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I have a few examples of the failure of Government rhetoric. This year, they dropped their own commitment, made in three consecutive manifestos, to cut British carbon emissions by 20 per cent. by 2010, and replaced it with a target of 15 per cent. The Guardian reports today that the Government have ordered a U-turn on the Merton rule, having caved in to the House Builders Federation. The Government have chronically underfunded, and are now scrapping, the farce that is the low-carbon buildings programme, causing huge problems for the microgeneration industry. They have underspent, cut and then redirected budget commitments for energy efficiency and failed to support plans to build the world’s first carbon capture and storage power station in Peterhead, Scotland, opting instead for yet another
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iterative round of consultation and a competition, instead of just getting on with it. They were caught red-handed trying to water down Britain’s commitment to the EU renewable energy target of 20 per cent. by 2020.

Although the Prime Minister acknowledged the scale of the challenge that we face, his speech was remarkably short on solutions proportionate to the task. We had already heard much of what was announced. The Government had already committed to end fuel poverty, take action on low-energy light bulbs, build zero-carbon homes from 2016 and launch a competition to build a commercial carbon capture and storage project in Britain. The most groundbreaking proposal on Monday may have been the Prime Minister’s move to eliminate plastic shopping bags, but even that is to go to a forum for discussion before anything is done. Reluctance, reannouncements, rehashing and repetition are, sadly, all too familiar.

People are asking where the real vision and action are. If we judge the Government’s performance this year by deeds and not words, a decidedly mixed and unambitious picture emerges. I ask the House to keep in mind the following facts: despite all the talk, UK carbon emissions are still higher today than when the Labour Government took office 10 years ago; the downward trajectory is barely noticeable. This morning, perhaps mindful of the irony of the fact that we were to have this debate, the Government snuck out a written statement announcing that they intend to expand massively Heathrow airport, without so much as a mention of climate change or carbon emissions in the consultation process. The Bali conference is only weeks away, and Britain will no longer be visiting in a position of global leadership on climate change.

Martin Horwood (Cheltenham) (LD): On the subject of leadership, will the hon. Gentleman take this perfect opportunity to say that, in respect of the targets in the Climate Change Bill, the Conservative party will stand shoulder to shoulder with Friends of the Earth and the Liberal Democrats in arguing for reductions of at least 80 per cent. by 2050?

Gregory Barker: That is a good point, and I shall come to it specifically later.

Mr. Kidney: Does the hon. Gentleman accept that when we get to the international negotiations, Governments from around the world will resist any binding agreements on carbon reduction, because they fear that it will harm their economies? Does he give credit to this Government for proving in the past 10 years that we have successfully expanded our economy but decoupled the production of carbon emissions that used to go with that?

Gregory Barker: We have expanded our economy but barely reduced our CO2 emissions, and we will meet our Kyoto commitments only because of the big leap forward that was made under the last Conservative Government. Nevertheless, I give credit to the Government for arguing the case.

Mr. Chaytor: Will the hon. Gentleman remind us of his party’s view of the climate change levy and what contribution that has made towards reducing CO2 emissions?

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Gregory Barker: The climate change levy is a very inefficient tool: like a lot of things that come from new Labour, it is a great brand but poor in its effects. We should replace it with a carbon levy that does not focus on the amount of energy a business uses and clobber its competitiveness across the board, but focuses specifically on carbon output. That would be a much more business-friendly tool.

Mr. Gummer: Is not the climate change levy a typical example of this Government’s actions? They call something the right name, it does not work, and then they accuse people who complain about it of attacking the whole principle. They must put their words and actions together if we are to achieve anything.

Gregory Barker: It is new Labour all over—great brand, shame about the product.

