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The further question that we have to ask is whether the costs of warming control is in a number of cases greater than the benefits of dealing with the problem. One might look at this matter differently: it is not out of the question that we in Britain could actually benefit from global warming. One scenario might be that the north of England and Scotland acquire a climate similar to that of the south of England, with the south of England acquiring a Mediterranean climate. I personally am very happy with the climate that we now have, but possible changes could be perfectly acceptable and in the eyes of many could even be an advantage. What troubles me is that we who have less to lose than so many other countries should anticipate spending so much more than some of those countries that have far more to lose.
1.41 pm
Lord Turner of Ecchinswell: My Lords, I begin by declaring a personal interest, since I shall shortly become chairman of a company investing in low-carbon technologies. That reflects my belief that there are opportunities for business to create employment and profits from the technologies required for a low-carbon economy. I am also a director of Siemens UK, which has interests in renewable energy as well as in non-renewable energy. But it is on public policy that we focus today.
Last year’s
report made a very important contribution to the debate about public
policy. But there are dangers, as illustrated by some of the press
reporting of the report, that the report’s important
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The report questions the robustness of the economic assumptions that underpin the IPCC’s emission scenarios. It makes two specific criticisms. First, it says that the IPCC was wrong to use market exchange rate measures of GDP growth rather than purchasing power parity measures. Secondly, it says that it was politically constrained from including scenarios in which the developing world or particular parts of it were unsuccessful in achieving convergence towards developed world living standards.
The first criticism is entirely justified. The market exchange rate approach is simply wrong and the PPP approach correct. The percentage of respected economists who say otherwise is as small as the percentage of respected scientists who deny that human-induced climate change is occurring. The second criticism is also valid. Almost no economist would assume a common rate of convergence across all developing economies. Many would suggest that the best current assumption is that some parts of the developing world—China and other Asian countries in particular—may be achieving historically rapid rates of growth and convergence, while others, including several African states, are sadly not yet on any clear convergence path at all. These are important methodological points and, although it does not follow that better methodology will necessarily produce materially lower estimates of economic growth, emissions or concentrations than those in the IPCC scenarios, there is a danger that the casual reader, or the reader searching for reasons to justify a policy of inaction, will slip to that conclusion.
The market exchange rate versus PPP distinction is important but, as the report itself makes clear in table 3, the impact on concentration levels likely to pertain in 2100 is fairly slight. The illustration given shows an adjustment in one predicted concentration level, on one scenario, from 731 parts per million to 678, which in terms of possible long-term climate effects is no more than a shift from the absolutely disastrous to the very slightly less disastrous. More important, it is not clear that slipping to more differentiated and realistic approaches to convergence and growth will produce lower growth rates, since if current growth assumptions look rather optimistic for Africa, they may well be too pessimistic for China, India and other Asian countries.
The IPCC scenarios
assume that world GDP will grow somewhere between 2.2 per cent per
annum and 3 per cent per annum in the 110 years between 1990 and 2100,
but the IMF's latest world economic outlook database figures, which are
correctly weighted on a PPP basis, show that global growth is now
running at 4.9 per cent per annum. The combination of the past 15 years
of historical experience, which are facts, and the IMF’s
forecast for
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Future global growth forecasts are highly uncertain, but one of the central economic facts of the past 15 years is that the increased integration of the global economy—the great power of the global free-market system—is unleashing, at least for a time, a major acceleration of growth in developing Asian economies which account for more than 40 per cent of the world's population. Once we allow for that phenomenon—which was rather strangely unreferred to in a report to do with the economic input into climate change—it is quite possible that the more robust methodologies for which the report rightly argues will suggest estimates for 21st-century growth at least within the 2.2 per cent to 3 per cent range and possibly even above it.
So it is really not the case, as the noble Lord, Lord Lawson, suggested, that the global growth forecasts in the IPCC are clearly biased upwards. I find it difficult to understand how he can stress at one point in his speech the rapid pace at which China is growing and building coal power stations and the fact that it may rapidly become the world's biggest emitter, but then assert in the same speech that we know that the IPCC forecasts are biased upwards.
