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Paris Agreement on Climate Change

Part of the debate – in the House of Commons at 3:42 pm on 7th September 2016.

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Photo of James Heappey James Heappey Conservative, Wells 3:42 pm, 7th September 2016

Like the Minister, I was surprised to see the topic for today’s debate given the fact that, as far as I can tell, there is consensus in the House on tackling climate change and ratifying the Paris agreement. I attend many meetings on these subjects, and I know just how heartfelt the concern is for this cause among Opposition and Government Members. To present a picture of disunity is rather unhelpful when there is real consensus of opinion in this place that we must all tackle this real challenge together.

The Climate Change Act 2008 achieved consensus. In Paris, our then Secretary of State for Energy and Climate Change led the negotiations with great style and was applauded for doing so by Members on both sides of the House. The fifth carbon budget was recommended. There had been concern that it would not be adopted, but it was—in full. We can therefore say that the intention of the Government and of this House is that we should continue to decarbonise at best speed.

It will not, however, be as straightforward in the UK, as a member of the EU, to ratify the treaty as it was for the US, China and elsewhere to do so. I have no doubt that Her Majesty’s Government remain as committed to it as ever, and that they will come up with a timeline that works legislatively and within the reality of the context of what the rest of the EU is doing. We should not seek to create any concern when none really exists. The Government’s green credentials are absolutely sound—£52 billion has been invested in renewable energy since 2010, and the deployment of renewables has accelerated under this Government—but we have to balance the energy trilemma. Price, security and decarbonisation are sometimes at odds with one another, so a bit of sense is required in how we proceed. The Government are clear that we will meet our decarbonisation targets, but we will do so without compromising on the other two elements.

I very much agree with Callum McCaig, who quite rightly said that the same people speak in these debates every time. That is a real shame. These issues range far more widely than the interests of those who are interested simply in energy policy and the environment. I am going to have a go at suggesting a line of argument that might attract a wider audience: whatever someone’s view on anthropogenic climate change, there is no reason not to support many of the opportunities that come from our drive to decarbonise.

I will give just three examples, about heat. I visited a district heating system out in east London recently. On the visit, I went into a one-bedroom flat to meet a chap who was on benefits and right on the poverty line, suffering from fuel poverty. Once the district heating system had been installed, he had put £30 on to his new meter in his flat. He had done so in October; when I went to see him at the beginning of March, there was still £13 left on the meter. He had heated his flat for an entire winter for seventeen quid. That is just extraordinary. It is socially just to adopt such policies; it does not just help tackle climate change.

A hospital in London has installed a combined heat and power station to cut down its energy bills by synergising heat and electricity. It realised that the surplus of heat was an opportunity to sell heat to a district heating system outside. It is doing so at a low cost—again, that is socially just—and the proceeds from the heating network have allowed it to build a new cancer centre. Again, that is extraordinary.

I know of a hotel chain that is installing CHPs. It is making huge savings on its energy costs while still absolutely meeting its customers’ needs for roasting hot water at whatever time of day. It is achieving that while saving money and decarbonising.

We must continue the drive towards greater energy efficiency—too much of our heat and electricity is being wasted—and some pretty nifty technologies are available to achieve that. I bring up heat and the need for greater efficiency together to make the point that the marginal financial gains experienced by businesses and homeowners will encourage people to take on these technologies, but we all know that the cumulative effect of their uptake will be a huge reduction in our production of carbon and therefore a huge increase in our ability to meet our targets.

I hope to speak in tomorrow’s Backbench Business debate on the fourth industrial revolution; I will speak at more length then on the incredible synergies I see being achieved when our physical energy infrastructure collides with the really exciting technological innovations that are coming through so rapidly. By seizing those opportunities we are not just seeking to accelerate our decarbonisation; we are developing a world-beating industrial strategy, with green growth and the pursuit of a zero marginal cost of energy right at its heart.

Arresting climate change and splashing out on subsidy are not synonymous. As far as I can see, the renewables sector in this country is succeeding. Offshore wind deployments around Europe are bringing down prices very rapidly. Despite the reduction in subsidy, the solar industry continues to achieve a good rate of deployment. Hydroelectric is coming. Industry is working hard to achieve tidal. A fantastic company in my constituency has employed some of the brightest oceanographers and hydrologists from around the world to look at what we can do with wave power. There are many more technologies beside. Now that we have recalibrated the planning process to empower communities to resist if it is not their will to have it on their doorstep, even onshore wind production is claiming to be able to operate subsidy free.

Sound climate change policy is not about the levels of subsidy. Subsidy can become a crutch if we are not careful. The Government have used subsidy as a lever to grow the renewables industries to the point at which they can go it alone. The direction of travel is clear. This Government are absolutely serious about decarbonisation and meeting our climate change targets.

There is one area where the Government’s policy is not quite so clear. As a Somerset MP, I daren’t not talk about the new nuclear programme. I understand my right hon. Friend the Prime Minister’s wish to scrutinise the Hinkley deal in more detail, but, as far as I can see, new nuclear is the only low-carbon generation technology that is ready to guarantee now that it will meet our baseload needs in the middle of the next decade. We cannot wish away the reality that our existing nuclear fleet will decommission in the next decade or so.

I seek to champion decentralised energy, a digitised smart energy system and the incredible economic and industrial opportunities that come with it, but renewables plus storage is not ready to commit to being our baseload in the timelines we need. Gas might seem cheap now, but gas prices can change. The debate about the Hinkley price compared with the current wholesale energy price is, in my view, a non-starter. We cannot build anything at the current wholesale price of energy. We must judge Hinkley and the wider new nuclear programme not only on the current strike price or the current wholesale price of energy; we must consider the costs of insufficient capacity in a decade’s time.

We must keep prices as low as possible and decarbonise as quickly possible, and we absolutely must keep the lights on—full stop. I am sure that this will be the last set of large power stations we will ever build. I am absolutely sold on all the incredible stuff that is happening to make renewables work, including storage and demand-side management. I believe that our future is not in big power stations, but we have to take a decision now for what will power the United Kingdom in a decade’s time. As exciting as those technologies are, none is ready to look us in the eye and say, “In 10 years’ time, we will keep your lights on.” The new nuclear programme is. I hope the Government agree and put Hinkley forward at the first possible opportunity.