Climate Change

Part of the debate – in the House of Lords at 3:50 pm on 10 November 2005.

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Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Farming, Food and Sustainable Energy) 3:50, 10 November 2005

My Lords, this has been an outstanding debate. At the risk of being accused of getting carried away, I think that it has seen this House at its very best. Although it is invidious to do so, I draw attention to two speeches in particular.

No one could close this debate without thanking the noble Lord, Lord May of Oxford, not just for choosing this subject but for his outstanding opening speech, which was an absolute model for all those interested in this subject, whether they know a great deal about it or, like me, do not know enough about it. I thank him very much for that. The other speech is the maiden speech of the noble Lord, Lord Turner. His reputation goes before him and he arrives in this House with many of us knowing a lot about his past career. All that he said today lived up to everything that we know about him. His knowledge on this subject seems great and genuine. We very much look forward to hearing what he has to say on this topic, and on many others in which he has a passing interest, in the near future.

Let me make it crystal clear. The Government share the view of noble Lords that climate change is an issue of unparalleled importance for the world environment and for future generations who will inhabit this planet. That is why the Prime Minister has given a world lead on the issue, especially this year from our G8 and EU presidencies. Our ambitious domestic programme to tackle climate change will continue to be accompanied by intensive international co-operation. Ambitious domestic action is the key, we think, to persuading others to work alongside us. Although the UK is on course to meet and, we believe, to exceed its Kyoto target, it is one of the few industrial countries to do so. We fully accept the strictures that tell us that we need to do more.

The Government have set highly ambitious domestic carbon dioxide reduction targets of 20 per cent by 2010 and 60 per cent by 2050 below 1990 levels. Those go much further than our Kyoto commitments. No other nation has attempted that level of action before, so we are in new territory—very challenging territory—and we must learn as we go. We do not for a moment accept that we are complacent about the issue. Our record shows that we take the issue seriously and that we accept that there is a real need for urgency.

We have come a long way in understanding the science of climate change. Indeed, the UK's Hadley Centre is a world leader in that respect. No one here has disputed the fact that a serious problem is mainly, chiefly and overwhelmingly the result of human activity. There is less global consensus on the economics of action to combat and adapt to climate change. Therefore, in order to encourage others to take action and to plan for our future, we need a full debate on the economics. The Government have given serious consideration to the report of the House of Lords Economic Affairs Committee on that issue. I thank the members of that committee, and, especially, its chairman, the noble Lord, Lord Wakeham. I can assure noble Lords, including him, that a thorough government response—I think that he would rather that it was thorough than straightaway—to the report will be released shortly. By shortly, I mean shortly.

Noble Lords will be aware that the Treasury and the Cabinet Office, led by Sir Nick Stern, will conduct an in-depth analysis of the economics of climate change and are to report back in autumn next year. The review will look at the medium- to long-term economic implications of climate change, the costs of action and inaction, the impact of climate change on development, and different approaches to tackle the issue—always, of course, recognising that traditional measures may be necessary.

In the UK we have shown that taking action on climate change does not necessarily lead to slowed economic growth. Noble Lords, including the noble Lord, Lord Turner, touched on that. Between 1990 and 2002, emissions fell by 13 per cent whereas the economy grew by 36 per cent. That is a clear message to those who believe that taking action on climate change will be economically prohibitive. Modelling work commissioned by the Government in preparing the energy White Paper of 2003 suggests that the cost to GDP in 2050 implied by a 60 per cent reduction in carbon dioxide emissions might be around 0.5 per cent to 2 per cent of the predicted baseline in 2050—in other words, slowing economic growth by just six months over 50 years. Those estimates remain consistent with expectations from international literature that shows that the economy-wide impact of significant cuts in greenhouse gas emissions need not be prohibitive, provided that appropriate policies are put in place and a sufficiently wide range of low-carbon technologies is made available.

We are already seeing the benefits of the policies and measures of the climate change programme, launched five years ago. The Treasury expects the climate change levy to deliver more than 3.5 million tonnes of carbon by 2010. Climate change agreements have also been successful. The UK emissions trading scheme, the first national emissions trading scheme to be established, also continues to be a success. This year, participants overachieved their emissions reduction targets by approximately 200,000 tonnes of carbon dioxide equivalent. Without those measures we would be seriously adrift from our Kyoto commitments. It would be wrong to assume that the progress that we have made is purely from the "dash for gas".

