My Lords, it is a great and somewhat unexpected privilege to open this debate. I particularly look forward to the maiden speech of my noble friend Lady May of Maidenhead. It is fitting that her first contribution should be to this debate, since the net-zero commitment is very much her personal legacy. It also gives me a chance to thank her for what she and your Lordships may feel was a less wise part of her legacy, which was nominating me to this House.
It is hard to overstate how crucial cheap energy is for economic growth and prosperity. The quadrupling of oil prices in 1974 ended three decades of rapid growth in western economies. Energy price rises have invariably been followed by a slowdown in growth. On the other hand, thanks to shale oil and gas in America, that country has had cheaper energy and grown faster than other western economies, and China’s extraordinary growth has been fuelled by cheap coal.
Let me start with a few facts about climate change and the climate agenda impacts. First, Britain has reduced its territorial emissions of CO2 more than any other major economy and they are now back to the level they were in 1879. Secondly, Britain has more offshore wind power than any other country bar China, not to mention its onshore wind, solar and bio energy.
Thirdly, despite or because of this, British industry pays the highest electricity prices in Europe. They doubled in real terms over the two decades up to the start of the Ukraine war, even though real gas prices remained largely unchanged over that period.
Fourthly, we have already lost most of our aluminium industry and are losing our primary steel-making capacity and, with it, thousands of jobs. We are seeing the Grangemouth refinery turning into an import terminal and other British refineries under threat. We import an increasing proportion of energy-intensive goods, such as cement and bricks.
Fifthly, when our manufacturing industry moves abroad, it does not reduce global emissions at all—far from it. We now import many carbon-intensive products, so the reduction in Britain’s carbon footprint is only 36%, much less than the near halving of our reported territorial emissions.
Finally, the Government propose to accelerate the move to net zero regardless of cost, to prevent new North Sea exploration and instead import oil and gas, and to ignore or deny the impact this will have on our energy costs, growth and jobs.
This is an unusually significant debate because, as far as I can tell, it is the first time that Parliament has formally debated the impact on jobs, growth and prosperity of our decision to decarbonise our economy. Our failure to do so has been part of a collective institutional failure by Governments of all parties, both Houses of Parliament, the BBC, the Climate Change Committee and other public bodies to permit or promote an informed debate on the economic costs and benefits of net zero.
I welcome this debate and look forward to the other speakers and the debate that will take place between them. In particular, I look forward to the maiden speech of the noble Baroness, Lady May of Maidenhead.
I will not pursue the specific points that were made in the introductory speech. I will use the limited time available to me to highlight some excellent and important work that has been undertaken on climate change by the actuarial profession. I declare my interest as a member of the Institute and Faculty of Actuaries as entered in the register. Climate change is an issue to which actuaries are devoting increasing attention. What happens in the future is intrinsic to the work of actuaries, hence the risks inherent in climate change are an essential element in the work that we do. It is already built into our professional standards. We are, in an important sense, risk scientists, able to uncover uncomfortable possibilities involving the risks we face, to which mainstream debates struggle to give sufficient weight.
I do not have enough time to go through all the arguments, but I trust my noble friend the Minister will follow up the information and perhaps even organise a meeting at which they can be explored at greater length. In summary, work undertaken by the profession in the report it produced last year, The Emperor’s New Climate Scenarios, identified that many of the models used to predict economic damage from the hothouse world we face have been too optimistic. Actuaries are saying that the models are not sufficiently accurate for us to place sufficient weight on them. They underestimate the rate at which the Earth is warming, hence carbon budgets based on those estimates are no longer applicable.
More recent work by the profession has identified how close we are to the risk of real problems and how they should be taken into account when making our decisions on policy. The key document here is the institute’s report from March this year, written in conjunction with Exeter University, Climate Scorpion—The Sting is in the Tail. The point made in the title is that the models currently used fail adequately to take into account what are called “tail risks”: the problems that appear towards the end of the period that is being assessed. The risky outcomes of climate change are those in the tail end of the models that are being used.
My Lords, I refer the House to my interests as set out in the register, specifically my chairmanship of BeyondNetZero, of Carbonplace and of the board of Equatic, and my membership of the board of the Institute for Carbon Management at the University of California, Los Angeles. I also refer noble Lords to my co-chairmanship of the Prime Minister’s Council for Science and Technology. I very much look forward to hearing the remarks of the noble Baroness, Lady May of Maidenhead, in this debate. Meanwhile, I will make four short points.
