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Thirdly, all this pain will not have an impact on CO2 emissions in any case, because most of them are to be taken up by the use of the emissions trading scheme, whereby permits to pollute and produce emissions can be bought. We have already heard about caps, but
Europe is awash with permits at the moment. To get Russia involved in the Kyoto protocol, it was given permits based on 1990 levels—when, of course, CO2 emissions from huge, inefficient and dirty state industries were massive. Many of those industries have closed down; their emissions are no longer. However, the ETS mechanism will enable aviation and shipping industries to purchase, from Russia and other countries awash with emissions, certificates to produce CO2 emissions that are not currently being produced. Rather than a reduction, we could actually see an increase in CO2 emissions. The impact will only add to the costs of industry, which will then be borne by consumers and people who wish to travel.
The hon. Member for Northavon (Steve Webb), speaking for the Liberal Democrats, said that he thought this was more a nudge and a wink, and that nothing much would be done at the end of the day as the Government would find ways around meeting the targets. That might well be the best result. The problem is that in the interim we are going to face additional costs and additional disadvantages to our economy.
My hon. Friend the Member for South Antrim (Dr. McCrea)—he totally disagrees with my views on this issue, incidentally, but I agree with him on this—pointed out that those costs will not be felt evenly. Some constituencies will suffer the costs much more heavily than others. If we are going to vote this Bill through, we should at least make people aware of the impact it is likely to have on them, their livelihoods and their economic activities.
David Taylor (North-West Leicestershire) (Lab/Co-op) rose—
Sammy Wilson: I was about to close, but I will give way to the hon. Gentleman.
David Taylor: I thank my hon. Friend—well, he is a friend outside the Chamber—for giving way. In articulating the case that outcomes are uncertain, costs substantial, modelling complex and time scales very lengthy, is he not putting forward a counsel of despair, a prediction of inertia or a “do nothing” approach in the face of global problems? Surely that is not the impression that he is trying to give to the House, or is it?
Sammy Wilson: I shall not go into all that, as I have probably pushed your indulgence to the limit, Mr. Deputy Speaker, but there may be opportunities later in the debate to look at what can be done. If there is, as I accept, global warming, climate change and impacts stemming from them and if we are going to keep using our resources, let us look into what we can do now that will make an impact now—not some time in the future, when, as has already been pointed out, most of us will not even be in the House anyway!
Joan Ruddock: I note from the clock that we have spent three hours on the first group of amendments; we have five such groups and only five hours of debate. I propose not to respond to all the issues raised, but just to some of the most direct ones that were put to me.
The hon. Member for Bexhill and Battle (Gregory Barker) asked about the definition of international aviation and shipping. We have not yet defined it, but
there is a provision in the Bill whereby we will be able to provide it in due course. We will, of course, consider all possibilities. The hon. Gentleman also effectively criticised us in saying that this is a framework Bill whereas we really need to know what is going to be done to put it all in place. I remind him that as soon as is reasonably practicable after we have set our carbon budgets, we shall have to publish a report saying exactly that: what we will have to do in order to meet those carbon budgets. That is in clause 13, as currently drafted.
The right hon. Member for Suffolk, Coastal (Mr. Gummer) raised many interesting points. He focused chiefly on shipping, which he suggested should be dealt with separately. The Bill does allow us to treat aviation and shipping separately, for precisely the reasons that he gave. The hon. Member for Angus (Mr. Weir) made a similar point.
The right hon. Member for Suffolk, Coastal questioned our commitment to working with the International Maritime Organisation. I referred earlier to the amount of energy we had put into working with the IMO, and how we had pushed forward the work being done. As I said then, we have made a voluntary contribution of £50,000 to the funding of a study of the important subject of greenhouse gas emissions from ships. I assure the right hon. Gentleman that we are on the case and will continue to press it, because we understand how important it is.
At times this evening, it seemed as though Members had never flown and did not intend ever to fly in the future. I must tell them that aviation currently accounts for 6 per cent. of our emissions, and that shipping accounts for just over 1 per cent. We must keep in proportion the contribution that each makes to our economy and the cost in terms of emissions at this time. We know that there will be huge increases in the future, but we must understand where we are now. Of course, it will take time for progress to be made.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Will the Minister give way?
Joan Ruddock: I do not think I should. We are running badly behind time.
The right hon. Member for Hitchin and Harpenden (Mr. Lilley) questioned the costs involved, as he has on previous occasions. The shadow Committee on Climate Change estimates the cost to the United Kingdom of meeting an 80 per cent. greenhouse gas reduction target to be between 1 and 2 per cent. of GDP in 2050. That was set out very clearly, and, as the right hon. Gentleman knows from the Stern report, most of us—although that may not include him—accept that the costs of inaction are much greater than the costs of action.
