipping without reference to other means of importing goods, that could mean it would make economic sense to ship goods only as far as Rotterdam and then move them by lorry into the UK in order to minimise the amount of carbon officially being counted.

I hope I have made the point sufficiently clear without sounding as though we are opposed to the inclusion of aviation and shipping, as per the amendment, but it is very important. We are in favour of these measures, and we have always argued that there should be no sectoral exemptions for aviation and shipping, but the definition of the process can still be improved. We would be keen to work closely with the Government on establishing a means of description that is more effective and would secure the international agreements on aviation and shipping that are vital if we are to find a truly holistic solution to this very important international problem.

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Photo of John Redwood John Redwood Conservative, Wokingham

Is my hon. Friend saying he is worried that the Government have not done enough work on possible dispersion of industry and activity out of the UK and into other centres? That would seem to be an own goal of the worst kind because it would not reduce carbon output, but it would reduce the number of jobs.

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Photo of Gregory Barker Gregory Barker Shadow Minister (Energy and Climate Change)

That is a far more concise way of putting the rather laboured argument that I was trying to make from the Dispatch Box.

This is a complex area. It is not beyond our ken to crack it, and some very sensible points have been made from colleagues on the Opposition Benches about the unintended consequences of including aviation and shipping. We do not want to lose sight of the principal aim of including those sectors in a way that makes them responsible for their own carbon pollution, but my right hon. Friend is absolutely right, and with his experience as a former Secretary of State and from his considerable business career he is well placed to understand the complexities and dangers that could be posed to our competitive position. That should not, however, prevent us from offering to work constructively with the Government on the matter; if they unable to do it, an incoming Conservative Government would certainly want to work closely with the aviation and shipping industry to ensure that a satisfactory answer was reached in order to allow carbon measurements to be made, but in a way that did not harm unduly our international competitive position.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 4:30 pm, 28th October 2008

I am a little confused by the Prime Minister saying that we need an ever-increasing supply of oil. Does the hon. Gentleman believe that as a result of the Bill there will be a reduction in the amount of crude oil used by this country?

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Photo of Gregory Barker Gregory Barker Shadow Minister (Energy and Climate Change)

I do not think there is going to be an immediate reduction in the amount of crude oil used as a result of this Bill, because the Bill is simply a framework. It is a form of regulating and auditing our emissions; it sets targets. What we need to follow the Bill is a really ambitious transformational set of policies, which will allow an incoming Conservative Government to effect the sort of dynamic changes that have been so absent during the past 10 years, but without harming our international competitive position. The big danger of the Bill is that people place too much emphasis on the targets and auditing mechanisms contained in it, which are then mistaken for policies that will deliver the transformation to a low-carbon economy that is imperative. We will not find them in the Energy Bill. A whole range of policies are sadly lacking from this Government, but would not be lacking from an incoming Conservative Administration.

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Photo of Elliot Morley Elliot Morley Labour, Scunthorpe

I warmly welcome the contribution to the debate made by my hon. Friend the Under-Secretary, particularly her acceptance of amendment No. 72, which stands in my name. I would like to emphasise that it is in my name only because it was tabled very late, and I want to pay tribute to my hon. Friend Nigel Griffiths, who has been very active in this matter. I am pleased to support the amendments that stand in his name and those of many hon. Friends, many of whom are present.

My hon. Friend the Under-Secretary knows that the issue we are discussing is of key interest to many members of the public and non-governmental organisations, and I agree with Gregory Barker that the improvements to the Bill and the scrutiny as it has gone through the parliamentary process have turned it into a piece of world-class legislation that gives a strong international lead. By accepting the amendment to take aviation and shipping into account, the Bill will send a clear signal internationally that including such emissions is the way that we have to go.

I accept that there has also to be international agreement on the matter. It was a great failing of the original Kyoto protocol that the bunker fuel agreement was not included. We all know the reasons for that—it was not possible to get international agreement, particularly given the resistance from the United States and others. We all know that whatever the outcome of the forthcoming elections in the US there will be a change of position, and I hope that that transfers to including aviation and shipping in the post-Kyoto 2012 framework, as we must. The European Union emissions trading scheme helps in that respect, and it may drive that change.

I would confirm what my hon. Friend the Under-Secretary said: the agreement on including aviation was reached under the UK presidency of the EU. It was a British initiative and a British priority. The UK presidency managed to get that agreement, which I believe to be so important. I also understand the point that the hon. Member for Bexhill and Battle made about perverse incentives, although the logic of that is to include all sectors of the economy—at some point, surface transport must be included in the EU ETS—but those are matters for future negotiation.

I reinforce the point that many groups are pleased about this. I acknowledge the contribution of the Friends of the Earth Big Ask campaign, which included the two key elements: the 80 per cent. target, which has been conceded, and the inclusion of aviation and shipping, which is being conceded tonight. That will strengthen the Bill; the two issues are vital.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

I congratulate the right hon. Gentleman on his amendment, which I support in principle. I note that the Government are minded to accept it, so I press him to define a little more tightly or expand a little on what he understands by "taken into account"?

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Photo of Elliot Morley Elliot Morley Labour, Scunthorpe

There must be provision and planning, as there are for the 2012 time limit, to ensure that aviation and shipping are taken into account and included in carbon budgets. Lord Turner's committee acknowledged that, although he recognised the current difficulties with agreeing international methodology and getting international agreements. It is imperative to achieve those and I hope that that will happen by 2009, when the all-important forum of the United Nations climate change convention at Copenhagen takes place. To fail to secure international agreement would be a global disaster. However, including such elements in the Bill demonstrates that the Government are serious about the matter. They are giving a clear lead to the rest of the world that those elements must be included if we are to move to a low-carbon future.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

Although we welcome the new clause and the Government's acceptance of the spirit of amendment No. 72, which Mr. Morley tabled, we remain concerned that the guarantees that the nation—and, indeed, the planet—seeks from the British Government about aviation and shipping are not firm enough. Although we may have confidence in the Under-Secretary and the new Secretary of State—any Secretary of State whose first act is to add his name to a Liberal Democrat amendment cannot be all bad—what about their heirs and successors? Can we be confident that future Secretaries of State, who are perhaps not so committed, will be bound by the amendments? We contend that they will not and that, in addition to the new clause, we need new clause 14. We welcome the supportive comments of Gregory Barker about new clause 14, on which I suspect we will test the opinion of the House later.

We are concerned about new clause 15 because of its advisory nature. "Advise" or "advice" appear nine times in it—it is an entirely advisory clause. That would be fine if the Government were bound by the advice but, by definition, one is not bound by advice. Amendment No. 3 would remove the opt-out. The Government have the option after five years of saying, "This is all terribly difficult—we're not going to do it." Our worry is that aviation and shipping are so important that, if five years of the best brains around the globe getting together cannot crack the problem, we are genuinely in trouble. We do not want to give the Government the option after five years of slipping out a written statement on the last day of a parliamentary Session to claim that they had tried hard but could not include aviation and shipping because it was too difficult. There is not enough of a guarantee that those matters will be taken into account.

Although I am beginning to understand the theology of such issues, I cannot understand why the new clause and amendment No. 72, as redrafted, guarantee anything. They are a nudge and a wink and a hint from a well-disposed Secretary of State and Under-Secretary, but they guarantee nothing, especially when Ministers change and others may not be so committed. We therefore need to beef up those amendments.

New clause 14 states that the Government need to provide projections on aviation and shipping. We welcome the Minister's assurance that the projections on aviation will be forthcoming and updated, but simply saying that shipping is too difficult, which is essentially the position, is inadequate. We need to resolve those difficulties. We need an approximation to the best guess, and doing that is not a science; it is an art. However, as my hon. Friend David Howarth said, doing nothing is likely to be an awful lot further away from the optimal solution than having an approximation, an imputation or an assumption.

Our second concern is about the role of national leadership. I fully accept that in time everything will need to be done multilaterally, but we are not playing a game in which we cannot make a move until everybody else has moved. We are talking about a vital issue on which we need to lead by example and bring others with us. If we say, "We're not going to include these things until everybody else does or until we've decided altogether how to do it", the clock will be ticking in the meantime. That is our profound concern.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

If it is about oil, no. [ Laughter. ] Of course I will give way.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I thank my hon. Friend for giving way to my standard question about oil. Last week the Prime Minister said that we needed an ever-increasing supply of oil, which confused me in the light of our objective of having a low-carbon economy, because burning oil creates carbon dioxide and water primarily. Will my hon. Friend share his views on whether we can satisfy the objectives of the Bill, with or without the inclusion of aviation and shipping, while having an ever-increasing supply of oil?

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

I am most grateful to my hon. Friend for that helpful intervention. From our perspective we need to get on with decarbonising the economy. The goal of an ever-increasing supply of oil is literally nonsense and should certainly not be an aim of Government policy.

The point that I made in an intervention on the Minister is that it might be great that the Department of Energy and Climate Change sets such bold targets, but as long as the Department for Transport, for example, continues to act as if it were a wholly owned subsidiary of BAA, we will not achieve what we need to. It is vital to bring aviation and shipping within the scope of the Bill, so that the other bits of Government, which are perhaps not quite as well disposed towards tackling climate change as the Department of Energy and Climate Change is, are brought into line. The sooner we do that, the smaller the chance that irreversible decisions will be taken on airport expansion—decisions that would undermine the goal that we all share of tackling climate change effectively.

We welcome new clause 15 and the advice that will be forthcoming, but we simply do not believe that it goes far enough. In addition, we need the projections provided for in our new clause 14 and a calculation of what that means for non-aviation and shipping carbon emissions. The Minister's view seems to be that the rest of the economy can just take the hit, because as long as the grand total is okay, we are all happy. However, the rest of the economy might have a view on taking more of a hit than aviation and shipping simply because aviation and shipping were not included in the budgets.

There is an equity issue, too. We might have a view, for example, on how fair it is to expect manufacturing to take the entire hit because aviation and shipping have been allowed to run away with their emissions. There is an equity issue to do with the balance of reducing emissions, not only at household level but between different sectors of the economy. Favourable treatment towards one sector, which would be likely if we did not bring it within the Bill, is undesirable for us all.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

The hon. Gentleman started his speech with the premise that the Bill places no absolute requirement on the Government to include aviation and shipping in the budgets or the targets. That is correct, but I have struggled to follow how his new clause 14 would change that. I can see that it might improve the transparency of some of the information going into the mix, but it does not change the basic premise of his argument, does it?

