Martin
Horwood: I am grateful to the Minister for his comments.
He made some serious criticisms of the amendment, including the one
that we should not attempt to introduce too many policy measures
relating to greenhouse gases for which there is limited or uncertain
scope for reduction. Sadly, if that is true, we are all in trouble. If
reductions to 15 per cent. of our greenhouse gas emissions are not
going to be attempted or are going to be outside the scope of policy,
we are in deep trouble, especially as that percentage is set to rise
dramatically if carbon reductions are achieved. If I tell the Minister
that significant efforts are being made in other countries to reduce
such emissions, he might take the matter more seriously. I mentioned
Japan in my opening remarks. According to the team from Obihiro
university of agriculture and veterinary medicine, a few simple food
additives costing about 50p each day per cow might be able to remove
virtually all methane from a herd’s daily output of
greenhouse-gas enriched belches. Given that there are something like
1.5 billion cows on the planet, that would provide significant scope
for reduction in methane emissions. In the same way that renewable
energy can be stimulated by feed-in tariffs and other policy measures,
energy efficiency can be stimulated by policy measures, and carbon
trading stimulates business and industry to reduce its carbon
footprint. There is political business potential to reduce methane and
other greenhouse gas emissions, but we need the policy tools. We need
the policy framework in place to achieve that, and that is why we
support this amendment. However, I acknowledge that if we do not have
the support that I had hoped for from Conservative Members, it is
unlikely that the amendment will be agreed to. On those grounds, I beg
to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
23 ordered to stand part of the
Bill. Clause
24 ordered to stand part of the
Bill.
Clause
25UK
domestic
effort David
Maclean (Penrith and The Border) (Con): I beg to move
amendment No. 83, in clause 25, page 13, line 22, at end
add— ‘(3) In this section
“sinks” mean land-based carbon sinks which have been
assessed by the Committee on Climate Change as being, or likely to be
permanent.’.
The
Chairman: With this it will be convenient to discuss the
following: Clause stand
part. Government
new clause 2—Duty to have regard to need for UK domestic
action on climate
change.
David
Maclean: Where I am coming from is my belief that carbon
sinks have a vital role to play in the United Kingdom, and certainly
internationally. This is not the point at which we should talk about
the vital role that carbon sinks can play in the rain forest, but I
hope that the Government will encourage companies to invest heavily in
them. However, in the United Kingdom, too, there is a great role for
carbon sinks in our forests, peat lands and bogs. I do not want them
discredited because
of some inappropriate carbon-sink trading that might be going on, or
some inappropriate or dodgy dealing that does not stack
up. As
I read about carbon sinks, discovering the wonderful role that our
forests and peat lands could perform, I came across more and more stuff
on the internet from environmental groups that had been rubbishing
carbon sinks on the basis that the schemes could be a bit dodgy or the
solution was not permanent. The groups suggested that if the world
warms up, our forests in this country could get warmer and that rather
than our peat bogs and carbon sinks retaining carbon, they could be
releasing it, so let us not touch them. Some of the criticism had a
rather puritanical and misguided streak, saying, “Yes, carbon
sinks may be good, but they do not cause enough pain, and what we
really ought to be doing in the United Kingdom is making sure that we
are closing down industry and making people and businesses suffer, so
let us not pay attention to the trees and the forests and the land that
we have and let us not exploit it to the full.” That is barking.
If we are to be successful in meeting our climate change targets and
are to do genuine good, yes, we must have targets for industry to
reduce the amount of carbon emissions and for the rest of us to drive
less or to have a cleaner or lower carbon lifestyle. However, for
goodness’ sake, let us exploit some of the things that we have
in this country and expand
them. Carbon
dioxide emissions from soils totalled 13.69 million tonnes
in 2005. By comparison, carbon dioxide emissions from domestic aviation
were 2.47 million tonnes. There used to be an old gardener on the
television years ago—was he a Yorkshire gardener?—who
said, “The answer lies in the soil.” The answer in some
part does lie in the soil. If we maintain it and keep it properly, we
will be locking carbon in for evermore. All the peat lands in England
and Wales would absorb around 41,000 tonnes of carbon a year if they
were kept in a pristine condition. However, they could emit up to
381,000 tonnes of carbon a year if they were damaged by practices such
as excessive burning, drainage and overgrazing. The restoration and
enhancement of peat lands could save 400,000 tonnes a year, which is
the equivalent to the greenhouse gas emissions from 1.1 billion car
miles or 84,000 family-sized cars. In addition to that, not only do we
lock in the carbon, but we would safeguard the habitats of 5,000
different species of plants and
animals. I
am sure, Mr. Cook, that it will be at the forefront of your
mind that Natural England held a conference headlined “Better
Bogs Create Carbon Sinks”. The “better bogs”
conference, which was officially entitled “Moors for the
Future”, in the Peak district,
said: “We
must protect and enhance our upland peat bogs—they are the
UK’s most important and vulnerable carbon
store.” That
was the message from Natural England. Sir Martin Doughty, the chair of
Natural England,
said: “Evidence
shows that the degradation of soils through over-grazing, fires,
drainage and erosion is releasing five times more carbon dioxide into
the atmosphere every year than from all domestic flights in the
UK.” Peat
soils contain a huge amount of carbon. If it is locked in, it is okay,
but if there is degradation and the peat land is not looked after
properly, it becomes a major source of emissions.
