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My Lords, I thank the noble Baroness, Lady Jenkin, for introducing this debate and giving us the opportunity to address an issue relevant to the general election, as has been said, but much more so to the very pressing, urgent case of the future of our planet. The House will know of my long-standing interest in international development, both as chair of the International Development Committee in the House of Commons for 10 years and through my continuing connections with the sector, which are noted in the register of interests.
Many of us have been campaigning on climate change for many years. The Liberal Democrats are particularly proud of our record during the coalition Government and, frankly, disappointed that much of what we achieved in that coalition has been set back and dismantled by the Conservatives since. However, as has been mentioned, the advent of Extinction Rebellion, Greta Thunberg and the pupil strikes has forced the issue right up the international agenda. I am not sure how Greta Thunberg will find a zero-carbon way to Madrid, but I hope she succeeds. It is absolutely right that we should focus on how climate change is applied right across our international development agenda, because the challenges are immense. However, I have a few cautions in that connection.
First, I acknowledge that climate change features quite directly in government policy, both in the general programmes, and through international climate finance and our support for international climate funds. That is of course welcome, but as has been said by the IDC, there is concern about a lack of coherent strategy and effective cross-departmental co-ordination, which has been weakened under the Government. The IDC asked the Government to revisit this but, sadly, I saw from their reply that they declined to do so.
Another point is that real concern has been expressed about the danger of relabelling, which is simply redefining aid spending that was going to happen anyway and calling it climate change targeted. That is simply unacceptable. Bond has suggested that direct spending from the aid budget should be limited to 10% of the total budget. Others have said that, because this is a new global crisis that was not relevant and taken on board when we set our development objectives, we have to find new money for a new crisis, not raid the existing budget, which is focused on poverty.
I have long been concerned that the increasing demand for humanitarian aid, much of which now goes to middle-income countries, has squeezed the budget for spending on pro-poor development, by which I mean health, education, infrastructure, capacity-building—those kinds of things. Those budgets have been squeezed because of the need for humanitarian support. I am not decrying that support, but it none the less has had that effect. If we add climate change to it, it is obvious that the budget in these areas will come under even more pressure.
The reality is that both the developed and the developing world must completely reshape their economic model within a generation if civilisation on this—our only—planet is to survive. It is a fundamental, radical change on a scale never previously envisaged. As we engage in providing assistance to poor, developing nations, we surely have to be mindful of how we ensure that we reduce the problem as we do so, and do not add to it.
DfID has committed to targeting 50% of the climate change spending that comes from the aid budget to mitigation in accordance with the United Nations objective, but clearly—I give credit to the Government for acknowledging this—if we are looking at the times ahead, we have to consider mitigation alongside prevention. In that context, it has to be holistic. I contest that, if we are to meet this challenge, we have to unlock new money if development funding is not to be swallowed up by climate change. In fact, I have heard some sources within government suggesting that we should re-designate the entire development budget as a climate change budget. I would wholly resist any such suggestion. It would be a criminal neglect of the world’s poor if that happened.
We have to unlock new money and find ways of securing many more resources than have been put into the system. The UK is justly proud of our sustained commitment to delivering 0.7%. I give credit to my former colleague, Michael Moore, for introducing the legislation to put it in law. That is a piece of honour for the UK which I hope we will all stand by, but there is little scope to increase total aid flows above matching our commitment, unless we can tap new sources of money. I suggest that they must come from one source or another in the private sector. One vehicle being developed is the insurance industry. Not only can it produce models for insurance even for the vulnerable poor, possibly in co-operation with donors or Governments, but it can also offer expertise to people on how they can mitigate and adapt to climate change; it is in its interest to do so to reduce its own risk exposure.
