Steve
Webb: I have a staggeringly brief question.
The first
carbon budget will be set in 2009 for the five-year period 2008-12. It
took years of study to work that one out. Will the Minister say more
about why the first set of targets partly relates to history?
Clause 5(1)(b) states that the duty of the Secretary of
State is to ensure that the carbon account does not exceed this figure.
He obviously cannot exercise that duty historically, because there are
no levers he can pull. Why does the period not start in
2009?
Mr.
Woolas: I just thought of another reason why I was hoping
for inspiration.
It might
help if I point out to the Committee that about half of UK emissions
are already covered by the European trading scheme. The big emitters
are already there, so to respond the important question asked by the
hon. Member for Vale of York about surety for business investment, we
have some experience to build on. In a sense, it is a chicken and egg
situation. A large
part of the benefit of a carbon market is that it
creates investment opportunities. The private sector is going to have
to provide 85 to 90 per cent. of world finance for the low-carbon world
economy, and the carbon markets are there to incentivise, as she
accepts. Although one is never as sure as one would like to be, the
great advantage to business of the Bill and the approach of five-year
budgets is that they provide certainty. That we can talk about the
position 15 years ahead and rolling on provides that certainty. That
point has been supported by businesses in the consultation and during
consideration of the draft Bill. I will lay
out briefly the reasons for the timetable, which will answer the
question the hon. Member for Northavon asked. The first reason we chose
that timetable is to dovetail with international time scales. The first
budget period, 2008-12, runs concurrently with the first commitment
period under Kyoto and the second phase of the European Union emissions
trading scheme, so it makes sense from that point of view. I will not
go into the reasons why five years is preferred to one—I think
there will be some debate on that
later. There
is another reason that is not in my speaking notes, but that is
important. It is not a retrospective decision: we will take the
measurements that were already reported under Kyoto and build those
into the budget, but what starting in 2008 does is provide an absolute
guarantee to business, to the markets and to everyone else that there
has not been a political fix in the period. If we were to preannounce
what the first budgetary period was going to be, everybody would shift
their organisation in such a way as to get the best advantage.
Theoretically—it could not happen because of the ETS—a
company could switch off the power for a couple of weeks in winter to
show a much lower baseline. That is a theoretical example, as I said,
and I have nobody in mind, but that could be a problem and we want to
avoid it. That is the answer to the hon. Gentleman’s
question. One
of the strongest parts in the Bill—an aspect on which there is a
very strong consensus—is found in this clause and the related
clauses on the creation of carbon budgets. With our European partners,
we are world leaders in this field, and I have been delighted to note
the development of carbon budgets, or the research to prepare for them,
elsewhere. I am pleased there is consensus. I hope I have answered hon.
Members’ questions
adequately. Question
put and agreed to.
Clause 5
ordered to stand part of the Bill.
Clause
6Level
of carbon
budgets
Steve
Webb: I beg to move amendment No. 31, in
clause 6, page 3, line 37, leave
out ‘26%’ and insert
‘35%’. Here
we go again. With your strictures in mind, Mr Atkinson, we
will not repeat the debate about targets, but the amendment deals with
the interim figure in the Bill. There are only two principal numbers in
the Bill—60 and 26—and we are suggesting that 26 be
replaced by 35. Why 35 specifically? It is because we
asked, if 60 per cent. became 80 per cent. what
would have to happen to 26 per cent.? It was no
more sophisticated than that, but there are more fundamental questions
at stake.
How
should we view the trajectory for 2050? 2020 matters for a number of
reasons. One is that it is the end point for a number of commitments,
negotiations and promises at EU level and beyond. It matters also
because of political accountability. Although I do not suppose that any
current Ministers will be Ministers in 2050, or in senior
positions—although you never know—it is at least credible
that there is some political continuity over a decade, so having a
realistic target for 2020 is more realpolitik than something decades
hence. There
has been some discussion of whether we have a steady progression to
2050, and the 2020 target would be an interim target. There seem to be
two counter-arguments to that. One is that there is “low-hanging
fruit”: in other words, the easy carbon savings will be made
first, so we ought to be able to get more than halfway to the 2050
target by halfway through the time period—2020 bisects the
period between 1990 and 2050. The other counter-argument says, no, it
takes time to innovate and for big capital projects to come on stream,
so we should be more gentle with the earlier target. We have not, in
our amendment, taken a view on that or changed the Government’s
judgment on that. We have simply made a pro-rata change from 26 per
cent. to 35 per cent. in the way that 60 per cent. was
changed to 80 per cent.. So, assuming we end up with 80 per cent., via
whatever mechanism, 35 per cent. has the same relationship to 80 per
cent. that 26 per cent. had to 60 per cent.. We have not
altered the judgment on whether it is easy or difficult to make headway
in the earlier phases—that is a separate
debate. One
difficulty we had in trying to prepare for this debate is the many
different targets and objectives there are for 2020, with different
baselines and different coverage. The Minister knows that there are
targets for everything excluding the emissions trading scheme; targets
based on 2005 figures; and targets that cover all greenhouse gases and
some that cover only CO2. It is rather hard to
get one’s head round which targets one is talking about and how
they all fit together. I hope the Minister will give us a feel for how
the number we end up with in clause 6 fits together with the various
obligations that the UK has entered into and those that the EU has
entered into, and with the Kyoto
process. The
amendment is prompted in part by the debate on Second Reading, because
it was repeatedly said, by a number of hon. Members both on this
Committee and in the House, that we need to get on with the process.