I see the
Minister nodding—I have rabbited on about so many different
things that he was bound to have nodded at something. If the Government
accept the analysis that our carbon sinks are legitimate and good, and
that we ought to enhance them, I do not want anyone rubbishing them in
the next few years and deterring businesses from investing in them. I
am happy to have businesses in my constituency that might be emitting
carbon doing a carbon-trading deal and investing in peat bogs, new
forest—or woodlands—and in trees that, hopefully, will
not catch fire accidentally or be cut down. We must distinguish between
that sort of forestry and planting trees for 20 or 30 years that might
soak up carbon while they are growing, but which are then cut down
regularly. That is not what I have in
mind. The
only way in which we can make the approach completely legitimate and
stop some of the misguided environmental groups from attacking our
carbon sinks and the planting of trees is to make sure that the
Committee on Climate Change has the role of approving carbon sinks. It
is no good me or anyone else coming along and saying, “I am just
going to have a carbon sink there. I am investing in this and buying a
bit of hillside, which has good grouse shooting and a lot of peat. I am
therefore doing my bit as a carbon sink, so can I please have that
accredited against me?”
If we are to
have legitimate and kosher carbon sinks, the Committee on Climate
Change should accredit them or have an assessment system for saying,
“Yes, this is a good carbon sink and, as far as we can say, it
has the possibility of remaining permanent, so Natural England and
others can put conditions on it to make sure that the peat is not
eroded and not dug up, drained and released.” We want a
legitimate verification system that keeps our carbon sinks as a
valuable resource for reducing carbon and locking it in, and that does
not allow people to discredit the whole
concept. I
conclude with those words because I am worried that some people want to
discredit the concept of carbon sinks for their own ends. Yes, the UK
should be doing a lot. Yes, our industry should be producing less
carbon, but let us not rubbish carbon sinks as a natural and perfectly
acceptable form of locking in carbon that should be expanded and
increased, and that should not only help British industry, but
contribute to the world’s reduction of carbon in the
atmosphere.
Miss
McIntosh: I congratulate my right hon. Friend on
speaking to the amendment so eloquently and with such knowledge. I wish
to restrict my remarks to clause stand part and Government new clause
2. I place on record how firmly we are wedded to the wording and the
principle of clause 25. In my humble view, it goes to the heart of what
the Government and all of us want to achieve in support of a climate
change strategy. Our aim is obviously not only to come forward with a
Bill that is groundbreaking in its own way, but to create a low-carbon
economy. By being one of the first movers in that regard, it is
important to aim primarily at reducing pollution in this country, and
not to export the problem through the use of more than 30 per cent. of
credits, but to reduce emissions and, for want of a better term, to
reduce pollution in this
country. There
are few more important clauses than clause 25. It puts the
responsibility firmly on the Secretary of State to ensure that at least
70 per cent. of the effort
undertaken to reduce emissions to meet our carbon
budget is achieved domestically. The original Bill—indeed, this
is the case for the Bill without the clause—would have contained
no such clarity. I pay tribute to Conservative Members of the other
place who eventually won the argument for including clause 25 in the
Bill, with the help of Liberal Democrat peers, which was much
appreciated. The Conservative party considers that the removal of the
clause would seriously weaken the
Bill. We
have received strong support for keeping clause 25 in the
Bill in a joint statement from the WWF-UK, Scottish and Southern
Energy, Christian Aid and the Royal Society for the Protection of
Birds. In their briefing, they go right to the heart of the matter when
they
say: “Removing
clause 25 from the Bill would undermine a key objective of the
Bill—that of establishing a framework which provides UK
companies with the long-term certainty that they need to incentivise
sustainable and low carbon investments. It would also leave unanswered
the question—to what extent will the UK rely on buying credits
or emission allowances from other countries to meet its targets?