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

As the hon. Gentleman rightly says, our new clause 14 would require projections on aviation and shipping that would otherwise not be made, which would deliver an impact assessment on the rest of the economy. As he knows, our concern is about the actions of future Governments. The consequence of our proposal would be for other sectors of the economy to exert more pressure to include aviation and shipping, because it would be much more transparent that they would take the hit. That would be an indirect way of bringing pressure on future Governments not to neglect the other sectors of the economy.

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Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

Does the hon. Gentleman's point about the impact of aviation and shipping not show the absurdity at the heart of the Bill? Independent studies show that a 75 per cent. increase in emissions from shipping is expected in the next 15 to 20 years and that emissions from shipping already constitute more than double those from aviation globally. The fact that we are introducing an 80 per cent. reduction today while critical elements of delivering it are not within the power of the Secretary of State shows that we are posturing and not really putting down legally enforceable limits on emissions. In the meantime, we are failing to take the practical actions that could be taken to deliver emissions changes today.

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J

Graham Stuart is overlooking the fact that shipping is far less polluting per tonne kilometre of goods carried than aviation. The independent studies that predict an increase in emissions from shipping presume increased trade will be serviced principally by the least polluting mode of transport. Emissions would be several times worse if aviation were the form of transport. Emissions will be reduced with greatest efficiency if...

Submitted by John Byng Continue reading

Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

I partly agree with the hon. Gentleman, in the sense that we certainly need a legal framework and practical, urgent action now. His point highlights the fact that the Government's approach to aviation and shipping is almost one of "predict and provide". They are almost saying, "We will let that rip, and then we will pick up the pieces in the rest of the economy." That is why we cannot go on risking excluding those elements.

We are sure that the Government's intentions are good, but we do not believe that even this Government—and certainly not future Governments—will be bound by what is in new clause 15 or amendment No. 72. We are therefore seeking to add new clause 14 to the Bill.

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East 4:45 pm, 28th October 2008

I think that the whole House welcomes the movement by the Government in this area. I congratulate the Under-Secretary of State for Energy and Climate Change, my hon. Friend Joan Ruddock, and I particularly welcome the fact that the Government are accepting the amendment tabled in the name of my right hon. Friend Mr. Morley.

My hon. Friend the Minister rightly referred to the important interim advice from the Committee on Climate Change in the letter earlier this month to the Secretary of State of the new Department from the Committee's chairman, Lord Adair Turner. I want to highlight two or three important sentences in the letter. The advice provides the basis for the Government's movement, but it should also send an important message to Parliament and the Government about the decisive action that we need to take on this issue in the coming years. As we all know, the important recommendations were that the target for the reduction in emissions covered by the Bill—between 1990 and 2050, which is quite a long way ahead—should be 80 per cent., and that the target should include international aviation and shipping.

In an important point in the letter, Lord Turner explains the reasons for the change. He sets out what has changed since the report from the historic royal commission on environmental pollution in 2000, which is where the original 60 per cent. target came from. He lists six things that have changed, but I shall not refer to all of them today. However, I want to quote one of them. By way of an introduction to that, I want to point out that he suggests that

"the dangers of significant climate change are greater than previously assessed which argues for larger global, and thus UK, reductions."

He makes six points, and in point No. 5, he states that

"there is now a greater understanding of the range of potential climate change impacts, their regional variation and the possibility of abrupt or irreversible changes. These analyses also suggest greater damages once temperature increases become significant."

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I should like to ask the right hon. Gentleman my usual question. If we are going to reduce carbon emissions, why do we need a constantly increasing supply of oil?

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

The important thing is the demand for oil. We must use less oil; that is not in dispute. Obviously, we want to use less oil, and fewer fossil fuels. I do not quite grasp the hon. Gentleman's point—

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

I am not going to give way again, because many people who have served on the Public Bill Committee want to take part in the debate. However, we are not going to stop using oil in the next few years—

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. I am sorry to interrupt the right hon. Gentleman, but I must remind him that this group of amendments is to do with shipping and aviation. An opportunity for more general comments about the targets for the reduction of emissions will crop up at a later point on the Order Paper.

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

I am grateful to you for that advice, Mr. Deputy Speaker.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

On a point of order, Mr. Deputy Speaker. Can you assure us that we will have an opportunity to debate the Third Reading of the Bill, and to raise the more general points that the right hon. Gentleman has tried to raise, and which many of us would like to discuss, in the course of assessing some of the new clauses, particularly in relation to their cost effectiveness?

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

I think that the right hon. Gentleman knows that I cannot give any such assurance. The progress that is made on dealing with the amendments that have been selected by Mr. Speaker depends entirely on the House, so I am afraid that I cannot give any such assurance. However, I have to rule on the relevance of any remarks made to the particular group of amendments under discussion.

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Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

I am grateful, Mr. Deputy Speaker.

The crucial issue is the global temperature rise that the world has to avoid. There, of course, international aviation and shipping are highly important. Significant observations have been made to the effect that it is not easy to deal with these issues. I was a Cabinet Minister in the Transport Department when we were elected in 1997. The big thing that I grasped very quickly was that aviation was international. It was international organisations such as IATA—the International Air Transport Association—that had to be dealt with. International shipping is, of course, also important.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

It seems to me that the Government should be congratulated on proposing these new clauses. We Opposition Members are very pleased to support them. It also seems to me that the Government are in a difficult position. On the one hand, they cannot build into the Bill a unilateral system that might be wholly different from what emerges from negotiation. That is a perfectly reasonable Government position, but if it is to be tenable, the Government must give the House—not just now, but throughout the coming months and years—a real understanding of their commitment to doing the things that will make a reality of these new clauses.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

I think I will leave the issue of oil alone, as it has been somewhat widely discussed but is not entirely germane, Mr. Deputy Speaker, to the issues that concern us at this moment.

The Government need to give us the confidence to support them by being much tougher about what they intend to do in practical terms about these issues. First, it is obviously true that we need an internationally agreed system of measurement. In that, the Government need to be particularly attentive, so that we can all make a proper assessment of how successful we, along with other nations, are in reducing emissions.

Secondly, it is terribly important to recognise that we cannot do these things except in common with our neighbours. I thought that the intervention on the subject of European law by my hon. Friend Mr. Cash, who is no longer in his place, was outside the issue. If we do not do this on a European basis, there is simply no chance of doing it effectively at all. We need to recognise that the environment is not something that can be nationalised—it seems about the only thing that is not being nationalised at the moment, but it cannot be: we must do this on a European basis. It is an obvious fact of life.

Thirdly, if we are to proceed on a wider basis, I want to underline the points raised earlier about the danger of making things worse by accident. We know of many issues at the moment—the much-vaunted efforts for biofuels in the United States, for example—that have distorted the international situation very severely indeed. We have to be very careful that we do not do the same. The problem is that, in being careful, we must not put ourselves into a position of excusing not doing anything by saying how difficult it is to do. That is the issue that I want to press on the Minister.

If the Minister had come before the House to announce that there would be no third runway at Heathrow and that the ridiculous proposal to expand Stansted would not, in fact, go ahead, the House would have seen that the Government were doing all that they could do in advance of achieving the necessary international arrangements.

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J

Well done John Gummer. Airport expansion is so obviously unhelpful that the Government should put a stop to it immediately. Their present attitude undermines their credibility on the climate change issue.

Submitted by John Byng

Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

Does the right hon. Gentleman also oppose the expansion of our ports and docks? I do not know whether Felixstowe has any plans to expand, but should that expansion also be stopped? We are choosing just one target, aviation, which is fair enough, but perhaps the right hon. Gentleman should extend his argument to those other areas as well.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

I wish that the hon. Gentleman, with whom I often agree, had listened more carefully to my argument. I gave a series of examples to which the Opposition were committed. It was therefore not unreasonable for me to suggest that if the Government wished to gain the universal support that I believe will be necessary if the Bill is be effective, it would be helpful if they clarified their approach to some of the key matters that are before us. The expansion of Felixstowe, which I declare as an interest in my constituency, is not a matter before us; the matter before us is the Government's decision on Stansted, and their decision on Heathrow.

I know very well that the Minister is not the person making the decision in this instance, and also that, if she were, she would make that decision in a way of which I would greatly approve. However, I do not consider it unreasonable for me to say to her that it is imperative that the Government take seriously some of the decisions which we understand—notwithstanding the essentially light touch of the new clause—will be translated into action.

I want to say a little about unilateralism as it applies to aviation and shipping. It may be suggested that Britain should do nothing that might put her in a less powerful competitive position, and in general I think that that is true, but I hope the Minister will not be put off doing anything on that basis, or we shall find ourselves unable to take the lead that we have taken. The Climate Change Bill is unilateral in a very real sense, and so it should be.

Although I cannot be accused by anyone of being unilateralist in the sense that the Minister was but—I believe—is not now, I can at least say that unilateralism, in the sense of being a step ahead of others and helping them to make their decisions, is often necessary. T.S. Eliot once said "Being a step ahead of the rest is something that deserves congratulation and you are a hero; two steps ahead, and watch out for the men in white coats." There is some truth in that. I do not want us to get into a position in which we have so damaged our international ability to trade and compete that we suffer unilaterally, but we do need to ensure that we are taking a step ahead of the rest.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

Do I understand from my right hon. Friend's logic that, while there is a case for being ahead, if others do not follow us we should cease to give leadership, and that therefore a Bill that binds us unilaterally, by law, to targets 42 years ahead goes too far?

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

No, I do not agree with that. If I may say so, I think that my right hon. Friend is entirely wrong. The world is faced with the biggest threat that we have ever known about in advance, and for us not to take these measures would constitute a deep dereliction of our duty to this generation, the next generation and the generation after that.

I must tell my right hon. Friend that I deeply disagree with the approach that if no one else helps as we go over the precipice, we had better run with them. That is a totally unacceptable position. We must stand up. That is why the Bill is so important, why the Conservative party supported it from the beginning, why it is a triumph of cross-party agreement that we have secured it, and why it is so important to tighten it up in the areas that it does not currently cover. But to do that—

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. We must not get more than two steps ahead in moving towards Third Reading.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

With accustomed care, Mr. Deputy Speaker, you enabled me to get off my chest what I needed to, but did not allow me to proceed too far down that avenue, and I shall not do so.