To be fair, the Government are coming forward with some new measures that we can support, but they are small beer compared with the enormity of the task that we face. Nor can we leave it all to individuals or the consumer to help to deliver Britain’s CO2 reductions. What Britain needs is dynamic industrial change—change that is urgent, ambitious, clear and focused on the long term. The Prime Minister is right to join us in talking about the advent of a new industrial revolution and the opportunities that that could present, but the current pedestrian pace of change is not commensurate with the urgency of the challenge. Conservatives understand the changes that we need to make and the path that we need to take to meet this enormous challenge, but we also recognise the huge economic opportunity for Britain that this could offer. Over the next decade, UK plc has a real opportunity to lead the world. Conservative Members are not pessimists. Mankind will reach for solutions; our most progressive companies and successful entrepreneurs are already doing so. I have no doubt that we can embrace the low-carbon economy, because with or without us the world economy will change—

Mr. Redwood: Does my hon. Friend agree that if one wishes to influence people’s behaviour it is often better to offer them tax incentives and encouragement instead of higher taxes and over-prescriptive regulation that they can get around?

Gregory Barker: My right hon. Friend has hit on the head the difference between the Labour way and the Conservative way. We stand for incentives, encouragement and supporting business, not just clobbering it.

In Britain, we have a clear choice. We can be players on the field of the global economy, looking for solutions, forging new markets and grabbing first mover advantage, or we can be spectators watching from the sidelines while the action takes place without us. We have the research excellence and the entrepreneurs, and in the City we have an abundance of green capital. Let us not repeat the mistakes that we made after world war two, when in the face of change we clung to the old industrial certainties. We failed to modernise and let our competitors invest in change and innovation, and by being so cautious we locked a whole generation into economic decline.

As we enter the new low-carbon era, let us not make that mistake again. We need to embrace change and seize the opportunities that it will create. That is why we
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are drawing on the work of the quality of life review undertaken by my right hon. Friend the Member for Suffolk, Coastal and Zac Goldsmith. That is why we are using this great toolbox of ideas. That is why we propose bold policies such as the introduction of feed-in tariffs for microgeneration, which are working well in Europe, the replacement of the ineffective climate change levy with a focused carbon levy, and the introduction of a waste heat levy to incentivise combined heat and power and drive innovation in the energy sector—and let us not forget the reform of air passenger duty, which would move tax from the individual passenger to the efficiency of the aircraft. There is much more to come from the Conservatives, all of which will be aimed at ensuring that British business is sent clear, long-term market signals from the earliest possible date and that the long-term cost of carbon becomes embedded in economic decision making.

The Climate Change Bill will play a vital role in helping to create the long-term direction that business needs. As the House knows, Conservatives welcome the Bill, and it is to the Government’s credit that they introduced it in the Queen’s Speech. We look forward to working constructively on a cross-party basis to enhance and strengthen it when it begins its passage through the House of Lords next week. However, we must all acknowledge that it is only a framework; it cannot deliver a low-carbon economy on its own. Without coherent, joined-up and ambitious policy to underpin it, it will be little more than an effective way to keep track of the Government’s failure. As it stands, it needs to be strengthened and improved.

I do not want to pre-empt the Second Reading debate on the Bill, but there is one crucial point that the Government need to act on urgently. On Monday, the Prime Minister finally acknowledged that all the latest science says that an emissions reduction target of up to 80 per cent. is necessary to keep warming within the 2° target. Conservatives strongly believe that scientists, not politicians, should drive those targets. He also seemed to acknowledge his awareness that there is a flaw in how the Bill proposes to deal with raising its current reduction target of a minimum of 60 per cent. The Government are to ask the independent committee on climate change to revisit the 60 per cent. minimum target and report back with its recommendations in 2009. However, the committee will set the first 15 years of carbon budgets in 2008—a year before we know what the new reduction target will be. That is nonsensical. It is vital for British business to know the targets now, before we map out how we achieve them.

On Monday, the Prime Minister acknowledged that there is a problem but fudged the response. More clarity is needed. We need the committee to be announced to Parliament now, to sit provisionally before Royal Assent is given to the Bill, and to inform the targets that are proposed in it. Any other route would not provide the clear, credible and long-term signal that business so badly wants from the Bill. Moreover, we firmly believe that the committee is insufficiently independent. Its remit is too broad and vulnerable to political influence. Its recommendations must be driven and informed by the science.