First, targeted investment in net zero will encourage rather than hinder economic growth, and for that reason it is worth pursuing. The market opportunities are sizeable and, importantly, the UK labour market possesses the relevant skills to grow climate-related activity at scale. We are fortunate to have world-class research scientists and academics at the cutting edge of climate and energy technologies. Structures such as the Faraday Institution, the UK’s flagship institute for electrochemical energy research and development, show what is possible when industry partners are involved, working together with the innovators on projects with real commercial potential. We probably have 50% of the technologies that we need to get to net zero, but we also have universities such as Cambridge that are awash with groups that have the potential to take discovery science, incubate it and prepare it for the commercial markets at the scale that we need not just in the UK but also in the world. There is a wealth of engineering and technical expertise among those who have spent decades working in my old industry, oil and gas, that can now be deployed in the wind, solar, nuclear and other energy sectors.
Secondly, the Government’s commitment to net zero must be reflected in consistent policy approaches. Whatever the rationale at the time, the previous Government’s announcement that they would delay banning the sale of new petrol and diesel cars by five years to 2035 was counterproductive. It sent mixed messages to investors, and electric vehicle supply chains were heavily damaged. Supply was disrupted and consumer confidence suffered. The new Government’s green energy mission, the establishment of Great British Energy and the convening of solar and wind task forces are all encouraging but they cannot simply be strong statements of intent; they must be accompanied by vehicles for focused delivery. For that, the private sector must be invited to the table and provided with incentives to invest and scale its operations even further.
My Lords, I too thank the noble Lord, Lord Lilley, for securing this important debate. I am looking forward very much to the maiden speech of the noble Baroness, Lady May, who I know will bring great insight and experience to your Lordships’ House. I declare my interest as president of the Rural Coalition.
We need to take climate change extremely seriously. I commend the previous Government, and indeed some of the plans of the present Administration, for the steps they have taken and are taking. I support the plea by the noble Lord, Lord Lilley, for open and transparent costs of net zero so that we can make informed choices; that seems fundamental to all that we do in every part of our work. Other noble Lords will be able to speak in a more informed way than I can about the positive impact that net zero can have on the economy, not least in terms of jobs in new and emerging sectors such as renewable energy. It will also offset the negative economic impacts that climate change brings with it, such as droughts, pollution and ill health.
I shall limit my comments to quite a focused area: the use of land and, in particular, working with our farmers. Farmers are acutely attuned to changes in weather and therefore to the impact of climate change. They do not have a choice; their whole livelihood depends on it. Some of the increasingly extreme weather that we have seen over recent years, with record windfall and subsequent flooding alongside periods of extreme heat, has hit farmers very hard. I outlined to your Lordships’ House a few weeks ago the devastation and economic costs dealt to farmers recently in the wake of extreme flooding. I remind the House that, last winter, parts of the UK experienced double the level of the monthly rainfall totals of the period that were experienced between 1991 and 2020.
Farmers, as stewards of so much of our land, are uniquely placed to play an important role in helping to achieve His Majesty’s Government’s climate change agenda through nature recovery, sustainable food production and clean energy supply. There is a real opportunity here to have our agricultural industry set a leading example of how economic growth, food security and new energy technologies can work together as a force for good in responding to the environmental challenges we face. I urge the Minister to ensure that farmers are treated as crucial partners in pursuing the climate change agenda; that they are listened to and supported as the burden of demands made on them continues to increase.
My Lords, I very much welcome my noble friend Lord Lilley’s speech and congratulate him on calling this debate, because climate change is a challenge that we need to face, especially those of us who believe in an open, free-market economy. We have to accept that, historically, our free and open economies have operated without properly acknowledging the external costs created by the energy that we were using, exactly as the noble Lord, Lord Browne, said. We need to move to honest prices that fully reflect the costs of carbon emissions as part of a belief in a functioning market economy.
If we go through this process, we will end up with a system with enormous benefits: with greater security of supply, with much less exposure to the risks of volatile gas prices and indeed, in many cases, with lower operational costs, particularly for people driving motor vehicles. The costs of adjustment are indeed high. We absolutely need rigorous economic analysis of what those costs are and who bears them. At the Resolution Foundation—I declare an interest as president —we absolutely try to apply economic analysis to those costs.