It is in the register of interests that I am chair of a new organisation, Water Unite. Our aim is to apply a 1% levy on the sales of bottled water, and use the proceeds to invest in clean water, sanitation and plastic reuse and recycling in developing countries. If we could sign up enough of the world’s retailers and commercial catering companies, we could invest tens—even hundreds—of millions of pounds, in innovative projects to provide sustainable clean water, good sanitation and a reduction of plastic waste, without any burden on the taxpayer or the aid budget. To date, the Co-op is supporting us, along with Elior, a French-based catering company, and we are in active discussions with other key players. This is innovative in how we raise the money and on the scale of what we can invest to achieve sustainable improvements in infrastructure. The Minister and I have had this conversation, but if at some time the Government, with no contribution other than encouragement, could help more retailers to join us, we could do so much more.
I shall say something about fossil fuels, which I know something about. We know that the world is heavily dependent on fossil fuels; indeed, the use of fossil fuels is still growing. How are we to deal with fossil fuels during the transition and in our development policy? The World Bank has said that it will stop funding fossil fuel projects, other than in exceptional circumstances. The IDC has asked DfID to do the same. It declined, although it said that it will not fund coal. I do not disagree with the reasoning that DfID has put forward—it just shows the difficulties of addressing these issues—but for many developing countries, their natural resources are the foundation of their economy. We know that quite often it distorts that economy, and does not necessarily deliver a fair distribution of wealth, but without them their economic alternatives are limited.
Take a country such as Nigeria: it needs to know how a net zero carbon world would shape its future, which is currently highly dependent on oil. Guyana has just made the world’s biggest oil discovery in decades. It will want to feed the global transition with its resources. Are we to ban it from doing so? These are difficult questions. In recent months, BP has come under attack, even in this House, for its funding of the arts in the UK, which people regard as somehow tainted. To me, this has come from what I would call the woke sector trying to make some sort of statement but not facing the reality: we depend on companies such as BP. Ultimately, they must be part of the solution.
Take our domestic situation. The UK oil and gas industry supplies 45% of our energy needs. Currently, it generates a £30 billion annual surplus on our domestic balance of payments and employs more than 270,000 people. That cannot be switched off today or tomorrow. We have to work out how. We drive fossil fuel cars, heat our homes with fossil fuels and use products requiring fossil fuels in one form or another. Even our electricity is not carbon-free.
Let us not demonise the fossil fuel industry but get it on board and try to make sure that, by challenging it, it is part of the solution. The industry has capital and technical expertise. We are going to need those fossil fuels in the transition. Remember that this is about net-zero carbon, which means that there will still be fossil fuels in the mix in 2050; it is just that they will be offset or stored. Let us not pretend that we can switch them off and close them all down tomorrow. I am afraid that people who want to show how committed they can be are a little overeager and not too realistic about how it can be done. We need to do it as fast as possible and we should focus on development funding in developing countries, so that they can bypass fossil fuel for their own economic resources by using renewable and sustainable resources. I absolutely agree that that is the right way for our development funding to proceed.
Having said that and made my other cautions, one other thing I am slightly surprised about is how little population is discussed in the context of development. One of the problems we have is the pressure of population on the world’s resources. I do not have a dramatic answer but if we could contain the growth of population or even have a managed reduction—I mean that in terms of natural reduction—that would ease the pressure, yet it never seems a significant part of the policy. People often say that Thomas Malthus’s doomsday forecasts were wrong but maybe they were just ahead of the time. In a sense, everything that climate change threatens—the pestilence and disease—is exactly like the problems that he said would ultimately threaten mankind. We should be realistic about the practicalities of this because we could be facing a Malthusian Armageddon if we cannot tackle these problems.
This is my final point. Canada’s carbon tax was an issue in its election, as people did not like it; Macron had to face the Gilets Jaunes over fuel taxes; the COP has been moved from Santiago to Madrid because of demonstrations against inequality, and so forth. It is absolutely clear that we are in a climate emergency. The question, to my mind, is about political will as well as technical expertise. If we hear from the Greens, I am sure they will have the answers but not necessarily ones that would be as politically acceptable as they like to think. Is 21st-century politics up to this task? That, to me, is the question and it is a hell of a challenge.