My Lords, two weeks ago, in laying this order, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy made a Statement in another place, subsequently repeated here, setting out the Government’s ambitions to reduce greenhouse gas emissions from a target of at least 80% to 100%. This draft order does just that by seeking to amend the Climate Change Act. The target, otherwise known as net zero, will constitute a legally binding commitment to end the UK’s contribution to climate change.
I note the attention the Secondary Legislation Scrutiny Committee has drawn to this draft order, specifically on the economic and wider societal implications. I thank the committee for its review of the order and will address these points in my speech. However, first I will set out the case for action.
Last year the Intergovernmental Panel on Climate Change published its report on the impact of global warming at 1.5% above preindustrial levels. In that report it made it clear that a target set to limit global warming to 2% above preindustrial levels was no longer enough. It made it clear that by limiting warming to 1.5%, we may be able to mitigate some of the effects on health, livelihoods, food security, water supply, human security and economic growth—
Viscount Ridley (Con)
My noble friend mentions “2%” and “1.5%”. Surely, he means 2 degrees centigrade and 1.5 degrees centigrade above preindustrial levels?
My noble friend is absolutely correct. I should have said 1.5 degrees centigrade and 2 degrees centigrade, and I am grateful for that correction.
The panel made it clear that countries across the world, including the UK, need to do more.
The House has heard of the great progress we have made in tackling climate change; of how we have cut emissions—on this occasion I will correctly give a percentage—by 42% since 1990, while growing the economy by 72%; of how we have cut coal from 40% of our electricity generation to less than 5% in just six years; and of our leadership role in sectors from offshore wind to green finance. That progress has been delivered by parties across this House and by communities across the UK. But we know that this is only the start and that we need to do more. That is why we commissioned our expert independent advisers, the Committee on Climate Change, to see if we should, and could, go further than our 80% target and set a target for achieving net zero greenhouse gas emissions. On 2 May the committee responded.
In its report, the committee has told us, quite clearly, that ending the UK’s contribution to global warming is now within reach. It has advised that a net zero emissions target is necessary, because climate change is the single most important issue facing us; feasible, because we can get there using existing technologies and approaches, enabling us to continue to grow our economy and to maintain and improve our quality of life; and affordable, because it can be achieved at a cost equivalent to 1% to 2% of GDP in 2050. Due to falling costs, this is the same cost envelope which Parliament accepted for an 80% target back in 2008. That is before the many benefits, from improved air quality to new green-collar jobs, are taken into account.
The Secondary Legislation Scrutiny Committee drew particular attention to the economic and societal impacts of this transition. While this statutory instrument does not in itself place a direct burden on any other body than central government, it is right that we understand how to meet the costs of this transition in a fair and balanced way. That is why the Treasury will be taking forward a review on how to achieve this transition in a way that works for households, businesses and public finances. The review will also consider the implications for UK competitiveness. We provide full impact assessments when we set carbon budgets and will continue to do so for the sixth carbon budget when that is set.
Before my noble friend comes to an end, does the measure address carbon consumption, as opposed to carbon production? Carbon consumption is increasing fast and will increase further under this measure. Is that not considered important?
My noble friend is of course correct: as he is aware, this is about carbon production. If we wanted to measure total consumption, we would need worldwide agreement with other countries and changes would have to be made. At this stage, that is not the case. We believe that this is an important moment to show the world what we are determined to do, and not to rest on our achievements.
I was not coming to an end, because now is the time to say a word or two, particularly as it came up in various interventions after Question Time, on the Motion—
Before the Minister goes on to a different subject, as I understood him the noble Lord, Lord Howell, was asking about carbon production. I do not think the Minister addressed that. I think his noble friend was talking about issues such as afforestation, so that we do things other than cutting out boilers in houses. Does the order address those aspects of climate change?
