Climate Change Bill [HL]

moved Amendment No. 183A: 183A: Clause 36, page 18, line 13, at end insert— ““( ) No regulations under this section may make provision for individuals to be allocated, or deemed to have, a personal carbon allowance.”” The noble Lord said: My Lords, it is agreed on all sides of the House that the Bill as it stands would permit the introduction of personal carbon allowances and trading on those or similar schemes, if the Government of the day were so minded, without fresh primary legislation. My proposition in summary is as follows: personal carbon trading allowances could be introduced under the Bill. The Government would not consider so introducing them because the implications of personal carbon allowances would be so great. However, so far they have not explained how else they would introduce personal carbon allowances. The Liberal Democrats have said, as I understand it, that not only are they in favour of personal carbon allowances but they would use this legislation to introduce them, were they ever in a position so to do. The Conservatives were silent, on balance, on where they stood. So the Front Benches of all three main political parties in this Chamber have talked about whether to use this legislation to introduce such schemes. My proposal is that the nature of a scheme based on personal carbon allowances would be so substantial in its ramifications, so significant, that fresh primary legislation should be introduced rather than introducing it on the back of this Bill with the enabling provisions that it permits. I do not wish to enter at all into the argument for or against personal carbon allowances. That is not the burden of my argument. Your Lordships may be in favour or against personal carbon allowances or trading in them. My argument is solely that the implications are so substantial, whether you are in favour or against those schemes, that primary legislation is required. First, and very briefly because these matters were discussed in Committee, I will touch on some of the issues involved in personal carbon allowances. Essentially these are allowances of carbon emissions—rations, quotas, permits, call them what you will—that would be allocated in some way to individuals. Would it be to all individuals, or just adults? Would children have more or less than adults? Would people get more or less in rural or urban areas, in the north of Scotland or the south of England? Who would get what? Would they be allocated free or would people have to in some way bid for them at auction? An independent body would need to be established to set the cap for the total amount of emissions that people were allowed to buy and to take the important decision about the emissions allowance allocated to each individual. The question arises of what goods and services would be included. If you bought a gallon of petrol, presumably you would have to hand over some of your carbon allowance, at least in theory and principle. Presumably, that would apply also to the purchase of gas, electricity, oil, coal, diesel and flights. Which flights would be caught? If you go from London to Dubai to Delhi and back again, would you hand over emissions allowances just for the London to Dubai leg, or for London to Dubai to Delhi, or all the way back again? How many carbon emissions allowances would each purchase use up? Would everybody get the same allocation? Would they be allocated to everybody just the same? If that were the case, what would be the effect on the distribution of income and living standards between people? How would we treat visitors to this country? How would we treat people who are here for a few months, weeks, days, or people who leave halfway through the year? How would these allowances be traded? Would people be able to trade and to buy and sell them? The presumption is that they would. I have seen a proposal that people would have something like a bank card or a debit card and a trading account like a bank account, and that when they bought and sold things their account would be credited or debited. How would this relate to the 15 per cent to 20 per cent of people who are known to have problems thinking ahead about how to use their money and handle their finances? People would have to think ahead very carefully about how much of their carbon allowance they wanted to use over the following 12 months. How would people work this out? I am not talking about the sophisticated Members of your Lordships' House but people who demonstrably have problems thinking ahead and budgeting. How secure would such accounts or debit cards be? How would you prevent fraud and scams occurring, particularly if people are buying and selling? How would you know that you were buying an accredited emissions allowance and that it was not a scam? Every purchase of a qualifying commodity, good or service made by an individual would be recorded and the records would be substantial. Many people are concerned about identity cards and this would raise many of the same issues. What would be the position of illegal immigrants—people in the black economy? How would they obtain these cards so that they could buy fuel? It would not be a question just of whether you can pay for your gas and electricity; you would have to hand over a ration or quota, which would have been allocated to you. You have to own that in some way. Defra commissioned a study, referred to by the noble Baroness, Lady Miller, by the Centre for Sustainable Energy to look at many of these matters. Pages 25 to 27 of the report consider the issues that would arise if these schemes were introduced. The relevant passage is headed: "““The questions that need answers””." I shall not read them all out because there are so many, but the relevant headings are: "““Political acceptability … Political/institutional viability … Public reaction and ‘acceptability’ … Market reaction … Technical and operational feasibility””." That is, would it actually work? What would it cost? What would be the effect on equity and justice? What would be the distributional impacts? The study states: "““It is reasonable to say that, beyond some detailed assessment of the technical feasibility of individual carbon trading … most of these questions remain unanswered (and, in much of the literature, unasked)””." There is no doubt that if the Government of the day were minded to introduce personal carbon allowances it would raise an enormous range of issues which, I am sure, both Houses would want to debate fully, and not as regulations but as primary legislation. It might be said, ““Don’t worry, no Government would ever do this””. The Government’s answer so far is that the Bill has those powers but they think it inconceivable that the powers would be so used. I suggest that that is not a very good basis on which to conduct legislation. The Government have for some time been conducting a careful examination of whether to pursue personal carbon allowances and trading. This is not a hypothetical possibility; even the present Government are actively looking at it If the Government are looking so carefully at personal carbon allowances and a trading system based upon them and say that it is inconceivable that they would use this legislation to introduce them if their studies suggested it, what would they do? Do we have an assurance that they would introduce primary legislation? If that is the case, there should be no difficulty in accepting my amendment, which ensures that this Bill could not be used to introduce personal carbon allowances? However, if the Government say that they would still prefer to keep provision for this in the Bill, I suggest that that confirms my concern. I say again: I do not argue for or against personal carbon allowances and trading on them, but simply that they should not be enabled under this Bill. The Liberal Democrats said in Committee with, it is fair to say, a degree of vigour, that they were in favour. However, looking back at the record, it is not entirely clear whether they are in favour of personal carbon allowances in principle or whether they would use this legislation to introduce them if they had the opportunity. It is a very important distinction. The Conservatives were not, it is fair to say, prepared to be led by the Liberal Democrats. I think that the noble Lord, Lord Taylor, said that he did not want to lead us anywhere in particular on that evening. You could argue that the amendment is unnecessary because the Bill does not already facilitate this. Yes it does. You could argue that the amendment is unnecessary because no Government would ever use the legislation to do introduce such schemes—that is the Government’s proposition—but that is not a very good basis for undertaking legislation, particularly when the Government are actively investigating the possibility and one of the Opposition parties is saying enthusiastically that it would do so. You could argue, as I do, that the issues are so substantial that the potential for bringing in personal carbon allowances and trading under the powers in this Bill should not be there. I ask your Lordships to reflect upon those matters. I beg to move.