I am delighted that this is a debate where we will be hearing the maiden speech of the noble Baroness, Lady May of Maidenhead. One reason, of course, is that she took a lead in committing Britain to a net-zero target. But, if I may say so, there is a second reason as well: she also took a lead in focusing on the living standards of people who were just about managing—people who were struggling to make ends meet. She reminded us that concern about those living standards should be a cross-party issue and not the prerogative of any one party. This debate is an opportunity to combine our concern about the challenge of climate change with a recognition that the costs of adjustment must be borne fairly.
Some of these issues are most acute in the transport sector, which I would like to touch on in particular. This is not an area where we have made massive progress. Transport emissions of carbon dioxide are now greater than they were in 1990. The problem is getting worse, not better. In large part these emissions are associated with car use—over 80% of journeys are still taken by motor car—but it is also where the gains from successful adjustment are massive, with hundreds of billions of pounds of savings when we move to fundamentally lower-cost electric vehicles, powered by clean energy. At the moment, the cost of buying these vehicles is still too high while the benefits, once you have one, can be very low. I would be interested to hear from the Minister what the Government’s plans are to improve the regime for electric vehicles.
My Lords, it is a huge privilege to be standing here in this place to make my maiden speech. In doing so, I refer your Lordships to my entry in the register of interests, in particular my chairmanship of the Aldersgate Group, a not-for-profit which deals with climate change and environment matters, and of the Global Commission on Modern Slavery and Human Trafficking.
I stand here feeling the privilege of being in this place, but also with a sense of trepidation. People outside this House have said to me, “Don’t worry—you were a Member of Parliament for Maidenhead for 27 years. It’ll be all right. You’ll know what the ropes are—you’ll know the rules”, and I say, “No, this is a very different place”. When they ask how, I say, “Well, for a start, their Lordships normally speak only when they know what they’re talking about”. I will endeavour to follow that rule in my contributions in this place.
I thank all those who have welcomed me and eased my transition: the staff of the House, Black Rod and her staff, the doorkeepers, the clerks, the Lord Speaker’s office and the catering department, which provided a wonderful lunch after my introduction. I thank the security staff and others who have helped and guided me when they have found me wandering aimlessly along a corridor. I thank my two supporters on my introduction, my noble friends Lord True and Lady Evans of Bowes Park.
I also thank my mentor, my noble friend Lady Goldie. I hope she will not mind if I tell the story of the day of my introduction. I was standing in the Moses Room with my supporters, waiting to process into the Chamber, and my noble friend turned up with a very large envelope for me. My supporters indicated how generous it was of her to give me a gift. She said, “It’s the Companion to the Standing Orders to read during recess”. I have not yet been tested on it, but I thank my noble friend for the help and support she has given me, not just recently but over many years.
My Lords, it is a pleasure to be the first to commend the moving and compelling speech of my noble friend, and my former Member of Parliament. How appropriate that it should be made on the subject of climate change where, as we have heard, my noble friend ensured her legacy by making the UK the first major economy to enshrine in law a net-zero carbon target. She also accelerated progress internationally, cementing our credentials as an ambitious and reliable climate change partner. My noble friend is particularly welcome in your Lordships’ House because, as Prime Minister, she responded to the Burns committee report by exercising restraint in new appointments, unlike the generosity of her immediate successor.
Our paths first crossed nearly 30 years ago when Maidenhead Conservatives were choosing a new candidate. My seat in London had been abolished, and I fancied my prospects in this newly created constituency. My family had lived in it for more than 200 years, my wife had been on the local council, my children had been to the local comprehensive and I was in the Cabinet. The selection committee threw me out in the first round and chose instead an unknown councillor from Merton.
My noble friend became a great local MP, dominating the pages of the Maidenhead Advertiser every Friday and surprising constituents between elections by knocking on their doors on a Saturday morning to ask what they thought of the train service to Paddington. She did that even when she was Prime Minister. No cause was too small to generate her support—literally, as she came to Cookham last year to celebrate the return of the water vole to the banks of the River Thames.
My noble friend was on the Front Bench from 2001, becoming the longest-serving Home Secretary for 60 years and then becoming leader and Prime Minister in 2016, without the necessity of asking party members—not the most reliable of electorates. She generously invited me to join her Administration and retained my services throughout, unlike her predecessor who sacked me not once but twice.