We broadly agree with the range that the Committee has identified. In overall terms, costs of between 1 and 2 per cent. of GDP in 2050—
Mr. Lilley: Will the Minister give way?
Joan Ruddock:
Not at the moment. Let me tell the right hon. Gentleman that costs of between 1 and 2 per cent. of GDP in 2050 would mean that the United Kingdom economy would be 3.17 times larger in 2050,
rather than 3.2 times larger. There is a cost; estimates exist. The fact is that we know that not acting would cost us dearly.
Mr. Lilley: Will the Minister give way?
Joan Ruddock: The right hon. Gentleman has made his points many times before.
Joan Ruddock: He made them on Second Reading and he has made them again today, at some length.
Details of costs will be informed by the formal advice that the Government will receive from the committee for the first time in December. The right hon. Gentleman has only to wait until then.
The hon. Member for South Antrim (Dr. McCrea) made a number of points about the potential disadvantage that would be suffered in Northern Ireland. Let me assure him that the Secretary of State must consult the devolved Administrations on amending targets, setting budgets, and any proposals and policies for meeting budgets.
My hon. Friend the Member for Nottingham, South (Alan Simpson), my right hon. Friend the Member for Scunthorpe (Mr. Morley) and my hon. Friend the Member for Bury, North (Mr. Chaytor) produced strong and cogent arguments for why the House should not divide on the Liberal Democrat amendments. It is clear to us that, as has been acknowledged by Conservative Members in particular, we have moved considerably on the Bill. We now have a procedure that will enable us to receive advice that takes account of international shipping and aviation.
Steve Webb: It is just advice.
Joan Ruddock: The hon. Gentleman may say that, but we have included in this flagship Bill provision for an independent Committee on Climate Change, which already exists in shadow form. It is regarded as a committee of great stature, which will continue to be the case.
Steve Webb: It can be ignored.
Joan Ruddock: I think that when we consider the Bill’s passage—how we are moving towards, we hope, an Act of Parliament—the hon. Gentleman will understand that the world will be watching us, and the House will be watching us. There is total transparency in the way we intend to conduct ourselves, and I assure the hon. Gentleman that we will take the greatest note of, and have the greatest respect for, the advice of the Committee on Climate Change. As I have said, transparency is guaranteed.
We wish to accept amendment No. 72, which adds to our new clause 5.
Clause read a Second time, and added to the Bill.
‘Schedule [Carbon emissions reduction targets] contains amendments to the provisions of the Gas Act 1986 (c. 44), the Electricity Act 1989 (c. 29) and the Utilities Act 2000 (c. 27) relating to carbon emissions reduction targets.’.— [Joan Ruddock.]
Brought up, and read the First time.
6.45 pm
Joan Ruddock: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this it will be convenient to discuss the following:
New clause 10— Sectoral targets
(1) For the purpose of assisting with the achievement of the target specified in section 1, or any amendment thereto made pursuant to section 2, the Secretary of State must take all reasonable steps to ensure that the government sectoral targets for the time being specified in subsection (2) are achieved.
(2) The sectoral targets referred to in subsection (1) are—
(a) by 2020 the general level of energy efficiency of residential accommodation has increased by at least 20 per cent. compared with the general level of such energy efficiency in 2010;
(b) by the end of 2010 the general level of energy usage in the commercial and public services sector has reduced by at least 10 per cent. compared with the general level of such energy usage in 2005 and by the end of 2020 by at least 10 per cent. compared with the general level of such energy usage in 2010;
(c) as soon as is practicable the number of dwellings with one or more microgeneration installations shall be eight times the number of dwellings with one or more microgeneration installations in 2007.
“the commercial and public services sector” means—
(a) commercial and business premises, excluding industry;(b) retail premises, including warehousing;(c) hotels and restaurants;(d) premises used for the provision of any service or function by or on behalf of a public body.“microgeneration” has the same meaning as in the Energy Act 2004.’.
New clause 11— Greenhouse gas emissions performance standard (electricity generating stations)
‘(1) The Secretary of State may make provision by regulations for a greenhouse gas emissions performance standard to set the maximum level of carbon dioxide that may be emitted per unit of output by any generating station requiring consent for construction or extension under section 36 of the Electricity Act 1989 (c.29).
(2) Regulations made under subsection (1) may include provision—
(a) specifying how proposed generation stations are able to comply with any greenhouse gas emissions performance standard, and to demonstrate compliance with any regulations made under this section, including by the capture of carbon dioxide at the generating station and its transport to and injection into geological storage provided that such activities are licensed in accordance with applicable laws and regulations;
(b) specifying the basis on which emissions of greenhouse gases from combined heat and power generating stations shall be calculated such that the unit of output includes useful heat produced in addition to electricity generated by any such generating station;
(c) specifying any sources of electricity generation, including electricity generated from renewable sources, that are deemed to be compliant with any greenhouse gas emissions performance standard.