The order addresses setting a new target. Obviously, we will have to address the questions about how we achieve it. As I understood my noble friend’s question—I may have misunderstood him—he was concerned about our production of carbon as a country. He was addressing consumption and what one could therefore say was displaced production: consumption by means of importing things that might otherwise have been produced in this country. That is what I was trying to address, and I hope that the noble Lord will accept that. On his other point about the means by which we do that—whether we can also reduce levels of carbon by planting trees, carbon capture and storage, or whatever—I imagine that all these matters will come up, but that is another issue and not for the order.
I turn to the amendment in the name of the noble Lord, Lord Grantchester, because it might help if I say a few words now in advance of him, presumably, moving his amendment and then making a decision on what he wants to do with it. I believe that his amendment is unnecessary and that a bipartisan approach to the order is very important. As I put it earlier, this is something on which the bipartisan approach and the need to take people with us is important. Perhaps I can deal with the three points that he makes in his amendment.
On the first, I direct the noble Lord to the detailed and analytically rigorous report we have had from the Committee on Climate Change and assure him that it is just the start. We will build on the frameworks set out in our clean growth strategy and industrial strategy to deliver that target. As the climate change committee has acknowledged, those provide the right framework for action. In addition, our forthcoming White Paper will outline the Government’s vision for the energy system to 2050. On his second point, we are using the powers set out in the 2008 Act—an Act introduced by the Government of whom he was a supporter, and which again had cross-party support. The climate change committee’s report has also shown that that target is now feasible and deliverable, and can be met within the same cost envelope as the 80% target. I have also announced that the Treasury will publish a review on that point. On his final point, although emissions from international aviation and shipping are not formally included within the legislative target, we have made clear the need for action across the whole economy, including international aviation and shipping. As he knows, emissions from domestic flights and shipping are already covered by our existing domestic legislation—
If I may finish this sentence, I will give way. They are already covered by our existing domestic legislation and the Committee on Climate Change accounts for international flights in its advice to us on setting interim carbon budgets. That will continue to be the case for our more ambitious target.
Does my noble friend wish to emphasise the fact that, under the arrangements here, shipping and aircraft emissions are included in our estimates and budgets so that, although how we will do it internationally may still be a matter for argument, the Government have committed that the net zero will cover emissions from aeroplanes and shipping?
My noble friend is correct. I was trying to distinguish between domestic and international in the legislation that we already have. As I and my noble friend have made clear, both of them will continue to be covered in our interim budgets.
Today is just the start. We have laid a strong foundation in the clean growth strategy and the industrial strategy—a point borne out in the independent advice from my noble friend Lord Deben as chairman of the Committee on Climate Change. As I think all noble Lords will accept, achieving net-zero emissions will require hard choices and leadership. It will require us to agree on the ends and strive for consensus on the means, which is why I stress how important it is to take people with us. It will require us to continue to transform our economy, our homes, our transport, our businesses and how we generate and use energy.
Our forthcoming energy White Paper, which noble Lords must wait for, will outline the Government’s vision for the energy system in 2050 and a series of actions to enable that system to evolve during the next decade to achieve our 2050 aims. We will lay out plans across other sectors in the months and years ahead. With continued cross-party support and collaboration across all sectors in society, we can deliver this. I commend the draft order to the House.
At the end, insert: “and that this House supports the objective of achieving net-zero carbon emissions by 2050, and acknowledges the substantial implications of this Order for the United Kingdom; but regrets that Her Majesty’s Government have (1) given little detail of how the emissions target will be met; (2) made a substantial change in policy without the full and proper scrutiny that such a change deserves; and (3) not introduced regulations under section 30 of the Climate Change Act 2008 to include greenhouse gases from (a) international aviation, or (b) international shipping, as part of the emissions target”.
My Lords, I thank the Minister for his explanation of the order. I was always fearful that proposing my amendment before the House could give rise to misinterpretation. The amendment has been carefully drafted. As the House well understands, there are only two mechanisms by which the House can signify a response to the Government concerning statutory instruments: either a regret Motion or an annulment Motion. A careful reading of this amendment will confirm that Labour very much supports the order. Indeed, it forms the basis of Labour policy and was called for in the other place as far back as a year ago by our party leader, Jeremy Corbyn, and the shadow Secretary of State for Business, Rebecca Long-Bailey.