My Lords, I thank my noble friend Lord Lilley for securing this important debate and for his insightful introduction. Climate change is real and a living reality for many across the globe. Indeed, for some small island nations, it remains an existential threat and it impacts growth and prosperity. In welcoming my noble friend Lady May to her place, I note that she brings incredible insights and a deep sense of devotion to public service, as we heard from the noble Lord, Lord Young. During her tenure as Prime Minister, she championed tackling climate change and was a powerful advocate of collective action on the world stage. To coin a phrase, we are all in it together.
My noble friend Lord Lilley talked of my noble friend’s decision to appoint him to this House. I assure my noble friend that, perhaps like others, we love hearing his voice. I agree with his call for transparency of costs for enabling those long-term decisions, both at home and internationally.
As far as appointments are concerned, I will take a moment to give my personal reflections in relation to my noble friend Lady May. The noble Lord, Lord Young, talked of her selection for Maidenhead. She left a vacancy in Merton and I followed in her shoes, minus the heels of course—although perhaps, standing at five feet six, I would have benefited greatly from them. Nevertheless, she was an advocate for localism, and it was an honour to follow her. Indeed, she introduced me to the Conservative Party and appointed me as Minister of State at the Foreign Office. That turned out to be a long-term decision.
When I was appointed to the Foreign Office, one of my early visits was to the Caribbean. I was at the Pacific Islands Forum in Australasia, in Fiji. Hurricanes hit the Caribbean, and there was a moment of trepidation. Very early on in my career at the Foreign Office, I needed to invoke that call to the boss, to alert the Prime Minister to what had happened in the Caribbean. My noble friend acted promptly and convened a COBRA meeting, and with others I was dispatched to the region. What I saw was nothing short of devastation—it was like a war scene. It instilled in me the need to tackle climate change collectively and the need for international action.
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Costs were never discussed during the passage of the Climate Change Act in 2008, nor during the 90-minute debate committing us to net zero in 2019. It is extraordinary that we still have no official cost-benefit analysis of net zero, five years after embarking on the project.
Long ago, our national broadcaster formally decided not to give airtime to any views that might undermine public support for net zero. I discovered this when expressing doubts not about the science of global warming, which is rock solid, but about its scale and impact. The BBC published an apology “for giving voice to Peter Lilley”, removed the offending programme from the BBC iPlayer lest other people hear my voice, sent the producers on a re-education course and banished me from their studios on this issue ever since. Now my absence is no great loss to me or the nation, but our national broadcaster’s refusal to allow serious debate on the costs of the most expensive commitment since the welfare state is a travesty.
The most egregious failure has been that of the Climate Change Committee, which should have provided unbiased estimates of costs for public debate. I am glad that my noble friend Lord Deben will be able to explain why it has refused to do so. It even spent large sums of taxpayers’ money resisting a freedom of information request for details of its forecast that net zero would cost the nation 1% to 2% of GDP by 2050. Many assumed that this was the cost of getting to net zero but, actually, this is the cost we will face after 2050 once we have eliminated our emissions. The CCC has not calculated the cost of getting there; maybe its forecasting instrument is like one of those telescopes that can focus with great clarity on distant objects but renders anything near at hand a blurred and fuzzy image. There seems to be no other reason for not giving us the costs of getting to 2050.
The CCC’s reluctance to publish its workings was perhaps understandable given that it was so optimistic but, as it turns out, that is true of estimates produced by most public bodies. Sir Chris Llewellyn Smith—the lead author of the Royal Society’s report on the cost of large-scale electricity storage—recently pointed out that all official estimates were grossly optimistic, and he was honest enough to include his own, by the Royal Society. It is sad that we do not have the information on which we can have an honest and informed debate.
True believers in net zero are reluctant to discuss its costs because they have convinced themselves that there are none. It will give us cheap energy and boost growth by creating new jobs in new industries, exporting clean technologies worldwide, making the world greener and ourselves richer. How wonderful if that were true. There is an old saying that if something seems too good to be true, it probably is not true. I hope that wind power, in particular, because we have lots of it, will one day be cheaper than fossil fuels, but it patently is not yet. If wind and solar are cheaper, why have our electricity prices doubled as they have replaced fossil fuels? If renewables are cheaper, why is our electricity more expensive than in other European countries, which have less than us? If renewables are cheaper, why do they need subsidy?
