Tony
Baldry: I think that every member of the Committee will
have received a copy of the joint statement by the World Wide Fund for
Nature, Scottish and Southern Energy, Christian Aid and the Royal
Society for the Protection of Birds—an unusual combination
bringing together development non-governmental organisations, wildlife
NGOs and business. Two paragraphs from that statement are worth putting
on the
record: “These
organisations support the amendment as a necessary requirement to
ensure that the UK becomes a low carbon economy and does not rely too
heavily on carbon credits. A major benefit of the amendment is that it
would bolster the UK’s leadership on climate change by ensuring
significant reduction efforts are made
at home. Financial flows to developing countries should come on top of
these actions and not instead. Finally, the amendment would not
conflict with the UK’s participation in the EU Emissions Trading
Scheme. The
Government’s proposed replacement amendment (New Clause 2) that
‘the Secretary of State must have regard to the need for UK
domestic action on climate change’ would provide next to no
clarity or certainty on this issue. Indeed, in WWF’s opinion the
amendment is almost meaningless in addressing the key issue of whether
the UK sets itself on the path to becoming a low carbon economy and
avoids locking itself into new high carbon and long-lived
infrastructure.” The
Minister can ignore the Committee and he can ignore the House of Lords,
but I caution him that it is not necessarily sensible to ignore the
combined postcard-writing power of the WWF and the
RSPB. 7.45
pm
Mr.
Woolas: I ignore those organisations at my peril, and
spend many late nights signing letters to hon. Members who have
forwarded those postcards. I am grateful to people who write
in. May
I deal with amendment No. 83 first? The debate has been important and
perhaps the important points made by the right hon. Member for Penrith
and The Border have been forgotten. He asked for an assurance that we
take account of the carbon sinks in the United Kingdom. As the Member
for Oldham, East and Saddleworth, I understand the point, because much
of the measurement of moorland peat is done in my constituency, and I
have been following that for some 10
years. I
can assure the right hon. Gentleman that the carbon sinks are included
in the targets. The Bill relates to net UK emissions—emissions
less removals by UK carbon sinks. That provides an important incentive
to promote carbon sinks in the United Kingdom. Indeed, the Forestry
Commission is one of the most successful organisations in the world at
increasing forestation in percentage terms, but not in total acreage,
and has responded to that very point. It relates to the subsequent
debate about the balance between overseas and domestic emissions. The
net emissions are
there. I
can provide further reassurance. There are already well-established
mechanisms in place to ensure that removals from sinks are properly
assessed. Information must be compiled in accordance with the same
systems and international methods as for the annual emissions inventory
which the UK is already required to submit to the United Nations
framework convention on climate change. The UK emissions inventory
follows such guidance from the intergovernmental panel on climate
change which is reviewed every year by the United Nations—that
is, by international experts—to ensure that such practice is
followed. We intend to follow exactly the same guidance in compiling
the emissions statement, including information on removal by sinks
under clause 15. In fact, clause 29(2) requires that the amount of UK
emissions and UK removal of greenhouse gases must be determined
consistently with international carbon reporting practice, which is
defined subsequently in clause 86.
For those
reasons, the right hon. Gentleman’s amendment is unnecessary,
but I entirely agree that it backs up the point about basing our net
emissions measurements on science and not on a political fix. It also,
conveniently, helps me with my argument against subsequent speakers,
and I shall explain why.
This is the
heart of the debate and hon. Members on both sides made their arguments
strongly and passionately. Let me try to explain the
Government’s argument. We have discussed Government amendments
to clause 14 on the balance between UK emissions, action within the EU,
and international action. That was a key issue, as has been said, when
the Bill was debated in the other place, and the Government have given
it significant consideration since then. In the debates on the Bill
there has sometimes seemed to be a mistaken idea that this Government,
or a future Government, will do anything they can to buy their way out
of reducing UK emissions, by purchasing international credits instead.
However, we all recognise that the world as a whole will only tackle
climate change if developed countries such as ours reduce their
emissions significantly. That is why we have tabled new clause 2. If
accepted, it will place into legislation for the first time the need
for UK domestic action on climate change. The new clause is intended to
set out plainly the belief of Government and, we hope, Parliament that
we need to reduce our domestic emissions if we are going to meet our
targets and encourage others to reduce their emissions as
well.