(3) No consent shall be granted under section 36 of the Electricity Act 1989 for any generating station that does not comply with regulations made under subsection (1).
(4) Before making regulations under subsection (1) (including setting the level of the greenhouse gas emissions performance standard), the Secretary of State must consult such persons as are likely to be affected by or have an interest in the regulations.
(5) Regulations made under subsection (1) shall be made by statutory instrument, which may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.
“greenhouse gas emissions performance standard” means a standard prescribed by regulations setting the maximum level of carbon dioxide that may be emitted per unit of output from an individual generating station.’.
Government new schedule 1— Carbon emissions reduction targets.
Joan Ruddock: The new clauses and amendments contain various proposals to tackle emissions from particular sectors of the economy. The Bill’s overarching objective is to ensure that each budget is met, along with the 2050 target. In environmental terms, it does not matter where in the economy the emissions reductions come from, and we consider it important to retain the flexibility to act wherever it is most cost-effective to do so.
The Government new clauses and schedule give effect to our commitment to creating a new community energy savings programme, as announced by the Prime Minister on 11 September. The House will be familiar with the existing CERT scheme—the carbon emissions reduction target scheme—under which the major energy suppliers are obliged to promote carbon-saving measures to households in Great Britain. Each of the various measures has a score that is defined in terms of carbon reductions, and each supplier must meet a target level of carbon emissions reductions over the three years of the programme.
As I think all Members will acknowledge, energy efficiency is never more important than at a time when rising energy prices have made it so difficult for large numbers of people to afford to heat their homes adequately. We need to ensure that vulnerable households obtain all the help that they can. It was with that in mind that the Prime Minister launched the home energy savings programme, a suite of measures designed to help households to save both money and energy.
The package included two significant changes to CERT arrangements. First, the Prime Minister proposed a 20 per cent. increase in the existing CERT target, and additional amendments to strengthen the CERT scheme. Both can be achieved without changes in primary legislation. Secondly, he announced proposals for a new community energy savings programme. The new clauses and amendments make the necessary changes to enable the Secretary of State to introduce secondary legislation creating the new scheme, which will be based on the CERT model but will have a number of novel features.
The precise arrangements will be subject to consultation, and we do not yet have fixed ideas, but one of the key features is that the scheme will be community-focused. It will be designed as far as possible to bring together the activity of the energy companies with that of local authorities and other key organisations in a particular area. We want action to be joined-up and comprehensive, and we want to see real community delivery on a house-by-house, street-by-street level. I know that a number of my hon. Friends, and indeed other hon. Members, have called for such an approach.
Joan Walley (Stoke-on-Trent, North) (Lab): I welcome the proposals that my hon. Friend is describing. Can she assure me that she will take account of areas such as Stoke-on-Trent, where we already have a warm zone scheme, so that we can ensure that all the partners dealing with energy efficiency work side by side, not just on fuel poverty but on energy efficiency?
Joan Ruddock: I can certainly give my hon. Friend that assurance. I pay tribute to her for the work that she has done, and for the way in which she continually brings to Ministers the views of her constituents on how well the programmes have worked on the ground.
Sir Robert Smith: As the Minister will know, people who are not on the gas main find it extremely difficult to heat their homes, especially as they have to rely on oil and other fuels. Will the new scheme allow CERT to be redirected, to recognise the benefits of heat pumps both in providing a cheaper means of heating the home and in reducing carbon emissions?
Joan Ruddock: I am a bit of an enthusiast for heat pumps, and I am very much alive to the issue that the hon. Gentleman raises. I want us to be able to look at these schemes to see whether more assistance can be provided to people who are off the gas main—but, as I have said, we have not yet worked out the details. However, there will be consultation and we will, of course, be pleased to hear from the hon. Gentleman.
The new scheme will be funded and delivered by the energy suppliers and, for the first time, by the energy generators too. The generators are not at present covered by CERT, but we believe that all companies in the energy market now have a responsibility to help those in need of support. I am grateful for the constructive spirit in which the generators are already approaching the new proposals.
We expect to set the carbon savings target for the community energy savings programme at 12.5 per cent. of the current overall CERT target, equating to collective expenditure by the energy companies estimated at about £350 million over three years. I look forward to receiving input from a large number of parties as we refine the proposals, but for the moment we need to establish the powers that will allow us to flesh out the details of the scheme more fully in a statutory instrument, and that is what our Government amendments achieve.
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