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My Lords, I declare an interest in a renewable energy company primarily involved in the wind business, though not in Europe. It is primarily involved with China, India and developing world; contrary to the implication of earlier comments by the noble Viscount, Lord Ridley, there is quite a lot of action occurring in those countries as well as in our own.
I very much hope that we will support this order with enthusiasm and strong cross-party support, continuing that pattern of cross-party consensus about which the noble Lord, Lord Deben, spoke earlier. There has been a consensus; it has been opposed by a minority of sceptics, but the facts have continually proved those sceptics wrong. We have to take action because it is clear that global warming is occurring, and it is now occurring at an accelerating pace.
In 1998 we faced, because of an El Niño effect, a year in which temperatures soared well above the trend of rising temperature that scientists had predicted. As a result, there was for about eight years thereafter something of a pause in the average rise of temperatures. At that time, many sceptics—including, I suspect, some contributing to this debate today—leaped on that pause and said, “Well, that proves that global warming is not occurring”. However, the fact is that nine of the hottest years on record have occurred since 2005 and the five hottest have been the last five. On the current pattern of this year, it is looking almost certain that by its end we will be saying that the six hottest have been those up to 2019. We are facing very clear evidence that warming is occurring.
We also have to take action because there will be extremely harmful effects. What is going on in India has already been referred to; I have just come back from there, where I was engaging with many people in the Indian steel and cement industries who are putting in place plans for radical reductions in their carbon emissions. While I was there, the temperatures in northern India were over 50 degrees centigrade. With only a few degrees warming, the North Indian Plain will be essentially unliveable for human beings. We face major challenges from climate change, but there are other parts of the world where it is truly life-threatening.
We cannot now stop significant global warming—it is baked in already—but we have to limit it as much as possible. The guideline of how much we should limit it by is well described by the IPCC report from November of last year, which argued effectively that beyond about 1.5 degrees centigrade of warming, the effects are non-linear—they are multiplying. Every 0.5 degrees centigrade further does not just make it a bit worse but a lot worse, so that is a reasonable target. To achieve that, the whole world has to get to about net zero emissions sometime around 2050 or 2060. Some developing countries growing rapidly will find it difficult to get there by 2050 but can get there by 2060. That makes it a reasonable target for us, with our greater economic capacity, to get there by 2050.
The costs of our getting there by 2050 are clearly manageable. When estimates are produced of the costs of achieving emissions reductions, sceptics always come out with arguments that say, “These estimates are far too low”. However, experience suggests precisely the opposite. In 2003, the Government estimated that the cost of reducing emissions in the UK by 60% would be about 1% to 2% of GDP. In 2008, when I was the first chair of the climate change committee, we estimated—on the basis of a very detailed, sector-by-sector analysis of what the resource costs would be in power production in the transport sector, and so on—that to achieve an 80% reduction it would be 1% to 1.5% of GDP. The CCC, on the basis of equally detailed analysis, has now suggested that 100% would cost 1% to 1.5% of GDP.
Why have those costs come down, or at least why has what you can achieve for the same costs gone up? The answer is that the costs of key technologies have come down far faster than any of us dared believe would happen. The cost of solar photovoltaics has come down by about 85% in the last 10 years, the cost of wind power by about 75% in the last 10 years, and the cost of batteries by about 85%. That shows the extraordinary power of scale economies, learning-curve effects and induced technological change—once you have clear, quantitative targets, you drive cost reductions that would not otherwise occur.
It is almost certain that such technological change, learning-curve effects and economy-of-scale effects will occur in future and will probably prove the climate change committee to have been too conservative again. But it has been right to be conservative and say, “These are the maximum costs that we might face and which will occur if we do not have radical cost reduction, but it is highly likely that we will”. The most effective way to ensure that we get technological change and cost reductions from learning-curve and economy-of-scale effects is to set a stretching target so that industry knows that that is non-negotiable and that within that, it can invest to achieve those cost reductions, confident that that will be economic. That provides us with a strong basis for supporting this order—with, I hope, unanimity, and certainly with strong support.