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Simon Hughes: I am happy to serve under your chairmanship, Miss Begg.
As the Minister indicated, the orders are interrelated and complex. We could all go into a lot of detail on these matters, but colleagues will be pleased to know that I will resist doing so. I believe that it would be wrong to vote against the motion because the orders are a step in the right direction. They will implement provisions in the Climate Change Act 2008 and will honour Government commitments. However, I share the opinion of the hon. Member for Edinburgh, South that we are missing a trick in terms of ambition. The Minister has heard some of the arguments already.
To confront the problem head-on, the first argument is over what the target should be. In my earlier intervention, I indicated that it is right for us to move from only a CO2 emissions plan to a combined greenhouse gases emissions plan. That is clearly sensible progress. The Government have chosen the 34 per cent. target. It is fine to have targets, but what matters is their implementation, the monitoring, the evidence and the action. We have a target for the proportion of renewables in this country of 10 per cent. by 2010. From my exchange with the Minister the other day, it is clear that the Government already concede that we are a long way off that target and will not meet it. Having a target is not sufficient.
The first evidence of whether the Government are serious about meeting their targets will be in the policy statement that the Minister trailed today, which is expected before the summer. The evidence of whether the commitment can be delivered will be in the strategies for individual sectors and on things such as behaviour and energy efficiency. Today we are talking about the theory, the superstructure and the infrastructure, rather than the delivery mechanisms.
I, too, had the privilege of meeting Lord Turner and the director of the Committee on Climate Change the other day. We talked about their recommendations, the good work that they are doing, the competent advice that they are giving and their clear views. Given the options that the Committee on Climate Change gave the Government of adopting a 34 per cent. target now or a 42 per cent. target after the Copenhagen summit in December, it is clear to me as a result of those discussions that it would have been best to accept the more ambitious target now. That is for two reasons. First, it is increasingly clear from the science at home and abroad that we will not contain the temperature rise at previous levels unless we do more and do it faster. Secondly, as the Minister has conceded, the UK has an international and historical responsibility to lead the way in Copenhagen.
We have already led the way by passing the Climate Change Act 2008, by putting up the target from 60 to 80 per cent. and by accepting that shipping and airline activity must be included. However, if we are to lead the way not just in December but in the run-up to December, we need to be seen to be bold. A 42 per cent. target for us represents a 30 per cent. EU-wide target.
We need to be bold not only because it is right that we should but because, as the Minister well knows, the UK and the United States have a historic legacy as the two greatest contributors to emissions in the world. We emitted the most before the United States grew so much, but we have not emitted as much in recent times, not being such a big country. If we are to get countries such as China and India, which are hugely important, and countries in eastern Europe such as Poland, which has a big coal industry, to be positive both before and at Copenhagen, we should be bold. Therefore I regret that the Government have not been able to follow the recommendation of the Committee on Climate Change and take its second option, which was a 42 per cent. target.
I do not believe that colleagues have yet made my next point explicitly. The Minister knows that there is a great deal of concern that, as we monitor what happens, companies and investors should provide a full and transparent account of the emissions that will result from their investments and activities. The Minister will have seen the early-day motions on the Order Paper that explicitly deal with this issue.
I wish to quote from an e-mail that I recently received from a constituent about early-day motion 1250, which is entitled, “Reporting on carbon liabilities”. I know that the Minister is aware of the general issue and some of the specifics. My constituent, Hannah Roberts, wrote:
“I am writing to you to ask for your support for EDM 1250, which calls on the government to require all UK-listed companies in the oil and gas, and power sectors to report on their total carbon liabilities.
In order to avoid dangerous levels of climate change, it is likely that global emissions must peak by 2015 and, for developed nations, fall by at least 80 per cent. compared with 1990 levels by 2050”—
which is the Climate Change Act target. Some of us hope that we will be able to have 100 per cent. achievement by 2050, but I accept that we have come a long way with the consensus on 80 per cent. My constituent went on to state:
“Failure to do so”—
as the hon. Member for Edinburgh, South (Nigel Griffiths) indicated, the evidence is there—
“would likely commit the world to very severe human, economic and environmental impacts.”
Then she makes the specific argument for reporting appropriately:
“Despite the need for urgent action, UK oil and power companies are still seeking to develop large, carbon intensive projects—such as the Alberta tar sands or unabated coal fired power stations. These developments have the potential to lock us into a high carbon economy for decades to come. In the case of tar sands, which emit on average three times more carbon dioxide in their extraction and production than conventional oil, oil companies are actually planning to intensify the carbon impacts of their operations and products. This is a short-sighted business strategy in a world that needs to shift quickly to a low carbon economy.
After taking the lead with the Climate Change Act, the UK can deliver on its promises and build on this success by enabling investors to drive the necessary shift to a low carbon future.”
My constituent then makes the key link between the strategies of the private sector and the mechanisms that we are talking about:
“Transparent reporting of the lifecycle carbon impacts of operations and products as financial liabilities is the best way to enable investors and pension funds to factor in carbon risks to their analysis. This is particularly urgent in the oil and gas, and power sectors. Mandatory carbon liability disclosure for these sectors would reveal massive hidden costs in projects such as new tar sand developments and unabated coal fired power stations and encourage investment in low carbon projects. The result being to protect our savings and pensions against a possible carbon crunch, support emissions reductions and help make the UK a world leader in financing the emerging green, global economy.”
A further note is that that probably applies in particular to those businesses in which the Government are now the major shareholder. For example, the Government have inherited the international investments of the banks that they have taken into public ownership.
If it were possible, would it not be appropriate to put responsibility for emissions on investors so that we would be able to take responsibility for more of the greenhouse gases that, directly or indirectly, are a product of the activities of companies based here? If the choice is between the consumer or the investor curbing the emissions, the further up the chain of command we start, the better.