However, we
also must not lose sight of the reality that climate change is a global
challenge. We need global emissions to halve by 2050, based on the 2
deg C increase that we talked about at clause 1. The international
carbon market will be the key to achieving the scale of investment
flows necessary to achieve that, which are estimated to be in the
hundreds of billions of dollars, over and above the additional public
money—additional to official development assistance—that
is required. We need action at European Union and international level,
as well as at domestic level, if the world is to tackle climate change.
We do not believe that the policy outlined in clause 25 is the right
one. Apart from the point that clause 25 is inflexible—I do not
want to debate that as it is helpful to specify a figure—the
70:30 limit is arbitrary.
Miss
McIntosh: The Minister will be familiar with the
conclusions of the Environment, Food and Rural Affairs Committee. It
positively recommended that the provision to allow for international
credits should be strictly limited to a quantifiable amount, to be
advised by the Committee on Climate Change for each budgetary period.
What is absent from the new clause is the recognition that although we
want to contribute, as my hon. Friend the Member for Ruislip-Northwood
said, in the original budget for 2010 there was no mention of any part
being allocated to international credits.
Mr.
Woolas: Indeed, we looked at the Select Committee report
and other recommendations when considering the new clause and I hope
that the hon. Lady expects an honest disagreement. Let me explain why
there are problems with the idea of setting a fixed limit in the way in
which clause 25 suggests. The UK’s policy in this regard is
firmly rooted within a joint-European Union effort. That is one of the
most successful, if not the most successful, area of European Union
solidarity in terms of world leadership. As it stands, clause 25 fails
to recognise the crucial role of action at the European Union
level.
The hon.
Member for Northavon made some important points about the construct of
the ETS. If one looks at clause 25 in the context of the ETS, it
creates an
artificial distinction between domestic action and other action in the
European context. That would create a significant risk of cutting
across the ability of the United Kingdom’s companies to
participate freely in the EU ETS. The EU ETS is a stepping stone to the
ultimate prize—a global carbon market that sets an absolute cap
on emissions. The rest of the world is not only watching the EU very
carefully, but in some cases, including within the United States, is
now following it. Under the EU ETS rules, it does not matter if UK
companies reduce their own emissions or buy allowances from another EU
country, where the same emissions reductions might be made more
cheaply. However, under clause 25, emissions credits bought under ETS,
even from another developed country such as Germany or France, would
count as being overseas action and would be counted against the 30 per
cent. limit or any other limit that we would set. That would create
huge uncertainty and would risk increasing costs as well, as the
Government have little or no control over the commercial decisions in
the
ETS. Let
me quote what Lord Turner of Ecchinswell said on this issue when he
appeared before the Select Committee on Environment, Food and Rural
Affairs, which the hon. Member for Vale of York
mentioned: “Of
course, it is important within the European Emissions Trading Scheme to
realise that we cannot actually in advance define the maximum amount of
buy-in which will occur from the rest of Europe to the UK. That is not
a policy variable which the UK Government or any other
government” within
the EU—actually, he did not say “within the EU”,
but that was the
context— “can
pre-fix within the scheme. The amount of buy-in will be whatever the
market determines and will only become clear as we move towards the end
of a budget
period.” Yet
clause 25 invites us to do the exact opposite, defining now, in 2008,
what the maximum amount of credits will be, as bought in from within
Europe and from the rest of the world, all the way to 2050 and
beyond. Let
me further back up my argument by mentioning what Lord Taylor of
Holbeach, the Opposition spokesman, said in the other place,
when discussing the
amendment: “A
fixed percentage in the Bill may not be the best way of going about
that. that
is, addressing
decarbonisation— “We
understand the difficulties in placing such a precise figure in the
Bill, which range from the constraints of the international negotiation
tables to the fact that the carbon market will look a lot different in
42 years.”—[Official Report, House of Lords11
March 2008; Vol. 699, c.
1407.] There
is a difficulty, first, in the context of the
ETS.
Steve
Webb: The Minister is answering the point thoughtfully and
seriously, but he is saying essentially that the UK Government are
indifferent about domestic emission cuts and that those bought in from,
say, Germany—a country like ours—or Poland, or a much
poorer country. However, our argument is that it is not a matter of
indifference. Surely, there are strong arguments why the UK would want,
as a positive policy goal, to favour domestic cuts, as even new clause
2 says. His argument that we should just be neutral within the ETS is
inconsistent with his own new clause 2.