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Martin Horwood: I agree about the need for independence and for a shadow committee to be established soon. Returning to targets, the hon. Gentleman seems to have accepted the figure of 60 per cent. that is in the Bill. What is his objection to setting a higher figure now and letting the scientists reduce it if we do unexpectedly well?

Gregory Barker: We want to get away from politicians fiddling with the targets and having a know-all attitude. We want science to drive the long-term targets. It is clear to everybody that 60 per cent. is not enough, but rather than me—a graduate with a history and economics degree—suggesting a target for the Bill, far better that it should be the scientific committee that is going to sit and consider it. We will support a far more ambitious target, but for the sake of its credibility it needs to be set by scientists, not politicians.

Mr. Michael Jack (Fylde) (Con): Does my hon. Friend agree with the conclusion of the report by the Select Committee that examined the draft Climate Change Bill, which said that the status of the Committee should be equivalent to that of the Monetary Policy Committee, whereby the Secretary of State would have to accept its advice and not merely regard it as guidance?

Gregory Barker: Those are wise words. We will draw on the work of my right hon. Friend’s Committee in the House of Lords and, in the new year, in the Commons.

We firmly believe that the committee must be independent and that independent science must drive its recommendations. It is not there to second-guess any of the Government’s political priorities, whatever colour the Government of the day may be. There is much work to do on the Bill, but we look forward, in a constructive spirit, to enhancing and strengthening it in the coming weeks to turn it into the framework for dynamic industrial change that it has the potential to be.

The world stands on the cusp of a new low-carbon age. Britain has too much potential to do anything other than help to lead the way forward. However, that requires a Government with ambition, vision, ideas and the people to come together to provide that leadership.

1.39 pm

Colin Challen (Morley and Rothwell) (Lab): I have sat in this Chamber on many occasions thinking that time was going backwards, and today that belief was confirmed. The clock has gone backwards several times already; I am sure that can be reviewed.

I welcome the debate because it is very timely, given that the week-long conference of the Commonwealth Parliamentary Association will take place next week, here in Westminster. Parliamentarians from all over the Commonwealth will attend, and I very much look forward to it. I also look forward to being in Bali for at least the first week of the conference. I hope to try to influence things, but I probably have no great chance of success. It will be a very difficult conference—perhaps somewhat more difficult than a win for an English side against Croatia. At least the England team will get another chance; we will not have a second chance after Bali. There may well be a penalty shoot-out later on, but we will have to wait and see.

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I very much welcome the Government’s statement on their principles for approaching Bali, and the credence we can give to the principles is based on the Government’s leadership. There might be some domestic problems—we all know about those—but in the international arena the UK has led the debate on climate change. The first principle states that the post-2012 regime must meet the scale of the challenge. That is absolutely correct. There cannot be any deviation from that principle at all. It is good to remind ourselves how big the challenge is. We often say that we have 10 or 15 years before global emissions peak and then drop. I would argue that we have already exceeded that peak.

Over the past 650,000 years, the highest level of carbon alone in the atmosphere was 280 parts per million, and now that figure stands at 384 parts per million. Carbon equivalent gases are perhaps over 430 parts per million now. It is obvious to me that we are well into uncharted territory already. We do not have a window of opportunity to see how much further we can test the system. I would not accept anyone saying that we have another 10 or 15 years to sort the problem out. We do not.

Mr. Nigel Evans (Ribble Valley) (Con): I wish the hon. Gentleman well on his visit to Bali. I was in India not so long ago. It has huge poverty, and it is a developing country. We cannot tell countries such as India, or the poorest parts of China, that they cannot develop. We want to ensure that they are able to grow in the most environmentally friendly ways possible. Developed countries such as the United Kingdom and the United States of America can help by sharing our technology with those countries. We should not see that as a barrier to competition, or the giving away of a valuable resource. We would be playing our part in helping them to grow in an environmentally friendly way.

