Climate Change Bill [HL]

My Lords, I beg to move that this Bill be now read a second time. It is, I hope, common ground between most of us in this House that climate change is one of the greatest challenges of our age. The Intergovernmental Panel on Climate Change recently published its fourth assessment report, an authoritative analysis of the current state of knowledge on the subject. Its key conclusions remind us why the need for this Bill is so pressing. The IPCC concludes that the climate is observably warming and that this is due much more to human activity than to any naturally occurring factors. Without effective international reductions in emissions, atmospheric concentrations of greenhouse gases will continue to grow and temperatures will rise by up to 4 degrees centigrade this century. Dire consequences for food and water resources, human health, infrastructure, biodiversity and economic activity worldwide will follow and the risk of abrupt or irreversible climate change will increase. To avoid the worst of this, global emissions must peak soon and then decline rapidly. We know that this can be done. The Stern report set out clearly that doing nothing would cost far more than taking action and that early action will be easier and cheaper than action taken later. Meanwhile, we must also adapt to unavoidable changes already in the system. The negotiations beginning in Bali next week on a post-2012 global framework are critical. The United Kingdom, with our European partners, will continue to demonstrate leadership, but this is a problem that needs action at every level—global, European, national, local and personal and family. Responsibility for domestic action on climate change lies with the devolved Administrations for their parts of the UK, and all parts are co-operating on this Bill. I have never come across a Bill that enjoys such an all-party consensus; although we will have debates about whether it goes far enough in this or that respect, there is a massive degree of political consensus on the Bill. The Committee on Climate Change will be jointly sponsored and funded, and devolved Ministers have agreed to put the necessary legislative consent motions to the Scottish Parliament and Northern Ireland Assembly. The Bill is an unequivocal statement that the UK will do its part in the struggle against dangerous climate change and provides a framework to help us to adapt to its unavoidable impacts. It provides a clear, credible framework for our emissions reductions. The targets and budgets provide clarity for industry to plan and invest in moving towards a low-carbon economy and so reap the potentially large economic benefits. I must take this opportunity to say how helpful the pre-legislative scrutiny has been in developing the Bill. It was incredibly helpful to civil servants and parliamentary draftsmen in Whitehall. In particular, I thank my noble friend Lord Puttnam and the other members of the Joint Committee that he chaired. He brought great clarity to the debates that took place. The Bill has benefited greatly from their careful examination, as I shall make clear from a practical point of view during its passage. We also had great assistance from the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, from two committees of another place that examined the draft Bill and, last but not least, from some 17,000 organisations and members of the public who responded to our public consultation. As I say, the overwhelming consensus strongly supports the principles of the Bill, often coupled with proposals to strengthen it. I shall briefly address each part of the Bill. This is Second Reading and therefore I shall not go into a lot of detail. Part 1 puts into law our commitment to reduce carbon dioxide emissions by at least 60 per cent on the 1990 baseline by 2050. It sets an interim target of between 26 and 32 per cent reductions by 2020. The level of the 2050 target has been much discussed, not least in our recent debate on the Queen’s Speech. This target is based on analysis by the Royal Commission on Environmental Pollution. It is within the range of reductions for developed countries recommended by Stern, which European Union Heads of Government have called for. The science is clear that developed countries will need to reduce their emissions by at least 60 per cent if the world is to avoid dangerous climate change. It is also clear that the United Kingdom alone cannot tackle climate change. We have never said that we could; we need a comprehensive global response. This Bill demonstrates that we will play our part and, where we can, give a lead. We will help in efforts to persuade other countries to take on similar commitments, but we will achieve little, and could marginalise ourselves in the international debate, if we set a target without adequate analysis of its costs and other implications, or without a credible plan to achieve it. The science continues to develop. Therefore, as the Prime Minister recently announced, we will ask the Committee on Climate Change to be set up under the Bill whether our target should be tightened up to 80 per cent. This is also in line with the view of the Joint Committee that the Committee on Climate Change will have the right combination of expertise to review this target and should do so. Since responding to the parliamentary committees, the Government have continued to listen. We have accepted calls to bring forward the committee’s review of the 2050 target, so this will be done alongside its consideration of the first three carbon reduction budgets. This will provide greater certainty about the United Kingdom’s long-term direction of travel as soon as possible. We are currently considering the timing of this advice with the shadow secretariat to the Committee on Climate Change and may come forward with a government amendment in due course. Part 1 also establishes a system of five-year carbon budgets, backed by strong annual accountability and independent scrutiny. The Secretary of State must report to Parliament on the Government’s plans and proposals to meet each carbon budget as soon as practicable after it is set. It also sets out circumstances when targets and budgets can be amended and the matters to be taken into account in setting the budgets. It allows other greenhouse gases to be included in our targets by order. The Committee on Climate Change will look at the implications of doing this as part of its review of the 2050 target. Finally, Part 1 permits the Secretary of State by order to add emissions from international aviation and shipping to the targets and budgets, where appropriate in connection with a change in European or international law or policy. These emissions are currently excluded from the targets and budgets, reflecting international practice and the complexity of the issues. However, the Government believe that it is important that