Let me return to the difference between shipping and aviation. I ask the Minister to concentrate on shipping. Shipping can provide the most carbon-efficient mechanism for transporting goods, and we therefore must take care in how we deal with it. However, it is not like aviation in a number of other ways. First, the EU trading scheme does not easily apply to shipping; it is difficult to see how we can use that as a mechanism in the same way as we can with aviation. Secondly, a great deal can be achieved in the shipping industry through taking steps that are not open to the aviation industry. For example, if it were demanded that over a short period ships increasingly used a higher quality of fuel, that could rapidly reduce the carbon impact, but that step is not open to aviation in the same way or over the same time scale.

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Photo of Barry Gardiner Barry Gardiner Labour, Brent North 5:00 pm, 28th October 2008

I am grateful to the right hon. Gentleman for giving way. I have been listening to his comments with great care, and I agree with much of what he has said. With regard to the point he has just made, does he agree that it is important for the Government to be in deep dialogue with the International Maritime Organisation about addressing such matters? It would be helpful if the Minister were to describe the sort of discussions that she has had with the IMO.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

The hon. Gentleman is right, and I pressed the Minister earlier about this issue, because there is a feeling abroad that we have not been sufficiently hard-working in this area and that we have failed to produce as much pressure as we should. It is thought that perhaps we should ginger up our role in international shipping, because we do not want the EU to set proper standards for the kind of fuel that is provided for, and used by, ships docking at its ports, including Felixstowe in my constituency, only to find that they therefore unload outside the EU, such as in Morocco or Turkey. We need to find ways of achieving the ends we want without producing untoward results, but that does not excuse us from being seen to be an effective pressure on the international shipping community, which in many respects wishes to be pressed and wants to move. The Government must show that they are doing that.

My last point on this issue refers to a question raised by Steve Webb. He talked about the need to include shipping and aviation as a matter of equity. That may be the case, but I think there is a more important reason: if we do not have a system that covers the whole of commercial and industrial life, we will automatically create damaging kinds of discrimination and diversion. There is a commercial reason for doing this, and we ought to be citing it; otherwise, there will be untoward consequences. If we leave out shipping and aviation, not only will other areas be disproportionately affected, but if the carbon costs of imports are not included businesses that rely on imports will be able to compete disproportionately with businesses that manufacture at home.

I do not want to be protectionist, but I do want to have equality in this commercial context, so that we ensure that the home-produced product—whether it be food, an area in which I am particularly interested, or manufactured goods—is not disproportionately affected because those businesses are paying the cost of the carbon that they use, whereas other businesses are not paying the cost of the carbon that is used when their product is flown or shipped in from a far-away country. I therefore beg the Minister to take seriously the point that this is not only a matter of theoretical equality, much as I believe in that as an issue. It is a matter of commercial justice and a crucial one for an island that has lost much of its manufacturing ability and ought to gain much back.

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J

I am glad John Gummer has pointed out the damage that failure to deal with emissions from aviation and shipping would do to domestic production.

He says he does not want to be a protectionist but we do need to favour local producers as a contribution to tackling climate change and oil depletion.

Submitted by John Byng

Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

My right hon. Friend has just put forward a very good case against unilateralism in shipping and aviation, as those industries would be adversely affected by it. I cannot understand why he feels that those industries should be protected from unilateralism but other parts of industry should not be protected from it elsewhere in the Bill.

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

I have obviously not made myself very clear to my hon. Friend. I was making the point that if we do not include those two industries in the Bill there will be untoward results because they are excluded. In fact, I was making the opposite argument.

My hon. Friend is a doubter about whether we should be doing all this at all, and the reason for his doubt is that he has not committed himself to the scientific view of the damage that climate change is likely to bring and the fact that human beings are causing it. I understand that someone who takes that view can argue that we really ought to sit back and wait for someone else to do something, because it does not matter anyway. In my view, which is based on the scientific advice, it matters desperately and may matter much more than we think.

We therefore have to act rapidly and achieve a delicate and difficult balance by acting sufficiently unilaterally to lead but not going so far as to make it difficult for others to follow by giving them an advantage that they do not want to give up. It is quite a delicate step, and the Government are trying to do that. We as an Opposition have a duty to support them in so far as they are, and they ought to give us a bit more help in supporting them by making clear what they are doing practically to make the amendments a reality.

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Photo of Nia Griffith Nia Griffith PPS (Team PPS), Home Office, PPS (Team PPS), HM Treasury

I welcome new clause 15 and pay tribute to the work of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and my hon. Friend Mr. Woolas not only on the Bill but on raising the issue of aviation and shipping on the international stage. We all know that that is where it has to be raised.

We recognise the need to count in the emissions from aviation and shipping, but we all accept that calculating how to apportion them to individual countries is fraught with difficulty. As our Climate Change Bill is often referred to as a world first, it is crucial that we include aviation and shipping. We do not want to give other people the idea that those matters can be left out of legislation. They should be included because we need to raise consciousness among many other nations that may follow suit by producing similar legislation. However, we realise that there is still an enormous amount of work to be done to reach an international agreement about how any mechanism might work, and we still need to work hard on the international stage in many other spheres. We all recognise that what we do here can be worth while only if it is mirrored elsewhere in the world.

We certainly might be able to use a system involving sectoral emissions, but we must remember that one problem with the EU emissions trading system is that we sometimes lose manufacturing industry from this country because it relocates to a country where the emissions trading scheme does not require it to meet our standards. We may find that, in the aviation and shipping industries, transport routes and refuelling stops become much more about avoiding the emissions being counted than about producing the lowest possible emissions.

Our Bill is also important because we do not see it merely as a legal sanction. Once we have exceeded targets, it is too late—those emissions are out there and causing damage. We should see the Bill as an important monitoring tool and as a process rather than as an end in itself.

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Photo of Nia Griffith Nia Griffith PPS (Team PPS), Home Office, PPS (Team PPS), HM Treasury

I shall give way, but if the matter is about oil, I suspect that you would prefer me not to refer to it at this stage, Mr. Deputy Speaker.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

I find it somewhat confusing when we talk about shipping emissions. A significant point about shipping is that the consumption of energy is linked to the fourth power of the velocity, which is an important reason why it is possible to reduce shipping emissions. However, all these things are powered by oil. If we do not take any view about whether we need a constant supply of oil, there will be a problem.

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. The hon. Lady was prescient. Obviously, we want to have a good debate, but we have a formidable Order Paper before us and we need also to make reasonable progress.

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Photo of Nia Griffith Nia Griffith PPS (Team PPS), Home Office, PPS (Team PPS), HM Treasury

This issue is about counting and monitoring, which is why it is important that we include mechanisms in the Bill such as making provision on advice and listening to the Committee on Climate Change. Those are the tools that we are using. The monitoring and reporting processes, and the targets that we put in place, will make us think about how we achieve the necessary reductions in emissions and how we create a low-carbon economy.

Motor manufacturers came to the Joint Committee on the draft Climate Change Bill saying, "You tell us what we have to do and when we have to do it by, and we will need to take decisive actions." The same applies in respect of aviation and shipping; they need to be included in international debate, because we need to set the parameters on an international scale. If enough of the powerful economies say that ships can come to their countries only if they meet X, Y and Z conditions, a sea change—if I may say that—will begin to take place in how boats and ships are fuelled.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

We are about a quarter of the way into the period from 1990—the base year—to 2050. In the first 15 years of that period, the UK cut its CO2 emissions by 6.4 per cent. Does my hon. Friend think that we can include aviation and shipping and make 80 per cent. cuts by 2050, or does she think that that is fantasy politics?

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Photo of Nia Griffith Nia Griffith PPS (Team PPS), Home Office, PPS (Team PPS), HM Treasury

I think that we need the mechanism of the Bill in order to give us determination. My hon. Friend rightly points out that we have so far lagged behind in making ourselves take the action that will produce the emissions cuts that we all want, and that is the area in which we must move forward. As I say, we cannot make progress on this issue simply on a national basis, but it is important that new clause 15 is included in the Bill to send a clear message to the rest of the world. We will have to continue to use it as a tool both internally in the UK and in our external negotiations. That is why it is important that the wording of new clause 15 not only gives us a certain flexibility, but sets out clearly that aviation and shipping must form part of the advice that we must take in order to move forward and choose what we are going to do to reduce our emissions and meet targets, rather than exceed them.

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Photo of Tim Yeo Tim Yeo Chair, Environmental Audit Committee

I declare an interest that is in the register: I am a director of Eurotunnel, which provides a low-carbon transport route between Britain and the continent.

I warmly welcome the Government new clauses that we are debating and the Government's acceptance of amendment No. 72, just as I welcomed the Bill on Second Reading in the summer. The Minister knows that, like me, the Environmental Audit Committee, which I chair, would much prefer the Government to go further and faster in relation to both aviation and shipping. I particularly hope that the Government will be—or will continue to be—in the forefront of efforts to bring aviation into the European Union emissions trading scheme on a basis that really drives carbon prices to a level that will incentivise investment in low-carbon infrastructure, encourage the faster introduction of more efficient aircraft and accelerate the use of more efficient practices by airlines as they move planes both on the ground and in the air. Those benefits could flow quite quickly, but they will do so only if the terms for the introduction of aviation into the scheme are a great deal better than those that applied in phase 1 for the power generation industry.

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Photo of Tim Yeo Tim Yeo Chair, Environmental Audit Committee

I am glad to see the Minister nodding her assent. As I mentioned in my intervention, I also hope that the Government will lead the debate on how to accelerate a switch by the shipping industry to some of the more efficient, less polluting and more low-carbon methods referred to by my right hon. Friend Mr. Gummer. Britain is a great maritime nation, and the shipping industry would respond to a lead from the Government on these matters. Indeed, the industry is looking for a lead, and the evidence given to my Committee this morning suggested that while it is not very concerned about the precise policies, it would like to know how the Government intend to accelerate those changes.

I also urge the Government to consider what more can be done to speed up a switch from domestic flights to lower carbon alternatives. There is a strong probability that those countries that have a low-carbon transport infrastructure, such as France has, and that Spain and others are rapidly developing through their high-speed rail networks, will enjoy a huge economic and commercial advantage in 10 or 15 years. Because those projects take a long time to build, it will be too late for us if we wake up in 2020 and wish that we had implemented our own when we first realised that it was important.

Many of the supporters of the Bill and the Government's approach are dismayed that other parts of the Government appear to be moving in the opposite direction. Reference has already been made to Heathrow, but I wish to refer to Stansted, an issue in which you, Mr. Deputy Speaker, may have a passing interest. Only two weeks ago, the Government approved a substantial increase in the number of flights from Stansted. That was an environmentally catastrophic decision for my constituents in South Suffolk, for people in East Anglia and for Britain. It was taken at a time when usage of Stansted is falling—the figures for 2008 are lower than those for 2007—so there was no reason for that decision. There was no pressure to make it, especially as the low-cost airlines that dominate the airport are experiencing a drastic change to their business prospects and business model.