Lord Lawson of Blaby: My Lords, perhaps I may intervene as the noble Lord has mentioned me by name, twice I think. What concerned me most was that, whereas the energy intensity of growth in the world in recent years has steadily diminished, the IPCC economic forecasts show that that will be reversed and that energy intensity will increase—according to those forecasts. That makes an enormous difference in carbon dioxide emissions.
Lord
Turner of Ecchinswell: My Lords, I agree entirely
with the noble Lord that, in addition to growth rate, it is important
to consider the issue of the carbon intensity of growth. However, he
very deliberately drew attention to the fact that Chinese growth is
being driven by coal power rather than gas power. One of the key
drivers of the increasing carbon efficiency of growth—of falling
carbon emissions relative to growth over the past 20 years in the
developed world—has been the increasing use of gas. But if China
is growing rapidly, and powering itself extensively through coal, we
may well see a major growth spurt that is very carbon intensive. The
noble Lord seemed to deploy a debating technique whereby, to argue that
Kyoto is completely ineffective,
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As the noble Lords, Lord Oxburgh and Lord Rees of Ludlow, stressed, there are uncertainties in the details of climate change science, but extremely high probabilities, bordering on certainty, that the scale of global warming could be significant and harmful if concentration levels of greenhouse gases rise even to the IPCC’s middle scenarios, let alone to its high scenarios.
A similar situation applies to the economics. There are uncertainties and it is important continually to improve forecast methodologies and the clarity of communication. But if the global market economy is even reasonably successful in delivering widening prosperity across an increasing proportion of the developing world—an outcome that we should surely desire in human terms, and which at present, at least for some regions of the world, looks extremely likely—it is almost certain that, unless we take deliberate countervailing action, concentration levels of greenhouse gases will rise to at least pre-industrial levels, and to levels not seen for hundreds of thousands, and possibly millions, of years. It is vital that that near certainty remains clear to people even as we note important uncertainties in the detail.
1.51 pm
Baroness Miller of Chilthorne Domer: My Lords, it is hard to think of a debate that it is more of a privilege to listen to. I warmly thank the noble Lord, Lord Wakeham, for giving us the opportunity to debate this issue and to listen to such thought provoking speeches.
I congratulate my noble friend Lord Teverson on his maiden speech. He is a tremendous addition to the Liberal Democrat Benches, with his experience in economics, politics and finance. As we have heard, he is a very passionate exponent of the issues that will face us in the future.
We all might have expected the G8 summit to put climate change at the top of its agenda, but yet again it has been overtaken by tragic events which it will no doubt have to spend much time debating instead. Although it may still touch on climate change, its fate is never to be the urgent issue of the day. Politicians will continue to struggle with that. That is why the remark of the noble Lord, Lord Oxburgh, was so important. Kyoto is not an end in itself, but it is a unique first essential step along the path of some international agreement on dealing with this threat. Of course, it is imperfect in its current form and I have no doubt that it will not be perfect in its post-2012 form, but it is very much a first step and a statement that the world wants to take action. That is why it is so important that the developing world states that it will join in that, and that it is concernedabout it.
Some interesting issues have
been raised; for example, whether the green movement is hostile to
science. That is like asking whether scientists are hostile to the
environment. It is a non-question. I am
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The committee’s evidence is excellent and makes interesting reading. As one would expect, it reveals varied opinions, and interesting, thought provoking questions were asked. As I have said, the debate today has been excellent, but I join other speakers in expressing a certain disappointment about the report. Others have mentioned the tone of the report, but perhaps I could be slightly more forthright in saying that one of the weaknesses of the report is that it started out with an assumption which it then set out to prove.