Apologists say that those are the costs of old technologies and that the costs are coming down. The first part is true, although it is a shame they did not tell us at the time. Dieter Helm has calculated that Britain wasted up to £100 billion by investing prematurely in immature technology, rather than waiting until it was cost effective.
The Secretary of State assured us last month that, on the basis of recent auctions, renewables are the cheapest form of power to build and operate. Unfortunately, that is simply not true. The latest auction price for offshore wind was £82 per megawatt hour in today’s money, whereas his own department’s figures—for reference, on page 24 of the Electricity Generation Costs 2023 document—put the cost to build and operate a new gas plant at less than £60 per megawatt hour. Does the Secretary of State repudiate his own departmental figures?
Moreover, this is only half the story, because the comparison is not like for like. Wind is intermittent, and Dieter Helm advised the Government that, to make a true comparison, the costs of wind should include the cost of back-up generators or storage. Electricity that is not there when you want it is less valuable than electricity that is.
My economics lecturer taught us this by the old fable of the two New York bakers. One advertised bagels at 50 cents each, the other opposite at a dollar. A customer went to the cheaper baker and asked for a bagel. “Sorry, we’re out of bagels”, he was told. So he went to the other store and asked if they had any bagels. When the shopkeeper gave him one and charged him a dollar, he protested, “But the shop opposite only charges 50 cents a bagel”. “Well, why didn’t you go there?” “I did, but he’s out of bagels just now”. To which the other shopkeeper replied, “When I’m out of bagels, I only charge 50 cents”. Wind may be as cheap as other things when it is available, but it is a lot more expensive when it is not.
Electricity when it is not there when you want it is less valuable electricity, so you need back-up gas plants or storage. Back-up gas plants are doubly expensive because they can operate only when the wind is not blowing and they in turn need carbon capture and storage, which, even if it can be made to work with gas-fired stations, which it has not yet, will add further costs—again doubly so, because it will operate only part-time.
The second leg of the too good to be true story is that if we plough ahead with decarbonising our economy supply, we will enrich ourselves by generating new export industries. The Industry Minister, the noble Lord, Lord Vallance, who pursued the Sue Gray route to the upper echelons of the Labour Party, was given a little section of his own in the Labour manifesto, in which he said that
“by accelerating the transition to clean, homegrown energy”
we will not only
“end the era of high energy bills”
but be
“helping ourselves and exporting our solutions worldwide. But if we choose to go slowly, others will provide the answers, and ultimately we’ll end up buying these solutions rather than selling them”.
Where has he been for the past 20 years? Far from choosing to go slowly, we have outpaced other countries, but we have had to buy the solutions from abroad. Imports of renewable technologies vastly exceed our exports. Foreign suppliers have finally begun to make wind vanes in this country and assemble generators here, which is welcome, but they are largely for our fields, and those companies are not going to make us an exporter. The only turbines we export are gas turbines, which we are phasing out and urging others to do likewise. The only area where we might take the lead in developing a new industry is small nuclear, which I persuaded the Energy and Climate Change Committee to back a decade ago. I hope this Government will give that project more welly than my Government did.
An honest appraisal of the cost of net zero will conclude that it is bound to be costly. That does not necessarily mean that we should abandon it. If the costs are less than the likely benefits to the world in reducing the impact of global warming, it is worth the world bearing those costs. Of course, Britain’s contribution to global emissions is very small—less than 1%—so our impact alone is negligible. I accept that we must be prepared to make our proportionate contribution to that collective effort.
I know that many noble Lords believe that we should lead the world by going further and faster in that direction. I confess that I have always found the idea that we can lead the world somewhat hubristic—a hangover from our imperial past. So far, the big emitters —China, India and, in future, Africa and Latin America —have made it clear that they do not give a damn what we do. The one thing that we can be sure of is that if we impose such costs on our economy that we self-harm and reduce our emissions by exporting our industry abroad, other countries will take note, learn the lessons from our folly and make sure that they do not follow our lead.
