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Lord Rooker: This has been a useful debate. I was almost going to rest my case on the fact that my noble friend Lord Hunt read out Clause 10 (3) but that would be trite. A point that has not been made is that while subsection (2) has that list—and I will come to a discussion on that—subsection (1) requires the Secretary of State as well as the Committee on Climate Change to consider the contents of that list in making decisions. These are matters the Committee on Climate Change has to take into account when it provides its advice on the level of the carbon budgets and the Secretary of State must also take them into account in making their decisions. I will not go over the list in full. It is not a big list but it includes the economic and social contexts as well as scientific factors and the international context. We think it is a broad and comprehensive list and the Joint Committee noted that balancing existing

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considerations will be quite a complex task for the Government and the Committee on Climate Change, requiring both technical analysis and, of course, political judgment. We do not want to overburden the Committee on Climate Change in preparing its advice on carbon levels but it is entitled, in addition to the areas that must be taken into account by the Secretary of State, to take any other factor into account. That is what Clause 10(3) means. It is not limited; it is a free agent. We are appointing a committee of independent people and if it chooses to look at other issues, that is entirely within its remit. In some ways we agree very much with the thrust of the debate but we think we have covered the points made in our drafting of the Bill.

Lord Clinton-Davis: The interpretation that my noble friend puts on this is consonant with other legislation. It is not at all unusual.

Lord Rooker: It is. There are lots of committees. I am sticking to the Committee on Climate Change at the moment. It is a completely free agent; I make that absolutely clear. This Bill does not restrict the Committee on Climate Change from looking at any factor outside that list, whether social, economic, technical or political.

We do not think that Amendment No. 48 is helpful. We believe the specific issue of decisions on the level of carbon budgets to be already adequately covered by the matter of scientific knowledge about climate change. We drafted that list to allow for very wide interpretation of its scope by both the Committee and the Secretary of State. Both the Committee and the Government are required to take climate change into account in the consideration of carbon budgets. We are not sure what value would be added by the amendment. We think the points made are adequately covered by the list. We do not want to add to the list unless some cast-iron case is brought forward, and we have not seen one at the present time. As I have said, Clause 10 (3) gives the Committee massive scope.

Amendments Nos. 49A, 50B, 51A and 53A would adjust the focus of the matters in Clause 10 to be considered by both the Committee on Climate Change and the Government. These amendments would require the Government and the committee to consider the impact of climate change on these issues. I understand that these amendments may have been prompted by the concern that considering the impacts of the level of the budget on economic and fiscal circumstances may lead to inaction or the setting of an unambitious budget.

I begin by emphasising that the Bill requires the Secretary of State to set a carbon budget for each period—inaction is not an option. There is no get-out for the Secretary of State in that respect because of the requirement on the office. When considering the impacts of decisions on the level of the budget on the matters listed in Clause 10, the Government and the committee will need to consider the impacts, costs and benefits of a range of levels for the carbon budget. That will ensure that the costs of the impacts of climate change will be considered alongside the

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costs of setting a budget at a particular level. We feel that the amendments misunderstand the intention of Clause 10, which refers to,

“matters to be taken into account”,

and balanced by the Committee on Climate Change and the Government when providing advice and making decisions. In considering the level of the budget, it is right that the impact of such decisions on the matters in Clause 10 should also be considered.

The committee is required to take account of,

“scientific knowledge about climate change”,

which will include consideration of the effects of climate change. We have not been prescriptive in drafting the clause. While Ministers have a good degree of sympathy with the amendments, we genuinely believe that the way in which the clause is drafted has the desired effect. Therefore, I ask the noble Duke to withdraw the amendment.

The Earl of Caithness: Can we have another go at this? I do not think that the Minister fully understands what my noble friend the Duke of Montrose is aiming at. This involves looking at the problem from a different point of view. The committee is a free agent—to use the Minister’s words—to look at whatever it wants, which is covered by Clause 10(3). In fact, we could delete Clause 10(2) and just revamp subsection (3) to say that the committee and the Secretary of State can take anything they like into account. There has been that usual get-out clause in lots of Bills.

Clause 10(2) refers to particular points for the committee to take into account. I believe that my noble friend’s amendment is intended to get the Committee on Climate Change and the Secretary of State to consider the consequences of not moving as fast as could be. It seems to me that Clause 10(2) is negative, whereas my noble friend’s amendment is positive.

Going back to the point that I made about the Treasury press notice and the effect on GDP, if the effect of a proposal from the Committee on Climate Change is to reduce GDP by, say, 1 per cent over five years, that is a fairly tough hair shirt. However, if the committee were to find that the consequence of not doing more would be a greater reduction in GDP, it is much easier—

Lord Clinton-Davis: Will the noble Lord give way—

The Earl of Caithness: Please let me finish my sentence. It would be much easier for the British public who have to buy the policy to appreciate why the action has been taken.

Lord Clinton-Davis: Why does the noble Earl say that the,

“matters to be taken into account”,

defined in subsection (2), are negative? I cannot see that at all.

The Earl of Caithness: They are negative in the sense that they are taking into account the consequence of what is being suggested by the carbon budget. The point that I am trying to make is to consider the consequences on the economy of not doing more.