Without a requirement for clear and strong domestic action, the UK
could in theory meet its targets under the Bill without any action to
decarbonise the UK economy—an outcome that would do little to
promote UK leadership in the international climate
negotiations.” If
one accepts that the point of the Bill is, as has been said, to provide
the market and companies operating within it with the long-term clarity
and certainty that they need to compete and be the best in the world,
the clause should be
retained. 7.30
pm The
clause says that the Secretary of State must ensure that at least 70
per cent. of the efforts undertaken are achieved by
“domestic
emissions reductions and domestic removal by
sinks.” It
goes on to define “effort”
as “the
difference between the present UK carbon budget and the verified
emissions for the previous budgetary
period.” Having
compared the clause with new clause 2, I humbly submit—I hope
that the Minister will respond positively to this plea—that the
wording completely misses the point of seeking to obtain the highest
reduction. Clause 25 writes into the Bill a provision in relation to 70
per cent. of domestic action and will thereby reduce pollution at home;
it will not just export the problem. That will still leave a 30 per
cent. allowance for international credits and will fit and be
compatible with the EU
ETS. I
commend clause 25 to the Committee and make a plea to the Minister to
keep it in the Bill. Perhaps he will also withdraw new clause
2.
Steve
Webb: I agree with the hon. Lady that the clause is
fundamental, and I would like to address the clause stand part issue.
In my short contribution, I shall address some misunderstandings or
myths that have surrounded the debate, which we heard on Second
Reading.
The first
such myth, which is often quoted, is that a tonne of carbon is a tonne
of carbon, and that it is of no great consequence, as far as the planet
is concerned, where it is saved, as it will have the same adverse
effect wherever it goes up. It is interesting that the person whom the
Government have asked to supervise the process, Lord Turner, does not
take that view. In discussions in another place he has said
that
“it
is not absolutely the case that a tonne of carbon saved in every
country of the world is precisely the same. There is a value in hard
emission reductions targets in developed countries because they will
drive the changes in behaviour, energy efficiency and technology which
will then be required across the whole
world.”—[Official Report, House of Lords, 11 March
2008; Vol. 699, c.
1412.] So the
argument that it is all the same whether we do it ourselves or buy it
in is not accepted by Lord Turner. Given that he has been charged with
advising the Government, it seems a shame to pre-empt what he will say
by taking out some sort of assumption about the importance of domestic
effort.
There are two
conflicting arguments, one of which is that we just want to save the
stuff. The other says that there is a leadership role both from the
point of view of British industry, as Conservative Members have said,
and—I hesitate to use the “M” word at this
point—from a moral dimension. That moral dimension says that
because, to a greater or lesser extent, we caused the problem, we have
a responsibility to make the first moves in clearing it up. That means
that we should play our part and make the adjustments
sooner. If
we accept the long-term goal, whether that is described as a
zero-carbon Britain or a low-carbon economy, the sooner we get on with
it the better. Clause 25 allows us to put off the evil day—or it
might be a good day, depending on how we look at it—by getting
savings elsewhere. Our argument for retaining clause 25 is that there
is a strong case on moral, practical and even self-interested grounds
for doing far more of this ourselves than might otherwise be the
case. The
second principal argument used against any restriction of the sort
contained in clause 25 is that it messes up emissions trading. The
point about emissions trading is that it is an elegant, market-based
solution and people will get the cheapest savings possible. People who
find it hard to make emissions savings do not have to spend huge
amounts of money as they can pay somebody who finds it easy to make
those savings and the aggregate costs are
minimised. As
an economist, I can see the attraction of that, but the working of the
European emissions trading scheme means that there is no conflict
between having some sort of cap on the extent to which we can opt out
of domestic effort and the ETS. That is because the ETS is operated at
an individual business location level. In other words, Governments
agree a national allocation and that is subdivided between individual
operators in the market. Once that has been done, businesses either
meet their carbon emissions cap or they under-emit and sell their
credits or over-emit and buy them in. That is true whatever we do in
Committee this afternoon. It does not matter whether it involves 100,
0, 30 or 70 credits and so on. Whatever it is, businesses
still have their caps and permits and they still buy and sell
credits. Nothing
in the Bill will change the duties of businesses to comply with their
emissions caps, so the existence of a cap and an emissions trading
scheme has no bearing on that—it is totally unaffected by clause
25. On Second Reading, at least one Minister said that we should not do
this as it would interfere with emissions trading, but it has no
bearing on that
whatever. If
we delete clause 25, there could be wholesale import, export and
crediting schemes and so on. However, we would get a perverse result.