The replacement of domestic flights with low-carbon alternative transport choices would not harm Britain's competitive position internationally; in many respects, it would help it. For example, it would free slots at Heathrow for the introduction of strategically important long-haul international routes. While I welcome the Government's fresh approach on aviation as reflected in the Bill, the amendments and the Minister's remarks, I urge them to be bolder. In particular, I hope that the Minister and the new Department—I wish it a successful future—will bring colleagues in the Department for Transport into line.

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Photo of David Chaytor David Chaytor Labour, Bury North 5:15 pm, 28th October 2008

I congratulate my hon. Friend the Minister and her former ministerial colleagues on steering the Bill so successfully through Committee and, in particular, on listening carefully to the various representations made over many months, especially on aviation and shipping, as well as on the overall target for 2050.

I am struggling to understand how Steve Webb can believe that new clause 14 is significantly different from the proposals in Government new clause 15, with the addition of amendment No. 72. I support amendments Nos. 68 and 69, but in the absence of my hon. Friend Nigel Griffiths, I am happy that they should be superseded by amendment No. 72. I urge all Members to consider the context of amendment No. 72, because it would simply add aviation and shipping to those matters that must be taken into account by the Secretary of State and the Committee on Climate Change, which include

"scientific knowledge about climate change...technology relevant to climate change ... economic circumstances ... fiscal circumstances ... social circumstances...energy policy ... circumstances at European and international level."

Logically, if the hon. Gentleman seeks to suggest that Government new clause 15 and amendment No. 72 are inadequate, he should table additional amendments that spell out how the references to all the other items in clause 10(2) are inadequate, but he is not doing that.

There are uncertainties about the method of calculating emissions from aviation and shipping. There are uncertainties about the method of assigning the emissions to different nation states. There is always the question of a future Government who do not have the same determination as this Government to reduce UK emissions. Although I accept those points, I cannot see the purpose of new clause 14. I fear that although we have successfully built up impressive cross-party consensus over many months, there is a bit of game playing going on as we reach the end point. That is regrettable.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Energy and Climate Change

Does the hon. Gentleman recognise that Government new clause 15 is entirely about a duty on the Climate Change Committee to give advice? The only duty placed on the Secretary of State is to publish that advice. Amendment No. 72, as redrafted, puts in place another thing to which the Climate Change Committee must have regard. The duty that we have proposed in new clause 14 is a duty on the Secretary of State with regard to carbon emissions, while amendment No. 3 gets rid of an opt-out for the Secretary of State. It is not taking anything away from the cross-party consensus, but going further and trying to oblige the Secretary of State to do something.

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Photo of David Chaytor David Chaytor Labour, Bury North

I do not agree. Clause 10 is very specific when it states:

"The following matters must be taken into account" both

"by the Secretary of State ... and ... by the Committee on Climate Change".

There is hardly any difference. There is a difference between the wording used in new clause 15 and amendment No. 72 and that used in new clause 14, and that is why I urge the House to reject any attempt to move to a vote on new clause 14.

I want to endorse the comments made by Mr. Gummer, who pointed out that in environmental policy, above all, we need a Government who are open, outward-looking and prepared to engage with the international community. Of course, my right hon. Friend Mr. Morley pointed out earlier that aviation's inclusion in the EU emissions trading scheme was carried out under the UK presidency. Will the Minister say whether she thinks that that would have happened if the Government had had an irrational, obsessive Eurosceptic policy?

As we move towards further negotiations on the precise methodology for including emissions from aviation and shipping, are we more or less likely to reach agreement with other nation states with a Government who are open, outward-looking, prepared to negotiate and positive about their membership of the EU or with a future Government less enthusiastic about the EU and determined to refuse to co-operate with the other member states? It is self-evident that the likelihood of any change of Government in the future is linked to that. The shadow spokesman, who is not in his place, worked himself up into a frenzy of excitement about the prospect of an incoming Conservative Government, but the likelihood of that happening is in inverse proportion to the continuation of the Opposition's irrational, obsessive hostility towards the EU and international co-operation more generally.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I draw the House's attention to my declaration in the Register of Members' Interests.

In the speeches of a number of hon. Members, it has been assumed that the whole House is unanimous on the measures before us, and on the Bill that they amend or add to. Historically, the House has made its worst mistakes not when it is divided, but when it is virtually unanimous; not when it is adversarial, but when MPs switch off their critical faculties in a spasm of moral self-congratulation. My concern is that, in considering these measures, we are displaying that tendency. It is vital that we bring the House back down to earth by considering the hard costs and benefits of, and alternatives to, what is proposed and what we are doing. We have not done that very much so far in the debates in the House. Only once in Committee was mention made of the costs and benefits of what we are proposing.

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Photo of Elliot Morley Elliot Morley Labour, Scunthorpe

The right hon. Gentleman will find that, apart from the Stern report, which addressed the issue of costs and benefits, the report by Lord Turner specifically identified some of the projected costs for his recommendations, which are now being incorporated in the Bill. They were relatively modest.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I am not in any way disputing what the hon. Gentleman says, but no hon. Members, in either the House or Committee, have addressed the question of costs and benefits. They could have done so, as the Government have produced an impact assessment spelling out their estimate of the costs and benefits involved. Those figures are all we have when it comes to trying to assess the costs and benefits of the specific clauses and amendments before us.

The Government's impact assessment has three very important implications. The first is that the costs of the Bill as a whole are potentially huge, and they will be even more onerous if these proposals are accepted. The impact assessment puts the transitional costs at between 1.3 and 2 per cent. of gross domestic product up to 2020. In addition, there will be competitive costs to this country as a result of industry being driven overseas, even though that will not reduce the level of carbon emissions. Ignoring both those costs and making the heroic assumption that British industry can instantly and perfectly implement the latest and most cost-effective technology to meet the targets, means that the estimated cost of the Bill as a whole—even before the target for emission reductions is increased from 60 per cent. to 80 per cent.—comes to £205 billion.

That is a lot of money. We have to ask whether we are prepared to increase it by including aviation and shipping, as the measures before us propose. I do not know whether hon. Members have consulted their constituents, but £205 billion would equal over £10,000 from every family in every constituency.

People are used to hearing about the large sums of money being used to rescue the banks, but that has been in the form of loans that one hopes ultimately will be repaid. The costs that we are incurring through the amendments—and by the Bill even if it remains unamended—are real money. Our constituents will cough up that £10,000 in taxes and lost incomes, and never see it again. Before we add even more onerous burdens by including aviation and shipping in the Bill, we must be very sure that we are happy with the costs that we are already incurring.

Secondly, we need to look at the benefits, which the impact assessment also considers. Although it shows that the maximum costs, even excluding all the things proposed in the measures before us, are potentially £205 billion, the striking thing is that it puts the maximum benefits of the actions proposed in the Bill at £110 billion, or just over half that total. Do the authors of the new proposals believe that their costs will eventually exceed their benefits, as is the case with the Bill as a whole, or can they reassure us that the benefits will be greater than the costs?

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J

Peter Lilley questions whether we should increase the costs by adding aviation and shipping. He is clearly overlooking the fact that to do otherwise would impact adversely on domestic producers which would also be costly. And any failure to include aviation would favour the most polluting form of transport which would be perverse and would undermine the purpose of the costly changes in other areas of the economy.

Submitted by John Byng

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I will give way in a moment, and especially to Colin Challen.

I have reservations about the certainty with which some people adopt the scientific case behind global alarmism, but I am equally uncertain that it is necessarily wrong, so I am quite prepared to take out an insurance policy against the possibility that we will face global warming, just as I insure my house against the possibility of fire. However, I ask the House whether it is sensible to buy an insurance policy whose premiums could be twice the value of one's house—

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. The right hon. Gentleman is an experienced and skilful debater in this House, but I think that he must realise himself that he is building a broad case on a narrow foundation. The remarks that he is making are, in terms of good order and debate, more strictly applicable to later parts of the Bill, and particularly to Third Reading. Therefore, I really must direct him to the specific matter covered in this group of new clauses and amendments.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

Of course I take your remarks to heart, Mr. Deputy Speaker.

We have to remember the normal laws of declining marginal benefit and increasing marginal cost. If we tighten the Bill by adding more rigorous burdens regarding aviation and shipping, we must expect the costs to be higher than the costs of meeting the 60 per cent. target, let alone the 80 per cent. target, and we must expect the benefits to be less than the marginal benefits that were to be accrued.

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Photo of David Howarth David Howarth Shadow Solicitor General, Ministry of Justice, Shadow Minister (Shadow Solicitor General), Home Affairs 5:30 pm, 28th October 2008

The right hon. Gentleman will of course be aware of the work that Professor Barker did with Pan, Köhler, Warren and Winne, published in 2006 in The Energy Journal, which showed that as the targets become stricter, the world growth rate increases because of induced technological change. Economics has moved on slightly since he was at Cambridge.

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Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. Oh, dear. The hon. Gentleman is enticing Mr. Lilley towards the wider aspects of the Bill again. I must remind the House that we want to make progress on to other matters, and we should therefore stick strictly to the terms of the amendments before us.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I will do just that and avoid discussing with David Howarth my experience of Cambridge, which was splendid. I instead return to the measure before us, which asks the Committee on Climate Change to assess the cost of including aviation and shipping in the Bill. However, the new clause does not say how those assessments are to be made. We must assume that they are to be made on the basis that Lord Stern used to assess the costs and benefits in the report to which Mr. Morley referred, or on the basis used in the impact assessment that the Government put before the House, although that assessment refuses to give us any costings specifically on aviation and shipping.

It is interesting that the impact assessment totally contradicts Lord Stern, who said that the costs of the measure, including aviation, would be far short of the benefits. Of course, he reached that conclusion only by discounting the future at such a low rate that the benefits exceeded the costs. According to Nordhaus, the leading valuator of this sort of methodology, half the benefits that Sir Nicholas Stern takes into account will not accrue until after the year 2800, but so low is his discount rate that they outweigh the costs that we will incur in this century.

