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It goes on partially to explain why, but ends by stating:

That is a statement of the bleeding obvious. It is logical and rational. Why have we been running away from that logical, rational position for the past 15 years? We as politicians ought to address that, and—in the light of an earlier intervention about how to face up to the electorate—we should take on board the radical thinking that is now perhaps beginning to be taken up as the mainstream thinking, and welcome proposals such as the personal carbon allowances scheme or domestic tradable quotas, which was the subject of a Bill that I presented two years ago. We should look into such matters very seriously.

We should look into matters such as the new carbon-reducing scheme for individuals of the Royal Society for the Encouragement of Arts, Manufactures and Commerce, and into the carbon rationing schemes that people throughout the country are voluntarily starting. I recently visited such a scheme in Oxford. Such schemes are gathering pace. People are not waiting for us to do things; they are doing things themselves.

In terms of the markets, we are putting too many eggs into one basket. If that basket were called contraction and convergence, I for one would be very much more confident that it would achieve some success. I am a strong supporter of the contraction and convergence framework, and I hope that the Bill that I presented last December will eventually be taken up by DEFRA, in the same way that I feel that, to a certain extent, the Secretary of State has taken up the issue of personal carbon allowances.

If we were to have personal carbon allowances—a radical policy—some people would say that we were telling the electorate that they have to make a great many sacrifices. As those Members who have already signed up the “25/5 challenge” of the all-party group
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on climate change to reduce carbon emissions by 25 per cent. in five years will know, the sacrifices do not hurt very much—in fact, people do not even notice some of them. We could go down that route, but it would need support. That relates to my final point: the need for a cross-party consensus.

This year, I visited all three party conferences—I might not make a habit of doing so. I escaped as quickly as I could from the Tory and Liberal Democrat conferences at Bournemouth and Brighton to get back to the warmth of Manchester. However, if we are to tackle this issue seriously, we need a cross-party consensus. I have a copy of the report that the cross-party group produced. Three very distinguished but totally independent people wrote it, and a great deal of evidence was submitted. If we do not have a consensus, I do not see how we can put in place the policies that will tackle the problem. As I have said, that problem is now being described in much starker and harsher terms than even the talk of 60 per cent. by 2050.

A Tyndall centre for climate change research report was commissioned by the Co-operative Bank and Friends of the Earth. It talks about figures in respect of carbon emissions: 3 per cent. per annum is a big ask, but even if that is compounded it is insufficient to tackle the problem that we face. It also talks about between 6 per cent. and 9 per cent. per annum, and that is predicated on our doing the biggest part of the job early—instead of waiting until 31 December 2050 and then having a big shutdown in carbon emissions. That means that the policies required go far beyond a bit of taxation, a bit of regulation and a bit of market intervention. It means that we will have to do things that some of our voters will not thank us for. I hope that we will progress with talks on a consensus, and build a bridge before we drive the policies across. We should proceed on that basis.

3.40 pm

Mr. Nick Hurd (Ruislip-Northwood) (Con): I welcome this debate and my contribution will focus on three aspects of this extremely broad and complex issue. The first is Britain’s role, about which we need to be clear. Secondly, I want to press the Government, and clarify their position, on a specific element of the international dialogue that appears to have been neglected: the response to the fact that approximately 20 per cent. of global emissions result from the human activity of destroying trees. Thirdly, I want to return to the issue of cross-party consensus. Greater minds than mine have worked on this issue, which seems to be extremely important, notwithstanding the current healthy competitive tension between the parties as they attempt to “out-green” each other.

On Britain’s role, Mrs. Thatcher was right—there, I have said it—to say that there is no national solution to climate change. The fundamental challenge is how to build consensus around a stabilisation target that is credible and supported by robust science, and how to engage the global community in getting on the road map to achieving that target. Since the superpower of today and the superpower of tomorrow are in a temporary stand-off on this issue, the leadership function falls, in a very timid way, to the European Union.