Professor Colin Robinson was quoted by the noble Lord, Lord Sheldon. At the start of the evidence volume, Professor Robinson makes the point that economists are not qualified to comment in detail on the methods used by scientists to model climate change. But the tone of the report is set by his comment that those who call for substantial action are,
That sets the tone for the report, which spends an undue amount of time questioning the intricacies of the modelling and the scenarios behind some of the predictions of the IPCC.I could not better the analysis of the noble Lord, Lord Turner, and I certainly would not wish to try. I will read his speech in Hansard. He encapsulatedfar more eloquently than I would many of my reservations about the assumptions that had been made about the IPCC. Other noble Lords, including the noble Lord, Lord Rees of Ludlow, said that the very questioning and wishing for certainty in scenarios that are of their very nature uncertain is unrealistic.
Those of us who opened the report with anticipation felt that because the committee was so over-determined to pursue that one issue at length—whether the IPCC was too politicised—it was to the loss of other issues that were not explored. Noble Lords have mentioned some of them. My noble friend Lord Vallance made a particularly powerful speech about the technologies and the potential behind them. I would have expected the committee to spend two or three chapters on the optimism reflected in his speech about those possibilities, rather than one chapter.
The noble Lord,
Lord Giddens, mentioned lifestyle change, which was perhaps slightly
outside the remit of the committee. Nevertheless, the willingness of
people, given the potential, to change their lifestyle and to adapt is
worth exploring. It is cynical to say that people want to carry on
regardless. Many surveys have shown that when confronted with choices,
one of the most important things to people is their children’s
future. After all, that is what people are striving for, that is what
people are educating their children for, and this is about the sort of
inheritance that people want their children to have. When confronted
with the
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The committee had some strong evidence fromthe Royal Society, which outlined 12 misleading arguments that it refuted at length and in detail in its evidence. Nevertheless, those misleading arguments have been advanced again today. The noble Lord, Lord Sheldon, mentioned a cosier, warmer climate; the very thing that the Royal Society refutes on page 302 of its evidence. Paragraphs 149 to 155 of the report seem to reproduce those misleading arguments. I wonder whether the committee had really taken to heart the evidence given by the Royal Society, which explained why those arguments were wrong.
However, I would not want to leave that point without saying that the report had some particular strengths. For example, paragraph 180 on adaptation becoming the norm of policy thinking was very important. Paragraph 181, which talked of a carbon tax replacing the climate change levy as the way forward, and paragraph 182, which again emphasised innovation regarding climate change, were also important.
Before this debate I asked myself whether at this point we would be able to ask if the committee had moved on in its thinking from last year. A number of speeches—those of the noble Lords, Lord Layard and Lord Vallance, in particular—indicated that times had changed and Members of the committee have said that a year has passed. We now have the Stern review which is able to build on the committee’s work. It was not clear whether the Stern review happened because of this report and whether the Treasury was pushed into such a review, but that is not important.
I hope that the Stern review will concentrate on the issue of mitigation or adaptation. Of course it is not a choice; it is a bit like asking, “Do we need food or sleep”? Clearly, we need global mitigation action. In our reaction, that of the developed world, we will not be the first countries to suffer catastrophic effects, but that does not mean that in the short term we should not worry about the catastrophic effects on others and, in the long term, the catastrophic effects on the developing world will mean catastrophic effects on us, as my noble friend Lord Teverson so dramatically described when he talked about migration.
Many noble Lords mentioned the predictions about warming as measured by the air. The noble Earl, Lord Selborne, mentioned the work of the National Oceanography Centre, Southampton. The Plymouth Marine Laboratory has been carrying out some extremely interesting work regarding the deep oceans. Even if you argue this way or that about warming in the atmosphere, what is happening in the deep oceans should give us all great cause for concern, because it takes far more to warm a small amount in the deep ocean than it does in the atmosphere. The deep oceans are a real indicator of the extent of the problem, according to the information given to me by the laboratory.
The debate today has been extremely
illuminating. The noble Lord, Lord Wakeham, said that the report was
evidence-based and not party-political. I would
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As my noble friend Lord Teverson said, the reports of your Lordships’ House are held in high regard. It would be unfortunate if they became party-political or anything less than evidence-based. This House has a reputation for an extremely high standard of report, which I for one would be anxious for it to maintain. We can be in absolutely no doubt about the quality of the debate today, and I very much look forward to reading it.
