My Lords, the UK is committed to using its multilateral and bilateral trade policy to encourage the uptake and spread of clean technologies as a lever to remove market distortions and to help countries to adapt to the challenges and impacts of climate change in pursuit of our Paris Agreement and the 2050 net-zero target.
I welcome the Minister’s fine words, but some trade agreements seem to ignore them. For example, will we continue our membership of the 53-nation Energy Charter Treaty and the interstate dispute settlement protocol, both of which protect fossil fuel companies against measures that damage their profits and have been used to challenge environmental regulations?
My Lords, environmental policies are at the forefront of our minds when we negotiate free trade agreements and in the areas to which the noble Lord refers. But, of course, these agreements are negotiated. We push very hard for the inclusion of all the lines we want but sometimes, necessarily, there has to be a bit of give and take in these agreements.
My Lords, I am sure my noble friend will agree that many of these agreements are asymmetrical in nature—we are giving and other countries are taking. Could we look at the environmental and animal welfare chapters of the recent agreements in principle for trade deals with Australia and New Zealand? In particular, will my noble friend yet again confirm that we will not accept any agricultural or other products into this country which do not meet our high standards of animal welfare and environmental protection? Will he also tell us when flesh will be put on the bones of the environmental and animal welfare chapters of these two agreements?
My noble friend is an assiduous champion of these matters. Our ambitious trade deal with Australia includes the first substantive climate change article that Australia has included in a deal, which affirms both parties’ commitment to the Paris Agreement. Of course, our very recent agreement in principle with New Zealand goes beyond this and breaks new ground on climate change. It will include the most comprehensive environmental goods list of liberalised tariffs in an FTA to date and precedent-setting commitments on coal and fossil fuels. I look forward to debating these matters further with your Lordships’ House when the full texts of these agreements are available.
My Lords, we welcome the fact that the Government have added trade and shipping to the reporting of UK emissions. They represent about 50% of all UK emissions. The Minister will be well aware that the UK is heavily reliant on trans-shipment—that is, shipments that come to the UK primarily via European ports. The European Commission is planning an extension of the Emissions Trading System to include ports and shipping. Does the Minister agree that it makes no sense for the UK to have a wholly separate scheme and that there are mechanisms within the UK-EU TCA to open up discussions for a pan-European trading scheme for emissions for shipping and ports? There is a way—is there a will?
My Lords, the shipping industry is of course very important to the United Kingdom. I am sure noble Lords have noted that my right honourable friend the Chancellor of Exchequer gave some relief to the shipping industry yesterday in terms of tonnage tax. If I may, I will follow up in a letter the particular points the noble Lord has raised this morning.
The Australian Government specifically exclude farmers from any climate change responsibilities and the New Zealand Government have a different system for them, but we are going to ask our farmers to meet very considerable responsibilities on climate change. How on earth can the Government allow goods to come into this country to compete with our farmers and expect our farmers to meet the high standards that we are going to demand?
My Lords, I am happy to repeat again from this Dispatch Box our commitment to maintaining very high standards of animal welfare, and of course food safety, in relation to free trade agreements. I do not fully agree with the points the noble Lord makes. We do seek to secure these points in free trade agreements, as I said earlier, and we are absolutely committed to upholding the UK’s high environmental standards when we negotiate our free trade agreements.
Many countries are moving forward with proposals for carbon border taxes to address the emissions caused by their imports. The Government have said precious little about this. As COP approaches, does the Minister agree that the UK needs to show leadership in these proposals, not least as the UK has the highest rate of imported carbon in the G7? What proposals are the Government bringing forward?
My Lords, as we transition to net zero, of course the UK recognises the importance of addressing the risk of carbon leakage to ensure that our ambitious policy of decarbonisation is not undermined. We have ambitious carbon pricing through our emissions trading schemes, and we have committed to review this to ensure that it is consistent with our net-zero pathway and carbon priceable mechanisms.
My Lords, does the Minister recognise that as the UK has decarbonised its domestic economy, we have dramatically increased our trade-embedded emissions from under 12% in 1990 to over 42% today? The Net Zero Review blandly states that a case for conducting a formal call for evidence into a carbon border adjustment mechanism “may emerge”. Do these figures not demonstrate that the case is clear, compelling and should be acted on now?
My Lords, internationally, we believe that the first step is to use climate diplomacy to encourage our trading partners to ambitiously mitigate climate change in co-ordination with each other for this very reason: to reduce the leakage risk across economies. But the noble Lord makes a point, and we will also consider of course the full range of options to address the risk of carbon leakage, including by seeking opportunities at the relevant international level.
Being endlessly flexible and trying to help out the Government, I was prepared to do either Question; I would just like to register that. But on the question of trade, it is clear from yesterday’s climate-unfriendly Budget that this Government have no climate change ambitions for trade. They are absolutely ignorant about what they need to do. Would the Minister agree?