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My personal view is that it is entirely right for Britain to seek a leadership role. It is important to establish that point, because one hears voices—I hear them in my constituency—saying, “Why are you banging on about this subject? It is all about the United States and China.” It is not, and not least because of the point made by the hon. Member for Eastleigh (Chris Huhne). We are not 2 per cent. of the problem. Given that carbon molecules stay in the atmosphere for 100 years, we are significantly more than 2 per cent. of the problem. There is a strong moral case to be made for British leadership on this issue. Our society has prospered on the back of easy access to cheap fossil fuels, and the price is being picked up by the poor countries. That is the reality—if one believes in the theory of human impact on climate change—and the moral case for British leadership on this issue.

The second argument for British leadership is that we are very well placed to lead because of our diplomatic relationships and skills base, and because of the credibility of the climate science rooted in this country. Thirdly, such leadership would be to our advantage. We will doubtless witness in our lifetimes a step in the transition toward a low carbon economy. The winners will be those at the vanguard of that movement, and Britain has the opportunity to be there. It is in our economic interest to be a leader in this process.

The Prime Minister gets this and has taken a lead on the issue. Such leadership has been defined to date by rhetoric. To say that is not to disparage him, because words are important in moving this issue up the global agenda. The other element that defines his leadership is the 60 per cent. target, which is ambitious. The problem with it is that no one believes that we are going to hit it, so the credibility of our leadership is being really tested, and we need to re-examine the key pillars of that leadership.

As a developed economy and one of the leading economies in the world, we have the opportunity to prove the principle of green growth, by which I mean the principle that one can significantly reduce emissions without sacrificing economic growth. We were well teed up to do this because of the dash for gas—whatever the motivation for that—but the awkward fact is that carbon emissions have risen since 1997, as people are noticing. We are in danger of squandering our opportunity. Energy efficiency and conservation are at the heart of our response and carry with them significant economic opportunities for this country, such as the ability to enhance our competitiveness in an age in which fossil fuels are likely to get more expensive, rather than less.

If we can prove that point, we have the opportunity to transform the international debate, which is proceeding at the pace of the least willing. We have to prove the principle of green growth and shift the debate from one that focuses exclusively on risk to one that also entertains the possibility of opportunity. That could be invaluable in triggering the gear change that, as previous speakers have said, is needed.

The second element must involve broadening the coalition of the willing and changing the frame of the debate. Until now, climate change has been spoken of
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in isolation. It has sat in a kind of silo of thinking, but the more we look at it, the more we see that it is absolutely interlocked with the biggest geopolitical issues of our age. It is absolutely interlocked with energy security, with access to water and food, and with growing concerns for security linked to the migration of peoples fleeing the impacts of climate change. It is also interlocked with issues of poverty alleviation and the treatment of chronic health inequalities around the world. The more we can stitch concerns about climate change into these issues, the greater will be our chance of broadening the coalition of the willing to deal with it. The British Government have a crucial opportunity in that regard.

The third pillar is one on which the Secretary of State tried to make mischief—the leadership role in Europe. I take a Eurosceptic position on the value of the euro to this country and on the process of ever-closer political union, but I can reconcile that position very comfortably in my mind with a strong desire to see Europe becoming much more effective in doing what it says on the tin in relation to promoting more effective action on issues that cross borders.

The reality in Europe is that, although some economies are much more advanced than ours in promoting renewable energy—I believe that the Minister has more experience of this matter than I do—we must recognise that opinions on the European emissions trading scheme vary enormously. That extremely important initiative, which was a result of Kyoto, is none the less fragile, and the British Government, as a leader in Europe, must be at the forefront of the drive to build on the initiative and not to sacrifice it. We must take our partners with us on that. The development of market instruments such as the emissions trading scheme and the clean development mechanism is likely to be at the heart of the solution, not least in regard to correcting a market failure—the inability to price carbon effectively. The lack of an effective price for carbon underlies the apparent failure of the first phase of the emissions trading scheme to drive innovation and change.