Gains in energy efficiency are expected by 2010 to deliver roughly half the carbon savings envisaged in the 2000 UK climate change programme. UK delivery of increased energy efficiency is very encouraging to date. The first phase of our energy-efficiency commitment—an obligation on energy suppliers to promote improvements in household energy efficiency—has seen around 10 million British households, of which 6 million are on low incomes, benefit from energy-saving measures that also translate into lower carbon emissions. We are continuing to evaluate those policies and to make adjustments as are necessary and sensible. We have responded to the rise in emissions in 2003 and 2004 by conducting a comprehensive review of the UK climate change programme. The review concentrates on emissions from the principal sectors included in the original programme: business, households, energy supply, agriculture, forestry, land use, the public sector and transport. We expect to publish the revised programme around the turn of the year. That will in turn enable us to evaluate possible new policy options but take full account of the outcome of a number of very important pieces of work that will contribute to the review. They include the outcomes of the joint Defra-Treasury energy-efficiency innovation review, the biomass task force that reported a short time ago and the review of the renewables obligation.

Ahead of the climate change programme review, I am delighted to confirm what the noble Baroness told us: the Secretary of State for Transport, Alistair Darling, today announced a renewable transport fuels obligation. Many people have been waiting for that news, which I believe will be excellently received throughout the country. The obligation will require that 5 per cent of all fuel sold in UK forecourts will come from renewable sources by 2010. The prediction is that around 1 million tonnes of carbon dioxide will be saved in 2010—the equivalent of taking 1 million cars off the road.

In addition to the major stimulation to the biofuels industry which we believe will result from the obligation, I remind noble Lords that ground support to growers of energy crops of £29 million has been provided under Defra's energy crop scheme. We are keen to encourage a competitive UK biofuel industry. We are confident that there is scope for both home-grown biofuels and for imports.

As noble Lords appreciate, tackling climate change is not just the responsibility of big business and the Government: it requires the participation of us all. The noble Baroness, Lady Platt of Writtle, was right. We have to raise the level of citizen engagement in energy efficiency and climate change in the UK. But I concede that we have a long way to go and must put a lot of effort into it. That is very much the focus for the Government's climate change communications initiative, published earlier this year, under which at least £12 million is available for the next three years. We will launch the first elements of the strategy later this year to build on and complement the substantial amount of existing awareness and will look to determine whether there is further scope. Of all the matters that have been raised today, public awareness is one of the most important and we must take that forward.

We are pressing for the inclusion of aviation in the EU Emissions Trading Scheme from 2008 or as soon as possible thereafter. Many noble Lords raised the aviation issue. The European Commission has adopted a communication aiming to bring forward legislation in 2006 to include aviation in the EU ETS. We are using our presidency of the EU to debate the Commission's proposals and hope to agree a way forward.

A key to the successes of this year has been the Prime Minister's desire to use our presidencies of the G8 and EU to add fresh impetus to the international climate change agenda. We believe that there is a growing consensus on the need for action resulting from a series of meetings held this year, which was highlighted by the joint statement on climate change issued by the science academies of all the G8 countries, along with China, India and Brazil. The statement reflects a growing global scientific consensus that climate change is happening and that it is in large part caused by human activity. The statement also urges governments,

"to identify cost-effective steps that can be taken now to contribute to substantial and long-term reductions in net global greenhouse gas emissions", thus raising the activity of our key delivery bodies, including the Carbon Trust, the Energy Saving Trust, the Environment Agency and the UK Climate Impacts Programme. We fund the Carbon Trust and Energy Saving Trust to the tune of some £87 million a year.

As regards the wider community, the European Union Emissions Trading Scheme—a market mechanism for encouraging industry and electricity generators to reduce carbon dioxide emissions—represents one of the most cost-effective ways of achieving emissions reductions. EU member states are looking forward to phase 2 of the scheme and for ways in which we can build on the successes and learn from our experiences of phase 1. Addressing any gaps, anomalies or competitive distortions that may have arisen is a priority for the UK. I thank the noble Lord, Lord May of Oxford, for his work in helping to secure the joint statement.

At their meeting in Gleneagles, G8 leaders heeded the scientific evidence and agreed to a statement on the importance of climate change. Those leaders, including President Bush, acknowledged that human activity does in large part contribute to climate change and agreed to,

"act with resolve and urgency now".

The statement also acknowledged that greenhouse gas emissions need to slow, peak and reverse, and that we need to make "substantial cuts" in emissions. That represents the strongest statement on climate change yet from the US Administration.