More sensibly, the Government rejected that. I asked them what interest rate they think should be used, and presumably want to use, in the assessments that they require in new clause 15. They say that they are using the traditional, conventional discount rate required by the Treasury of 3.5 per cent. in real terms. That is why their calculations show that the costs are not necessarily much lower than the benefits, and could well be twice as great as the benefits. Presumably, if the Committee follows the Government's methodology, it could reach the same conclusion for aviation and shipping.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I give way to the hon. Gentleman, who made by far the best speech on Second Reading.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

I am grateful to the right hon. Gentleman. Like other industries, aviation and shipping are, of course, susceptible to technological change. On the £205 billion cost—that is the upper end; the lower end is £30 billion—may I point out that the impact assessment said:

"Upper end of the range assumes no technological change"?

There may well be technological change in aviation and shipping. Conversely, on the benefits, which are between £82 billion and £110 billion, the impact assessment says:

"Benefits are therefore likely to be higher."

I suggest that the right hon. Gentleman is being a little pessimistic about aviation and shipping, and about the cost-benefit analysis.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I may be wrong, of course, but I am using the Government's figures. Throughout the debate no one else has bothered even to mention the Government's figures, and they were mentioned only once in Committee. It is only sensible that we should do so, and if we do, and if in particular we reach the conclusion that they should use the methodology implied in the impact assessment and not the absurd methods used by Sir Nicholas Stern, now Lord Stern—he received his reward—they would reach a conclusion very similar to that advocated by the hon. Gentleman on Second Reading: that we should put far more emphasis on adaptation to helping poor countries cope with climate change, rather than on crippling our industries—aviation, shipping and all the other industries—to little avail.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I give way to my hon. Friend, who made the equal best speech on Second Reading.

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Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I hope that my right hon. Friend has not devalued the compliment that he threw across the Floor of the House; heaven knows what he will say when another Member seeks to intervene.

The question at issue has been whether technology in aviation and shipping can proceed at a pace to enable the costs to be kept reasonably low and therefore to allow us to pick up the benefits of a low carbon technology without extra cost. Is my right hon. Friend aware that the leading estimates of the improvement needed in carbon productivity are that it needs to increase fourfold over the next 40 years—that is, that the average of the past 15 years, which is 1.5 per cent. per annum, needs to increase to about 6 per cent. per annum if we are to get anywhere near meeting the 80 per cent. target? Will he speculate on whether it is plausible that a fourfold increase can be achieved?

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

That would be extremely demanding, but the implications of the Government's impact assessment both for aviation and shipping and for industries more generally is that we must find more effective ways of reducing costs and carbon utilisation than they themselves think are available or would result from the measures in the Bill.

Either that, or we must adopt the route proposed by Rob Marris and devote more effort to adaptation to climate change rather than mitigation, which would remove the burden—the almost impossible task—of bringing aviation and shipping into the scheme. It would also mean that, if global warming continues but turns out not to be predominantly the result of human activity, we would still be able to help the people in poor countries who would suffer from it, whereas we would not help them if we relied only on mitigation efforts.

The implications of the clauses before us are extremely serious. We are potentially asking our constituents to bear a burden of £10,000 for every household, should we increase it. We are potentially producing benefits that may be only half the costs that we are incurring. We have been using a method to assess future costs and benefits that has been surreptitiously abandoned by the Government, but they have told us nothing about it. These issues ought to be discussed more fully before the Bill becomes law, and it is a sad day when Parliament refuses to face up to these hard facts.

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Photo of Alan Simpson Alan Simpson Labour, Nottingham South

There is a real danger of the House misleading itself into debates which, although important, are not the debates that should be taking place on the amendments. There are issues to be addressed concerning the methodology of impact assessments, but at this stage the House is being asked to address the principle of the inclusion of the Government's assessment of carbon impacts in the way in which we set our carbon budgets. It is important to bring the debate back to that.

It is also important not to allow ourselves to conduct a caricature debate about the choices that we face. The choices are not between unilateralism or multilateralism, or between mitigation or adaptation. We will have to do both. When the ship is sinking, the last thing we want to hear is someone running round the decks saying, "No action until there is a global refit." If the ship is sinking, we want action taken on the threat that we face at that time.

What we need to recognise from the scientific reports, which have been coming to us in their own tsunamis, is that the climate and the planet are the part of the equation that is in the process of taking the most enormous unilateral action. We will have to address huge upheavals in the whole framework of how we consider societies and economies capable of working viably throughout the whole of this century.

I had hoped that John Hemming would be here for his customary intervention on this issue. The answer to the question about oil is that by the time we come out of the current global financial crisis, two things will be queuing up. The first will be the climate crises already in the pipeline. Secondly, by that time we will probably have passed the peak oil level anyway, and we will have to move to a post-oil economy if we want a viable economy of any sort.

The question before the House is whether it is right in principle to include aviation and shipping in how we assess carbon impact. The answer is that it has to be right. It would be absurd for the House to pretend that we can ignore the impact that aviation in particular, and shipping, have on our carbon emissions and the climate damage that we do. Mr. Gummer is right to say that there are domestic implications that need to feed back into our policy on airport expansion. It would be enormously sensible to draw airport expansion to a halt; that would give a hugely important signal to people in this country and internationally about the importance that we place on the environment being the centrepiece of any sustainable economy in the 21st century.

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Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I agree with the hon. Gentleman; it makes no logical sense for shipping and aviation to be excluded. They should be included. Amendment No. 72 says that consideration should be given to

"the emissions...that the Secretary of State expects to arise during the budget period."

However, the Minister seemed earlier to suggest—perhaps I misunderstood her—that the Government would refuse to produce any numbers on the emissions that they expected to arise from aviation and shipping.

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Photo of Alan Simpson Alan Simpson Labour, Nottingham South

I understood that the Minister said that she would produce the assessments for the period of the Parliament, but that there was no point in coming back with annual statements when those would be set out in the overall assessment. In so far as we can predict across the period of a whole Parliament, that is the sensible way for the issue to be incorporated.

I want the Liberal Democrats to think carefully about whether we need to divide on new clause 14. When I consider amendment No. 72, the Government's comments about its incorporation into the framework of the Bill and what the Bill says, I think that there is a real danger that we would be dividing about how many angels there are on the head of a pin. I find comfort not in clause 10, but in clause 9, which sets out a duty for the Secretary of State to

"publish a statement setting out whether and how the order", which has to be brought before Parliament,

"takes account of any representations made by the other national authorities."

In so far as there is a direct transfer from aviation and shipping to other sectors of the economy, I cannot conceive of a situation in which those sectors do not make their own representations about the distorting effects of their being asked to carry the carbon consequences of existing policies on aviation and shipping.

The cross-party agreement that seems to have emerged gives everything that the Liberal Democrat new clause seeks to deliver. There are issues on which it is important for the House to divide, but we owe ourselves the discipline of not pretending, for narrow advantage, that there is a real division among the different parties, and that a real gain can be made from a Division when it cannot. I hope that the Liberal Democrats will have another look at the amendments and the clauses that were initially in the Bill, because I doubt whether they could find any way in which new clause 14 would change anything.

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Photo of William McCrea William McCrea Shadow Spokesperson (Environment, Food and Rural Affairs) 5:45 pm, 28th October 2008

My hon. Friends and I accept that climate change is a serious environmental threat that requires action. We have to tackle carbon emissions, and it is therefore important that there is an appropriate Bill to do that. Although I have a very sceptical colleague sitting beside me, our party's policy is that the Bill is necessary. However, I do not accept that we can say with authority that man is the sole contributor to the situation. There are those who have over-egged the case and in many ways destroyed the argument, and that has made many people in the community cynical. There are also those who have underestimated the case, and they have not helped the debate either. I believe that global warming is a reality. Scientists have a certain view of the issue; in this House we need to take a balanced view.

I should like to draw to the Minister's attention some consequences of these proposals, particularly in the region of the United Kingdom that I come from, Northern Ireland. It is essential to deal with this issue internationally and even-handedly, in conjunction with our European Union partners. It is accepted in Northern Ireland that those who call themselves great Europeans have a wonderful way of taking European legislation and, if it suits them, driving a coach and horses through it and not carrying out what was intended. In the UK—although many see us as bad Europeans in many ways—the Government gold-plate legislation with great zeal and force it on the people.

There needs to be equity in the provisions made across Europe. There is a case for commercial justice in relation to aviation—in my constituency, for example. I have in my constituency an international airport, Belfast International, which is in direct competition with another international airport that is not many miles away, but happens to be in another EU country. Unlike many other EU countries, we have a land border. I ask the Minister to consider carefully the danger that if we take action unilaterally, rather than right across Europe, we could be on the verge of driving local industry over that border. That would penalise my constituents and my local airport. It is not the business of this United Kingdom Government to penalise their British citizens in Northern Ireland or to direct business to our competitors. There is a genuine fear that there will be discrimination against a region of the UK as regards the aviation industry. I do not believe that the Government intend that to be the outcome of their actions, but it could be, if they do not ensure that there is a balanced and equitable approach across Europe.

I know that an easy, throwaway statement can be made about transport alternatives and so on. In Northern Ireland, over many years, the trains were removed—most of Northern Ireland is not served by train—and the timing, frequency and availability of buses is not as in other regions of the United Kingdom. If we take people out of cars to deal with the issue, what will they use? A horse and trap? Bicycles? We have to deal with reality, rather than go back into history.

We have to have a balanced view. I appeal to the Minister concerning aviation and how it relates to the competition faced by the international airport in my constituency, lest we destroy a vital part of our industry, and direct industry away from a region of the United Kingdom. That would not be good for the future of the UK or its industrial prosperity.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

I rise to give a cautious welcome to the movement by the Government on this important issue, but we must recognise the scale of the journey. We have moved from a situation, in summer 2007, when those of us on the Joint Committee on the draft Bill were listening to a Government who were saying, "We are filing the inclusion of aviation in the 'too difficult' box. We don't need to do it because we aren't required to by our international agreements." The message from the Government in the Bill is now, "We'll tell you if we're going to include aviation and shipping in our international targets by the end of 2012, and if we do it, we'll tell you then how we're going to do it. On the way we'll get some advice from the Committee on Climate Change and publish some projections." Steve Webb was right: there is no absolute obligation on the Government to include aviation and shipping in the carbon budgets or the targets, and we should be quite clear about that.

It has been a modest journey, but a welcome one. That is why the Bill needs toughening, and I extend a cautious welcome to amendment No. 72, tabled by Mr. Morley, who, sadly, is no longer in his place. It adds value by requiring the Government and the Committee on Climate Change to take into account aviation and shipping in their public deliberations. I am concerned that the phrase "take into account" is too vague, because it can mean anything to any Government—but there has been an improvement.