The second opportunity for Europe will be to ensure that the single market grows the market for new technologies and raises product standards. The more we do that, the cheaper those technologies will become as they are deployed. Europe has an enormous opportunity to do that and to reach bilateral agreements with significant players in the global warming debate and to encourage them to engage with climate change. I very much welcome the initiatives that the Government are taking through agreements with places such as China. We need to see the details, and the results, of those agreements, but the initiative is the right one. However, the European Union has much greater weight than we do as an individual nation in helping to bring the big polluters to the table. From my perspective as a Eurosceptic, that is what I believe Europe should be about, and I want to encourage the Government to be at the forefront of that process.

Moving on from the role of Britain, I should like to press the Government on an issue that I mentioned earlier. It is striking that almost 20 per cent. of our carbon emissions come from deforestation—a broadly similar proportion to that in the United States. In theory, we can control the practice, as humans are responsible for it. In theory, too, that should be cheaper than restructuring the way in which we produce, distribute
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and consume energy, although I think that we shall have to do that as well. However, the global community is slow to grasp that opportunity, even though it ought to be pretty close to the top of the list of cost-effective actions that we could take.

I am aware that the rain forest nations have put together a proposal for conservation credits. The implementation of such a proposal would be fraught with difficulty, but it is an attractive theory that is entirely consistent with the EU principle of paying farmers to maintain the environment. I have some experience of this matter, having lived in Brazil for five years. The harsh reality is that deforestation of the Amazon is being driven by a very hard dollar for soya and for beef, which are exported principally to Europe. However, there is no equivalent hard dollar for conservation out there in the marketplace. That opportunity must be thought through carefully as we try to get to grips with the global challenge. Will the Government support and actively promote the creation of conservation credits in Nairobi? I look to the ministerial response on that in the winding-up speech.

Turning to the domestic agenda, it is clearly desirable that a cross-party consensus is achieved that includes the world of business, on which we will rely for many of the solutions to the challenge. People have in their in-trays documents on long-term investment decisions that will shape our ability to meet the 2050 target to reduce the carbon intensity of our economy, and they want some vision of what will happen after 2012. They want some vision of the political will to grasp the issue and take action, because that will shape their investment decisions.

My understanding is that there is cross-party consensus on the target, although the language is shifting to suggest that it is a minimum rather than a maximum. Conservative Members at least believe that the 2050 target needs to be broken down. I put it to the Government that the evidence I have heard from business is that the 2050 target is simply not biting on today’s decision makers, whether they sit in Whitehall, the civic centre or the boardroom. I have not heard a plausible or robust argument against breaking down that target into more pressing milestones. I look forward to the ministerial response on that.

The issue between us seems to be about tax, which I regret for two reasons. First, I detect that there is increasingly common ground, at least among Conservative Members, about the need to re-examine the tax system. The shadow Chancellor spoke about green taxes in Tokyo, and there is clearly a mood to shift taxation from goods towards bads.

Chris Huhne: Does the hon. Gentleman acknowledge that the shadow Chancellor’s formulation on green taxes allows for the possibility of a decline in green tax pressure? He talks about green taxes rising as a share of taxes. If taxes overall were falling, that would be perfectly consistent with green taxes falling. That is why we have been careful to express this as turning around green taxes as a share of national income.

Mr. Hurd: That is a point to take up with the shadow Chancellor. The point that I want to make about tax is that there seems to be increasingly common ground among Conservative Members about the need to re-examine the system.

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Although taxes are important levers, they are not the only one. I want to pick up on a point that was made from our Front Bench. It seems to me that there ought to be common ground where there is silence in terms of the cross-party debate—that is, the attitude to constructive regulation and standards that we will expect from the key products that drive our energy consumption, such as the car, the home, the office and the light bulb.

We can take people with us on a journey to revolutionise the standards of the products that are causing the problem, so I urge the people engaged in that cross-party consensus perhaps to focus on that in the short term as an opportunity to send a signal that will be heard by the manufacturers of those products and those who consume them.

My next point to reinforce the opportunity for cross-party consensus relates to procurement in the public sector. About £500 billion is being spent, and that is an enormous lever with things attached to it. The evidence given to the Environmental Audit Committee over many years suggests that, although the Government are making progress and making the right noises, they are very inconsistent.