I hope that we can now have an honest, frank, well-informed debate comparing the costs of action with the benefits of action. I am sure that will be a point that my bishop, the right reverend Prelate the Bishop of St Albans, will make in due course since, although we may not agree on this issue, we agree on the importance of honesty. We can have an honest debate only if it is well informed and if we stop trying to convince ourselves that fairy tales are true. I beg to move.
In short, the message is that we need to give greater weight in our assessment to worst-case scenarios. They need to be taken into account when making policy on climate change. This is essential, given our growing yet precarious lack of knowledge about extreme climate risk and, crucially, the range of tipping points that we face. For example, we have to treat the 1.5 degrees centigrade limit as a physical limit, not a political target. Too often the long-term impacts of climate change are described in terms of central estimates, when rule number one of risk assessment is to focus on the worst case. This subsequent note by actuaries makes it clear, first, that current energy policies are not sufficient to meet the Paris Agreement goals, that an overshoot of the 1.5 degrees centigrade threshold is now more likely than in the past, and that the rate of global warming was accelerating in 2023. In fact, the rate of acceleration was accelerating. We are going faster towards these tipping point risks.
Secondly, there are material risks associated with a failure to meet those goals, with the risk of triggering multiple climate tipping points and a potential tipping cascade. We must understand that a failure to meet the target does not mean that things will be a bit worse; we must take more seriously the fact that passing one of the tipping points will result in catastrophe.
I am therefore concerned about the Answer that my noble friend the Minister gave yesterday to the Written Question from the noble Baroness, Lady Jones of Moulsecoomb, referring to AMOC, the Atlantic meridional overturning circulation; at school we may have referred to it as the Gulf Stream drift, but it is now AMOC. The collapse of AMOC undoubtedly presents existential—an overused word, but in this case it is meaningful—risks to food production and water availability. Saying “It’s okay so far, and there are a range of views” is not an adequate response to the risks that we face.
The actuarial profession is taking these risks seriously. There are reports by practitioners who understand the nature of risks and how to adapt policy to those risks. I hope the Government will accept the information they are being provided with and adapt their policies to reflect these new dangers.
This brings me to my third point: incentives and private sector investment. Incentives are the result of pricing externalities, something that we must tackle head on if we are to achieve the necessary climate correction. For example, the carbon released by one actor but affecting another must be priced and paid for. Incentives to release less carbon or to avoid emissions altogether then follow. Governments are well placed to introduce incentives of this kind or preferential tax regimes, but they must be accompanied by substantial levels of private investment if the national energy transition is to be delivered and the necessary climate technologies commercialised and, importantly, scaled. Governments can set the regulatory environment to encourage investment and in some cases they can lean in, providing incentives or concessionary finance, but they cannot be expected to deliver. The UK continues to lead the world as a wellspring of sustainable finance in the form of venture capital, private equity and large-scale institutional investors. The success of the Inflation Reduction Act in the United States is a case in point.
Fourthly, we must now pick up the pace. The direction and quality of investment flow are eminently predictable if the surrounding conditions are known and controlled. This is the story of economic growth in all sectors, perhaps most notably in the extraction and burning of hydrocarbons over centuries past in this country. There is no reason to believe that it will not continue to be true in the story of our new energy and climate revolution. I am very optimistic, and progress is picking up, but the missing element is time. In my opinion we are approximately 25 years behind, so we must accelerate the rollout of incentives, financing and R&D breakthroughs. This country is well placed to do just that.
In one of the counties in which I am privileged to serve, Hertfordshire, we have some of the most innovative and forward-looking farmers in the whole world. They are right at the cutting edge of how we are going to face the challenges of food production, food security and net zero. What they are asking for, of course, is a level playing field in the international markets and, as any future trade agreements are brokered, their concern is that they should not be disadvantaged in any way. In light of the urgent need to safeguard our environment and to make the Government’s aims for food security, energy security and net zero a reality, the Government must provide a renewed and improved agricultural budget of at least £4 billion a year, which is what the NFU has been calling for, so that farmers can play their part in what is required.
British farmers already own or host about 70% of the UK’s total solar generation capacity, whether on the rooftops of farm buildings or in solar farms. Many food producers also host on-farm wind power. They have a clear role to play in the Government’s commitment to making the UK a clean energy superpower, but it is important that this is balanced with protecting the best agricultural land for food production. It was only a couple of years ago that we saw the invasion of Ukraine having an immediate impact on the cost of food and fertilisers. It was really impacting upon us, so food security is not some optional thing; it is absolutely fundamental to us as a nation.
