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18 Jun 2009 : Column 160WH—continued
I am nervous about an over-authoritarian response, and anything that is illiberal in how it intrudes on people’s privacy. I do not have a problem with having a tough set of laws and regulations to deal with the global crisis, because sometimes one has to regulate and legislate to change behaviour. I do not believe that everyone will wake up in time and come to understand their obligations. However, we need to respond positively. My response to the hon. Member for South Suffolk and his colleagues is to say that the public are clearly divided on the issue. It is controversial, and it would involve people living
their life in an entirely different way and being environmentally accountable. We should go down this road only if the preconditions that the Committee set out on public understanding are met.
I believe that public understanding of the crisis is growing quickly. They understand increasingly clearly that we all have personal obligations to do things about it, but we must ensure that the public do not think that there will be unfair penalties, or that the rich and well looked-after will be able to manage far better than the poor and disadvantaged. That would not be a good, fair or equitable social outcome. My proposal seems to be a reasonable way forward. I hope that it commends itself to members of the Committee, the Government and the public. I will, of course, ensure that we make public our response later this year.
3.53 pm
Gregory Barker (Bexhill and Battle) (Con): I am a Front-Bench spokesman and therefore precluded from nailing my colours to the mast of any candidate for Speaker; nevertheless, I wish you well on Monday, Mr. Bercow.
The speech by the hon. Member for North Southwark and Bermondsey (Simon Hughes) was thoughtful and covered all the points, but I find it eye-wateringly extraordinary that, more than a year after the report was published on 26 May 2008, his party still needs another six months or so to come to any sort of balanced conclusion. That is extraordinary, given that we are in the fifth year of a Parliament, but I leave that to one side.
I congratulate my hon. Friend the Member for South Suffolk (Mr. Yeo) on his excellent speech and on a thorough report. The Government response was long overdue. There is a great deal of detail in the report that informs this important debate, but I may disappoint him by saying that we on the Conservative Benches will find more in common with the Government response than we do with the Environmental Audit Committee’s report. However, it is an excellent example of the EAC leading the debate.
I am entirely party-free on this matter, as I am an alumnus of the EAC, having for five years served with great pleasure alongside at least three hon. Members in the Chamber—in fact, for the whole of my first Parliament. I have the greatest respect for the Committee’s work. It tests opinion in Parliament and in the country more widely. The EAC is second to none in the role of leading and helping to shape the debate on the challenges of climate change as well as the wider environmental debate. It is absolutely right and welcome that it has done so much important work on the issue.
Of course, the idea was run up the flagpole by the right hon. Member for South Shields (David Miliband) before he went on to become Foreign Secretary. Unfortunately, his utterances on, and enthusiasm for, personal carbon trading proved to be another banana skin on which he slipped, and he rapidly retreated to the Government’s much more measured approach to the subject.
I wish to be precise in giving my party’s response to the debate. There are several good reasons for thinking that personal carbon trading could contribute to a solution to the problem of dangerous man-made climate
change. We all know that there are no easy solutions, and that the solutions are many and complex. There are certainly no silver bullets, so everything that looks like a potential solution has to be looked at clearly.
I agree with the Committee’s statement that
“if the Government is to stand the slightest chance of meeting its 2050 target it cannot afford to neglect the domestic and personal sector.”
That is absolutely right—it is a given. The Committee then stated:
“Reductions in carbon emissions from business and industry will be meaningless unless accompanied by significant and equal reductions from households and individuals”,
Likewise, the Committee stated that
“existing initiatives are unlikely to bring about behavioural change on the scale required”.
I think that that principle could be extended across the range of Government policies. We are simply not seeing transformation on the scale required. Even if individually many of the Government’s schemes and policies are themselves not bad, they simply do not have the reach and breadth that we need, given the urgency of action required during the next decade.
I certainly agree with the Committee’s conclusion that
“more radical measures must be introduced if emissions reductions from the individual and household sector are ever to make a meaningful contribution to UK targets.”
However, I am less sure that its conclusion that personal carbon trading
“might be the kind of measure needed to bring about behavioural change”
is something that we need to embrace now.
In point 6, the Committee acknowledges
“the many difficulties that will have to be overcome in the development and implementation of personal carbon trading, not least work to bring about the public and political acceptance of such a concept; considerable further research is required on many aspects of personal carbon trading.”
The fundamental difference is that the Committee believes that by
“designing and implementing a sensitive and moderate scheme, these obstacles could be overcome.”
That is where I beg to differ.
There is a danger that such a scheme would ultimately appear to the public to be complicated, intrusive and potentially another arm of the Big Brother state. I could easily rehearse all the familiar arguments about identity cards, but, even greater than that, we would have a huge public debate about process. The debate would not be about the threat from climate change or the urgent need for action. It would be drawn down into a pointless discussion about process, cards, funding, formulae and something that, in itself, is not a solution but just a mechanism for getting to a solution. That could do huge damage to the growing public acceptance of the need for radical action on climate change.