Although the Minister hypothesises doing nothing for 49 years and then
suddenly doing it all in the final year, we all know that we have to
get on with it. The interim staging post then becomes important as a
signal of how serious we are. Our worry about leaving 26 per cent. in
the Bill—I know the phrase used is “at least 26 per
cent.”, but it could be “at least zero” and one
could argue that we do not need to worry about it—is that if
there is to be a number there, ’twere better that ’twere
the right one.
To give a
feel for what 26 per cent. would mean, the Tyndall Centre for Climate
Change Research has looked at the current targets and has suggested
that, under present targets, the total emissions we
would be talking about over the period 2000 to 2050
would be 7.5 billion tonnes of carbon—massively in excess of the
carbon
budget of 4.6 billion tons that is compatible with
the 2° C goal we have all been talking
about. To
be frank, 35 per cent. is at the cautious end of the range. A steady
reduction across the whole period, compatible with the budget we have
just discussed, would need 38 per cent. by 2020. We certainly have not
over-egged this—if anything, it is at the cautious end of the
scale—but to accept the amendment would be an important
indication of how seriously the problem is being
taken. We
have been talking about the 2050 target, and there are whole sections
of the Bill about how that target can be amended, but as far as I can
see there is nothing specifically about how the 26 per cent. target can
be amended. All the stuff about amendments and consultation and so on
relates to clause 2. Yes, there will be carbon budgets, and they will
imply particular levels of cut, but as far as I can see there is no
provision for changing the 26 per cent. figure.
[Interruption.] If I listen very carefully, I
might hear where it is. Is there a danger that we will leave in statute
a number we are all agreed is wrong?
[Interruption.] If the Minister could get his
official to hold up that number of fingers again, it would be very
helpful. [Interruption.] Ah, clause 7. In
principle, all the focus is clearly on the 60 per cent. or
80 per cent. figure, and it would be a worry if we left the 26 in,
particularly if we thought we would end up with 80 per
cent.
Mr.
Nick Hurd (Ruislip-Northwood) (Con): I am grateful to the
hon. Gentleman for giving way just before he concludes. I have followed
his argument with great interest and I welcome his emphasis on this
target, because it is the target that will bite on today’s
decision making. Will he clarify the economic consequences of moving
from the 26 per cent. to 35 per cent. target? The Committee ought to
get a sense of the cost attached to the
Bill.
Steve
Webb: As the hon. Gentleman knows, the final impact
assessment provides those figures based on 60 per cent. and
on 80 per cent., and 35 per cent. is the number consistent with 80 per
cent. It is the stepping stone to 80 per cent. in the same
way that 26 per cent. is the stepping stone to 60 per cent. All the
analysis has been done by the Government on that basis.
The right
hon. Member for Suffolk, Coastal rightly asked about the economic cost
of not getting on with all of this. There is, as we have said, a huge
potential benefit. To some extent, the argument for 35 per cent. is
also the argument for 80 per cent., and I will not rehash all of that.
There is, however, a separate set of arguments, first about the
consistency of all the other 2020 goals we have entered into, secondly
about the trajectory, and most of all about the importance of early
progress. What matters is in the jargon “the area under the
curve”, that is the cumulative emissions. If we are not quite
serious that quite soon we are going to make big headway, then the
goals for 2050 will not be worth having because we will already have
done the
damage. 2.30
pm
Mr.