The amendment does not seek to block the order or frustrate the process. The order will go forward today. It is another step in the right direction, as envisaged by the drafting of the Act in 2008. As scientific knowledge advances and experience is gained, today’s momentous move to a permanent net-zero carbon economy can be put into effect by the order, which substitutes the figure of 100% for 80%. However, the text of the amendment lays bare that the Government are not doing it properly. It reflects the summary conclusion reached by your Lordships’ Secondary Legislation Scrutiny Committee’s 53rd report, paragraph 12 of which states that,
“the Department should have acknowledged”,
in the Explanatory Memorandum this order’s far-reaching impact and summarised,
“the work that is underway to assess the significant costs and wider impacts of the transition, to inform Parliament’s scrutiny”.
The Minister in the other place, Chris Skidmore, did not take account of this in subsequent dialogue with the committee. Paragraph 10.3 of the Explanatory Memorandum to the order states:
“If the instrument makes provision different from that recommended by the Committee, the Secretary of State must publish a statement setting out the reasons for that decision, pursuant to s3(6)”.
My Lords, the issue before us has been debated often before, but I think it would be helpful if I were to describe how the process works. First, I want to go back to the Climate Change Act and remind the House that it was entirely a cross-party decision. It was proposed by all the opposition parties. It was prepared by the Conservatives with Friends of the Earth, and it was supported by the Liberal Democrats, the nationalist parties and the independents—yet it was not pushed in that way. It was pressed upon the Government that the Government should introduce it in order that it would be a totally cross-party decision. My predecessor, the first chairman of the climate change committee—I declare my interest as chairman—was manifestly independent and able to mirror that cross-party agreement. There were a few who voted against it. My noble friend Lord Lilley has been opposed to it ever since then. I venture to say that he was wrong then and he is wrong now, but that it not the point. He is in a minority now, as he was then.
The reason we passed that Act was that we saw that climate change was the biggest material threat to us that existed. Now fast forward to Paris. It is worth reminding the House that the agreement in Paris is, of course, not perfect, and many countries will not do what they promised to do. Indeed, if they all do what they promised to do, it is still not enough; they will have to do more. However, the fact is that it was a unique moment in the sense that every country in the world agreed to do something together. That has never happened before and is illustrative of the fact that the world understands just how serious the issue is. Those who seek to hold Britain back must remember that this is a decision which the world has made and is continuing to make a reality. I will come in a moment to the question of the distinction between production and consumption emissions, but it is worth starting by saying that we agreed on measuring production emissions because those are the emissions that we can control; they are the things that we can make sure we reduce and, if we concentrate on them, we will not double count.
20 of 94 shown
In its report, the Committee on Climate Change made it clear that 2050 is the right year for this target and is the appropriate UK contribution to the Paris agreement; it does not currently consider it credible for the UK to aim to reach net zero emissions earlier than 2050. I thank the Committee on Climate Change for the quality, breadth and analytical rigour of its advice.
Recent months and weeks have been a time of huge and growing interest in how we tackle the defining challenge of climate change. Calls for action have come from across society, and we all know that in doing this, it is important that we take people with us. My message today is that we have listened and we are taking action.
This country has long been a leader in tackling climate change. Thirty years ago, the then Prime Minister Mrs Thatcher was the first global leader to acknowledge at the UN,
“what may be early signs of man-induced climatic change”.
Eleven years ago, Parliament—under a different Government, of a different hue—passed the ground-breaking Climate Change Act, the first legislation in the world to set legally binding long-term targets for reducing emissions. That Act, passed with strong support from all sides of both Houses, created a vital precedent on climate: listen to the science; focus on the evidence; pursue deliverable solutions. Today I believe that we can make history again as the first major economy in the world to commit to ending our contribution to global warming. I ask the House to come together today in the same spirit to support this draft legislation.
