My Lords, the Government welcome the review by the National Infrastructure Commission. There are existing powers and duties in place for regulators in relation to decarbonisation. As we transition to net zero, regulators will need to continue to play their part in delivering this important goal. We are considering the commission’s report carefully and will look at what additional guidance may be necessary to support our regulators in helping the UK to meet this vital commitment.
I am grateful to the Minister for his response, because it is good to know that the Government are looking at this seriously. Does he agree that the three regulators that have been reviewed—Ofgem, Ofcom and Ofwat—have the opportunity to make an enormous difference to reducing our carbon emissions by 2050? Can he explain whether the same duties will be imposed on the Office of Rail Regulation, and on his department in respect of road transport and other transports, because they all have a big role to play?
The noble Lord raises an important question. All must do their part and, wherever my department is responsible, it will ensure that there is serious communication between the individual agencies, all anchored to the 2050 net zero commitment.
We are anchored to the Intergovernmental Panel on Climate Change, and we have our own climate change committee putting the science at the heart of our work. However, the challenge we face is that we alone cannot bring about the necessary steps, so this must be a global endeavour. We are living through a new geological age which has been termed the Anthropocene—we are bringing about change in our very own environment.
My Lords, I declare an interest as an engineer in the nuclear industry. New nuclear and a reset of the strategy for achieving it is critical to zero carbon by 2050, being the only mature option for the zero-carbon baseload or non-variable power. Can the Minister provide some assurance that the Government will maintain their focus on new nuclear initiatives such as investment in small modular reactors and the regulated asset based funding model to enable new nuclear beyond Hinkley to move forward?
I am happy to assure the noble Lord that nuclear will remain part of our strategy. It is indeed a low-carbon approach. We are strongly committed to small modular reactors and right now we need a baseload to complement our renewable electricity supply.
My Lords, when the Minister and his department review the infrastructure report, will he also take into consideration the words of Ofgem, whose annual summary of trends was published this month. It says that the decarbonisation of energy has retracted to its,
“slowest rate of decline since 2012”.
There is a disconnect between the Government’s target of 2050 and what is actually happening. Can he tell us what Her Majesty’s Government are doing to reverse that trend, and when will the decarbonisation of energy start to accelerate again?
It is sometimes difficult to assess the rate at which we are decarbonising, but I can assure the noble Lord that, as we continue to phase out coal and to work carefully with the domestic heating approach, we are on track to meet our 2050 commitments. It will be a challenge, and all must do their part.
My Lords, the Government’s terms of reference for the National Infrastructure Commission actually require it not to have a significant impact on the public balance sheet. That seems to me absolutely bizarre, because the Government have an objective to get to net zero emissions but they do not want to invest in the solutions.
The answer to the point raised by the noble Baroness is that we need to invest very carefully and very substantially. There will be impacts across our entire economy—all will have to do their part. The Government will examine this report very carefully indeed, along with the terms of reference going forward.
My Lords, will much of the cost of net zero emissions by 2050 be transferred on to energy prices? If that is the case, will that not make us increasingly uncompetitive in the world and wipe out what remains of our heavy industries?
We face a challenge going forward to achieve the net zero target by 2050. We have to remember that this is not all about energy regeneration itself because there are other areas that we need to consider, not least the decarbonisation of our transport network. Each of these elements will have a cost that, whether we like it or not, will eventually fall on taxpayers or individual consumers. That is where the money will ultimately come from.
My Lords, while the regulators need these additional powers to enhance public confidence in combating climate change, can the Minister explain how the net zero target can be achieved by 2050 when the Government’s own target continues to exclude aviation and shipping?
The useful answer to the question is that we rely heavily on the Committee on Climate Change. Only this week, I had a meeting with its chief executive to examine shipping and aviation and to explore the manners and means by which we can ensure that they too are wedded to the necessary decarbonisation. I believe that they will be able to help us deliver on that very difficult and challenging point.
My Lords, will my noble friend explain to the House the contribution that energy derived from waste recovery plants are making to zero carbon emissions? In particular, will he ensure that, rather than the electricity generated by them going to the national grid, it will go to local homes to reduce their heating costs, particularly in the north of England?
My noble friend has raised a point to which I do not have the exact answer. If she will permit, I will write to her setting out exactly how much energy is generated from waste and whether it plugs into either the local or the national grid.
My Lords, the noble Lord will agree that if we want to make a real impact on climate change we have to get fossil fuels out of the system. In that respect, what are the Government going to do about phasing out the use of domestic gas boilers?
I might ask the noble Baroness the same question. Everyone here is of course available to phase out their gas boilers. The challenge, however, is doing so in a manner that does not increase the cost per household and we must continue to address fuel poverty which remains a challenge. That will be revealed next year when we put together our plan setting out how to decarbonise domestic heating structures.
My noble friend is never an irritant. I am happy to put a letter together setting out the evidence which we are using to ensure that we are basing our future prospects in terms of decarbonisation on sound, solid and verifiable science.