In my intervention, I gave the example of the DHL contract—the largest Government contract in recent times. My understanding—the Minister might deny this—is that it does nothing to reduce the Government’s carbon footprint. That opportunity has been missed, but I hope that the opportunity that the massive investment in the school building programme represents will not be missed. That carries with it a great opportunity to demonstrate the technologies that will make a difference and to connect young people in this country with the issue. Those are levers that we can pull and they provide opportunities to build credibility and prove to people sitting in Ruislip or Shanghai that we can do something to manage the risk of climate instability, which has the power to inflict huge financial and human costs on our society.

3.55 pm

Paddy Tipping (Sherwood) (Lab): I am pleased to follow the hon. Member for Ruislip-Northwood (Mr. Hurd) because he makes two points—one on Britain’s leadership in the world and the other on carbon pricing—that I want to reinforce and reiterate.

The Government have achieved a great deal, but there will be big challenges in the future, not just for Government but for all of us. Let me list some of the achievements: the introduction of fiscal measures; the renewables obligation; the climate change levy; and the stepping up of duty on motor vehicle taxation. Those are important, and as other Members on both sides of the House have said, we need more. We have worked for many years to introduce a renewable transport fuel obligation, and it is almost within our grasp.

Chris Huhne: If I understood the hon. Gentleman correctly, he mentioned that there had been a rise in fuel and car taxation. He may not be aware of this, but in fact the vehicle excise duty proposals announced in the Budget involve a fall, even in cash terms, of £10 million in overall revenue. Once again, fuel duty is declining in real terms. Therefore, he is not correct.

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Paddy Tipping: I watched with interest the Liberal party conference and the proposals that came out of it. My simple point, however, is that it is important to step up the differential rates between cars of different capacity. As the hon. Gentleman draws me into that area, I wish that the Chancellor had done more, and I hope that we will continue to go in that direction. The hon. Gentleman also minimised the Warm Front scheme. I do not belittle the achievement of better insulation for 1.1 million people. Nor do I belittle the £800 million available between 2005 and 2008 for increasing and taking forward the Warm Front scheme. Those are important initiatives. If people want to build consensus, it is important to recognise what the Government have done.

We need to recognise the challenges before us. A 20 per cent. reduction in carbon emissions by 2010 is a big step, which we will have to work hard to achieve. The Government’s aspiration for 20 per cent. renewables by 2020 is regarded by many in the industry as impossible. Achieving our medium-term target of a 60 per cent. reduction in carbon emissions by 2050 would be an amazingly hard step, not just for Government and domestically, but internationally, too.

The Government have been extremely strong in raising climate change on the domestic agenda. Looking back to Kyoto, the role of the European Union was important, but so was that of our Deputy Prime Minister. Who would have thought that climate change would be one of the top two agenda issues at Gleneagles? That would have been unthinkable a decade ago. Keeping the discussion going to St. Petersburg in Russia was also an important step forward, as was the Gleneagles dialogue, a sophisticated diplomatic approach outside the United Nations framework, which, because of its size, will prove difficult. I was excited by what was achieved in Mexico last week, and I was disappointed at what remains to be done. I guess that all of us look forward to Nairobi next month. Again, it will be hard for us to make progress through the United Nations process. But it is important that the British Government continue to show leadership.

The big challenge is post-Kyoto in 2012, which is only six years away. We need to use international discussions now to make our arguments for what comes next. I am not entirely clear about what should come next, but I do know that there is a false dichotomy between those who argue for targets and those who argue for technology. The real gain will be made by introducing targets that encourage new technologies, so that we have a target-led approach that produces market-led solutions through technology.

The big challenge is carbon pricing, as the hon. Member for Ruislip-Northwood (Mr. Hurd) rightly said. If we are serious about making change, we have to secure a high, stable price for carbon that can be maintained for a long period. The buzz phrase in the industry—I hear it from British electricity generators—is carbon pricing that is long, loud and legal. As a catchphrase, that has much substance. The way to achieve that new, higher price for carbon is to build on what we have.

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