We recognise that there are tremendous difficulties in calculation—we have to respect that, and we must not get too far ahead of ourselves in the international process. But this Climate Change Bill is very important. It is a landmark Bill, which sets an international lead as a framework Bill. That is its value. It is a new method of setting targets and monitoring progress against targets. The key innovation in the Bill is not the long-term targets, but the carbon budgets. The rolling carbon budgets will allow us to get a grip on the problem of cumulative carbon emissions—a point forcefully made by my hon. Friend Mr. Stuart. It is the cumulative carbon emissions that count, not the absolute carbon emissions at the distant date of 2050.

The carbon budgets are the key innovation, and we simply cannot undermine them by leaving completely to one side the fastest growing source of emissions, however difficult it is to calculate them. We should take the opportunity to place on record the fact that aviation emissions in the UK grew by 90 per cent. between 1990 and 2004. The Under-Secretary was unable to answer the question posed by my hon. Friend the Member for Beverley and Holderness about the proportion of future emissions in the carbon budget that the Government think will come from aviation, but she will be aware that there are various estimates from serious people such as the Tyndall Centre and WWF, and the range of projections is between 50 per cent. and 100 per cent. of our carbon budget in 2050. We have to address a serious engine of growth in carbon emissions, and we cannot afford the "out of sight, out of mind" message that we received from the Government 18 months ago.

As the Under-Secretary well knows, transport, and aviation in particular, is the most difficult in policy terms, partly because there is no obvious short-term technology solution. It does not take much for us to imagine that our children or grandchildren will be driving around in cars that are different from the ones that we drive. We can almost feel the technology—it is out there. But in aviation that is not the case. The best-case scenarios for aviation are for technology products leading to improvements of about 1.5 per cent. a year, which is not enough, given the demand. We are left in very difficult political territory when making policy—having to decide whether we want to manage demand through price mechanisms, taxes or the management of airport capacity.

The Government are placing all their bets on the European emissions trading scheme—the cap-and-trade scheme. That make me nervous, because in the Environmental Audit Committee we spend a lot of time looking at the emissions trading scheme. It works as a testing mechanism, but it has comprehensively failed to reduce emissions, because a cap-and-trade scheme is only as good as the cap, which is a function of political will. The great concern is whether there will be the political will in 2011, in the face of the mother of all lobbies from the aviation industry, to set a cap that bites. We know that such a cap will have significant implications for the price that consumers will pay for aviation. There will be significant consequences for the price of carbon credits in the system for other industries. This is an extremely difficult policy area.

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Photo of Barry Gardiner Barry Gardiner Labour, Brent North

Does the hon. Gentleman agree that it would be possible to allow an expansion of the aviation industry, and shipping as well, as long as that was taken into account in the carbon budget, as he rightly stressed, with accommodations and increased cuts in those areas? That would, critically, demand that it be possible to quantify exactly what the amount of the contribution was—the central point made by Mr. Stuart earlier.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

Absolutely—we need to know what we are dealing with. The hon. Gentleman has painted a gentle and attractive scenario, but it places a lot of faith in the emissions trading system, which is attractive in theory but has not worked in practice, because too much political risk is tied up in it.

I was making the point that we cannot afford an "out of sight, out of mind" attitude to aviation and shipping, because the policy challenge is too great. It requires the Government of the day to get a grip on it, and the harsh reality is that this Government have been extremely clumsy in the signals that they have sent through their policies on aviation. We had a clumsy increase in air passenger duty, which gave green taxes a bad name because it was closely associated with the concept of stealth taxes. We seem to be slow-marching towards the wrong decision on Heathrow. It was desperately disappointing that one of the first signals from a new Secretary of State in a new Department was simply to confirm that existing position on Heathrow. The Under-Secretary will be aware that it is hard to persuade those in this country, let alone any other, that we are serious about controlling emissions from aviation if we give the green light to the expansion of the fastest-growing source of emissions. The negative value of that decision far outweighs the relatively small value of the signals being sent in the Bill.

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Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

This is a question not only of aviation but of shipping. We are a major maritime nation, but little effort has been made here, or globally, into finding out what the emissions from shipping are, let alone into the investment and leadership that Ministers like to talk about that is needed to transform the efficiency of shipping in terms of emissions. That is a very challenging process in aviation, but probably a lot less so in shipping. However, precious little effort or political will has been applied to that area so far.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

I accept that point completely. It is coming through in all the evidence received by the Environmental Audit Committee at the moment. The value of the debates on the amendments is to ensure that such matters are included in the Bill, so that the Government cannot ignore the issue.

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

If it is about oil, the answer is no.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

Does the hon. Gentleman accept that shipping is one of the modes of transport that, historically, operated without any carbon emissions?

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Photo of Nick Hurd Nick Hurd Shadow Minister (Cabinet Office)

I congratulate the Government on moving from an unsustainable position on the inclusion of aviation and shipping in our consideration of budgets and targets—but I say to the Under-Secretary that the most powerful signal they could send would be to review and reverse the decision on Heathrow.

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Photo of Charles Walker Charles Walker Conservative, Broxbourne 6:00 pm, 28th October 2008

I am glad that we are debating the inclusion of aviation and shipping in the Bill; such matters need to be aired and discussed in Parliament. Setting a reduction target of 80 per cent. by 2050 is laudable and ambitious, but probably unachievable. In the next 42 years we will return to this place regularly to recalibrate the target—to reduce it to take into account global recession and the need to create jobs and wealth.

The danger of setting a target of 80 per cent. is that it will become just another missed target. My word, we have had a lot of missed targets in the past 10 years. There is a danger that our constituents will perceive politicians perpetrating another con trick by setting a target that there is little—if any—hope of achieving. Let us be honest with the electorate and say that in an ideal world, we would like a carbon-neutral economy by 2050—zero carbon emissions—but it simply will not happen, because we do not live in an ideal world. What we should say is that in the next 42 years we will rightly reduce our reliance on fossil fuels, but do it sensibly, and that we will progress towards reducing carbon emissions, but not set artificial targets, which we realise—probably secretly—that we have little chance of achieving. We need to be honest with the electorate, and I do not believe that we are doing that.

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Photo of Christopher Chope Christopher Chope Conservative, Christchurch

In a sense, it is a pity that today's business is not subject to any knives, because that means that we are unlikely to reach all the items on our agenda, and there are some important issues to debate later. I shall therefore keep my remarks brief.

The issue that we are discussing needs to be put into context. A paper that PricewaterhouseCoopers produced, entitled "The world in 2050", projects that the United Kingdom will produce only 1.2 per cent. of global emissions in 2050—without the increased targets in the Bill and without including emissions from shipping and aviation. We must take that into consideration. Even if we eliminated that 1.2 per cent., would it make any difference to the world? I do not think that it would—indeed, the burdens on our economy would be even more enormous than they are already likely to be, as my right hon. Friend Mr. Lilley explained so well.

My right hon. Friend was one of five who voted against Second Reading. When the history books are written in 2050, people will ask why only five people voted against Second Reading of a ludicrous measure. However, he failed to say that, as we export more of our manufacturing industry, we will depend all the more on international shipping and aviation for our imports. The new clauses therefore deal with matters that are highly relevant to our viability as a nation.

The TaxPayers Alliance produced an important research note, which shows that, if we achieved an 80 per cent. reduction in emissions, UK gross domestic product in 2050 would have to be 3.8 per cent. lower than it was in 1990. We know of the public dismay and, indeed, even the Prime Minister's concern, about the fact that we have now entered the first quarter of negative growth since 2007. What would 3.8 per cent. negative growth in 2050 compared with 1990 mean for the people of this country? It would be a disaster on a massive scale and unacceptable to the people. Not enough has been done to spell out the implications of the Bill.

As one examines the measure, one realises that it contains all sorts of loopholes. It would therefore be possible for successor Governments—or even the current Government—to adjust the membership of the committee that is meant to be pushing all of this so that it was then able to use the word "appropriate" to decide that the provisions passed in the Bill were wholly inappropriate as our economy went down the global league table.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I appreciate the hon. Gentleman's point that targets set for a time when most of us will not be in the House—and perhaps not on the planet—are all very well. However, even if the Government reduced or amended the targets, the Bill contains costs now that would hit our constituents hard in fuel, food and travel bills. We should be worrying about that.

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Photo of Christopher Chope Christopher Chope Conservative, Christchurch

I agree, but I shall concentrate on aviation, aerospace manufacturing and shipping because they are key industries in our country. One could argue that the City of London is the centre of global shipping activity. We have some of the world's largest hub airports, and also international shipping container terminals, albeit not so many as we had, which is a pity. Aviation is our heritage, but I have not heard a word to show that the promoters of the Bill and the supporters of the amendments support and laud British aviation and shipping.

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Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

Would the hon. Gentleman therefore argue that people such as Richard Branson should not try to reinvest all Virgin Atlantic's profits in exploring the possibilities of biofuels? If it were a bit more expensive to develop that new technology, would not some sort of statutory framework, which encouraged people, help those who wanted to do that?

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Photo of Christopher Chope Christopher Chope Conservative, Christchurch

I could not agree less. Richard Branson's success is based on being a buccaneer and an entrepreneur and not taking any notice of regulations and Governments. He occasionally may cosy up to the current Government, but when he realises what is involved, he gets away pretty quickly. The hon. Gentleman has deployed an argument that supports my case. Let us have free trade, the market and competition.

Global trade depends, above all, on aviation and shipping. It would not get far without them. I want global trade to grow, but it is not clear whether the Bill's promoters and the amendments' supporters share that objective. How do the Government propose to reduce emissions from aviation and shipping without damaging global trade? It is obviously common sense to say that fuel expenditure could be reduced for each unit of aviation and shipping activity, and that each unit could be more fuel efficient, but the market will achieve that objective—we do not need regulation to do it. I am worried that an agenda for imposing volume reductions in aviation and shipping underlies the Bill and the amendments. Imposing such volume reductions would be damaging to global trade. We are a global trading nation and it would therefore be highly damaging to the United Kingdom plc.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

Mr. Lilley kindly praised me in his interesting remarks. He may have misinterpreted my position slightly because I believe that the United Kingdom and the world need to opt for adaptation, about which I have been banging on in the House for more than two years, initially as a lone voice. However, we also need to lessen emissions because I have no doubt that human activity contributes significantly to adverse climate change. I have been seized of that notion for the past 35 years, since I studied it at university, and I am not a scientist—the science has been around for a long time. Of course, just because it has been around for a long time does not mean that it is right.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

The hon. Gentleman says that he has been seized of the idea for the past 35 years, but 35 years ago, some of the people who now talk about man-made global warming were talking about man-made global cooling and an ice age. If the hon. Gentleman was seized of the idea in the 1970s, he was well ahead of those who now advocate the notion of global warming.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

I am slightly saddened that the Minister of Environment in the Northern Ireland Assembly is apparently more than 35 years behind me. That troubles me, but I will go no further into that.

