Climate Change Bill [Lords]

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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.
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 6

Level 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
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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