Climate Change

My Lords, this has been an extremely interesting debate and I thank the noble Lord, Lord Dixon-Smith, for the quality and breadth of his speech. We have been debating these issues almost daily during the past week, and listening to noble Lords who take climate change seriously, I wish rather more of them than just the noble Lord, Lord Dixon-Smith, had been present for our debate on carbon budgets last week, when we had a different cast list with a very different view on the issues. None the less, today has been extremely interesting. I agree with the noble Lord, Lord Dixon-Smith, about the need for a more focused approach to the 2050 targets. That was his first substantive point. In July, we will publish our strategy document on how to take forward our policies on climate change and energy. I say to the noble Lord and the noble Baroness, Lady Maddock, that they will be convinced that this is a serious, realisable but ambitious approach. We believe that the climate is already changing. The atmosphere is warming up because of the greenhouse effect, and the rate of change will accelerate rapidly unless we take decisive action. I agree with the noble Earl, Lord Cathcart, and say to the noble Lord, Lord Reay, that, frankly, I would rather sail on HMS "Stern" than sink into the rising sea with HMS "Lawson". The noble Lord, Lord Tanlaw, asked me whether my new department, the Department of Energy and Climate Change, and the direction of government policy had led to a big increase in staff; he seemed to think that it might have. He will know that my department is only six months old. Its size is roughly equivalent to the size of the energy group within BERR and the former climate change group in Defra. I must say that the discipline on public finance within government is very tough at the moment, having been responsible for overseeing budgetary matters in the Department of Energy and Climate Change in the past few weeks. The new department has been faced by some mega-issues about both climate change and energy. It is a very exciting time, but the demands we are making on our staff are considerable and I have been impressed by the quality of our people and their motivation. That gives us a great foundation for the future. Last week, we had an entertaining debate—perhaps not for me, but for other noble Lords—and saw the benefit of debating a statutory instrument in prime time, when we debated the whole question of the science. The noble Lord, Lord Reay, raised that and referred to the speech of the noble Lord, Lord Leach, last week. The noble Lord, Lord Tanlaw, made some interesting comments about the role of scientists and the IPCC in particular. It is worth making the point that its most recent report, its fourth assessment report, was written by 619 named scientists and reviewed by another 622, and that objectivity is ensured by the broad and open review process and shared responsibility for the report. No one Government, organisation or individual has sole responsibility for any part. On the point made by the noble Lord, Lord Tanlaw, on the influence of the political process on that work, the IPCC is very careful to keep science separated from the political negotiations that take place at UN climate change convention meetings. The scientists in the working groups write their reports, which are then extensively reviewed and edited in draft before government review and final acceptance. IPCC assessment reports are not written or changed by Governments. I thought that the noble Lord, Lord Rees, was persuasive on that point. I understand that there will be disagreements about the science, but one should not ignore the rigour of the IPCC process. Let me come on to the role of carbon budgets. We debated that last week. The Climate Change Act, which introduced the binding long-term framework to limit greenhouse gases in this country and the carbon budgets that provide the engine room, if you like, for reducing carbon emissions, are critical to our success in the UK. At the Budget—the statutory instruments that we debated last week follow on from it—we announced the levels for the first three carbon budgets for the periods 2008-2012, 2013-2017 and 2018-2022, representing respectively more than a 22 per cent, 28 per cent and 34 per cent reduction in greenhouse gases compared to 1990 levels. These budgets correspond to the interim level recommended by the Committee on Climate Change. However, we have made it clear that we will tighten these following a global deal to reduce emissions and subsequent agreement within the European Union. On the expertise available to the Committee on Climate Change, I should say that the seven members of the CCC include three scientists and an engineer—the noble Lord, Lord May, Professor Jim Skea, Sir Brian Hoskins and Professor Julia King—all of the very highest calibre. I have been impressed by the quality and rigour of their advice to the Government. All of this is in the context of seeking international agreement in Copenhagen so that we can take action to ensure that we see the kind of progress in reducing greenhouse gas emissions that is necessary. I said last week that we are confident. It is going to be very tough; we have always known that negotiations at Copenhagen would be tough. My right honourable friend the Secretary of State has