Energy: Climate Change — Motion to Take Note (Continued)

Part of the debate – in the House of Lords at 6:09 pm on 2nd November 2010.

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Photo of Lord Giddens Lord Giddens Labour 6:09 pm, 2nd November 2010

My Lords, I thank the noble Lord, Lord Marland, for initiating the debate and for the commendable brevity of his introduction-it was short and to the point. I also commend him for his commitment to his work in his post as Minister.

I enjoyed the intervention of the noble Lord, Lord Lawson, who is not in his place. I would go so far as to call it a tour de force-if one can have a tour de force where most of what one says, if he will forgive me, is wrong or questionable. The noble Lord seems to question the authenticity of the science. He thinks that climate change has levelled off and most of his subsequent points and claims stem from that view. However, he is definitively mistaken. The most thoroughgoing climate and weather monitoring organisation in the world, in some part based on space and satellite technology-the National Oceanic and Atmospheric Administration of the United States-has shown that 2010 will be the warmest year in sea and land temperatures since reliable records began. It has analysed data from scientists in 40 different countries, using 10 different indices. All show that climate change is happening and is almost certainly caused by human intervention. It is important to recognise that these studies are based not on modelling but on direct observations.

The risks posed by climate change are all too real and, unlike most other global risks, are irreversible. That is an important point because, once the greenhouse gas emissions are in the air, we know of no way of getting them out again. Because of its implacable nature, this problem is quite different from most of the other global problems that we face.

The coalition is absolutely right to seek to institute measures to reduce our carbon emissions and to call on other industrial countries to lead the way in doing the same. The noble Lord, Lord Lawson, pointed out that on a federal level the United States has been unable to supply the leadership that the world needs. Fortunately, an enormous amount is going on below federal level in the United States, at a regional level, in cities and in individual states-for example, Colorado has an entirely commendable zero carbon plan that is both realistic and interesting.

Climate change should be seen as much as an economic and security issue as an environmental one. Innovation is going to be at least as important as regulation, and countries and businesses that are in the vanguard will prosper in economic competition. This is one of the points on which I disagree fundamentally with the noble Lord, Lord Lawson, as he knows. There is an entire new frontier of economic competition in which the UK must attempt to be at the forefront. The transformations that will occur in the energy industry-not only in renewables but in other areas-will be far reaching and we must not be left behind.

At the moment, this country is absolutely not in the vanguard of these innovations. Even though I sit on the Labour Benches, I have to say that Labour achieved very little in practical change. Of course, the party set up a framework for the future-the Climate Change Act and the Energy Act are important-but in terms of practical achievement there is not a great deal. The UK is currently next to bottom in the proportion of energy mix delivered by renewables.

I applaud the Minister for his determination to change the situation and the coalition for adopting a non-partisan policy. I hope that my party will do the same. It is highly important that climate change should be a non-partisan issue. In the United States, policy has been paralysed by an almost complete politicisation of the issue. Noble Lords will perhaps have seen reported in the Guardian yesterday that only approximately 14 per cent of Republicans accept that climate change is real and caused by human activity, compared to almost 60 per cent of Democrats. We must avoid that political polarisation here. I am pleased that so far we have done so and that the coalition has contributed actively to that. Unlike the noble Lord, Lord Lawson, I support the overall themes and thrust of the coalition's policy.

However, there are plenty of problems around and I ask the Minister to comment on a few of them. First, it is distressing-to me anyway-that the budgets of the DECC and Defra have been slashed so radically. How is that compatible with dealing with what, in the introduction to the Government's report on climate change, is said to be the most fundamental global problem that we face? How is such a devastating cut there and elsewhere compatible with the thrust and commitment that we need, as well as the labour power, from these two key departments?

Secondly, in its letter to Chris Huhne of 9 September 2010 the climate change committee strongly reaffirmed that a step change in policy is necessary. In this document and in its previous report, especially, it calls for a revolutionary change in policy if the country is to reach its 2020 target of 15 per cent of UK energy generation from renewables. I ask the Minister whether the current policies are radical enough. Where is this step change going to come from? I would be grateful if he could identify for me the combination of policies that will produce the step change that the climate change committee has several times restated is necessary.

The Severn barrage, with which the Government have decided not to go ahead, was an area of radical policy that would have contributed to such a step change. In response to a Starred Question in the House on 19 October, the Minister said that the reason for the Government's decision was the cost, which amounted to £30 billion, but I am not sure that that is the case. I would like him to comment further on that, because there is the upfront cost and the overall cost implication for the country of not going ahead with the project. Cost cannot be measured only in terms of what you pay now; it also has to be measured in terms of potential benefits-and the benefits would have been formidable from this single project. I would like the Minister to explain what the cost benefit showed, because it does not appear in his response to the Question.

Thirdly, how much progress has been made with reforming the climate change levy? As I understand it, the relevant legislation will be in the projected Finance Bill 2011. However, as the noble Lord hinted in his introduction, do not energy companies and investors need clear signposts before this? There are plenty of signs that companies are not proceeding with the kinds of innovations that they might otherwise develop because of the fairly long lapse in the introduction of these changes and because they do not know what the context of their business in the future will be.

Fourthly, how much attention are the Minister and the Government giving to lessons that can be learnt from other countries? I have in mind especially Portugal's E4 programme, which was launched in 2001 with the aim of creating a consistent, integrated approach to energy. It has been amazingly successful. Portugal is, of course, a small country and it has a little more sunshine than we do, but it now gets 40 per cent of its electricity from renewables. That is an increase of 28 per cent in five years. This is interesting because in the pre-existing cases of countries that get a high proportion of their electricity mix from renewables, such as Denmark and Sweden-they were driven by energy security considerations in response to the oil crisis of the late 1970s-it took something like 25 years for their policies to unfold. Many have drawn the inference that this is difficult to do and that we are therefore talking about a long-term project, but the case of Portugal shows that that is definitively wrong. It is possible to make very large changes in a short time. We should be ambitious. We have a 15 per cent target, which the climate change committee has recently reiterated, but let us look at what Portugal has achieved and what it is planning, which is to source 80 per cent of its electricity from renewables within the next six or seven years. It shows that it can be done.

This being the second time that I have crossed swords with the noble Lord, Lord Lawson, on these issues today, he will know that there are many areas where I disagree with him. One is China, on which he is absolutely wrong. China has a developed climate change plan, initiated by its Government. The Chinese Government are very worried about the consequences of climate change, pointing to the melting of the glaciers from which the main rivers of China come, which will affect hundreds of millions of people. It is not right to say that the Chinese are simply blind to this issue-very much the opposite is the case. It is not right to say that China is building one coal-fired power station every week and is simply on a fossil-fuel trajectory. As was mentioned in our earlier discussion, the Chinese are closing down a lot of their older coal-fired power stations because they want to contribute to decarbonising their economy. China is taking the lead in wind power and solar power, not simply, I think, because that is where it sees a competitive advantage-although it certainly does-but because the Chinese Government are conscious of the need to transform their energy mix out of concern for both energy security and climate change issues.

This country has to be in the lead in technological innovation in respect of our energy mix. If we are not, we are likely to be the beached whale or the dead duck in the global competition that is now developing.