Climate Change Bill [HL]

My Lords, successive reports of the International Panel on Climate Change have increased our knowledge and have narrowed down the range of uncertainty on the prospects of climate change. The estimates will continue to be refined but, for me, at least, it is now clear enough that an approach of ““wait and see”” is no longer tenable or even morally defensible. It is most unlikely that this will all turn out to be a false alarm. Fifteen years ago, I hoped that the scientists might discover—as is often the case in nature—that some dampening mechanism had come into effect, that a hotter, moister, more carbon-rich atmosphere encouraged more active carbon sinks and sequestration. Instead, I am more concerned about the accelerative mechanisms: the saturation of the upper layers of the oceans; the reduction in the polar icecaps; the reflective power of the Earth; and, most frightening of all, the thawing of the Siberian tundra, which is releasing vast quantities of methane and has a global effect 21 times that of CO2. The dying breed who argue that even if there is warming, it is due to something other than CO2, are now largely confined to Texas and the Washington Beltway, although, as the noble Lords, Lord Waldegrave and Lord Crickhowell, have hinted, they may have posted one or two honorary consuls in their midst. They need to explain how it is possible to double the concentration of C02 in the atmosphere and not have a warming effect: in other words, why the scientists of the 19th century, such as Fourier and Arrhenius, were wrong. It is therefore welcome that the Government are responding in the Bill to the growing threat that we face. Nevertheless, there are some questions about the components of the Government’s approach to climate change. First, the target set for 2050 appears to be largely unconditional and unilateral. The UK will commit itself to this target irrespective of the performance of other nations. The reality, however, is that our own contribution by 2050 is unlikely to be crucial, so we are heavily dependent on the exemplary effect: in other words, we cannot carry conviction in international debate if we do not carry our full share of the burden. There is genuine validity in this, but we should not be naïve and rely on it too heavily. If we fail to persuade other nations, we could be left in 40 years’ time having paid heavily to decarbonise our economy and still incurring the costs of rebuilding our sea defences and water resources. The Bill should therefore contain a duty to work actively internationally for more demanding targets. I am critical of a number of aspects of EU policy on climate change, but the EU might have the better of the argument in one respect. The target for CO2 for 2020, which was set at the May 2007 council, is in two parts: first, a high target representing what it believes is necessary, will campaign for and will adopt if others do the same; secondly, a lower but still demanding target, which is what it will do unconditionally regardless of others. On the other hand, the adoption of a separate target for the share of renewables, to which we signed up at the same council, is a serious error. It is wrong to preordain a market share for any source of energy or any technology, and there would rightly be strong objections from NGOs and from those on the Liberal Democrat Benches if such a thing were attempted for nuclear power. Having pushed up the price of carbon to reflect its social costs, whether by taxes or by cap and trade, we should allow renewables to find their own level. They should enter the merit order on merit—in other words, because they can contribute substantially to a low-carbon economy—but we should not push on blindly to push the share all the way up to 20 per cent if there are other non-renewable sources, such as clean coal or nuclear, which cost us less. In short, we should in our thinking replace the renewable/non-renewable distinction with a low-carbon versus a high-carbon distinction. There will be many instruments at our disposal: taxes, relief from taxes, cap and trade, subsidy, grant, and regulation. None is inherently superior to the others, and all will find a use. Whichever is used should be reduced to a common metric: the cost per tonne of carbon avoided. Otherwise, we will find that we are a long way from equalising at the margin the effectiveness of the different approaches. A recent report by John Llewellyn of Lehmann Brothers, which I commend to the House, demonstrates that the implied cost of carbon in the EU auto-regulations greatly exceeds the IPCC’s estimate of the cost of carbon required to stabilise CO2 at around 550 parts per million. One of the instruments permitted is the purchase of carbon credits, to which a number of noble Lords have referred. In theory, this allows lower-cost ways of reducing carbon to be pursued and brings the developing world into the system, but we must not fool ourselves; much of the credits industry is intellectually bogus—the modern equivalent of purchasing indulgences. Adopting a hydro scheme in Cameroon, say, rather than reducing carbon at home, may look smart but only if there is genuine additionality; that is, the hydro scheme would not have gone ahead otherwise. It is essential that there is integrity to the process. I welcome the creation of the Committee on Climate Change, but it must be expert, objective and independent. It must not be put together by balancing opposing vested interests. There can be no place for representatives, whether of business interests or campaigning NGOs. Like many noble Lords, I believe that the committee should be given power to advise not just on appropriate carbon budgets but also on the effectiveness of the different approaches being followed. Having assembled a group with substantial expertise and the staff to support it, it would be a great waste not to use that fully. I support those who see a role for the committee in the field of adaptation. Finally, we must recognise that we face an optimisation problem, not a maximisation one. There are multiple objectives—carbon reduction, strengthened energy security, affordability and promoting economic development. We should avoid approaches which pursue one of those without regard to the others. Regrettably, the US seems to be on a course to tackle energy security even if it involves measures which add to CO2 emissions. Many of the so-called unconventional hydrocarbons, such as tar sands and tight gas, do precisely that, as do some forms of biofuels. This is a Bill of extraordinary ambition. I know of no other instance where a Secretary of State is placed under a statutory duty of such breadth and has such responsibility for the actions of other people. I was interested in the comment made by the noble Lord, Lord Crickhowell, about how this might be approached. Nevertheless, we have to face it that climate change is an issue like no other. Only nuclear war has quite the same global and possibly terminal impact. I am confident that, amended through the collective wisdom of this House, this Bill can be a pioneer in the way in which countries go about organising themselves in tackling climate change and that it can mobilise scientific, economic and philosophical resources to bring rationality to a series of formidably complex problems.