Gummer: Past sins are supposed to throw long shadows. One
problem we face is that we have all experienced a long succession of
energy Bills with no targets that could possibly relate to the
ministerial experience of anybody on the Floor of
the House. All
the targets were, at the very
least, for times when those who set them would be taking well earned
rests in retirement homes. Some have pointed out that energy Bills
originally contained more targets, but they were taken out on the
“better not” principle—a Minister should not
promise to achieve something by a time when he might still be a
Minister, because somebody might draw his attention to
it. I
understand that point because as a Minister of State at the Ministry of
Agriculture, Fisheries and Food, I proposed a review of a decision
about fishing off the coast of north-east England to take place five
years after the decision, never thinking that I would come back as the
Minister of Agriculture, Fisheries and Food when the review was due to
take place. I recognise the temptation to avoid such
situations. I
therefore start by being relatively sympathetic to the amendment. If I
had not already made it clear that I feel we must have certainty about
the full length of the thing, I might well have joined the Liberal
Democrats in supporting the amendment. However, I hope the Minister
will reassert the truth that everything we do immediately is worth a
great deal more than everything we do in 10 years’
time and that everything we do in 10 years’ time is worth a
great deal more than what we do in 20 years’ time. If
it were not for the ancient sins, I would be relatively happy, because
it is manifestly true that getting things right now has a huge
advantage over leaving them until
later. This
is a matter of morality, because to leave the next generation with a
worse problem than we have would be peculiarly unpleasant. I hope the
Minister will reassure us by saying clearly that it is the intention of
the Government to use whatever time they have to do as much as they can
as soon as possible. That will make it easier to deal with these
problems as we go
along. Secondly,
I hope the Minister will reassure me that there will be no temptation
within the five-year periods to leave that which needs to be achieved
until the end. I accepted his explanation for having five-year periods
and supported the idea. For the reasons that I have mentioned, it is
easier and better to do things earlier. If things are allowed to pile
up, there will come a stage when the problem cannot be solved, rather
like the debt that some of our constituents come to our constituency
surgeries to resolve. I am sure other hon. Members agree that often in
one’s surgery, one thinks, “If only this person had come
to me three years ago, I could have done something about it. The debt
is now so vast that nothing can be done.” I am terribly keen
that the Minister should commit himself to saying that this Government
will do as much as they can as early as possible to meet the interim
target and the five-yearly budget
arrangements. Thirdly,
many of us expect the advice from the Committee on Climate Change to
have a big effect on the interim target. If so, will the Minister
ensure that the Government respond rapidly to give industry the
opportunity to understand how the decision-making process should be
affected? I do not think that we can resile from targets that are based
on science on the basis that we cannot manage them, because climate
change does not stop. The target is there not because we can do it, but
because we know what will happen if we do not meet that target. I hope
that he will undertake that,
should the target be significantly higher than the
one in the Bill, he would take immediate action to
spell out the Government’s view of what that would mean for
personal action, governmental action and business
action. Mr.
Chaytor: The point made by the hon. Member for Northavon
about the capacity in the Bill to amend the 2020 target is an important
one, and I hope that my hon. Friend the Minister will respond to that
later. The basic principle that he is arguing for—that deeper
cuts made earlier will be necessary and are more useful—is a
sound one that all the scientific evidence supports and Lord
Stern’s report endorsed.
I am deeply
sceptical of our capacity to secure a cut of 35 per cent. by 2020. That
is partly why, although I am instinctively sympathetic to the
principle, I am nervous about suggesting that that target should be
stated and supported at this stage. Of course, 2020 is conceivably the
final year of the next Parliament but one. That is an important point
to make, because it reminds us that this issue is about not just
setting targets for the distant future, but matching targets to
policies. Earlier I gently criticised the official Opposition and the
disconnect between some of the ambitions for which they are arguing and
the reality of their voting record. The same applies to the Liberal
Democrats: there is a disconnect between their hugely ambitious efforts
to support the highest targets and the reality of their support for
particular policies when it comes to a vote in the House.
I touched on
the point that there is nothing magic about 2020. Arguably, it would be
more effective if we had not only a more stringent target for 2020,
which I hope we will have, but an earlier target. The beauty of a
target for 2015 is that it could well be the final year of the next
Parliament, and therefore all parties would have to match up their
support for a target with a set of principles, policies and mechanisms
in their election manifesto. The argument for changing the target date
from 2020 to 2015 is stronger than the argument for changing, at this
stage, the current 2020 target of 26 per cent. to a higher target.
Having a 2015 target, which nobody has yet suggested and there is no
amendment on the order paper to that effect, would force each and every
one of us and our parties, the leadership and the membership, to
concentrate their minds on the kinds of policies necessary to deliver
that target.
Finally, it
seems that the argument I made in support of my proposal to move the
2050 target earlier may be the way forward. My argument was that there
is a consensual way forward by reconsidering the date for the Report
Stage of the Bill, together with the date that has been given to the
Committee on Climate Change to produce its first report. We can find a
way forward that everybody can agree upon if we bring forward the
release of the Climate Change Committee’s advice to before the
Report stage of the Bill.
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