taken part in extensive international meetings; he was recently in China. There are positive signals. We should not ignore the impact of the change of Administration in the US. There is a long way to go, and I am sure that these negotiations will be very difficult. However, we are optimistic. I take the point about the energy needs of developing countries. That has to be taken into account; that cannot be inconsistent with a global deal. I understand the points about the importance of India and China that a number of noble Lords have made, and I will come on to carbon capture and storage. It is clear that the Chinese Government are extremely interested in carbon capture and storage technology, which is why our decision, made only three weeks ago, is so important; not just for what we can achieve in this country, but for the opportunity for the export of technological and, we hope, other know-how in this area. On the international dimension, the noble Baroness, Lady Flather, once again made a very measured and interesting contribution. She raised some inevitably difficult and ethical points about population issues. She was right, I am sure, to mention the pressures that population growth will bring to the globe. She also mentioned the role of religion. I suspect that she probably absolved the Anglican diocese of Liverpool from those strictures, given the remarkable progress that the right reverend Prelate has made. What he had to say was very interesting. When one thinks of climate change and the poorest countries, one thinks of the impact of the rise in sea levels and the flooding, drought and disease that will inevitably follow. That is why international action and agreement are so critical. The noble Baroness made some very important points about women and their role in the very poorest countries. The noble Earl, Lord Cathcart, and other noble Lords put a great deal of emphasis on energy. That is absolutely right. We should focus on energy, as this House has done on very many occasions. We all understand that decarbonisation of our power supply is an essential foundation in moving towards a low carbon economy. It is an approach that looks for a diverse supply of energy in the future. We see a new generation of nuclear power stations in prospect. We are overseeing what is, undoubtedly, the fastest growth in renewable energy in Europe. Yes, it is from a lower base, but the progress that has been made recently must give us a great deal of encouragement for the future, including on pioneering carbon capture and storage. Let me make it clear; I know that noble Lords are concerned about what they call the energy gap. Security of supply has to be my department’s most important obligation. We are aware of the plants that are due to close and of the decommissioning of a number of nuclear power stations. We should not ignore the plants that are now in construction, the plants that are with consent and other proposals that will come along in the next year or two. I agree with the noble Lord, Lord Rees, about storage. Good progress is being made. There was a very important announcement on coal. As I said, we think that this has huge potential for up to four new projects to demonstrate carbon capture and storage. I have the privilege of attending a conference in Norway on CCS next week to discuss this and the question of international co-operation and collaboration. It is quite clear, if one looks at the amount of coal that is used globally, that we need a great deal of international effort and co-operation. In the UK, we are in a very good position to influence that because of the announcement that we have made. On the takeover of British Energy by EDF, we signalled the way for new nuclear. Since then, other companies have also intimated their desire to develop new nuclear power stations. It is very encouraging. There are questions about the supply chain and to what extent we in the UK can take advantage of this investment. That is something my department is very concerned about. On renewables, the noble Lord, Lord Dixon-Smith, talked about estuary tidal wave technology and its potential. I agree with him. I recently visited the Orkneys to look at some of the technologies there. It is very exciting. If we can really pull it off, the UK is undoubtedly in a technological lead. There are some major companies involved. It has yet to be developed at scale. The next two years or so will be very important but, if we can pull it off, it will bring huge advance to this country. The noble Lords, Lord Rees and Lord Dixon-Smith, again emphasised the potential of solar. It will be very interesting to see how these proposals develop. I confess that I thought the noble Earl, Lord Cathcart, was with me when it came to renewables, until he started to talk about wind. We are not going to meet the renewable energy targets that we have been set without wind. Wind will be an important part of the mix in the future. In our renewable energy strategy, which we will publish in the summer, we will say much more about it. I understand the issue of intermittency; it is why we need a diverse source of supply. Renewables come with a cost. However, we must remember what the noble Lord, Lord Stern, said on the economics of climate change that, essentially, the sooner we get on with taking the actions that are required, the