Climate Change Bill [HL]

My Lords, these amendments give new order-making powers which sound like they should be welcomed. However, I feel that we need further clarification before the full support of this side of the House can be offered. The amendments allow the Secretary of State to make regulations that would impose new financial penalties or increase the existing penalties under trading schemes. In the first instance, this seems an improvement. Indeed, fees and penalties may be necessary tools in ensuring that trading schemes are taken seriously and not simply ignored. We do not want to be in a situation where businesses think it worth while to pollute as normal because the penalties are not robust enough to make them change their ways. However, I think that such a scenario is unlikely, as cost savings and competitor and consumer pressures are all drivers for responsible businesses to take carbon emissions seriously. Notwithstanding, I welcome the fact that these regulatory orders will be subject to affirmative procedure. Any time the Government start discussing charging individuals or businesses, there needs to be a mechanism for thorough scrutiny. We need to ensure that any order that might create through regulation new fees for business is examined as closely as possible. Can the Minister clarify his position towards imposing penalties? In what circumstances does he see these powers being exercised? Does he feel that there will be a need initially to increase the penalties on businesses for missing targets? Essentially, what is the purpose of inserting this new power? It would be helpful for everyone to understand more clearly how the imposition of fines will work in relation to the trading schemes. Does he foresee a substantial shift in the amount of fines that will be levied? What measures will have been taken to inform the business community about the Government’s position on the future of fees and emissions? This also brings to mind the way in which business’s commitment will be calculated. If there is not a robust mechanism for measuring and reporting on emissions, how can business be asked to be held to account in a proper fashion? The National Audit Office review on UK greenhouse gas emissions, published this week, noted that the Government currently use two different methods of calculating our national emissions, one which includes the pollution from aviation, and the other, which does not. Unsurprisingly, each method produces considerably different results. The NAO report rightly criticises the Government for then using both sets of data interchangeably, even within the same document, to produce a statistic favourable to their current argument. Surely such an a la carte approach to emissions accounting is anathema to responsible business, which needs consistency and market clarity above all else. How are business emissions to be calculated? Will the Government specify the ways in which emissions must be calculated before they decide on the mechanism for levying fees? That seems essential. Will the ground continually be moving under the feet of responsible business? Before many of the orders to be made under this Bill are carried out—and it seems that most of what will happen under the Bill will have to come through orders—a firm system should be in place to address the issues in the NAO review. The issue of financial penalties is a choice example of how unclear reporting procedures will lead to a bungled application of the measures intended to curb emissions. Though it might sound a bit tangential, it is very important to this amendment that we have clear assurances on how the Government intend to handle the issues presented in the NAO report. In general terms, how do the Government plan to make regulations to reduce emissions when it is unclear what those emissions are?