Ultimately, it boils down to this: there is a serious problem. We need much more radical action and we must be much more ambitious in our response to dangerous man-made climate change, but there is a hierarchy of response and action. A number of other
measures cannot be put in place until the infrastructure to decarbonise our economy is in place, and until the public feel that the Government are showing real leadership and have implemented the measures needed to make it easier, and possible, for people to live a more low-carbon lifestyle and easily to facilitate the changes that they need to make in their lives to live a more low-carbon and sustainable existence. To bring in such a measure now would risk alienating the public opinion that is essential if we are to beat the challenge of dangerous man-made climate change.
Although I believe in political leadership, not followership, on this issue there is a possibility of our alienating the people whom we need onside if we are to be effective in adopting the manifold solutions that we need to bring to bear on global warming. Only when those other measures are in place and we have retrofitted the vast majority of the housing stock with the energy efficiency measures that it is crying out for can we start to put pressure on people to change their lifestyles. Only when we have a much more equitable system of taxation, with green taxation taking on a more important role in the overall balance of taxation policy, and only when the Government are making real steps to ensure that the investment flows into the energy supply to ensure that renewables are playing a full part, and that the carbon from the fossil fuels that we do deploy is captured and sequestered, will it be fair to start putting more pressure to the British public—the consumer.
Ultimately, it is not that we are against the principle of personal carbon trading, but in the face of a real threat—let us be clear that, as we heard today, climate change is posing a growing threat to our nation and to the well-being of the population—we have to do a lot of things first, before we get to the unpalatable measure of the intrusive, Big Brother approach of personal carbon trading. Because of all the detail on our personal and private lives that would have to be assembled centrally and held in a database, worrying and complex questions arise that go way beyond simply dealing with effective solutions to climate change. The hon. Member for North Southwark and Bermondsey rightly mentioned the liberal principles that are at stake. We cannot discard those lightly.
Until we see a far more robust implementation of policies to transform the basis of our economy and to make it easier for people to live low-carbon lives, simply introducing personal carbon trading would be regarded by the electorate—the public—as an abdication of responsibility by the Government, who should be leading on this issue, and it would be seen as a substitute for real Government action on this agenda. There is still so much that we should be doing, at Government, local government and community levels, before trying to pick our way through such a complex and potentially unpopular policy such as personal carbon trading.
The Government response to the report, rightly, does not pooh-pooh the whole scheme. It draws attention to the support that the Government have given to external research—to academia and think-tanks—and says that they are
“committed to keeping in touch with their progress.”
I think that we could be a bit more robust in that regard and a bit more supportive of external research, because
we cannot totally dismiss it, despite our reservations. Perhaps, when all the other things are in place, if we are not successful in decarbonising the economy to the extent that we think possible, ultimately we will have to go down the route of personal carbon trading, but it is not acceptable at the moment. We are not yet in a position where we have the right to impose it on the British public, but we should keep it under review, consider carefully the recommendations of the EAC, and look with interest at the continuing debate in academia and at the research studies.
My view of pilot schemes is slightly less clear. There could be merits in a pilot scheme, and we could learn more for potential future action. However, the danger is that Government pilots would spark a national debate, which could deflect the focus away from the strong action that we need in other areas, including our infrastructure, energy efficiency, developing renewables and decarbonising our economy. My party published a wider range of measures earlier this year in a paper called “Low Carbon Economy”. That is where the focus has to be. We have still to get the public to focus on the potential of, and opportunities in, decarbonising our economy and on the considerable benefits that would flow to both their quality of life and our economic life if we did that.
I agreed with many things that the hon. Member for Morley and Rothwell (Colin Challen) said. I appreciate that he is a long-term advocate of personal carbon trading. He is right to say that the Government have a slew of different initiatives that are complex and often opaque. That criticism is valid. Individually, a lot of the schemes are perfectly sensible, but the whole creates a rather confusing blizzard of schemes and counter-schemes. However, I do not agree that the answer to climate change is to inhibit economic growth and simply to put a brake on progress. On the contrary, the economic development of clean energy and deploying capital from the private sector to get the billions of pounds of investment that we need from it into sustainable solutions will be a key factor.
Earlier today, I was with the shadow Chancellor of the Exchequer at the London stock exchange for the launch of the new index, the green initiative and opportunities index, which we hope will make the UK the global hub for green financing and investment. There are the things on the opportunity, innovation and enterprise agendas that we should be focusing on and trying to capture the imagination of the British public with, rather than going down the route of hair-shirt restrictions, which are part of the older agenda of environmentalism.
Colin Challen: I am a little perturbed by the hon. Gentleman’s interpretation of my words, some of which I never actually said. I did say that it was possible for people to plan their life better so that they can still maintain their quality of life by having a smaller carbon footprint. It is not about wearing a hair shirt.
