Energy Bill

Part of the debate – in the House of Lords at 9:45 pm on 22nd October 2008.

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Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 9:45 pm, 22nd October 2008

My Lords, that is certainly so, but the noble Baroness will appreciate that we are rather more secure in our sources of supply of coal to this country than we are in other sources, particularly of imported gas. We have had difficulties in recent years because effectively we are at the end of the pipeline for Russian supplies and we all remember the enormous tensions that built up two years ago when market imperfections caused the price of gas in the United Kingdom to rise very high indeed. All noble Lords will be greatly concerned about energy costs at the present time and particularly how they impact on the less well-off in our community. These are real issues, to which there is no single easy solution. We cannot jeopardise the electricity generation resources that we have.

Of course I agree with the noble Lord, Lord Teverson, about the necessity for the cap, but he wants to put the cap on greenhouse gases on particular productive units and I want a cap that applies at the level of the economy. The Government maintain that this is the most marked and effective way in which we will be able to apply costs to productive techniques that have a high carbon content. It is the basis of the Government's approach to this issue.

We appreciate that this country cannot tackle on its own the issue of controlling carbon dioxide and getting effective reductions; it clearly needs international action. That is why we invest such a great deal of our commitment in the EU Emissions Trading Scheme. The noble Lord has to face up to the fact that, with his proposal, he may merely control certain kinds of electricity generation in this country, with the option of the use of coal—and the carbon that that represents—being taken up by other countries, with no net advantage, therefore, either to Europe as a whole or the world in its entirety; it would merely transfer the potential of power stations.

Of course we are committed to meeting greenhouse gas reduction targets. The Climate Change Bill, which the House debated earlier this year, means that the United Kingdom will be the first country in the world to set a framework for achieving carbon reductions through legally binding targets and carbon budgets. The noble Lord, Lord Teverson, and the noble Baroness, Lady Young, with her particular knowledge of the matter, referred to the large combustion plant directive. The directive does not include CO2—it concentrates on sulphur dioxide, nitrogen oxide and other noxious substances—because the European scheme for CO2 emissions provides a framework for dealing with that dimension. It sets Europe-wide greenhouse gas emissions targets but allows companies to identify the most cost-effective means of delivering them.