I welcome Government new clause 15 and amendment No. 72, which will mean that the Bill includes emissions from aviation and shipping. That is right, but I want to counterpoise that with the 80 per cent. cut by 2050. Mr. Gummer was absolutely right when he cited T. S. Eliot, rather than George Eliot, on being two steps ahead. If we as politicians are one step ahead of the electorate, that is leadership. If we are two steps ahead, that is eccentricity. If we regard the inclusion of aviation and shipping as one step in that paradigm, the second step is the 80 per cent. cut.

Trying to do both is unrealistic. Probably for the first and only time ever, I agreed with a great deal of what Mr. Walker said. Government amendment No. 1, to which we shall come later, talks about the 80 per cent. cut. We are talking about aviation and shipping, but one has to counterpoise them, because we cannot achieve both. We cannot include aviation and shipping and have an 80 per cent. cut by 2050. That will just not be possible.

The baseline year for the percentage calculations is 1990. My figures for the United Kingdom are from DEFRA's website and are for the period 1990 to 2005, a 15-year period, which is one quarter of the period 1990 to 2050. One would not expect to make much progress in the first couple of years, but then the technological benefits should kick in, albeit before the law of diminishing returns starts to apply as we approach 2050, thereby lessening savings in CO2 emissions. However, my figures, which are for the first 25 per cent. of that period, show that CO2 emissions, which constitute 84 per cent. of the basket of greenhouse gas emissions in DEFRA's calculations, went down by 6.4 per cent. Overall greenhouse gas emissions in the United Kingdom went down by 15.3 per cent. in that period.

For all our debate so far and for all the importance of cutting emissions and including aviation and shipping, as highlighted by new clause 15 and amendment No. 72, we are deluding ourselves and the electorate if we think that we as a society can include aviation and shipping, which we should, and have an 80 per cent. target for 2050.

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Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

I strongly agree with the hon. Gentleman's line of argument. He might also like to point out that almost all the 6 per cent. improvement that he mentioned was a result of gas privatisation and the consequent dash for gas, which was opposed by the Labour party throughout its passage in the House. Since that one-off change, which mainly happened before the end of the millennium, there has been virtually no improvement at all. In fact, that figure has gone into reverse in recent years.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

The figures that I received from the Library about nine to 12 months ago indicated that between 1999 and 2006, which were the latest figures that the Library could supply, per capita CO2 emissions in the United Kingdom increased—not by a lot, but they did increase. The trend was in the wrong direction. Therefore, to suggest that an 80 per cent. cut is feasible troubles me greatly.

The youngest Member of the House is Jo Swinson, who was here for the earlier part of the debate, but has had to slip out. She is 28. She will be 70 in 2050. It is unlikely that she will be an active Member of the House by then. [ Interruption. ] I hear chuntering, which will no doubt be recorded in Hansard as an interruption. I carefully used the adjective "unlikely". I did not say that she would not be a Member. That is a measure of the problem, when our youngest Member will be one of the oldest Members, if she is still here, in 2050. It is an abdication of responsibility and comes close to misleading people to say that we can include aviation and shipping and have an 80 per cent. cut when, on tables of life expectancy and life patterns, no one who is currently in the Chamber will be an active politician in 42 years' time.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I take my hon. Friend's point about the seriousness with which we must approach the targets. Clearly we have woefully missed them so far. We have a target of achieving a 20 per cent. cut in CO2 emissions by 2010, which we are nowhere near. What informs the targets for 2050, however, is surely the need to limit the overall concentration of CO2 in the atmosphere. Therefore, it is up to us to find the mechanisms to help us to achieve those targets. By saying that we cannot achieve them, we are already being faint hearted. We could have achieved the earlier targets that we set ourselves had the will been there. We must have the will to achieve the new targets.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office 6:15 pm, 28th October 2008

Willing the means does not mean that we will get there and it can be counter-productive. If I challenged my hon. Friend to run 100 m in 14 seconds, for example, she might train and try to do it. If I challenged her to run 100 m in 10.5 seconds, I suspect that she would not even bother to start training. That will be the position of the electorate, particularly when they see us, rightly and as I hope that we will, including aviation and shipping in the approach to cutting emissions, which we must do, as well as addressing adaptation. However, the thought that will strike many of my constituents is this: "We can't do both, so why should I bother doing anything?"

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Photo of John Gummer John Gummer Conservative, Suffolk Coastal

But surely the alternative is even worse. If the hon. Gentleman is suggesting that we should have targets that are not sufficiently good to solve the problem, nobody would take any part at all. The targets are not invented; they are necessary if we are to counter climate change. We owe it to our constituents to say, "That's what we've got to do and we've got to find a way of doing it," not to pretend that we can go for an easier target because it is better electorally.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

I humbly suggest to the right hon. Gentleman that he is completely wrong. There is no question of "solving the problem". The 80 per cent. target is proposed in order to limit climate change to an average of 2° C, not to keep at a certain level with no change. The figure of 2° C is somewhat arbitrary—indeed, anything that we do in that regard is arbitrary—but if we set ourselves up to fail, then fail we surely shall.

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Photo of Michael Weir Michael Weir Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

I will be relatively brief, as most of the issues have probably been covered by now. I welcome the amendments from the Government, who have moved a long way from where they started. I listened carefully to what the Minister said about the Government's amendments and why they were not going slightly further than we would wish.

I appreciate the difficulties with aviation and shipping. I heard what she said about the possibility of going for a sectoral system, along the lines of the EU emissions trading scheme. I can well see how that might be attractive for aviation, since we are talking about a relatively small number of international airlines flying into the UK. However, I am not sure that that would work so well for shipping, which is a very different industry and may, I suspect, need different treatment. As an aside, the point that John Hemming made about ships not always using oil is an interesting one. If I remember my history correctly, the development of warships in the early 20th century led the movement towards the use of oil to power shipping rather than steam or sails, but that is by the by.

It is important to include shipping, however, because apart from the quantity of emissions in general, there is a problem with shipping, particularly with older ships that use heavy oil, which is very polluting, thereby contributing greatly towards climate change. Aviation also contributes to climate change, but the other day I noticed a report saying that Boeing believed that it would be able to develop biofuels for aircraft within the next few years. Given the problems that have been experienced with biofuels in other areas, however, I am dubious about how much that will move matters forward.

Listening to the Minister and appreciating the difficulties, I come close to agreeing with her. However, when she talked about the need to reach international agreement, I heard the call of the long grass, because, to a large extent, that has been the problem until now.

Mr. Morley, who is no longer in his place, said that one reason that international shipping and aviation were not included in the Kyoto protocol was simply that international agreement on the issue could not be reached at that time. It seems unlikely that it will be any easier to reach an international agreement now than it was then. Indeed, given that the world is undoubtedly going into a recession—we have heard the views of some hon. Members on that today—some Governments are already trying to rein back from their green policies for fear of their impact on their national economies. The chance of reaching an international agreement is therefore receding rather than improving. The idea of being able to reach such an agreement before the Copenhagen conference is pie in the sky.

I definitely got the impression from the Minister that there had not been a great deal of progress on this matter, yet I note that the section of the Library research paper on calculating emissions states:

"Under the Kyoto Protocol, the United Kingdom has a legally binding obligation to reduce greenhouse gas emissions by 12.5 per cent. below 1990 levels by 2008-2012. Aviation is split into domestic and international for the purpose of calculating emission levels and for Kyoto. International carbon dioxide emissions from aviation do not come under the Kyoto agreement and so are not calculated in the UK's emission...totals for this purpose".

It goes on to say that the Department for Transport

"states that this is because 'there is no international agreement yet on ways of allocating such emissions'".

That point was made by the Minister. It goes on:

"Despite this, under Kyoto, signatory nations do report estimates of international aviation bunker fuel emissions as a 'memo item' in their national greenhouse gas inventories."

That point is also made by Friends of the Earth. So these emissions are calculated, and I believe that that gives the United Kingdom a basis for moving forward.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

It might be helpful if I clarify this point. There is a real difference between knowing what global emissions are—having a figure for global emissions that is calculated in a particular way for this reporting under Kyoto—and being able to account for a proportion of those emissions in any particular sovereign state. That is the issue.

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Photo of Michael Weir Michael Weir Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

But there is a basis for calculating the figures for sovereign states, as I understand it, and progress has been made. This is not a question of starting with a blank sheet.

Much has been made of the point, which was raised by the right hon. Member for Scunthorpe, that we must take into account these emissions. That is also a concern of mine. In Committee, I raised concerns about the get-out clauses, the ambiguities relating to the setting of the 2050 target and the carbon budget, and the fact that economic differences and various changes should be taken into account. In my view, there are too many get-out clauses, if we are serious about attempting to reach the carbon targets that we are setting. I would be tempted to support the amendment tabled by Steve Webb if he were to put it to a vote. It places a duty on the Secretary of State and removes some of the dubiety and some of the possibility of a get-out. That would be useful.

What is needed is leadership. We have to show the way in which these emissions are to be included in international agreements. It is all very well to talk about reaching such agreements, but I have never seen one that was quickly negotiated, and I suspect that this one will drag on as well. The Scottish Government have pledged to include aviation and shipping in their Climate Change Bill. That shows leadership, and this House should also show leadership by moving down that route.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

First, I have to say how pleased I am that, at least towards the end of the debate on this group of amendments, I heard some voices querying what is being done in this part of the Bill. That shows that there is another side to the argument. The tactic of those who have driven the Bill forward has been to give the impression that those who take a contrary view are cranks who do not care about the environment and are isolated. This is in spite of the fact that the most recent survey of climate scientists indicates that 46 per cent. of them disagree with the view that climate change is solely down to the activities of man. There is no scientific consensus on this, and there have been attempts to silence those who take a different view.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

Does the hon. Gentleman accept that human activity is a significant contributory factor to the change that many scientists say the climate has been undergoing in the past 50 years?

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I think I have already made it clear that 46 per cent. of climate scientists believe that climate change is not solely down to the activity of man. That means, of course, that there are scientists who believe that it is. There is an array of environmentalists, scientists and economists who take a contrary view, however, and who believe that the impact of man is not significant. I want to make it clear that I happen to share that view.

