What steps his Department is taking to tackle climate change through trade policy.
The UK has long supported the promotion of our values globally, including ambitious global action to tackle climate change, and this will continue. We are exploring all options in the design of future trade policy, including how to tackle climate change. We are working to realise the potential for low-carbon exports from the UK and supporting UK jobs.
While the Department for International Development has a clear strategy for promoting low-carbon development in low-income countries, fossil fuels made up a shocking 99.4% of UK Export Finance’s energy support to low and middle-income countries in the last financial year. Does the Secretary of State agree with the International Development Committee’s finding that his Department’s spending is
“damaging the coherence of the Government’s approach to combating climate change”, and what steps has he taken to ensure a more joined-up approach among his Cabinet colleagues?
The UK has an enviable record of success in decarbonisation. A target will be agreed of 80% of reduction by 2050; renewable capacity is up four times since 2010; and there will be £10 billion in annual support by 2021. Expertise is being built in offshore, smart energy, sustainable construction, precision agriculture, green finance, electric vehicles and so on. As I travel around the world, I meet many representatives from developing countries who are interested in all these technologies. Our trade policy is focused absolutely on ensuring that our exporters are set up to spread this green technology around the world. UKEF will play its part in funding this global revolution. In the short term, I have no doubt that some fossil fuel investments will be made, but as we progress that will transform into low-carbon development.
The Secretary of State has previously stated that
“poverty reduction objectives are deemed to outweigh the impact on climate change.”
However, his colleague the Secretary of State for International Development has previously stated that unless we tackle climate change with the urgency it requires “100 million more people” will be thrown “into poverty”. Can the Minister confirm who is correct and what the Government position actually is?
Certainly from the Department for International Trade point of view, our job is to promote international trade. We are out there making sure that the deals we do internationally suit those countries with which we do them. We are bringing in the unilateral preferences that are transitioning across from a European perspective. We are confident that the backing we can give developing countries is suitable for their circumstances, and allows them to participate in world trade and so bring their people out of poverty.
I think we are spending £1.5 billion in the current period on climate change for less-developed nations, and the same amount—£1.5 billion—on promoting economic development and trade, so there is some synergy for us to work with, is there not?
There absolutely is. As we grow our capacity in this country, we have more capability of exporting and, indeed, advising others on climate change. Yes, we can work in countries on poverty reduction at the same time as promoting energy sustainability.
The recent chapters in CETA— the EU-Canada comprehensive economic and trade agreement—and the EU agreements with Japan, Singapore and Vietnam include quite clear climate change commitments. We are of course signatories to the Paris agreement. I recognise that the President of the United States has said it is going to withdraw from that; it has currently not done so. Where it is possible to have chapters in our free trade agreements on climate change and on our climate change policies, we will do so; where not, we have to understand that we can open doors to dialogue through those trade deals. Indeed, we can then create flows of exports on untariffed sales at more favourable rates into those economies and help the transition, even in more developed countries where it is difficult to negotiate such chapters in our FTAs.
May I congratulate the Government on their policies and on what they are doing on the way forward? We should set an example to the rest of the world when it comes to global policies on how we trade. The recent election results have proven that there is a wish among all parties for that to happen, so we need to set an example. What has been done with the regional Administrations to ensure that Scotland, Northern Ireland, Wales and England work together to set that example?
As the hon. Gentleman knows well, the UK has extensive funding for climate change mitigation and for sustainability. I would simply say to him that, as and when we manage to reinstitute the Stormont Assembly in Northern Ireland, we can have discussions between the DIT and other parts of the UK Government to ensure that those issues are taken forward.
The Secretary of State’s damascene conversion to addressing the climate emergency is welcome, but, as we have heard, some of those with whom he wishes to conclude trade agreements are less enlightened. Given what he has just said, will the Minister commit to introducing climate clauses to all future trade agreements? Will he publish specific details of the support his Department offers the fossil fuel sector through export finance, and say how that support conforms with the Equator Principles?
As I have said, we will consider each and every FTA on its own merits, and in certain circumstances we may find partners who are not prepared to put those sorts of clauses in an FTA. On balance, however, we will look at the advantage to exporters of low-carbon products, and ensure that as and when we proceed with those agreements—if we decide to do so—we facilitate the export of low-carbon products so that economies represented by Governments who do not wish to include an FTA clause on the environment can benefit from the transition that lower input costs produce. I have already made clear the Government’s position on publishing the output of UKEF. There will be an element of carbon-based energy generation in UKEF’s mix in the short term. The UK has huge and growing expertise that will no doubt come to the forefront of UKEF financing in due course, as that transition happens.