While rooftop installations offer an ideal platform for renewables, I urge the Government to ensure that those, along with brownfield sites, are prioritised for mounting solar farms, rather than using the most productive agricultural land, which we must protect for our food production. I seek assurances from the Minister that he will do all he can on this front to ensure that these principles are enshrined in the forthcoming land use framework.
For a start, if you are able to charge your electric vehicle at home—in a private driveway or whatever—the costs of charging are only half those faced by less affluent people who are having to charge their cars on the street. This gap in pricing is a major problem. We need to improve the planning regime, so that on-street charging becomes cheaper and quicker, and we need greater competition. I hope the Minister will be able to tell us what plans the Government have to narrow the gap between the costs of on-street and off-street charging, which is now very substantial.
We have historically been rewarding the purchase of electric cars with a very favourable tax regime. These benefits have largely gone to affluent people buying them. That is where innovation starts; they were initially very high cost and it was understandable that the driver of the change would come from the people who could afford expensive electric vehicles. But as the costs fall, will the Government accept that it is no longer necessary to have such expensive subsidies and rewards for the costs of buying an electric vehicle, and instead put more support into holding down the costs for people charging them?
Briefly, another area of transport where we face serious challenges is flying. The growth of emissions from jet flights means that we will soon be seeing them as the biggest single contributor to carbon emissions in the transport sector. There is another uncomfortable fact about the distribution of the costs of adjusting to climate change and the inability, at the moment, fully to cover those costs. It is very likely that the emissions simply from the jet travel of the most affluent 20% of people in this country will be greater than the total emissions incurred by the least affluent 20% from heating their houses, using transport and any other costs. Yet jet travel is an area where we are still not properly covering the costs of the carbon that we emit. Is that not an area for radical progress?
At the end of the day, I think we will end up with fantastic opportunities for Britain; the economic analysis is pretty compelling on this. This will be not because of fantasies about being world-leading, and certainly not by ignoring the economic costs, but by investing in technologies and our natural advantages, with wind and offshore power, tidal power and small modular reactors. We can then have a more efficient economy and a more equitable one as well.
It is a great pleasure to be speaking in a debate on climate change. I thank my noble friend Lord Lilley for initiating this debate but recognise that there may be some differences of opinion across the House on this issue. I view with deep concern the changes in our climate recently; 2023 was the hottest year in human history. Without action, we will see the frequency and severity of extreme weather events accelerating. The Amazon rainforest will become a carbon source, not a carbon sink. Some of those countries currently sitting around the Commonwealth Heads of Government table will simply cease to exist.
But I believe that there is good news and that we can reap economic benefit from dealing with climate change. The net zero review of 2023 indicated that dealing with the transition from fossil fuels to sustainability was the growth opportunity of the 21st century, estimating that we could see nearly half a million new green jobs here in the UK by 2030. McKinsey has estimated that dealing with providing goods and services for the global net-zero transition could bring £1 trillion to the UK economy by 2030.
I also believe there is a cost of inaction. As just one example, the Green Finance Institute has estimated that the degradation of our environment linked to climate could lead to a loss of 12% of our GDP. I also think that, if we look at this debate just as a matter of who has the biggest sterling figure on their side of the argument, we are missing something. There is a real human cost to climate change.
When extreme weather destroys homes and livelihoods, when harvests fail, when water supplies dry up, people are driven to destitution and desperation. In that destitution and desperation lies vulnerability, and particularly vulnerability to modern slavery and human trafficking. If the agriculture in a community fails year on year, parents are more likely to take the difficult, heartbreaking decision to let their sons and daughters move or be taken away to a promise of a better life—but in fact taken into slavery, forced into work from which they cannot escape, their freedom and human dignity cruelly taken from them. I believe that is an issue we simply cannot and must not ignore.
In looking at and dealing with climate change, I believe there is an economic benefit. It can bring jobs and prosperity, but it can also help us reduce vulnerability to modern slavery and human trafficking. I urge the Government and all across this House to recognise the need to deal with climate change to save our planet and to save our humanity.
My noble friend led the country with patience at a time of maximum turbulence in her party at the other end, which treated her badly. In retrospect, Parliament should have backed her proposals on Brexit, as the country would have had a better deal than the one we ended up with.
