Climate Change Bill [HL]

My Lords, this is the first opportunity I have had to congratulate the noble Lord, Lord Stern, on his report. Its findings on this important issue affect many in this House and around the country and may be one of the reasons that the Bill is before your Lordships’ House. However, I suggest to him that the amendment does not constitute a restriction on trading. It would not affect trading one way or the other. Trading could still take place. The amendment looks at ways of reducing our carbon dioxide emissions. I am speaking to this amendment because I was lobbied from a most unusual source, the CEO of a large energy company in this country, who said that it is vital if we are to tackle climate change. He is behind the amendment because this matter constitutes a circular argument. If we are not prepared to invest in very expensive kit to reduce the carbon dioxide emitted from our power stations, and to have a let-out clause to enable us to buy in from other countries, we will never tackle this matter. If we never do that, with our technical expertise, it is absolutely certain that no other country will do it. We have to take the lead on this, but if we do not we should be able to offset by buying credits from overseas. The necessary money will simply not be spent on this issue. I take noble Lords back to the whole argument about carbon storage and capture which many of us fought for over a long period. We are talking about the Government putting money into one pilot project. We could have had a pilot project up and running if the money had been available. What we are actually saying here is, ““It’s too expensive for us to do it in this country. Therefore, we shall just wait until it becomes cheaper or we’ll buy the relevant carbon dioxide from somewhere else””. Perhaps I am the only trading-scheme sceptic in the House this evening. However, if we are looking at financial models, it is always interesting to read the small print which states, ““Past performance may not be a good indicator of future performance””. I hope that is the case with trading because, if you look at the European trading scheme up until this point, you would not hold it as a great model for reducing carbon dioxide. I have the same concern as regards percentages. The noble Lord, Lord Turner, mentioned being constrained about buying credits from overseas. I have a real issue with that. The amendment does not talk about trading schemes at all. It talks about reducing emissions of carbon dioxide and the development of carbon sinks. Carbon sinks are a particularly worrying matter if you listen to the National Trust’s view of what will happen to our peat carbon sinks over the next 20 years, which may become emitters as they dry out. If we are buying carbon credits, we should be very wary of them. The Government have already had their fingers burnt over offsets and have had to introduce measures on that. A tonne of carbon dioxide in this country and a tonne of carbon dioxide in any other country in the world is the same. However, I am concerned that buying a tonne of carbon dioxide in another country may be used as a financial tool and that that does not really equate to the reduction of a tonne of carbon dioxide. On that basis, I very much hope that noble Lords will look at the terms of the amendment. I agree that the noble Lord, Lord Turner, and the carbon committee can deal with this issue but we should not fall into the traps we have fallen into before. If we are to deal with climate change, as everybody in this House is concerned to do, we should be talking about genuine reductions. Fossil fuels that have been underground for millions of years should not be released into the atmosphere. We should not introduce financial mechanisms that make us feel good about this. Therefore, I very much hope that the Minister will confirm that this measure will not affect trading and could have a real effect on our ability to reduce our own emissions, which we have a moral obligation to do.