Climate Change

The problem is that there is some confusion among those who advocate annual targets. Even they recognise that in any one year it is possible to face circumstances that are outside the Government’s control. There could, for example, be a dramatic shift in prices—we have seen that in recent years—whereby coal becomes much more attractive as a fuel than gas. The levers of control over that are extremely limited, in terms of what the Government can do. Some people say that it would be possible to make an allowance for that within an annual target. The difference between that and carbon budgeting has thus become very narrow. I would rather be a bit more honest about this, and recognise that carbon budgeting gives the kind of flexibility that any Government require and that it takes us towards the concepts of carbon markets, of caps and of budgeting for carbon within all our lifestyles, right down to personal lifestyles. I know that the hon. Member for Eastleigh (Chris Huhne) does not share my views about the radicalism of personal carbon allowances; I disagree with him on that matter. We should keep an open mind on how we approach this issue, as part of the all-important cultural shift in which we begin to think about carbon in the same way as we think about the price of electricity or gas. That shift has to come. The Government can provide a lead in that regard. The move towards smart metering is extremely good, for example. I have had a prototype smart meter fitted in my own home recently. By the sound of things, it is not as good as some of the meters that will be available in the next few years, but it nevertheless allows me to see exactly what my real-time electricity use is, and I have taken steps to reduce that as a result. I also welcome the extra money for building in high sustainability and low carbon to such programmes as building schools for the future. I am keen on that, not least because Scunthorpe is in the current wave for that programme, involving a £74 million programme of new schools and refurbishments. What better opportunity could there be not only to build in standards for low carbon but to use the results as a teaching tool, so that the pupils can see real-time read-outs of renewable power use and understand the value of passive heating and ventilation? Those are the kinds of standards that can be built in, and I welcome that. I am pleased that the Government have seized the opportunity to do it. Government procurement, too, is a powerful tool. I know that this subject has been examined, but we are only scratching the surface. We could make a lot more progress through the power of Government procurement, and also local government procurement, which is not used as it should be in this context. I agree with some of the points that have been made about energy companies becoming providers of energy services rather than simply selling energy; that change must happen. I should like to suggest to my hon. Friend the Minister that renewable energy certificates are among the most successful vehicles for the encouragement of renewables. They have worked well, and helped to take the use of renewable energy from a very low level towards achieving our targets. Given what Germany has done with feed-in tariffs, however, perhaps we should consider moving away from renewable energy certificates. We would have to do that over time, because people have invested in the scheme and we cannot undermine that investment, but I believe that we should be thinking about feed-in tariffs that depend on the level of technology involved. For example, if a power station is investing in carbon capture, which involves very expensive technology at the moment, feed-in tariffs for that power station should reflect that level of investment. In the domestic energy sphere, people who fit micro-power to their own homes should certainly get a better feed-in tariff than they do at the moment, although I welcome the Chancellor’s proposal to make that income tax-free. He has sent out an important signal by doing that. I want to turn to the international issues that relate to climate change, because they will be the key factor. There is a lot that we can do, and we should lead by example. We should demonstrate that an advanced industrial country can reduce its emissions without affecting its gross domestic product. However, we shall have to persuade other countries to do more. We need to look for an agreement post-2012, at the end of the present Kyoto protocol, and we have an awfully long way to go in getting the necessary buy-in from a number of countries. I listened carefully to what the hon. Member for Eastleigh said about the range of 450 to 550 parts per million. We should be aiming for the bottom end of that range, because I worry about the impact that being at the top of the range would have on the global climate. Hon. Members will be aware, however, that a number of countries think that 550 parts per million is an unrealistic target. We still have a long way to go to convince countries that 550 would be straying into the area of dangerous climate change. One way of getting greater international support would be for the developed nations to place more emphasis on including aid packages to developing countries as part of a climate change agreement relating to adaptation. I would like to suggest to the Minister that we need new funding for that. We need to ally these issues to our aid programmes. I know that the Department for International Development has been giving a lot of thought to the matter, but we need new money on the table to get those agreements, particularly from the emerging economies. One way of doing that would be to ensure that money was available in the framework for clean energy and development, which came out of the Gleneagles action plan. That potentially powerful vehicle is being set up by the World Bank, and it needs our encouragement and support. It is important that carbon markets develop, because although proposals for smart taxation that encourages the use of new technologies, for lower emission vehicles and for offsetting the emissions from planes are all perfectly legitimate arguments, I worry that there is a potential for the prices involved to be rather elastic. For example, the fuel surcharges on air tickets range from about £30 to £60, before we add the increased departure tax. Those taxes have not had a great effect. Neither of the Opposition Front-Bench spokesmen has told the House what figure they would propose that would actually deter people from flying. I have never seen such a figure. I would like my hon. Friend the Minister to consider that, if there were a cap on emissions, the aviation sector would not be able to exceed that cap. That would be a much more effective way of ensuring that aircraft emissions did not rise, and that new technologies and the efficient use of existing aircraft were encouraged. Carbon markets are not yet mature—they are still developing—but there is an argument for taking a levy on each tonne of carbon traded. This has been discussed in Germany, and the figure of 10 cents has been suggested. That money could go into a fund that could boost adaptation funds. There would also be a strong element of social justice involved, because the money would come from the people producing the carbon and go to those who, because of their poverty, were not. Given the rate of growth of the markets, there is the potential for a huge fund that could be directed towards adaptation and new technologies. The proposal is not without its problems, but it is something to think about in terms of raising large sums of money that could make a real difference. It could encourage adaptation and the decarbonisation of our societies. I have a final point to put to the Minister, and it is one that I can make more easily than he can. If there were a lack of progress towards international carbon markets or, heaven forbid, towards a framework, post-2012, by some countries—some have legitimate claims because they are emerging economies; others should know better—would he give some thought to a concept that I regard as very much a second choice? If countries such as ours, or markets such as the European Union, are imposing the justifiable burdens and costs of carbon markets that encourage the use of new technology and innovation, could a carbon levy be imposed on imports from countries that are not part of any international agreement and are not taking action to control carbon? That levy could then be recycled back to the developing countries to support technology transfer and new technologies. I understand the controversy involved in moving into such an area. I know all about the kind of opposition that such a proposal would get from the World Trade Organisation, and I must make it clear that that is not something that I want to see. I want to see an effective outcome, post-2012, involving a proper and effective framework agreement that has been signed up to by the United Nations forum on climate change. If there is no progress, however, there should be no free riders. It saddens me to say so, but, in those circumstances, a carbon levy is something that we should consider.