Colin Challen: I absolutely agree with that. There are two further points. We should also bear it in mind that if we want them to grow, we will have to allow them a degree of increase in their carbon emissions. We allowed ourselves that luxury. I hope that it would not be on the same scale as ours, but the only way to ensure that is to make our cuts even deeper. We also need technology transfer mechanisms. One of the possibilities that we ought to consider is the way in which the World Bank is funding fossil fuel developments. Oil companies, with oil priced at nearly $100 a barrel, are making unprecedented profits. That does not make sense.

To return to the target, and the stabilisation greenhouse gases, a new element now has to be factored in. In the past, we largely concentrated on anthropogenic emissions, which reflects the science since about 1994. Recently, and this idea is now included in the Hadley Centre’s future work programme, we have had to consider the coupling of greenhouse emissions from man-made sources and those coming from positive feedbacks into the system, which are now emerging as a major contributor. We have multiplied the impact of positive feedbacks, and if we get beyond a tipping point, there might be nothing we can do to rein in those feedbacks. That modelling is now being used more widely, including by the intergovernmental panel on climate change, even though it was buried deeply within its report. If we
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consider that factor, I hope that we will note that our targets have to be much higher—probably beyond the 80 per cent. that has already been mentioned this afternoon. That is a worrying development, but we have to take it into account if we are to achieve the first principle set out by the Department for Environment, Food and Rural Affairs.

The Tyndall Centre for Climate Change Research has considered what our accepted share of global emissions might mean for us. It has shown that to have a 30 per cent. chance of avoiding dangerous climate change, the UK’s 50-year budget between 2000 and 2050 has to be fixed at about 4.8 gigatonnes of CO2. It also has shown that between 2000 and 2006, the UK emitted 1.2 gigatonnes of CO2, so we have already used one quarter of the budget available to us, based on our current understanding of what must be done. That shows the severity of the situation. Based on those figures, to have a 30 per cent. chance of avoiding dangerous climate change, the cuts in our emissions we need to insist on after 2012 could be as much as 9 per cent. per annum. That goes well beyond anything anyone has asked for before.

I want to examine one of the other principles to which the Government have alluded in their statement, which is the role of markets. Markets are seen as the greatest mechanism to deliver cost-effective reductions in carbon emissions, and we have to focus hard on how successful they will be, and on whether we should not put too much faith in them. It is quite right that low-cost options should be explored first—they are the low-hanging fruit, and the biggest reductions can come that way—but the history of the markets to date shows a great deal of volatility in prices for carbon. It is now back at over €20 in the emissions trading scheme, having gone down to zero at one point.

There is not a great deal of long-term investment opportunity for the investment community if it cannot see how the future will pan out for the price of carbon. If we are always going to focus on the cheapest price of carbon, we will price out some of the long-term, perhaps more expensive, things that we need to do—alternative energy systems that are quite expensive to get up and running. We need to recognise what Stern said about carbon pricing: we cannot rely on markets alone to set the price. We have to do a range of other things to ensure that we do the right thing. To a great extent, we will need renewable technologies.

I have already mentioned the role of the World Bank. It needs to stop funding fossil fuels immediately, and we should invest more heavily in renewables. We should follow the example of Germany and examine successful schemes, such as the feed-in tariff. There are arguments about the level at which it can be applied, but we ought to be open to such ideas, and not over- defensive about measures we have in place already. Those are working to a certain extent, but if we compare the way in which the German feed-in tariff works with the way in which the renewables obligation works, we find that the feed-in tariff delivers renewable electricity about 2 euro cents cheaper per kilowatt-hour than our own system. We should be open to new ideas. It would be an example of leadership in Bali to say that we are not going to hunker down and be protective about what we have done. We have to be open and co-operative if the Bali process is going to work.

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Finally, I would like to reiterate my proposal that in the two-year period before the COP 15 in Copenhagen, when I hope the deal will be ready to sign, the UK should have some sort of national, Government-sponsored convention on the climate change framework, so that we can involve civil society, non-governmental organisations, business and everyone else with an open mind, just as we did at the Exeter science conference, to include far more people in the debate.

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