2.04 pm
Lord Dixon-Smith: My Lords, I begin by expressing my thanks to the Economic Affairs Committee for its immense amount of hard work, under the chairmanship of my noble friend Lord Wakeham, in producing this report. I add my thanks to my noble friend for introducing it.
One of the great virtues of the committee reports of this House is that they are subsequently submitted quite literally to Peer review, which is very much what we are indulging ourselves in today. That is rather important. If I were to make a suggestion about the future treatment of this report, it would be that the Hansard record of this debate should be attached within the cover of its future editions. That would be immensely worth while.
It is now more than 12 months since the report was published and what a year it has been. We had a major energy crisis last winter; we have seen the price of a barrel of oil double on the world markets; and we have had commensurately large increases in all other energy prices. We have also seen the arrival of the European Emissions Trading Scheme, which was supposed to put a proper cost on carbon emissions. Its failure to do so does not reduce the significance of its arrival but it does mean that some fairly rapid revision work needs to be done to ensure that it becomes an effective mechanism. One effect of that failure has been that carbon certificates have been cheap and, because of that, in last winter’s electricity generation we used more coal than we were accustomed to do and yet again—surprise, surprise—our carbon dioxide emissions have risen.
We have another energy review, which, rightly, keeps open all the options for energy supply in the future. That is immensely welcome. I wish that I could feel a little more confident about detecting within that review the urgency for change which the situation now requires. There is talk of a White Paper in the autumn but there is no mention of legislation, and some of the proposals in it will be dealt with in the spending review of 2008. That is beginning to press out the decision-making mechanism.
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In the mean time, energy security has becomea much higher-profile matter for all countries, particularly the United States. Beneficially, the relative cost of green energy is rapidly moving in a favourable direction so that, now, onshore wind is competitive, biofuels are likely to be competitive within less than a decade, and so on. Twelve months ago, who would have imagined such a script? I almost feel the ghost of Harold Macmillan standing behind me whispering over my shoulder, “Events, dear boy, events”.
The report deals with the relationship between two highly controversial matters. The first is global warming. One had only to listen to the “Today” programme on Thursday, 6 July, when Professor Lovelock was discussing the issue with some of his contemporaries, who equally believe in global warming, to realise that the subject, even for those who are totally convinced that warming is happening, is highly controversial. That is important.
The other part of the debate is the economic effect. The economy has been controversial throughout my whole public life, even when we did not have this problem. With such a recipe, and looking over a seriously long timescale such as the next century—or perhaps even longer, because the implications for mankind go further than that—it would be remarkable if strong views were not expressed and, indeed, if there were not a strong degree of dissension. To me, the remarkable thing is that the IPCC, which brings together so many scientists from so many different nations, has arrived at a consensus. But it has, and that gives particular integrity to its recommendations.
For me, the significance of the report is that it calls for more and better focused research both from the IPCC and on the economic front, particularly with the involvement of the Treasury. My noble friend Lord Wakeham mentioned that in his introduction and the noble Lord, Lord Macdonald of Tradeston, noted that the Stern review is going on. That has to be welcomed.
We must also recognise that the pool of relevant knowledge continues to expand and to develop. I can give two examples. First, on 30 June this year an article appeared in the American magazine Science. It is surprising how much good and relevant research is done on the subject in the United States of America when, in international circles, it has such an impossibly bad reputation in this area. The article was entitled “Food for Thought: Lower-Than-Expected Crop Yield Stimulation with Rising CO2 Concentrations”. That reported on the difference between experiments that were done 10 or 15 years ago and more recent experiments which have been carried out with more appropriate technology. A significant aspect used to calculate food production capacity in future environmental concentrations of CO2 has been somewhat eroded. I put it no higher than that. I have remarked before in this House that, in any event, there is insufficient land to produce both food and energy for mankind.