G8 leaders also agreed to a plan of action to combat climate change. The plan builds on existing work in order to increase the speed with which we reduce greenhouse gas emissions. The package includes improvements to energy efficiency in appliances and buildings, cleaner vehicles, aviation, work on developing cleaner fuels, renewable energy and promoting research and development, and the financing of future projects. To assist with this, the G8 has engaged with the International Energy Agency and has asked it to undertake further work on action to reduce emissions and improve funding for clean technologies in developing countries.

As the House knows, the Heads of Government also launched the Dialogue on Climate Change, Clean Energy and Sustainable Development, to report to the G8 Summit in Japan in 2008. The dialogue is intended to be complementary to the UNFCCC process by providing an informal structure for discussion on future energy needs. Developed and developing countries can discuss their energy needs and explore areas for co-operation without the need to deliver agreement on exactly the same course of action for all the countries.

At the first meeting of the Gleneagles Dialogue, held in London on 1 November—it has been referred to during the debate—the G8 countries and countries with significant energy needs, including China, India, Brazil, South Africa and Mexico, agreed to work towards new paradigms for international co-operation on climate change issues. Good outcomes were achieved on: the deployment of clean technologies; incentives for large-scale private sector investment in low-carbon technologies, working with the World Bank; a new model for co-operation between developing and developed countries—a point that the noble Lord, Lord Oxburgh, concentrated on in his remarks—and reinforcing action on adapting to climate change.

Climate change has also been a priority of the Government's presidency of the EU. We have pursued an ambitious agenda, focusing on continuing mitigation efforts in the short term through our commitment to the Kyoto Protocol, as well as considering longer-term emissions reductions pathways. There has been much discussion in the debate about China, India and other countries in the category. In view of their rapidly growing economies, it is crucial that China and India fully engage in international efforts to combat rising greenhouse emissions. Climate change therefore featured heavily at our recent EU summits with China and India. The UK will be investing £3.5 million in the development of a near-zero emissions coal demonstration plant in China using carbon capture and storage as part of the EU-China Climate Change Declaration agreed in September. I hope that noble Lords will see this as an important first step in determining which way China goes. I say that because we have heard both sides of the argument during the debate.

Earlier this week my right honourable friend Margaret Beckett participated in a major international conference on renewable energy in Beijing. The conference recognised the role that renewable energy plays not only in addressing environmental concerns, but in helping security of supply and the provision of decentralised energy systems that are more resilient to price fluctuations. China took the opportunity to announce its aim to increase its share of energy derived from renewable sources to 20 per cent by 2020.

There are now 14 developing countries with renewables targets and we will continue to work with developing countries through the Renewable Energy and Energy Efficiency Partnership, which aims to accelerate the deployment of renewable energy. Following on from the £2.5 million provided this year, the UK will be providing £6 million over the next two years.

Possibly the most important objective for our EU presidency is to secure agreement to the start of international discussions on a long-term framework to tackle global emissions. Launching discussions among all countries on future international action beyond the first commitment of the Kyoto Protocol will be a key item for discussion at the UN climate conference in Montreal, where the UK will lead the negotiations on behalf of the EU.

I want to counter the insinuation that the Prime Minister is somehow backing down on his commitment to the Kyoto Protocol. When, with great skill, the noble Lord, Lord Lawson, praised the Prime Minister—I argue that the noble Lord's point of view had a false basis—I was reminded that we have heard that extremists on both sides of the argument sometimes seem to have a common view. But only those who want the Prime Minister to back down on his commitment and those on the far edge of the environmentalist movement would see what the Prime Minister did as changing his stance. The Prime Minister stated on 1 November that the Kyoto Protocol and its associated mechanisms coming into force is absolutely essential. Someone referred to "wobble". There was no wobble.

However, we have to face reality. The US will not ratify Kyoto and it does not set targets for developing countries. For the long term, we need a global agreement. That is why we are driving forward a complementary approach to the formal target set in the negotiations of the UNFCCC, under the G8; it is not an alternative. The initiatives we have taken forward this year are all aimed at furthering the understanding of climate change, building consensus on the way forward and practical measures to reduce emissions. We hope that these will come together to help agreement on the long-term solution and I am not sure that I heard any arguments today to suggest that what we were doing was wrong.

The Government have put climate change at the heart of their domestic and international agenda and the results this year speak for themselves. The increased public interest and publicity for this topic is everywhere. We recognise that we need to do much more and we are working on that. We will continue to work with partners at home and overseas to tackle this problem, which requires an ambitious international response. Above all, we want to engage with all sectors of our communities—whether public or private, NGOs or business, central or local government—in working together to address what the Government believe may well be the most serious environmental threat we will face this century.