Mr.
Woolas: I have so far advanced the argument about the ETS.
I have another argument that I wish to develop, which encompasses the
hon. Gentleman’s
point. Of
course, we recognise how important it is that the Bill demonstrates the
need for domestic action to reduce UK emissions and—to address
the point that the hon. Member for Ruislip-Northwood made—to
ensure the maximum possible transparency about our plans for meeting
targets and moving the UK to a low-carbon economy. That is why we have
tabled Government amendment No. 8, which we have already discussed, and
new clause 2, which we are debating
now. New
clause 2 would place the Secretary of State under a legal duty to
consider the need to reduce UK emissions of greenhouse gases when
considering how to meet the targets and budgets. That important step
forward represents a constructive response to the concerns expressed in
Parliament. It will, if agreed to, set out unequivocally
Parliament’s desire that the UK should move to a low-carbon
economy. New clause 2 will mean that, when developing policies to meet
carbon budgets, the Secretary of State must keep in mind the need to
reduce UK emissions and the positive benefits in doing so, including
improved energy efficiency, which will of course reduce energy bills;
demonstrating our commitment to take action on climate change to
international partners; helping to meet our international obligations;
helping to meet other policy objectives, such as improving air
quality; and addressing the advantages to UK competitiveness of
developing the technologies and industries that can achieve low carbon.
We agree that there needs to be a balance. It is up to developed
countries to show the
way. 8
pm The
global low-carbon energy market is already worth $38 billion and
employs 1.7 million people. Within the UK, the environmental goods and
services market is likely to grow from £25 billion in 2005 to
nearly double that by 2015. We believe that, taken together, the
Government amendments will ensure that decisions on the appropriate
balance between action at domestic, EU and international level are
first, based on independent and expert advice from the Committee on
Climate Change, secondly, transparent, thirdly, sufficiently flexible
to take account of changes to the international context between now and
2050, and fourthly, guided by the need for UK domestic action on
climate change.
The
accusation is made or the implication is drawn that the United Kingdom
Government want the policy to pay off our conscience—so we can
pay someone else to reduce emissions. That is the proposition that is
made; I will not use the word allegation. That allegation misses two
fundamental points. [Interruption.] Sorry, I meant
to say proposition. The hour is late, Mr. Cook and I, like
you, am bored with my voice. The proposition misses two fundamental
points. First, the United Kingdom’s CO 2 emissions
within our borders are 2 per cent., but the emissions from United
Kingdom’s world economic activity are around 15 per cent. Our
carbon footprint goes way beyond our shores. The mechanisms that we
believe that we must have to address global emissions must take that
point on board. The 15 per cent. carbon footprint is our goal, not just
the 2 per cent. Of course the credibility of the clean development
mechanism and
the other mechanisms is crucial, but one should not
confuse problems with the CDM with arguments against the need for
offsetting. Secondly, on
the whole, developing countries in the G77 welcome and support this
approach, because it provides them with a flow of finance in addition
to overseas development aid that can help to ensure that their
prosperity can grow through low-carbon technology. When one debates in
the international forums on 30:70 or another figure, one hears a plea
from the developing to the developed countries to allow maximum
flexibility, so that the carbon markets can provide a flow of finance
to develop economic prosperity in those countries. I ask colleagues to
consider those two points when they make their
decision.
Mr.
Hurd: No one disputes the value of the international
capital flows that the Minister has described, but the debate is about
finding a balance. I have listened to him carefully and I think that
the record will show that in the previous debate he talked about the
Government’s desire to have the flexibility to go up to 100 per
cent. of international credits. Where is the reassurance about the
transparency that I was seeking? Where in this process do the
Government imagine we will have a transparent threshold for the
deployment of international credits, or are they trying to avoid that
completely?
Mr.
Woolas: I am grateful to the hon. Gentleman. He asks
questions and follows the debates closely. The reassurance that he
seeks is in the amendments that we have already tabled. Clause 35(2)
requires the Committee on Climate Change to comment on action, and new
clause 2, which the hon. Gentleman said was inadequate and not tough
enough for him, places a new legal duty upon us, as I have described. I
hope that the combination of those two factors, which the Government
have considered since the debate in the other place, will be enough. We
are in danger of throwing the baby out with the bathwater by not
grasping the profound importance of placing our statutory, legally
binding commitment within the international context of the EU and wider
international
agreements.
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