I should like to endorse the point made by the hon. Member for Edinburgh, South on the belief that the European trading scheme and its offsetting is not really working. My understanding, to put it simply, is that the general view is that the scheme itself has not resulted in any reduction in emissions so far. As the Minister will know, the current recession and the resulting drop in productivity means that it will be easier to meet a cap across Europe because there will be less activity across the continent, so we need a system whereby we do not just rely on a cap that is now relatively generous, with options to trade that might allow many loopholes to be exploited. We need a much tougher system than the current regime. The hon. Gentleman made the point that there are ways of doing that, and the Minister will be aware of the criticisms amplifying that. I will do no more than mention them now, because she will understand the issue.
The point that needs to be reinforced is that excluding the use of international offsets for all three interim budget periods, not just the first, was clearly recommended by the CCC, and I would be grateful if the Minister explained why that advice was not accepted. The committee also recommended that the Government should not reserve the option of purchasing international offset credits as an insurance option if emissions are higher.
The hon. Member for Bexhill and Battle, like me, raised the point about Heathrow, and it seems to me that that option would produce an opportunity to allow Heathrow to expand because the airlines could buy the extra credits they would need. The Minister’s critics, including organisations she has worked with and respected in the past, such as Friends of the Earth and others, say that is a catch-all option that will allow the Government to carry on with polluting policies. The response to emissions that are higher than anticipated should be tougher policies rather than bigger loopholes. I heard and understand the Minister’s point that there are many variables and that technological efficiencies might be produced that we do not yet know about, but the tougher the regime can be and the less ability there is to exploit the opportunity to buy extra capacity, the better.
I will repeat the valid criticism of the Government’s plan to buy international credits for the non-traded sector with the hope of using them after a deal in Copenhagen. They are planning to import credits—I stand to be corrected on this—to account for all extra emissions reductions required by moving from the interim to the intended budget. That will be a significant figure: the figure I have been given is 32 per cent. of the effort in reaching the 2020 target. Perhaps the Minster will confirm whether that is right.
However, the CCC—we checked this when we talked to Lord Turner and his colleagues the other day—has stated that the Government could obviously have alternative policies that would introduce new policies in the UK to curb emissions, rather than importing credits to do so. As the Minister has accepted, the traded sector will continue to buy international credits. Surely allocated emissions are not as good a criterion as actual emissions, so the accounting should look at actual, rather than allocated, emissions.
I still do not quite understand how what the Minister said about international aviation will work. My understanding is that the draft Climate Change Act 2008 (2020 Targets, Credit Limit and Definitions) Order 2009 establishes the definition for aviation that is not domestic aviation and for which we will not be responsible within our limit. However, the order’s explanatory notes state:
“The definitions put beyond doubt possible ambiguities, such as how to treat flights into or out of the United Kingdom which have interim stops.”
My understanding is that that excludes emissions from international flights that land here. From what I have read, I am not clear whether a plane that lands in London and then in Manchester, for example, would be regarded as a domestic flight due to the London to Manchester leg, or as part of an international flight. I would be grateful if the Minister explained how we can ensure that this is not another loophole in the welcome idea of including international aviation in the project.
Some of us want a tougher regime and will go on arguing for it. There will be an opportunity to return to these issues when the Government publish their strategy in the summer and after the Copenhagen summit. I hope that between now and the meeting in December in Copenhagen, we will hear ever bolder policies and ambitions from the Government. I hope that the Minister and her colleagues understand that the UK must continue to take a strong lead. The better the targets, the better the policies that will follow.
5.30 pm
Peter Bottomley: I would have said, “the better the achievements”, rather than “the better the targets”. The first time we set a target for reducing CO2 emissions, the achievement came because of the collapse of aluminium smelting in this country, and because the nuclear power designed for that smelting was used for general consumption. I suspect that the transfer of electricity generation from carbon to nuclear power will make as big a difference as anything else.
I have one question for the Minister. On page 7 of the Carbon Accounting Regulations 2009, the explanatory note states:
“No Impact Assessment has been prepared for this Order as no impact on the private or voluntary sectors is foreseen.”
That is an excellent bit of grammar. The explanatory memorandum published separately from the regulations states:
“There is no impact on business, charities or voluntary bodies.”
Those are different expressions. They might cover different things, but it seems odd to have brought business into one and not the other. Furthermore, I am rather surprised that carbon reduction orders will have no impact on business, as it seems that the whole point is for them to have just that. I may have missed something in the theology of the debate, and it would be useful to know a little more about that, either now or by letter.
I thank the Minister for her mathematical explanation. Of course, 87.5 per cent. is seven eighths of something—it is curious that the big number at the end can be divided by seven and not by eight, but I am willing to leave that for another time. It crossed my mind to note that it would be interesting to know which is the next number that can be divided by all the numbers that this number can be divided by.
On a more serious point, when we come to regulation 9 and the duty to maintain a register of transactions, who will be the invigilator of the system? Will it be the Office for National Statistics or the National Audit Office? Is there an outside body that will offer a view on how robust the numbers will be? I am not saying that the Government have got it wrong, but I want to get an explanation of what the system will be out in the open.
Regulation 8(3) states that
“A = B — C — D + E + F — G”
and I want to treble-check that no brackets are intended to be included. It looks reasonably simple and straightforward, but it is always worth asking. If we are to have this provision, is it not better to have the plusses together and the minuses together? The Minister might want to explain why D is a minus, which is
“the amount of carbon units cancelled under paragraph (2)”
and E is a plus,
“the amount of carbon units cancelled under paragraph (2) in relation to which no declaration was made under regulation 5(2)(b)”.
Subject to being satisfied on those points, I have no more contributions to make to the debate.
5.33 pm
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