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Mr. Nick Hurd (Ruislip-Northwood) (Con): I am grateful for the chance to make a brief and, I hope, constructive contribution to the debate. I congratulate the hon. Member for Lewes (Norman Baker) on securing it.

On the issue of climate change, we are discussing arguably the most demanding test of political leadership that the world faces. As my right hon. Friend the Member for West Dorset (Mr. Letwin) mentioned, the science has moved on to the point where every science agency that matters is telling its Government that action is required. It is time to move the debate on.

The imperative is to understand better the likely impacts of climate change and to focus on the response. Do we try and control it, or do we focus on adapting to   it? The political difficulties are immense. There remains huge uncertainty about the impact of climate change and the acceptable limits of greenhouse gas concentrations. The need to take out an insurance policy is clear. All insurance policies carry a cost. For that cost to be acceptable, there needs to be acceptance of the risk, not just by the scientists and the politicians who "get it", but by the public out there who tend still to see the problem as being "out there". They may be increasingly aware that the climate is less stable, but they are less clear about the link with the choices that they make in their day-to-day lives.

To be effective, any insurance policy on climate change needs to be global, requiring a degree of international co-operation that has never been achieved. Given these difficulties, it is perhaps not surprising that there is a vacuum of leadership on this key global challenge, a sense of drift reinforced by a lack of accountability. The superpower is clearly not engaged, at least at the federal level and at least until 2008. I shall argue today that there is an extraordinary opportunity for the European Union to fill that void, to leverage the power of the single market, to play a constructive and possibly decisive role in building the coalition of the willing that the hon. Member for Lewes mentioned, and to find a path beyond the first, very small step that was Kyoto.
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It must be for Britain to goad the EU into that role. We are uniquely placed to do so given our relationship with the United States, given that we are one of the few countries likely to meet the Kyoto targets, courtesy of the dash for gas led by a Conservative Government, and because we should see it as the right response to the current crisis in the EU. At the heart of the crisis is the need to redefine the relevance of the EU and to prove its value to a new generation. I would argue that that means giving priority to two things: first, re-establishing the EU's credentials as a force for prosperity, and secondly, proving that the EU can take an effective lead on some of the issues that we cannot tackle on our own. Climate change should be at the top of that list as an issue of growing salience to the people of Europe.

What the world lacks, as my right hon. Friend the Member for West Dorset eloquently pointed out, is a framework that takes us beyond 2012. The EU can take a lead in shaping and selling that framework. There is considerable merit in the contract-and-converge principle, but there are difficulties with it and it requires serious consideration. What is clear is that any agreement needs to be acceptable to the United States and the emerging giants.

To be successful, we need to win the argument that lower CO 2 emissions need not come at the expense of growth if we act now. In policy terms, that means focusing intensely on more efficient use of energy and the development of technology that cleans up the supply side. It means bringing the world of business and its customers with us, which in turn means talking less about cost and more about opportunity. We must build into any framework much greater accountability and transparency at individual country level and at the international level.

In building that coalition, there is a great deal that the EU could do to set a lead. I shall give three brief examples. The first is emissions trading. As a Conservative, I believe that emissions trading should be at the heart of a global market-led solution to the problem. The EU emissions trading scheme should be seen as an opportunity to develop a model for a global scheme. It needs to be robust and it needs to be seen to be robust. Critically, it should include aviation. The Minister sounded optimistic about that, but early signs are not encouraging on either front. Real political will needs to be applied to make an emissions trading scheme work and be seen to work.

The second example is the Prime Minister's favourite topic, the common agricultural policy. If the taxpayer is to subsidise farming, let us ensure that we get more bang for our buck. The link has been made with protecting the environment. Why not use the subsidies to incentivise the production of crops for biofuels, which have the capacity to transform the environmental impact of road traffic?

The third matter on which the EU could take a lead is developing technology, for example, clean coal. I congratulate the Government on their recent carbon capture and storage initiative, but we must acknowledge that its impact on the global problem will be marginal. Let us consider the huge coal reserves in the United States and China and face the fact that coal is here to stay. The challenge is to develop clean coal. Rather than mucking around with small, unilateral initiatives, it is
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time for the EU to take a bold step and gather international support for a large-scale demonstration project of a clean-coal power plant in India or China.

The Prime Minister rightly identified climate change as a priority. He is in a position to show the same leadership as Mrs. Thatcher when she put the issue on the political agenda. Britain can be a role model in showing the world that emissions can be cut at little or no cost to economic growth. However, before anyone listens to us we must set our house in order.

The Government have rightly set ambitious targets, but carbon emissions have risen on the Prime Minister's watch and that stark fact undermines our credibility and makes it unlikely that we shall hit future targets. We need a coherent policy framework, which is supported by a process that is more robust in making the Government accountable. Politicians arguably talk too much about processes, but we need a credible road map to reach the long-term targets. It is sensible to break down the targets into shorter-term milestones, backed with a more transparent plan for achieving them.

I should like humbly to recommend three priorities for domestic policy. First, energy efficiency appears the least controversial aspect on which to focus. Who could argue with the proposition of saving money and the planet at the same time? There is huge scope for improving the energy efficiency of our relatively old and inefficient housing stock, out of which seeps approximately 25 per cent. of our emissions. The Government can play a crucial role in breaking through consumer apathy, which is genuine, by a combination of education and compelling incentives to invest in making our homes and offices more energy efficient. Ideally, those incentives should extend to landlords in the private rented sector and small businesses, for which the climate change levy appears to be an ineffective stick.

Many people were disappointed by the Treasury's failure in the previous Parliament to devise new economic instruments to promote energy efficiency. Conservative Members tried to be creative by proposing a reform and extension of the energy efficiency commitment. It is imperative that we find common ground in this Parliament on the way forward on that crucial policy.

My second priority would be to send stronger signals to businesses, whose attitudes are critical. They need to understand that the environmental agenda can bring opportunities as well as costs. For example, let us consider the motor car. I am convinced that new technology provides the solution to road transport emissions. Rather than trying to force people off the road, the right long-term approach for the Government is to go with the grain of public preference and encourage British motorists to make greener choices by making the least polluting cars cheaper to own through the tax and grant system and establishing a coherent long-term framework of fuel differentials to support the greenest fuels.

The current market share for the greenest cars and the greenest fuel remains below 0.5 per cent. and that must be too low. It is imperative that we accelerate technology and incentivise the key manufacturers to recognise a global market opportunity, not least when China is on track to be the largest car market in the world in a generation. Britain has a role to play in that process and we are not meeting that challenge.
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The third priority must be to educate consumers and bring them with us. Their day-to-day decisions will make the difference. In that context, I congratulate The Independent, which has been especially effective, not least in its recent exposé of the way in which our standby culture contributes to emissions.

The link between aviation and climate change presents another opportunity to educate. In 2002, a Department for Transport survey showed that only one in eight people make a connection between flying and climate change. That must cause concern, given the growth in aviation emissions. The motor industry showed a positive example by giving consumers more information on emissions from the cars that they buy. Is not it time to put pressure on the aviation industry to follow that example, perhaps by putting information about emissions per journey on all relevant travel documentation? I stress the importance of consumer education because if we are forced in future down the route of a more aggressive tax regime, which the Liberal Democrats favour, to affect behaviour, it can be sustained only if hearts and minds are won first.

It is time for Britain to put its house in order and the issue that we are considering should cross party lines. It is time for Britain to lead the EU in seizing an historic leadership opportunity. If it takes the opportunity, the EU will take a critical step in redefining its relevance to the people that it serves.

6.10 pm

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