Along with the net-zero commitments, my noble friend will be remembered for the Modern Slavery Act. She is pursuing that cause by leading the Global Commission on Modern Slavery & Human Trafficking, focusing on the impact of climate change on population movement.
Throughout her public life, my noble friend has demonstrated decency, integrity, courage and selflessness. Before we heard of the Nolan principles, she embodied them. In her book The Abuse of Power, she poses this question: “Does politics attract people who yearn for power, rather than for the opportunity to serve?”. For my noble friend, there is no shadow of doubt about the answer. We warmly welcome her to the House and look forward to her future contributions.
Turning to my noble friend Lord Lilley’s Motion, I will make just one point as I have used most of my available time. My noble friend invites us to take note of
“the impact of His Majesty’s Government’s climate agenda on jobs, growth and prosperity”,
but he is choosing his own criteria. Without pressing the analogy too closely, but just to make a point, what would have been the reaction of your Lordships if, 80 years ago in 1944, my noble friend had asked what was the impact on jobs, growth and prosperity of World War II? The answer then would have been that, while those issues were important, there was an overriding priority.
Of course, climate change is not about saving freedom and democracy, but the Prime Minister and others, including in this debate, have described it as an existential threat. It follows that taking steps to avoid that threat would push the criteria my noble friend has chosen down the agenda. To that extent, they are of course important but secondary. The primary question should be: how effective is the Government’s agenda in averting climate change?
My noble friend may not accept that there is an existential threat, and others will argue this case better than I can, but my view is that we are approaching a number of tipping points that would adversely affect the world in which we live, with consequences for the air we breathe, global warming, rising sea levels, droughts, mass migration and the rest. So, forced to choose between my noble friends Lord Lilley and Lady May, my noble friend Lady May once again has my vote.
What I saw first hand was physical devastation and the economic impact on both independent nations as well as our overseas territories. In Antigua and Barbuda, the country’s entire GDP was wiped out by Mother Nature and the ravages of the hurricanes. It brought into focus the importance of climate finance, which I will focus on, and the need to update processes and dated bureaucratic procedures that hindered countries’ abilities, particularly those that had graduated to middle-income status. Through a single event, through no fault of their own, they saw their economic infrastructure wiped out. As I look towards the Minister, I hope the Government continue to advocate for reforms in these international structures. They need reform urgently. I hope the Government will champion the importance of small island developing states accessing funds. More pointedly, the issue of access must be addressed. Much work needs to be done on technical support for these countries.
As a country, we have already signed up to internationally agreed targets limiting our emissions, and we have delivered on these. But the UK has also stood up and committed to providing financial support to developing countries, in the form of international climate finance. In 2009, the UK, together with other developed countries, committed to providing $100 billion in climate finance annually by 2020, provided by both the public and private sectors. During the UN high-level week in 2019, I announced a commitment of £11.6 billion for the years 2021 to 2026 on behalf of the United Kingdom, in support of this international target. Yes, the UK was rightly recognised as an international leader on this important priority. Can the Minister please confirm that the Labour Government will continue to uphold our international commitments?
The previous Government committed to investing directly in both adaptation and mitigation. They committed to spend $3 billion on nature, which was a priority of the COP we hosted in Glasgow. The direct benefits are clear: when you travel around the globe, you see how climate change impacts and you see the results of taking action. When I visited Bangladesh, I saw that nature-based solutions, through the replanting of mangroves, have a major and powerful result, not just mitigating typhoons but saving lives. As my noble friend highlighted, such action saves livelihoods.
At COP 26, we introduced the Global Forest Finance Pledge, and I hope the Government will continue to champion this, particularly as CHOGM is convened this week with our Commonwealth family of nations. Therefore, I ask the Minister again: can he confirm that the Government remain committed to upholding existing commitments? I was somewhat puzzled—perhaps the Minister can clarify—by how the commitment that the previous Government made on climate finance can be squared with the Foreign Secretary’s recent statement that the ICF would be subject to a planned spending review.
The issue of the UK’s green finance strategy, where the private sector is being mobilised, is also an important priority. I hope the Government will continue to focus on the strong relationship and co-operation between Governments and the private sector, which we heard about from the noble Lord, Lord Browne. I look forward to the Minister’s reply.