It could certainly be concluded that this order does not follow that recommendation and that the Secretary of State has not made adequate statements about that decision.
The most important feature is included under the third point of the amendment: that, once again, the Government have,
“not introduced regulations under section 30 of the Climate Change Act 2008 to include greenhouse gases from … international aviation, or … international shipping—
IAS—
“as part of the emissions target”.
In 2012, the Committee on Climate Change recommended this only for Ed Davey, then Secretary of State for Energy and Climate Change, to reject it and say that it should be covered at international level. In 2015, the Committee on Climate Change again recommended the proposal for inclusion under the fifth carbon budget for the years 2028 to 2032. Once again, it was rejected. Now again, in 2019, as part of the “net zero by 2050” target, IAS emissions are excluded.
In its recommendations, the Committee on Climate Change has proposed that emissions from international aviation should be added, based on the UK’s share of the EU Emissions Trading Scheme’s cap of flights departing the UK. In their interpretation of Brexit, the Conservative Government have signalled that they will remain party to the ETS. Can the Minister confirm this and state why this recommendation cannot go forward?
The committee recommended that emissions from international shipping be added based on projections of UK emissions in one of three options: bunker sales, trade share of the UK global trade percentage or activity based essentially by route. I will be happy if the Minister writes to me with a serious response to the recommendation. However, I point out to him the words of the Prime Minister’s office responding to questions on net-zero emissions by 2050:
“This is a whole economy target … and we intend for it to apply to international aviation and shipping”.
Paragraph 10.5 of the Explanatory Memorandum replies that the Government,
“will continue to leave headroom”,
—note the “continue”—for IAS emissions in carbon budgets while reduction strategies are,
“developed within International Maritime Organisation and International Civil Aviation Organisation frameworks”.
However, this is a hollow commitment, as the Government are already failing to abide with the fourth and fifth carbon budgets, which were drawn up within the pathway of reaching 80% carbon emissions reduction at 2 degrees of global warming. Let us state it again: this order is to reach 100% reductions to reach net zero at 1.5 degrees of warming. The latest, updated emissions projections from the department are that we are some 7% over the requirements for the fourth carbon budget and 13% over those for the fifth. What urgent steps are the Minister and the Government taking to get the UK back on track to meet the already-agreed carbon budgets?
The headline recommendations of the Committee on Climate Change report of May 2019 on net zero were clear: in order to deliver,
“a greater than 50% chance of limiting global temperature increase to 1.5°C”,
a net-zero greenhouse gas emissions target for 2050,
“would respond to the latest climate science and fully meet the UK’s obligations under the Paris Agreement”.
It stated:
“A net-zero GHG target is not credible unless policy is ramped up significantly”,
and recommended:
“Delivery must progress with far greater urgency”.
There needs to be widespread collaboration across government with all sectors of the economy to deliver benefits for the environment, the economy, customers and citizens. Net zero will be possible only if the UK meets the challenge of decarbonising transport and heat; 2040 is already too late for the phase-out of petrol and diesel-powered vehicles. Battery technology development is urgently required. There is still no serious plan for decarbonising the UK’s heating systems. Carbon capture usage and storage is yet to get started and afforestation targets are not being delivered.
It is important to recognise that the committee declared the costs as manageable. As the cost of renewables has fallen, the cost equivalent of 1% to 2% of GDP in 2050 is the same as its previous estimates of meeting the 80% reduction. It judged this cost affordable. The committee called for an early review by the Treasury to assess the plan for funding and a distribution of costs for business, households and the taxpayer. Can the Minister give an indication today in regard to the scope of this review, as the Chancellor of the Exchequer has already suggested opposition to the current 1% to 2% of GDP cost? This review should be comprehensive and include taxation, subsidies, incentives and customer costs, as well as the wider potential benefits and costs of inaction and climate events.
