Debate on the Address

My Lords, I am grateful to the Minister for what I can only describe as his brilliant and rapid skate around the issues that we are covering today. My remarks may be slightly more focused, but not much, because the central theme will revolve around the implications for global warming, which covers precisely what the Minister has been saying, but from a different angle. It is a pleasure that we have four maiden speeches to look forward to today. My noble friends Lord Bruce-Lockhart and Lord Sheikh are standing here for the first time, and we look forward to hearing what they have to say. The noble Baronesses, Lady Ford and Lady Jones, are also going through the same test, if I may put it that way. I hope that they will feel some sympathy if I say that I hope that they feel as nervous as I do at this moment. All the subjects of today’s debate have a possible impact on climate change. If we do the right things we can make a major contribution towards limiting global warming, but if we get it wrong we can actually exacerbate the situation. The Minister mentioned Crossrail and the huge employment benefits that we stand to gain as a result of it. I entirely accept that, but 30,000 jobs have to produce something. That something, whatever it is, has to be transported. We have a continuous problem, in that we have to maintain a growing economy, which is absolutely essential if we are to be able to afford to get climate change under control. At the same time, that growth has implications that need to be taken into account to ensure that we do not do these things in a way that increase emissions. That has to be a real focus. The Stern report two weeks ago focused our attention, as the Minister rightly said, on the potential costs of the damage that global warming can do. Sir Nicholas Stern also showed that the costs of action to relieve that damage will almost certainly be less than the costs of the damage itself. Yesterday the noble Lord, Lord Giddens, in his remarkable speech proposing this debate, made rather light of economists in his opening remarks. I thought that he was very modest because it was quite clear by the time he had finished that economists have a very major contribution to make. Certainly his remarks did nothing to lighten the implications of what that report says. In today's debate, we are covering, as the Minister has acknowledged, all aspects of the work of Government. The debate has implications for foreign affairs, European affairs, taxation—we inevitably must trespass on the work of the Treasury—and so on. But central to everything that we do from now on is going to be that we have to manage this problem without putting the economy into recession. My noble friend Lord Lawson of Blaby, who is not here today, disagrees fundamentally with the current approach to global warming. But he is right in one thing: he has a real concern that if we take unfortunate steps we could push the economy into recession. That raises the significance of the international aspects of what we do. If we cannot persuade people abroad that they must also move in the same direction, we could find ourselves isolated and not where we can do the things that need to be done. So I look forward to seeing the Bill on climate change that was mentioned in the gracious Speech and that the Minister outlined in his Statement two weeks ago. But, of course, that does not mean that comment is inappropriate. The really significant thing to me is the statutory backing that will be given from the time the Bill is passed to reduce carbon dioxide emissions from 1990 levels—that is a few years ago—by 60 per cent by 2050. Not many people have sat down and considered the implications of that. If we are to succeed, then fossil fuel emissions by 2050 have to be down to the level at least where they were in the middle of the last century and actually, because the increase in energy use has been fairly flat over the past 30 years, probably earlier than that. That is a total and dramatic change in how we use energy and almost certainly in how we obtain our energy. One of the remarkable things about modern society is how effective the development of energy efficiency has been. A graph in the Science and Technology Committee report that we debated earlier this year revealed that quite starkly. It showed that over the past 30 years we have doubled our GDP. The energy cost per unit of GDP has fallen by nearly one-half. The really interesting line, in the middle of the graph, showed the national energy consumption, which is on a slightly rising plane. The great danger of keeping the economy growing, as we have to do, is that we will increase our energy consumption. If we do, it must not be fossil fuel based. I will illustrate the question of energy efficiency with two modern paradoxes. Consider the modern internal combustion engine. It is vastly more efficient, vastly more powerful and vastly more economical to use than the engines that we were familiar with when we were young—certainly when I was young; there are others here today who are younger than I am. Theoretically, the efficiency there is vast. Consider the modern car. It is bigger, stronger, more comfortable, faster, heavier and, most important, safer. A large part of the benefit of fuel economy has been taken up with providing other improvements, which we all welcome and which are beneficial. That trend will continue. Consider the modern television set. The conventional set today uses half the energy of a set produced 30 years ago. That is fine. Consider modern flat-screen technology, which gives a better picture, better sound, greater convenience and television sets that are easier to put into a room. That technology has put the energy consumption back up to where it was. Of course, efficiency improvements will continue, but we should not rely on improved energy efficiency to get us through to the end of the need to reduce carbon emissions. The development of alternative fuels will be more significant. The Minister has already mentioned the developments in agriculture, and for a moment I will speak as a farmer. It is a pleasure