these sectors should play their role. We have led the debate in Europe on including aviation in the European Union Emissions Trading Scheme, which would place a fixed cap on aviation emissions. We hope soon to see that come to fruition and will then ask the new committee to examine whether and how international aviation and shipping emissions could be included in the UK’s targets and budgets. Part 2 and Schedule 1 establish the Committee on Climate Change, which will be an independent non-departmental public body. It will advise the Government and the devolved Administrations on the emissions reduction pathway to the 2050 target and specifically on the level of the carbon budgets. The committee will use its expertise to balance economic, social and environmental factors and will take account of external issues including energy prices, economic growth forecasts and international developments. To ensure a really strong system of annual accountability, the committee will have a duty to report annually to Parliament and the devolved legislatures on the UK’s progress towards meeting its emissions reduction targets, and the Secretary of State will have a duty to respond. There have been calls both in this House and more widely for annual milestones and I suspect that we will hear more later today. The Government have considered this idea carefully and we have concluded that it would be both ineffective and fraught with practical difficulties. We believe that the approach in the Bill is more robust and will ensure effective annual accountability to Parliament and to the public. Part 3 and Schedule 2 introduce powers to establish domestic emissions trading schemes through secondary legislation. Trading schemes are among the most economically efficient means of delivering emissions reductions. The powers allow schemes to be introduced on a UK-wide basis, by two or more or national authorities working together or by a single national authority acting alone. Those provisions will enable new schemes to be introduced more flexibly and responsively, while maintaining the need for thorough analysis, consultation and scrutiny. Changes since the draft Bill include making all new enforcement powers subject to affirmative resolution, clarification of penalty provisions and a requirement to consult the new committee on new schemes. Naturally, alternative instruments such as taxation or regulation will still be adopted where they are more appropriate. These powers, with Schedule 4, are being used to implement the carbon reduction commitment, a mandatory cap-and-trade scheme covering approximately 4,000 to 5,000 large, non-energy-intensive organisations. That will save some 4 million tonnes of carbon dioxide per year by 2020. Part 4 concerns adaptation. To successfully adapt, we must first understand the risks of climate change impacts to the United Kingdom. We have some useful evidence but no comprehensive assessment of the risks and vulnerabilities based on the most recent science. Part 4 requires a first risk assessment to be reported to Parliament within three years. Subsequent risk assessments will be required at least every five years. Putting adaptation reporting to Parliament on a statutory footing for the first time will help to ensure a consistent focus on this work. Following the risk assessments, the Government must lay a programme of action before Parliament, encouraging a comprehensive and joined-up government approach. The programme must contribute to sustainable development, giving due consideration to the natural environment, the economy and social issues. We have already strengthened the adaptation provisions in the Bill but, in consultation with our stakeholders, we have concluded that we must go further, as the Prime Minister announced last week. We plan a government amendment to provide for powers to require public bodies to assess the risks of climate change and set out the actions that they need to take in response. To encourage consistency, we will also provide for statutory guidance to help public authorities to understand how to do that. Part 5 and Schedules 5 and 6 include other provisions to reduce emissions. We are providing powers for up to five local authorities to pilot waste reduction schemes to encourage households to minimise and recycle their waste. Currently, 3 per cent of all UK greenhouse gas emissions are methane from biodegradable waste in landfill. Despite making good progress in recent years, too much of our waste still goes into holes in the ground. As we know from earlier debates on another Bill in this House, the UK’s position on this is not good compared to that of our European partners and it must improve dramatically. Research suggests that incentive schemes could significantly help. We will invite local authorities to propose schemes for their areas, subject to various safeguards. Householders who reduce and recycle their waste will receive a rebate which may be integrated with the council tax system. In some schemes, householders who do not do that—that is, recycle—could end up paying more. Piloting will allow us to trial different schemes in different areas, monitor their impacts and report back to Parliament before any decision is taken to roll them out more widely. The Local Government Association has called for schemes of this kind and has welcomed the proposed pilots. Part 5 and Schedule 6 contain amendments to the Energy Act 2004 relating to the renewable transport fuel obligation. This obligation was established by order under the Energy Act, following parliamentary debates last month. From next April, road transport fuel suppliers must ensure that a proportion of the fuel supplied in the UK comprises renewables such as biofuels. The main objective of the renewable obligation is to reduce greenhouse gas emissions from road transport. The provisions in the Bill are to enhance the obligation’s operation. We have responded to concerns about the sustainability of biofuels—a topic that was raised in our debate on the Queen’s Speech and will, I suspect, be raised again today. The scheme already requires fuel suppliers to report on the carbon and sustainability aspects of their fuel. The Bill adds a duty on the administrator to promote the supply of renewable transport fuel that delivers carbon savings and contributes to sustainable development or general environmental protection. Other changes are designed to give more flexibility to develop the scheme in the longer term, in the light of experience. The other parts of the Bill deal with technical matters that need not bother us on Second Reading. There are procedural issues to look forward to. I have given a brief summary of the Bill, but because this is Second Reading and many noble Lords wish to speak, it would be improper if I took longer. I commend the Bill to the House. Moved, That the Bill be now read a second time.—(Lord Rooker.)