The Government also need to unblock the hurdles put before onshore wind’s participation and provide clarity to the nuclear sector. The importance of energy efficiency for homes and businesses needs repurposing, along with carbon-free housebuilding. That there is so much to propose and debate underlines the Government’s lack of policy proposals. The forthcoming energy White Paper gives the Minister the opportunity to answer these challenges and include the Government’s plans, with milestones, to achieve a minimum of net zero by 2050. Indeed, this target may need to be reassessed again. Having set this framework, the Government must introduce a comprehensive strategy of engagement across businesses, customers and the wider public. The Government deliver a wide range of services—through health and education, among others—and are well placed to lead the country’s response to achieving necessary targets. The Minister will remember that the House wished only to secure the achievements of a smart meter rollout in debating that legislation last year.
It should also be recognised that the foundations are in place to enable the UK to reach net zero by 2050. Successive Governments have attained notable achievements and set up the necessary framework, within which measures can be brought forward at least cost. I refer here to the achievements secured through the capacity market and the contracts for difference framework.
The indicators for success are positive. Fifty per cent of electricity generation now comes from low-carbon sources. The country has just experienced an 18-day period of coal-free generation. I could not wish my amendment to be misunderstood any longer and we are making progress. We will continue to work with government and all stakeholders to meet the climate challenge, and we approve of the order. However, the Government need to recognise the urgency to make progress. Can the Minister assure the House that the energy White Paper will be published with enough time to review it and enable a debate to happen before the Summer Recess? Can he give the House confidence that goes beyond rhetoric that the Government will tackle the issue seriously and that our schoolchildren can now return to their studies with hope?
My amendment is clear. I approve of the order before the House but regret that the Government are not taking their responsibilities seriously. I beg to move.
We had to put Paris into operation. In the cross-party balance that I shall seek, I must start by congratulating the Government on being the first Government who asked for the means whereby we could meet our Paris obligations. It was that request which the climate change committee sought to answer in its recent report. I was unhappy to hear those who said that the report was uncosted and unprepared. It has been recognised universally as the most seriously presented, costed effort to show the answer to the three main questions we were asked. The first was: was it necessary to do this and, if it were necessary, should it cover carbon and greenhouse gases as a whole or just carbon? The second big question was: was it possible? The third big question was: by when was it possible? The committee approached these questions by using all the information that was available, by seeking to fill in gaps where there were gaps and by seeking the best information and the best scientific base in order to fill those gaps.
Those who do not accept what we are doing today have a responsibility to argue the case, the details and the facts, and to show the science which they claim argues a case different from this one. I put it to your Lordships that this is by far the best document that has been produced, making the best attempt to look at how to face this real international emergency, and that so far, no one has made any basic statement, backed by facts and science, that gainsays the argument that we can do it, that we have to do it and that we can do it by 2050.
Therefore, I thank the Government for asking the question. I remind the House of what I said in another debate: if you ask the question and you get the answer, you cannot ignore it. The problem with knowing is that it brings with it responsibility. It is the story of Genesis: once you know, you cannot avoid responsibility. Mr Trump does not want to know because, if you know, you have to act.
I put it to the House that those who deny the way in which we propose to act, feeling that it is impossible, have to explain to the House why this issue is not as serious as we think it is. It is no good just saying, “Well, it’s going to be expensive and difficult, and really we don’t much like it”. They have to explain why they believe that climate change is not the threat that it is and that ignoring it will not risk what most of us believe we risk.
I remember a comment made by my noble friend Lord Garel-Jones. He said to a climate change sceptic, “If we do what the climate change committee says and it turns out not to be right, we will have cleaned up the world in a remarkable way. It might have cost us a lot of money but, on the other hand, if we do what the sceptics say and they turn out to be wrong, we will have buggered up the planet”. That is the fundamental choice that we are making. The Government have accepted that that means that we have to set this zero target, and it is of course a target for all greenhouse gases and not just carbon. Those of us on the committee came to the decision that that was so, and we have argued that case on some very—if I dare use the word—conservative lines.