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4.30 pm

Lord Lea of Crondall: I was going to intervene later on a related matter, but it has come up now. I should like to make a couple of points because I think we are talking at cross purposes. The reason for the confusion is that there is no fiscal delivery mechanism in the Bill, which I shall discuss in an amendment that we will consider at a later date. To get to 20 per cent, 40 per cent, 60 per cent, or whatever, there will have to be a painful fiscal tax—or whatever we call it—delivery mechanism. We have to find, at some stage, a way of getting a price tag into the Bill and some broad-brush ideas.

There is no point in having so-called dramatic carbon budgets for the year two thousand and something or other if we have no idea about the fiscal side of the equation. If people say that we cannot be very precise about that, we are being jolly precise about the other side of the balance sheet. This must involve either tax increases—balanced with some other reductions, but with a net increase of tax in this field and maybe with some hypothecation—or the allocation or purchase of tradable permits or subsidies of one sort or another. That is how the whole thing will work. These are at the heart of the action that will be very painful for many people.

I do not see how this part of the Bill can accommodate the point that the noble Earl wishes to make. It is a very important question, but first we must see what the price tag will be. That will be reflected in the world price of carbon, whether there is a European carbon tax, what happens to European emissions trading, and all of the rest of it. That cannot be the job of the Committee on Climate Change either; we have got to leave it for now. It is a Treasury matter and the central fiscal responsibility will be for the finance Minister at the Treasury. Hence the separate mechanism that I will propose a week on Monday in Amendment No. 182B.

I will explain why I am not proposing an amendment here. The central fiscal problem will arise from the fact we have a double bind with carbon. Increasingly, we have reports about shortage of reserves and exploration problems. That drives up prices on the normal supply-and-demand basis and there is very low elasticity of demand for carbon; hence home heating. You cannot suddenly turn it off without freezing to death and you cannot suddenly and easily halve overnight your car journeys.

The tax increases of 50 per cent or so cannot be stealth taxes. They have to be explained to the public and we have to start now to explain them and their order of magnitude. The trouble otherwise will be that people will say, “You agreed on this Bill but you did not tell us what it really meant. It was a false prospectus. You didn’t tell us anything about the taxation consequences—doubling the price of heating oil and so on”. That is why politicians are often accused of duplicity—unless we believe that what I am saying is absolutely wrong. Well, if it is wrong, let somebody say so. If noble Lords suspect that it is correct, we had better start to get our act together. People have talked about a new politics; well, goodness gracious, the real change in politics—this is new—is that we have got to

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produce tax and expenditure projections over 20 or 40 years to go along with the so-called carbon budget. The word “budget” normally—if I may be pedantic and semantic for a moment, as other noble Lords have tended to be—is, in a sense, a weasel word. It tends to imply that we know something about finance when actually we do not. That is just a taster of what has to be in the Bill, but it cannot be in this part of the Bill.

Lord Rooker: Perhaps it would be helpful if I added a further paragraph on that. If we ask ourselves how we know that the committee has taken all matters into account, I draw the Committee’s attention—at the risk of delaying things, which I do not want to do—to Clause 27, which relates to the functions of the committee and its advice in connection with carbon budgets. Clause 27 will require the committee to provide the reasons for its advice on carbon budgets. It will set out how it has arrived at its conclusions and how it has weighed up the costs and benefits and the risks associated with different abatement pathways so that we in Parliament, other stakeholders and the Government can understand why that carbon budget has been recommended. Therefore, jumping forward, there is a debate to be had and I think that answers to this debate are buried away in Clause 27.

The Duke of Montrose: This has certainly been an interesting debate; it has shone a light on to this issue from many different angles. I listened with some interest to what the Minister said. I cannot accept his comments immediately but I should like to read them in slightly more detail.

The noble Lord, Lord Hunt of Chesterton, who is no longer in his place, was right to draw the Committee’s attention to subsection (3). The powers are there but this is one issue that we keep working away at in the Bill. The Bill contains so many open and endless powers and we simply wish to see at what stage and to what degree each power should be defined. In Amendment No. 48 we have tried to bring about a little more explanation of the matters to be taken into account by the Secretary of State and the committee.

I am grateful to all noble Lords who participated in the debate. It was very interesting to hear the views of the noble Baroness, Lady Young of Old Scone, from the perspective of the Environment Agency. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 49 and 49A not moved.]

Lord Teverson moved Amendment No. 50:

Clause 10, page 5, line 40, after “decision” insert “, whether positive or negative,”

The noble Lord said: I shall speak also to Amendments Nos. 51 to 55 but I want to talk primarily about Amendment No. 53. In many ways, this matter goes back over some of the ground that we have just discussed and, in retrospect, it may have been better to put some of these amendments in the previous group.

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However, although I would have supported Amendment No. 48 in principle, I do not believe that it was worded strongly enough to deal with the list of matters that have to be taken into account. I shall not go through the whole debate again but I agree entirely with the noble Duke’s summing up of subsection (3). You can have a general catch-all clause at the end but a committee as important as this will always look back at its terms of reference to ensure that particular items have been taken into consideration. It might also consider others but they will not be given the same priority.