Gregory Barker: I am happy to stand corrected, if I misinterpreted what the hon. Gentleman said. I totally agree that, of course, it is possible to have a smaller carbon footprint and still enjoy a high quality of life. On that we are united.
There is a hierarchy of response. We cannot rule it out that, one day, we will need personal carbon rationing—trading—but there is still a huge amount for the Government to do. We need far more leadership and ambition. Running pilots would be an unwelcome distraction from the great task, which the next Government will have, of leading on the solutions to dangerous man-made climate change.
4.9 pm
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): I join all other hon. Members who have expressed their very best wishes to you, Mr. Bercow, and wish you well in the current contest.
I congratulate the hon. Member for South Suffolk (Mr. Yeo) on his thorough, enthusiastic presentation of the Committee’s report. I also congratulate the other Committee members on their contributions to this debate. The hon. Gentleman began by stressing the enormity of the challenge. He knows that I agree with him totally on that point. As other hon. Members have said, we have today launched our latest climate change projections, which show the reality of the changing climate in the UK and emphasise that we must both reduce our emissions and adapt to the inevitable changes.
Since the Committee’s report was published a year ago, we have in the Climate Change Act 2008 increased our 2050 target to an 80 per cent. reduction in greenhouse gas emissions against 1990 levels. We have also set out our proposed carbon budgets, which will take us to a 34 per cent. reduction over the five years from 2018 to 2022, putting us firmly on the trajectory towards 2050. We are also playing a leading role internationally in the preparations for the Copenhagen climate change meeting where we will press for an ambitious global deal. After such a deal, we will further tighten our carbon budgets in line with the new international position.
My hon. Friend the Member for Morley and Rothwell (Colin Challen) said that he believes that we are not doing enough, but we believe that we are doing enough, although it is always possible to do much more. We are on the path to make the emissions reductions required of developed countries such as ours. The independent Committee on Climate Change is satisfied with current progress. We all know the sort of measures that must be put in place, or that are in place but need to be increased in some instances. We will publish detailed policies later this summer following our setting of the carbon budgets.
My hon. Friend said that he believes that the UK is responsible not for 2 per cent. of global emissions, but for 15 per cent. That was not the conclusion of the work undertaken by the Department for Environment, Food and Rural Affairs. I had that checked because I know the thoroughness with which he reads about these matters. Essentially, our imports produce one third of the increase in our actual emissions, but that does not take us to 15 per cent. of global emissions. It simply increases our 2 per cent. by one third. However, that remains a small proportion of the world’s global emissions.
More than 40 per cent. of the emissions from the UK are attributable to individuals through energy use at home, through transport and in other ways. We recognise that policies to tackle such emissions must play a role alongside industry, business and the public sector. As
has been said, in 2007 the Government commissioned a series of studies on personal carbon trading, which considered four broad issues: the technical feasibility of a personal carbon trading scheme and its likely costs; the potential equity and distribution impacts; public acceptability of personal carbon trading; and the efficiency and effectiveness of personal carbon trading compared with other ways of achieving the same emissions reductions. Those studies were published in May last year, and I will recap the main findings.
First, there are no insurmountable technical barriers to the introduction of personal carbon trading, which could use established technologies drawn from current banking systems. Secondly, a personal carbon trading scheme based on banking technology would be likely to be expensive. The hon. Member for South Suffolk said that there would be no compulsion to pay, but everyone enrolled in the scheme—the whole population would have to be involved for the scheme to be fair—would have to pay the costs. Working out the costs is essential to any judgment on whether such a scheme would be affordable. We did not do that ourselves, but engaged consultants, who found that the costs would be between £700 million and £2 billion just to establish the necessary systems, and that there would be annual costs of between £1 billion and £2 billion.
My hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) said that he was initially a sceptic but had become a convert. My journey has been exactly the opposite. I was enthusiastic, with the previous Secretary of State, and I hoped that the scheme was a straightforward and direct way of making the necessary carbon reductions. One of the great attractions for me and for all hon. Members who have worked on the Committee is that everyone would receive the same allocation of emissions rights, so fairness would be apparent, but we must consider how many allowances people would need to meet their basic requirements.
In general, those with higher incomes use more energy and travel more, so they have higher carbon emissions. Not surprisingly, our study found personal carbon trading to be generally progressive in its distributional impact, and that is what we expected. However, a significant number of low-income households would lose out, and we cannot ignore that. More than 2 million low-income households could be doubly disadvantaged. Not only would they pay the cost of the scheme, which could be around £40 to £80 per household per year, but if they lived in a rural area and had to use their car regularly, for example, they would exceed their free allocation and incur the cost of buying additional allowances. We cannot find a way of overcoming that.
My hon. Friend also said that it would be possible to guarantee the outcome from a personal carbon trading scheme. The only way to guarantee an outcome from such a scheme would be to allow the carbon price to rise without constraint. Clearly, any market mechanism without constraint would be a huge disadvantage to those who are less able to pay.
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