First, we have assumed, and argued on the basis, that we have only the technology that we have; we have not taken a sort of Bush-ite attitude that something will turn up. Secondly, we have not taken into account the extra advantages that one could argue would come in other areas, such as health. We have not done that because we felt that we should put the most conservative —in other words, the most expensive—facts before the nation, as that was the right way to do it. We have also made sure that we have not included any major estimate of the reduction in costs, even though the costs of what we are doing have fallen dramatically in the past. We did all those things because we believed that that was the way to make the nation accept that this was possible, necessary and affordable, even if we put the highest price tag on it, as we should.
We are disappointed, I have to say, that those who appear not to have done the mathematics have produced new figures, some entirely out of the blue and some based on absolute nonsense. The Global Warming Policy Foundation talked about a figure reached by suggesting that to retrofit every house in Britain would cost £150,000 per house. Of course, you can produce any old figure you like if you start with rubbish figures in the first place.
I am sorry to see that a letter was sent to your Lordships by the president, I think, of the Global Warming Policy Foundation, which says, first, that we are presenting a new Bill. There is no new Bill here. We are saying that the amount of money, of between 0.5% and 2% of GNP—which Parliament had already voted for to cover the 60% reduction in emissions that we first thought we had to achieve, then voted for again to cover the 80% reduction—is the same amount that will be necessary to reach net zero. The reason for this is that we have been able to meet the 80% reduction at a much lower price than we expected, not least because of a reduction in the cost of offshore wind and the like. I remind the Government, to whom I have one or two things to say, that offshore wind became as cheap as it did because the Government intervened, providing the possibility of the money to create a market, which meant that offshore wind dropped in price. This is not just a matter of leaving the market to act, but of creating the circumstances in which the market can act.
I point out to the House that the figures in this document—this letter written to everyone—are just not true. The true figures are those that have been worked on for months by the best brains we could put together. Those are the figures on which we should base our future, not figures that have always been wrong. The Global Warming Policy Foundation has been wrong on every single figure it has put forward; there is no reason now to accept what it says. I say to my noble friend that when you agree to a net zero target, agree that it will be statutorily enforceable, and agree that you will commit to it, it is necessary to provide the means of doing so. The Government have not done that. As we said in our last annual report, the Government, although on course to meet the third carbon budget, are not on course to meet the fourth or fifth carbon budgets. Unless they do so, they cannot meet the net zero target we are today putting into law.
The whole idea of having budgets was that nobody would put off until tomorrow that which they should do today; that is why we have budgets. If we did not, as we perfectly well know, every Government—Labour, Liberal Democrat, Conservative or any party you like—would always find a good reason for not doing today what they ought. The targets in those budgets set a mechanism by which we have to do what is needed now. If we do not meet those targets, we are laying on the shoulders of future generations that which we should carry. We have to carry it. The words of these young children remind us that it is their future we have in our hands. Many of us in this House will not be here in 2050, but what happens in 2050 will affect all those we love most. The idea that we should betray them by not doing what we know we should is unacceptable.
The Government have to recognise that they are behindhand on their decisions about transport. The year 2040 is far too late; we cannot do it on that basis. It must be at least 2035 and, in my view, 2030 ought to be our target because I do not see how otherwise we give ourselves enough elbow room to reach it. The Government have not faced up to the problems of heating, which is a real issue.
The area where the Government are most to blame is of course their refusal to improve the regulations for housebuilding, which means that every year we are building more than 200,000 houses that do not meet the requirements and will have to be changed in future. I am afraid that I have used an improper word about this before but we are building crap houses and putting the cost on the shoulders of the people who buy them. That is unacceptable and the Government could change it tomorrow. If they do, though, let us make sure that means that it starts immediately and we do not excuse people who have planning permission so the building goes on for five or six years.
Frankly, I am ashamed of the housebuilders who, given that nine of them make 80% of the houses built, could have done this together. Instead they have blamed the Government and said, “The Government have to do it: we’re not prepared to do it ourselves”. If you applied the amount of money given to the chief executive of Persimmon to the houses he built, he could have built them all to the sort of standards we necessarily have. I look to the Government to make significant changes as far as that is concerned.