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Photo of David Chaytor David Chaytor Labour, Bury North

I am curious about the 46 per cent. of climate scientists. Will the hon. Gentleman tell the House why none of them is represented on the United Nations Intergovernmental Panel on Climate Change, which is the authoritative body? Is this a global conspiracy?

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

If one looks at the second IPCC report, one can see that Sir John Houghton suggested that he had excluded the views of some of those scientists because they did not fit in with the general view. There is a wide range of views among scientists who were engaged on the panel, and other views were deliberately excluded.

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Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

Will the hon. Gentleman give the House the source of his assertion that 46 per cent. of scientists disagree with the view that climate change is caused by human activity?

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I do not have the names of the two scientists involved, but they are associated with the Hamburg institute. The latest revision of the relevant survey took place in 2005, so this is a fairly up-to-date assertion. Indeed, let us look at some of the comments on the IPCC report. The Wall Street Journal talked about a "cover-up in the greenhouse" and pointed to some views having been suppressed.

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Photo of Andrew Tyrie Andrew Tyrie Conservative, Chichester

Professor von Storch, who is probably Germany's leading climate scientist, undertook that survey. Unfortunately, it has not been given a wide enough circulation. That same survey showed that one third of climate scientists did not believe that the lion's share of recently observed warming was anthropogenic in nature. Is the hon. Gentleman aware that a significant proportion of IPCC scientists have resigned in disgust because their views have not been reflected in the reports? They include some of the world's leading climate scientists, such as Professor Richard Lindzen, who has said that

"only the most senior scientists today can stand up against this alarmist gale".

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Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

On a point of order, Mr. Deputy Speaker. Will we be able to return to the question of aviation and shipping shortly?

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Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

These are matters that hon. Members can safely leave to the Chair.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education) 6:30 pm, 28th October 2008

I accept that I was probably led astray by the Members who intervened; they diverted me from the point that I was briefly trying to establish. I was arguing that a wide range of people are still sceptical about the main causes of climate change, which brings me to my point about the inclusion of aviation and shipping in the Bill.

If we have already gone down the road of including a wide range of our industries, our domestic fuel consumption and a number of climate-change regulations, the impact will be compounded when we include shipping and aviation. As others have pointed out, all this has been done without any indication of the cost to the relevant industries. I noted what Mr. Gummer said about industries paying for the cost of the carbon they use, but the truth of the matter is that it is not some anonymous "they", as in a shipping or airline company as, eventually, this comes down to costs that are passed on to consumers, travellers and all of us in respect of transporting our food to the shops where we purchase it. Those are real costs that our constituents will have to pay.

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Photo of Barry Gardiner Barry Gardiner Labour, Brent North

Is the hon. Gentleman aware of the research carried out by Lord Stern and others, showing that the costs of inaction are substantially higher than the costs of acting to mitigate climate change now?

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I note that, but as was pointed out earlier, the discount rates in Lord Stern's report grossly exaggerate the benefits of taking action and underestimate the cost of doing so. In artificially applying a 2 per cent. discount rate, he of course got the answer that he wanted. By any stretch of the imagination, costs amounting to 2 per cent. of gross domestic product will have a massive impact on our ability to finance public services. Again, those costs will be felt by individuals.

Some of the costs identified by Lord Stern—the impact on flooding, on food production and so forth—were predictions based on models with hundreds of variables. Even scientists have accepted that they do not understand all the connections between those variables. Barry Gardiner will know something about economic modelling, but climate change modelling is even more complicated and even less certain. We already know the impact of some economic models and we know how true the connections have been. The inclusion of aviation and shipping in the Bill has been accomplished without spelling out the costs. We will all be held responsible and we will all be held to account for that. What are the costs for our constituents? They have not been spelled out.

Secondly, as has emerged from a number of speeches, the degree of state and international planning involved in the whole exercise is considerable. Indeed, Gregory Barker pointed out that there are often unintended consequences in pursuing state and international planning. I heard the enthusiasm of some Conservative Members; they usually argue in favour of the working of the market and the market economy, yet some of them seemed to embrace a degree of state control and state planning that would make some of the left-wing Labour Members cheer and clap at the prospect. My second point, then, is that there will be a huge increase in Government regulation and Government interference in the economy, with all the consequences that will follow, yet we know how successful state planning has been in the past.

Thirdly, all this pain will not have an impact on CO2 emissions in any case, because most of them are to be taken up by the use of the emissions trading scheme, whereby permits to pollute and produce emissions can be bought. We have already heard about caps, but Europe is awash with permits at the moment. To get Russia involved in the Kyoto protocol, it was given permits based on 1990 levels—when, of course, CO2 emissions from huge, inefficient and dirty state industries were massive. Many of those industries have closed down; their emissions are no longer. However, the ETS mechanism will enable aviation and shipping industries to purchase, from Russia and other countries awash with emissions, certificates to produce CO2 emissions that are not currently being produced. Rather than a reduction, we could actually see an increase in CO2 emissions. The impact will only add to the costs of industry, which will then be borne by consumers and people who wish to travel.

Steve Webb, speaking for the Liberal Democrats, said that he thought this was more a nudge and a wink, and that nothing much would be done at the end of the day as the Government would find ways around meeting the targets. That might well be the best result. The problem is that in the interim we are going to face additional costs and additional disadvantages to our economy.

My hon. Friend Dr. McCrea—he totally disagrees with my views on this issue, incidentally, but I agree with him on this—pointed out that those costs will not be felt evenly. Some constituencies will suffer the costs much more heavily than others. If we are going to vote this Bill through, we should at least make people aware of the impact it is likely to have on them, their livelihoods and their economic activities.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

I thank my hon. Friend—well, he is a friend outside the Chamber—for giving way. In articulating the case that outcomes are uncertain, costs substantial, modelling complex and time scales very lengthy, is he not putting forward a counsel of despair, a prediction of inertia or a "do nothing" approach in the face of global problems? Surely that is not the impression that he is trying to give to the House, or is it?

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I shall not go into all that, as I have probably pushed your indulgence to the limit, Mr. Deputy Speaker, but there may be opportunities later in the debate to look at what can be done. If there is, as I accept, global warming, climate change and impacts stemming from them and if we are going to keep using our resources, let us look into what we can do now that will make an impact now—not some time in the future, when, as has already been pointed out, most of us will not even be in the House anyway!

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I note from the clock that we have spent three hours on the first group of amendments; we have five such groups and only five hours of debate. I propose not to respond to all the issues raised, but just to some of the most direct ones that were put to me.

Gregory Barker asked about the definition of international aviation and shipping. We have not yet defined it, but there is a provision in the Bill whereby we will be able to provide it in due course. We will, of course, consider all possibilities. The hon. Gentleman also effectively criticised us in saying that this is a framework Bill whereas we really need to know what is going to be done to put it all in place. I remind him that as soon as is reasonably practicable after we have set our carbon budgets, we shall have to publish a report saying exactly that: what we will have to do in order to meet those carbon budgets. That is in clause 13, as currently drafted.

Mr. Gummer raised many interesting points. He focused chiefly on shipping, which he suggested should be dealt with separately. The Bill does allow us to treat aviation and shipping separately, for precisely the reasons that he gave. Mr. Weir made a similar point.

The right hon. Member for Suffolk, Coastal questioned our commitment to working with the International Maritime Organisation. I referred earlier to the amount of energy we had put into working with the IMO, and how we had pushed forward the work being done. As I said then, we have made a voluntary contribution of £50,000 to the funding of a study of the important subject of greenhouse gas emissions from ships. I assure the right hon. Gentleman that we are on the case and will continue to press it, because we understand how important it is.

At times this evening, it seemed as though Members had never flown and did not intend ever to fly in the future. I must tell them that aviation currently accounts for 6 per cent. of our emissions, and that shipping accounts for just over 1 per cent. We must keep in proportion the contribution that each makes to our economy and the cost in terms of emissions at this time. We know that there will be huge increases in the future, but we must understand where we are now. Of course, it will take time for progress to be made.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I do not think I should. We are running badly behind time.

Mr. Lilley questioned the costs involved, as he has on previous occasions. The shadow Committee on Climate Change estimates the cost to the United Kingdom of meeting an 80 per cent. greenhouse gas reduction target to be between 1 and 2 per cent. of GDP in 2050. That was set out very clearly, and, as the right hon. Gentleman knows from the Stern report, most of us—although that may not include him—accept that the costs of inaction are much greater than the costs of action.

We broadly agree with the range that the Committee has identified. In overall terms, costs of between 1 and 2 per cent. of GDP in 2050—

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

Not at the moment. Let me tell the right hon. Gentleman that costs of between 1 and 2 per cent. of GDP in 2050 would mean that the United Kingdom economy would be 3.17 times larger in 2050, rather than 3.2 times larger. There is a cost; estimates exist. The fact is that we know that not acting would cost us dearly.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

The right hon. Gentleman has made his points many times before.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

He made them on Second Reading and he has made them again today, at some length.

Details of costs will be informed by the formal advice that the Government will receive from the committee for the first time in December. The right hon. Gentleman has only to wait until then.

Dr. McCrea made a number of points about the potential disadvantage that would be suffered in Northern Ireland. Let me assure him that the Secretary of State must consult the devolved Administrations on amending targets, setting budgets, and any proposals and policies for meeting budgets.

My hon. Friend Alan Simpson, my right hon. Friend Mr. Morley and my hon. Friend Mr. Chaytor produced strong and cogent arguments for why the House should not divide on the Liberal Democrat amendments. It is clear to us that, as has been acknowledged by Conservative Members in particular, we have moved considerably on the Bill. We now have a procedure that will enable us to receive advice that takes account of international shipping and aviation.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

The hon. Gentleman may say that, but we have included in this flagship Bill provision for an independent Committee on Climate Change, which already exists in shadow form. It is regarded as a committee of great stature, which will continue to be the case.

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Photo of Joan Ruddock Joan Ruddock Parliamentary Under-Secretary (Energy and Climate Change)

I think that when we consider the Bill's passage—how we are moving towards, we hope, an Act of Parliament—the hon. Gentleman will understand that the world will be watching us, and the House will be watching us. There is total transparency in the way we intend to conduct ourselves, and I assure the hon. Gentleman that we will take the greatest note of, and have the greatest respect for, the advice of the Committee on Climate Change. As I have said, transparency is guaranteed.

We wish to accept amendment No. 72, which adds to our new clause 5.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

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