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The second aspect—I shall not go into any further detail—is the temperature hockey stick with which the noble Lord, Lord Rees of Ludlow, has dealt with greater expertise and knowledge than I possibly could. It is worth noting that the latest research report, undertaken on behalf of the United States Congress, interestingly enough, largely vindicates the researchers’ work—Professor Mann et al’s hockey stick graph, first published in 1998. It concludes:
- “Based on the
analyses presented in the original papers by Mann et al. and this newer
supporting evidence, the committee finds it plausible that the Northern
Hemisphere was warmer during the last few decades of the 20th century
than during any comparable period over the preceding
millennium”.
We are not dealing with one or two hockey sticks—the one I have just mentioned and the hockey stick that deals with carbon dioxide in the atmosphere—but four hockey sticks all pointing in the same direction. The other two hockey sticks are the rapid increase in the human population and the rapid increase in industrial and economic growth. When four hockey sticks are all going the same way, perhaps we need to take note.
We must take account of and somehow explain what is already happening around the world. Arctic temperatures are well up and Arctic ice, as has been said, is diminishing. The Greenland ice cap is retreating. I draw attention to a slightly different point in the Antarctic from the ice problem: in the western Antarctic a small increase in water temperature is putting at risk the future of krill, the basic food for so many species of fish in that part of the world that support a large industry.
Only last week, the Sunday Times reported that the Eiger glacier is now 140 feet lower at its top, below the north face of the Eiger, than it was a little over 100 years ago. That is a local matter. Kilimanjaro used to have permanent snow cap but has now almost lost it. In my industry, the northern limits of crops such as maize, sunflower and soya creep inexorably to higher latitudes. This is an adaptation reality. Of course, mankind has the capacity to change what and where we cultivate. But that raises a slightly different question: whether the natural fauna and flora have the same flexibility. When migration routes for birds are set over millennia of experience, when they are dependent on particular foods being available in particular locations, they do not have the luxury that we do. I fear is that the extinction rate is likely to increase.
The
Association of British Insurers, which really must do a good risk
assessment, sent an interesting brief in which it projected what is
likely to happen to its industry and the volume and costs of the
economic impact of climate change. It makes the point that, if future
levels of carbon dioxide are at the lower end of the projected range,
the increase in damage might be reduced by up to 70 per cent. If ever
there was an
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This is yet another report on global warming, an issue on which we have had some very interesting debates in this House over the last year. The report is another in what I expect to be a succession on the subject. I am grateful to all have who contributed to this debate and look forward to the Minister’s reply.
2.17 pm
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, we have had a fascinating debate, but, with my time limit, I am not going to be able to do justice to all 20 speeches. At the outset, however, I must congratulate the noble Lord, Lord Teverson, on his maiden speech. He came to the House with a good track record, and he has certainly shown how seriously he takes this issue. As I was watching names being added to the list through the week, I thought that, with all the new Peers coming in, this would be an opportunity for lots of them to make their maiden speeches. I was surprised that we only got one, but the speech was incredibly valuable and I congratulate the noble Lord on it on behalf of the House.
Before I get into my set piece, I shall mention a couple of preliminary points so that I do not forget them. On Stern, which I will mention, we will have the report, and the Government will publish an energy White Paper following on from the energy review, by the end of the year. Remarks were also made, which I appreciate, about the setting up of the office of climate change, which we want to be a shared resource across the Government.
I shall not get involved in the arguments that have gone around the House regarding the green movement. The fact of the matter is that, when scientists are conducting experiments to discover possible changes in the environment, and when those studies are interfered with by those who do not want to know what the results are so that proper results cannot be obtained, that undermines everything else that the green movement says. If you want to use science to discover the effects, destroying the experiments is not a good idea.
I do not know the reasons for the delay in the debate on the report, but I understand that deeper waters—not a good phrase—have flowed on this. There have been important developments in our understanding of climate change in the 18 months since the Economic Affairs Committee began its inquiry into the economics of climate change. Significant progress has also been made in the national and international policy framework to address the climate change threat, and I will address some of those points.
The vast majority of scientific evidence
continues to corroborate the scientific consensus that human activities
currently represent the major influence on global climate change.
Arguments disputing the science have been found to be indefensible in
some ways and some apparent inconsistencies are still to
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