Half our national emissions are covered by the emissions trading
scheme. That means that the total of emissions from
that source is
given. Therefore, if every credit that we buy in is
a saving on the national account and anything that we sell is a debit,
there is no benefit from Government policies that incentivise
industries within the scope of the ETS to cut their emissions, as that
has no impact on the national carbon
account. For
example, within the scope of the ETS, the Government have a policy that
might get a particular industry to reduce its carbon emissions, which
is great, but the cap has already been fixed, so it comes in under the
total, the business sells its surplus credits abroad and that comes
through on the national carbon account. We already know what the figure
will be for that half of the
economy. A
worse problem is that the half of the economy with the cap and trade
will probably reduce its carbon emissions more slowly than we want to
be consistent with the rest of the Bill. Because that section of the
economy is fixed because 100 per cent. trading is allowed, the other
half of the economy potentially has to do a lot more of the legwork,
and that is inefficient. It is the opposite of the flexibility that the
Minister talked about—it creates artificial divisions between
the half of the economy that is in the ETS and the other half that is
not. Government activity to incentivise business within the ETS to do
better on carbon is a waste of time from the point of view of targets.
If the Government want to hit their targets, they must do far more with
the other half of the economy, and that is profoundly
distorting.
Cutting the
story short, there is no incompatibility between clause 25 and
emissions trading, which does not undermine or affect it in any way.
Deleting clause 25 would mean that everything that that half the
economy did was already predetermined in terms of the national carbon
account, so the other half would have to make most of the effort, which
seems
wrong. Fundamentally,
there is a strong, self-interested case for national leadership, as
well as a strong moral one, of the sort embodied in clause 25. If the
Minister wants to return with a different number, we would be happy to
debate it—he could say that our 30 per cent. is as arbitrary as
his 1 per cent. It is a case of more so than not: 70 per cent.
represents more domestic effort than not, but we could have a sensible
debate about the
figures. Although
new clause 2 is a token nod in the right direction, just “having
regard to” the merits of domestic effort does not really do the
job, so I hope that the Committee will resist new clause 2 and retain
clause
25. Mr.
Nick Hurd (Ruislip-Northwood) (Con): We on the Joint
Committee on the Draft Climate Change Bill spent much time on this
issue, because as previous speakers have said it is incredibly
important. Our conclusions will have significant economic consequences
for British taxpayers and shareholders in British
companies. I
know that the Minister understands all the arguments involved, and new
clause 2 is wholly inadequate—it does not mean anything and
sends a dangerous signal to British businesses that we want now to
commit to the long-term investment decisions that will make the
difference. In that context, they would need to receive a strong signal
about the commitment to reduce domestic emissions. We must not just buy
our way out of the problem in international markets.
We do not only
want British companies to reduce carbon emissions—this is not
just a carbon issue—but, as my hon. Friend the Member for Vale
of York said from the Front Bench, we want British companies and
institutes to get ahead in the journey towards a low-carbon economy,
because that is in our long-term economic
interests. The
Minister has spoken about striking a balance, and he knows, as does
everybody who has considered the issue, that important relevant
tensions and currents run against each other: on the one hand, the
responsibility of any Government and Parliament to ensure that our
route to reducing carbon emissions is as cost-effective as
possible—the same goes for anyone running a British company in
terms of their responsibilities to shareholders —and, on the
other, our moral responsibility to take a lead as a developed nation in
reducing emissions and our long-term economic interests in being at the
vanguard of a low-carbon economy. Those tensions must be
reconciled. With
your indulgence, Mr. Cook, I wish to make a simple point
about transparency. As has been said, the 70:30 figure is arbitrary.
There is no science to it—to some degree, it has been plucked
out of the air to generate debate and to make an important point, which
is that we need to reach an agreement on where to strike this
balance. Up
until now, the Government have not been transparent on that issue. In
the Environmental Audit Committee, we tracked the progress of the 2010
carbon target. When that target was published, there was no mention of
buying international credits. It was understood that it would be all
about UK domestic emission reductions. It was only when the revised
climate change programme was published in 2006 that the Government
began to count the use of carbon credits purchased from
abroad.
The
Environmental Audit Committee was quite shocked by a review of the
European emissions trading scheme. Our report states
that “without
the expected contribution of Phase II of the EU ETS, UK carbon
emissions in 2010 are projected to be only just over halfway to the 20%
target, a very significant shortfall.”
There has been no
transparency up until now about the degree to which we meet our
international agreements through the purchase of international credits.
That issue needs to be brought out of the darkness and into the
light. I
do not know whether 70:30 is the right balance—I do not know
whether the Minister even knows what the right balance is—but we
need a transparent number, a limit and a threshold around which we can
build a consensus. New clause 2 is too vague and will not
do.
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