cheaper it will be in the long run. We also have to bear in mind the costs with regard to the issue of energy saving potential in the future, which I will come to in a moment. The noble Lord, Lord Tanlaw, made a point about daylight saving in relation to energy saving. I know that he is very frustrated by what from his point of view is an utterly logical argument seeming to run up against what I think he feels is a brick wall. I hope he will not cease to make the case for that. It is a powerful case, but noble Lords will know—we have debated this on a number of occasions—that it is not a simple matter. Noble Lords will also recall the issues that arose when it was introduced for a short time some years ago. The right reverend Prelate also made a point about energy saving and procurement. He is absolutely right; it is a very important point. The Office of Government Commerce looks at these matters very seriously when it gives guidelines to those who will procure in the future. I was very interested in his points about the involvement of his regional development agency. It is the lead RDA on climate change, and I am impressed with its work. I am also interested in the way in which it uses its resources to lever the kinds of changes about which the right reverend Prelate spoke. The carbon fast is a brilliant idea. Let us hope that it develops and grows globally in the way that he has suggested. We need to do much more about energy saving. We can do more. We know that families lose at least £300 a year from inadequate energy efficiency. Energy efficiency is one answer to the question of cost because, although developing renewables may have a cost, the more energy efficient we become the more the costs to the customer are reduced. We have strong ambitions, which we need to develop. The noble Baroness, Lady Maddock, made the point that once we have got beyond cavity walls and loft insulation—in some homes much more needs to be done— funding is very important. We are working through ideas about how one can establish a financial framework that one way or another makes it worth while for the householder, who will not get support from the public purse to make what can be very expensive changes. Again, this is part of the work that we are undertaking at the moment. The noble Baroness is right to emphasise the potential of CHP and district heating. Again, this is work that we are undertaking at the moment. She may know of the work in Birmingham on district heating. We have been talking about this for a long time, but a district heating system has been established in the past 18 months and is being extended. The cost of the infrastructure for district heating is an issue, but again the RDA, Advantage West Midlands, is putting in resources to extend it, and it will be very interesting to see how that works out. The noble Earl, Lord Cathcart, talked about the grid. We readily accept that we need to move from what might be described as a passive grid network to one that becomes much smarter. The smart meter rollout will be an important step in laying the foundations for a smarter grid. I know that the noble Baroness, Lady Maddock, thinks that this should be done rather more quickly than it will be within the 10-year timetable, but she will know that we looked into this very carefully in the context of the Climate Change Act and we will, I hope, be able to come up with more details about the rollout. My noble friend Lord Bhattacharyya talked about social change and the potential of technological solutions. That was a very important contribution, in which he talked about the demands of the electricity supply, an off-grid electricity supply for vehicles, components and the fact that car manufacturers must produce sustainability. He urged us to work with other countries and companies across the world. I agree, although I hope, like him, that the West Midlands has a critical role to play in that, not least in his work at Warwick University. My noble friend Lord Soley and the noble Baroness, Lady Maddock, talked about energy-saving buildings and the Government’s own performance. I have to admit that it is a fair cop, because noble Lords will know that my own department’s building is not rated as highly as we would wish. It was of course inherited, and we are now taking action, but their substantive point is right; if the Government are going to put mechanisms into place, we must practise what we preach. We are very exercised about it. One of my offices is in Defra, which would look beautiful with solar panels on the outside and wind farms above it, but I am not sure that we will get away with that. No doubt one of our quangos will rule against us on environmental grounds. There will be a cost as a result of the measures that have to be taken, but I ask noble Lords to remember the point made by the noble Lord, Lord Stern, when he said that a low-carbon economy does not mean a low-growth economy. The noble Earl, Lord Cathcart, surely got it right when he spoke about the huge potential for jobs and exports for this country in leading the world in having a low-carbon economy. That is a wonderful prospect for us, and we should not ignore the potential benefits to our economy. I thank again the noble Lord, Lord Dixon-Smith, for introducing this debate and for the quality and breadth of his speech.