Treaty of Lisbon (No. 8)

The problem—I have touched on this already—is that the structure of the renewables obligation means that it drives investment into the nearest, most developed technologies, which are landfill gas and onshore wind. We all understand that there are strong feelings on both sides of the arguments, because of the visual intrusion and so on, but as the hon. Gentleman may know, as a result of planning difficulties, huge quantities of money are stuck in the system instead of being spent on renewables, which is a shame. The answer is not to impose wind farms on communities that do not want them, but to reform the way we support the renewables industry to develop less controversial forms of technology. The Conservative party has welcomed the EU-wide plan for a 20 per cent. reduction in greenhouse gas emissions, rising to 30 per cent. when an international agreement is reached. We expressed, and continue to express, our serious concerns about the sustainability of the EU-wide biofuels agreement, which is also part of the package. Last month, the Environmental Audit Committee called for a moratorium on both EU and UK biofuels targets. The Committee's report highlights the fact that demand for biofuels is already exacerbating the destruction of crucial rainforests in Indonesia and Malaysia. It is sheer madness to cut down the rainforest or threaten food security in the name of the environment. We took a principled stand on the issue last year when we voted against the Government's renewable transport fuel obligation for its failure to include sustainability criteria until at least 2011. We hold the same position in respect of the EU target of 10 per cent. biofuels by 2020. I hope that Ministers will go to Europe and argue the case that no mandatory biofuel targets be included in the renewable energy directive until a working sustainability criteria basis has been established. I turn briefly to the EU emissions trading scheme. It is not the be-all and end-all of climate change policy, as the Government sometimes seem to imply. It is not good enough to say that we can massively expand aviation capacity and not worry about the carbon implications because at some future date it will all be included in the ETS. A properly functioning scheme could play a vital role in driving down carbon emissions within the European Union. It is widely accepted that phase 1 has been a failure in reducing emissions significantly. Too many credits were handed out for free, which meant handing the industry a licence to pollute, and the costs were passed on to the consumer. That gifted energy companies more than £1 billion in windfall profits. That was not the object of the exercise. However, that was a political failure, not a market failure. Phase 1 has not driven innovation—with a market price of 10 cents a tonne of carbon, it will never do that—but it has proved that it is possible to devise a mechanism that could work in the future, and phase 2 already looks more promising. That is largely to do with the introduction of more auctioning. We believe that in phase 3 we should push towards 100 per cent. auctioning of those permits to pollute. If we bring the market in on the ground floor of the ETS, we will begin to get some real change and a real price in carbon, which comes back to the point that the hon. Member for Morley and Rothwell (Colin Challen) made earlier.