to feel a bit of spring sunshine in the industry; we have been in quite a long winter. We need to recognise what we are doing, because there are implications in what is happening that we need to be wide awake to. The United States of America, which has for a long time been a major part of the world’s bread basket, is now moving its surplus grain, which it normally exports, into the biofuels market. At the same time, we have bad harvests in Australia and grain production down in Ukraine, with the effect that grain prices now are at least 30 per cent higher than they were 12 months ago. The millers are complaining. They did not complain when the farmers were having a tough time, but now they are having a tough time, and they are complaining and talking bread prices up. The reality is that in moving grain into fuel we are not moving grain that is surplus to requirements into fuel. Unfortunately, annual grain production has been lower than annual grain consumption globally now for eight years. We are now consuming as energy the grain that previously was sold at low levels and that sustained much of the third world. That has serious implications, which we need to think about, although I would not begin to assume to dictate the solution. It may be that the higher prices will increase production; it is to be hoped that they do. But we cannot afford to increase the pressure on the natural environment. We cannot afford to lose more rainforest to soya bean and sugar cane production. We cannot afford to lose more savannah or temperate forest to arable agriculture in the conventional sense as we understand it in this country. We have a host of dilemmas, which forces us back into the need to produce alternative forms of energy production. Every time we move in that direction, we run into a different obstacle—the procedural obstacle that society does not like change. Even Governments sometimes resist change. We know that there will be a planning Bill and, although we do not know what will be in it, we have heard that the Government are to simplify planning procedures. I hope that the Minister will assure us that it will cover such matters as the siting of power stations—even coal-fired power stations with carbon sequestration, the only power stations of that type that could be built now, would require planning permission. One could bet that, even with carbon sequestration, such an application would attract planning objections. We have to overcome such objections, because the time limit for dealing with these issues is rapidly running short. I hope that the Minister can tell us a little about what will be included in that Bill. Will either the planning Bill or the Climate Change Bill be introduced first in this House? That would be a major fillip for this House. Although the Minister began to address the matter today, nothing has been said about carbon taxation, which will have to come if we are to get global warming under control. It would be better if we knew what was going on. I am in danger of speaking for too long, but I believe that the financial implications of what we are doing are serious. I shall conclude on a problem between the Treasury and local government, with which the Minister might be able to assist us, in relation to the disposal of domestic waste. My county of Essex is to install two major anaerobic digestion plants to treat domestic waste. Such a plant is, in effect, an oil refinery fuelled by domestic waste, which produces a green form of energy and a stable fertiliser that is safe to use. The problem is that it is very expensive to introduce such a system. Treasury rules for the private finance initiative that will be needed to build such systems require a best-value approach—and a number of waste disposal authorities are caught in that trap. The Treasury’s best-value approach is incineration, which is unquestionably much cheaper. The trouble with incineration is that it converts solid waste into gaseous waste, which is then spewed out into the atmosphere, if I may use that phrase, and exacerbates global warming. Anything that the Minister can do in the department, for which he and I share, in different ways, a responsibility, to encourage a change in that attitude in the Treasury will be of enormous help. We face enormous problems. Our ancestors two centuries ago, when they were unencumbered by regulation, used their initiative and inventiveness to change the world. We are now experiencing the effects of that, because the world has changed. We have to keep the benefits, but we have to control the disadvantages. The big question is whether the Government will encourage that. If one considers our major energy industries and the investments that underlie them, one sees that there is huge inertia in the system. The solution may well lie in what is now called ““disruptive innovation””. I learnt that phrase only recently from a report by the Cass Business School in London on the future of that field. It said that the hydrogen economy is considered to be a disruptive innovation. I shall give two examples of disruptive innovation. One is the recent arrival of digital cameras, which completely destroyed the old photographic film industry, although every family photographer will recognise and rejoice in that development. Another is the compact disc—a wonderful way of storing information and, indeed, a wonderful thing to travel with, as it can hold music and everything else. It completely removed the old tape systems with which we were all familiar. If we are to succeed, we shall have to move into the hydrogen economy, and we shall probably have to move into harvesting solar energy to a much greater extent than is presently envisaged. This change will be resisted by the inertia in the system brought about by the huge investments in the energy and transport industries as they currently exist. The real question that we must all face is: will the Government, who are going to have to initiate and encourage this change, do it with sufficient robustness to succeed? My current judgment is that they have failed to inspire. I hope that they will do better in the future.