Climate Change

[Relevant documents: Eighth Report of the Environmental Audit Committee of Session 2024-26, The Seventh Carbon Budget, HC 1327, and the Government response, Session 2026-27, HC 25; Oral evidence taken before the Environmental Audit Committee on 15 June, on Carbon Budget Seven follow-up, HC 361; Correspondence from the Minister for Climate to the Environmental Audit Committee, on The Seventh Carbon Budget, reported to the House on 23 June 2025, Session 2024-26.]

I beg to move,

That the draft Carbon Budget Order 2026, which was laid before this House on 2 June, be approved.

With this it will be convenient to discuss the following:

That the draft Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026, which were laid before this House on 14 April, in the last Session of Parliament, be approved.

That the draft Climate Change Act 2008 (Credit Limit) Order 2026, which was laid before this House on 14 April, in the last Session of Parliament, be approved.

This week has been like no other. At this very moment, people across our country are experiencing another reminder of the world we now live in. If anyone in this Chamber still thinks that climate change is a problem for tomorrow, they should step outside today. Parents will struggle to get their children to sleep through sweltering nights. Farmers will look anxiously at weather forecasts and cloudless skies. Hospitals, schools and care homes will prepare for temperatures that would have seemed extraordinary in Britain just a few decades ago.

Parts of our country are facing temperatures of up to 38° this week, while experts warn that 40° days may arrive far sooner than anyone expected. Today’s debate is not taking place against the backdrop of climate change; it is taking place in the middle of it, and I cannot make it clearer to the House that this is not normal. A Met Office extreme heat warning is in place for parts of the UK today and tomorrow. In fact, it has just confirmed that today is the hottest June day ever.

In recent months the crisis in the middle east has felt like a ghost from the recent past. Once again, the world has found itself staring at a major fossil fuel-producing region and wondering what happens next. Once again, energy markets have been holding their breath. Once again, families, businesses and Governments have been reminded just how fragile the system can be. This is, of course, the second fossil fuel shock in barely half a decade. It is only four years since Putin’s tanks rolled into Ukraine and sent shockwaves through the global economy, four years since family budgets were shredded by soaring energy bills, and four years since Britain was reminded that when our energy system depends on volatile fossil fuel markets, a crisis on the other side of the world can land on our doorstep in a matter of days.

Will the Minister give way?

I will make some progress.

Postponing difficult decisions has never been how our country has met its greatest challenges. We have always been strongest when we have looked beyond the immediate horizon, recognised the risks ahead and taken practical steps to prepare for them. That is what the carbon budget framework represents: a science-led budget to reduce emissions by around 87% between 2038 and 2042 compared with 1990 levels, including in international aviation and shipping. The framework is in line with the advice from the independent Climate Change Committee and is endorsed by the Environmental Audit Committee, which I thank for its rigorous scrutiny, including in the evidence session that it held with me last week.

Alongside the carbon budget framework, the regulations before the House today will formally include the UK’s share of international aviation and shipping emissions in carbon budgets from carbon budget 6 onwards, while the Climate Change Act 2008 (Credit Limit) Order 2026 will ensure that carbon budget 5 is met through domestic action, allowing the UK economy to capture the full benefits of the transition.

Will the Minister give way?

I will keep going.

In determining the level of the seventh carbon budget, we assessed different pathways for Britain’s future. What the analysis showed was remarkably clear: whether viewed through the lens of economic growth, national security, public health or long-term prosperity, the benefits of continuing on Britain’s path to net zero significantly outweigh the benefits of abandoning it. Let me explain why.

The first reason is business uncertainty. This framework provides something every successful economy depends on and every serious business asks for: certainty. Investment flows not to the country with the lowest costs or the biggest market, but to the country with a plan. It flows to the country where business investors and entrepreneurs can look 10, 15 or 20 years into the future and have confidence about the direction of travel.

Yesterday, in a career highlight, I was proud to open the London stock exchange to mark London Climate Action Week. It also celebrates a remarkable finding in new analysis by the London stock exchange, which is that the global green economy is now worth more than $10 trillion. Its analysis has found that green revenues grew by 5.3% in 2025, despite energy shocks, market volatility and geopolitical tensions. Here in the UK, I am proud to announce that this Government have officially secured £100 billion of private investment in clean energy since taking office.

The message from investors could not be clearer: the race is on. Capital is flowing towards the countries that are building, planning and backing the industries of the future, and that is one of the great strengths of the Climate Change Act and the carbon budget framework. For almost two decades, that has provided a stable and predictable signal about where Britain is heading, giving businesses the confidence to invest, innovate and grow.

Will the Minister give way?

I will keep going for a bit if that is okay.

This is a market solution to a generational challenge, providing certainty about the destination while allowing competition, innovation and enterprise to determine the journey, and the results can be seen across the country. On the day we laid this order before Parliament, new analysis showed that Britain’s net zero economy now supports more than 1 million jobs and generated £105 billion for the UK economy alone. We see that opportunity in carbon capture projects in Teesside, in new nuclear at Sizewell C in Suffolk, and in companies across the country building the technologies, supply chains and industries that will power the next chapter of British economic growth.

Indeed, as more than 75,000 people have descended on London for London Climate Action Week this week—taking part in over 1,300 events and helping to broker deals, partnerships and investments that will shape the global economy for years to come—they are doing so in a city that has established itself as the sustainable finance capital of the world. That is why support for this framework extends far beyond Government. The British Chambers of Commerce says these plans provide “greater certainty for…firms”. The CBI describes the green economy as

“a powerhouse of job creation and economic expansion”.

Will the Minister give way?

No, I will make some progress.

Those benefits include greater protection from flooding, cleaner rivers and greater biodiversity.

But this is not simply about what we avoid; it is about what we build. Across the world, more than $2 trillion is now invested in clean energy every year—roughly twice the amount invested in fossil fuels. It is where global capital is flowing, where industries are being built and where future economic advantage will increasingly be won. I make no apology for Britain competing for that opportunity. I do not want our country watching from the sidelines while others capture the jobs, industries and investment of the future. I want Britain helping to shape that future and benefiting from it.

Let me finish by saying this. Long before I entered this House and long before I became a Minister, I was one of the many people involved in the wider effort that helped to build support for the Climate Change Act, which is one of the most significant and widely supported pieces of cross-party legislation this country has ever passed.

Will the Minister give way?

Let me just finish.

Back then, it often felt like a cause that sat at the margins of politics, rather than at its centre. Progress felt slow; success felt uncertain. If someone had told me that one day I would stand at this Dispatch Box I might have struggled to believe it, but what that journey reminds me of is that real change is rarely the work of one person, one Government or one political party. It happens because people keep building year after year, Government after Government, Parliament after Parliament. Eighteen years ago, this House came together to pass the world’s first climate change Act. Seven years ago, it came together again to make Britain the first major economy to legislate on net zero emissions. Different Prime Ministers, different Governments and different political traditions have all helped to write that story.

Will the Minister give way?