I feel very strongly that a key area that has been left out here—in a way, it is the raison d’être of the whole Bill—is the much broader environmental question, not least biodiversity. It does not receive the degree of interest outside the scientific press that it deserves, but there are real issues concerning biodiversity—not only nature conservation but questions relating to crops, the way we live and the health of our national economy. That is why it is essential that environmental circumstances, biodiversity, ecosystems and ecology generally should be included in the list of matters set out in the clause. As the Bill stands, they have been left out completely and that is a major omission. They have to be a part of the list because, although we have the catch-all clause, they come under an area that the committee needs to consider in particular.

Lord Rooker: I am sorry to intervene—it is a habit from the other place—when the noble Lord is moving his amendment. However, he starts off from a basis that is completely wrong. The Climate Change Bill sets up a public body which will therefore be under a statutory duty, under Section 40 of the Natural Environment and Rural Communities Act 2006, to consider the purposes of conserving biodiversity. Therefore, that aspect is covered but does not show up in this Bill because it relates to other legislation. A requirement is there so I would hate the debate to start by saying that we had forgotten biodiversity. That is my point.

Lord Teverson: I thank the Minister for that intervention, which is extremely useful. I understand that. However, I am guessing that we could probably look through other areas and say that they also had to be looked at. My point is that it is important that such a thing is listed. I accept what he has said but that area does need to be listed within this Bill because it is the core part of climate change policy. On that basis, I beg to move this amendment.

Lord Crickhowell: Like the noble Lord, I could have made my remarks on the previous group debated, but perhaps chose not to because having added a slight word of disagreement with my noble friend on the Front Bench, I did not want to do so immediately again. I turn to the emphasis put on the importance of science by my noble friend the Duke of Montrose, with which I do not disagree. However, I also emphasise that within the list there are other important matters to be taken into account. In that context, I want to round off my remarks made earlier this afternoon.

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These are not negative matters. After all, going back to Clause 8, those matters are taken into account with the object of setting a carbon budget with a view to meeting the target—in Clause 1—for 2050. The Climate Change Committee and the Secretary of State will have to have that objective clearly in mind.

When debating the various matters that have to be taken into account, my noble friend the Duke of Montrose referred to economic, political and social circumstances and then moved on without mentioning energy policy—one of the most important factors to be taken into account and to which I referred earlier.

I want to make what is far from being a negative point. I am sorry that the noble Lord, Lord Puttnam, is not in his place, because during the second day in Committee he said he felt that the sense of urgency was beginning to seep out of our debates. I want to introduce a way of getting some urgency back, not into the debates, but into the achievement of what we are all setting out to do. That is not to set a lot of targets and prepare a lot of budgets, but to change the conditions created in the world by carbon emissions.

I again refer briefly to a remarkable and completely relevant contribution in a book written by my noble friend Lord Howell of Guildford and Carole Nakhle. My noble friend was saying that these issues are hugely important but the problem in trying to persuade people to do something about them—and to accept the burdens that the noble Lord, Lord Lea of Crondall, suggested were going to be put on them—is going to be quite difficult. You are being asked to do something that may be quite painful in the short term and will not produce any results until many years later.

4.45 pm

My noble friend Lord Howell points out that in the short term we have a potentially very serious energy crisis facing us. He therefore suggests that:

“It ought to be possible to combine the urgent needs for energy security, as well as the urgent needs of the developing world, with the long-run fight against global warming. Together the twin goals of energy security and climate security ought to provide a truly motivating worldwide story which the prophecies of disaster some decades ahead lack the persuasive power to convey or turn into action”.

Later, he writes:

“Harnessing these two causes—of energy security and climate security—would be to create a grand alliance, a grand unity, or at least harmony, of purpose which the world so conspicuously lacks at present”.

I shall make one final quote from the book. My noble friend writes that,

“what is crystal clear is that, starting from here and now, long-run targets for checking further carbon growth, however ‘demanding’, or backed by stern-sounding laws, stand not the slimmest hope of being achieved unless they are seen as necessary to protect people and industry against violent price movements, against power cuts and supply disruption, or against more oil shocks, as the Middle East and the Islamic world continue to boil. Nor will they do much to prepare the world for, or help it adjust to, the big climate changes which are already in the pipeline, and which no amount of carbon curbing will now avert. That will require expensive adaptation on a major scale”.

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I produce those quotes because I want to emphasise that it seems to me that far from being negative, some of the matters that have to be taken into account are entirely and completely positive. I hope that the Climate Change Committee and the Secretary of State will not only think of scientific knowledge about climate change and the economic and social issues which have been referred to but will pay a great deal of attention to Clause 10(2)(f), which relates to energy policy. I hope that by combining a realistic energy policy with the climate change policy they will seek to get something that is not only effective, but is also saleable to a doubtful and dubious world. In their book, my noble friend and his co-author set out a series of proposals for achieving greater energy efficiency and for saving the vast amounts of waste that now occur in our oil, gas and energy supplies. They are all relevant to what we are debating in the Bill, but they are all equally relevant to dealing with the energy crisis that my noble friend fears may get much worse in the short term.

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