Climate Change: Carbon Budgets

My Lords, the whole House will be grateful to the Minister for the way in which he has introduced this very timely debate and given us some foresight on the Government’s response to the progress report from the climate change committee. I also paid tribute to the members of the committee. I am very pleased that during the course of the debate we will be hearing from two of its members, and from the noble Lord, Lord Stern, who in many ways set the agenda. I should perhaps declare one interest, which is that I chair the partners’ board of the Living with Environmental Change Programme. This brings together the public funders of research into how we might respond to environmental change—not just climate change, but environmental change in its widest sense—for example, the impacts of population pressure on natural resources and ecosystems. As we would expect at this early stage, the second year of the first budget report, the progress report is inevitably more about setting out a framework for emission reductions and policy options, rather than reporting on progress to date. As the Minister reminded us, and as the foreword to the progress report states, the economic recession could produce an over-rosy impression of progress against budgets. We must be careful to ensure that we have long-term targets in mind. I must declare immediately that I am a fully paid-up supporter of the need to limit atmospheric concentrations of CO2 and equivalents to about 450 parts per million, the level believed to be consistent with a global average temperature increase of about two per cent. To those who say that the science is uncertain, I say that I agree, but given the risks, we have to be quite sure that the science is wrong before following the sceptics. To those who say that the costs of reducing emissions exceed the benefits, I would say that at least we can agree that the win-wins, the low-hanging fruit that the noble Lord, Lord Stern, identified in his review, should be harvested as soon as possible. It is some of those win-wins that I want to refer to today. In later budget periods, we will be relying on innovation, highly speculative at this stage, such as carbon capture and storage, the development of long-life batteries and second-generation biofuels, to name just three. All will require massive international funding to develop those technologies. However, as the progress report reminds us, there are some less speculative, far less research-dependent measures that we can adopt immediately—and that we should adopt as soon as possible. I refer in particular to Chapter 5, which refers to the major opportunities for reducing emissions in buildings and industry through energy efficiency improvement. To you and me, that means lagging the attic and cavity-wall insulation. If we could just start with those two, we would make a pretty dramatic improvement on the present emissions from buildings. The present framework policy for delivering residential emissions reduction is simply not appropriate. We rely on the energy suppliers to promote to their customers energy-saving measures—there is a contradiction. As the report states, it will take a long time—2022 is mentioned—before less than half the emissions reduction potential will be achieved. That is through using the procedure known as CERT. The Government’s new policy framework sets out in the heat and energy-saving strategy three pillars for a new approach: a whole house approach; a neighbourhood approach; and new funding mechanisms. A retrofit programme aimed at improving all properties in England to EPC bands B and C, which, currently, only 6 per cent of properties achieve, would cost an average of about £7,000 a house, according to the progress report. Fuel bills per household would be reduced by an average of 46 per cent. To my mind, that is a win-win. You do not muck around. If you can achieve those sort of savings in emissions and in the cost of running a household, you get on with it. The problem is that that is the average house. The report notes that a housing association based in Petersfield, the Drum Housing Association, was asked to do a pilot study on the less efficient houses, and found that that could work out at up to £38,000 a house. Of course, that is with all the bells and whistles. That is adding solar heating, PV and the like. I would simply say: stick to what will give you the quickest return and get on with it. Do the whole house audits, which will not cost a lot. Find the houses in which insulation will show the greatest return, and get on with it. At the moment, 40 per cent of the input is restricted to priority households: those on benefit or aged over 70. There is an economic case for widening that rapidly. Heat is an important part of the equation. After all, heat accounts for nearly 50 per cent of final energy consumed and nearly 50 per cent of CO2 emissions. We must do something about the present, lamentable level of renewable heat—1 per cent. The progress report suggests that that figure might be improved, but not dramatically. Again, I would look very quickly at where there is the most opportunity to provide renewable heat at competitive prices. So I think that you would have to look at houses that are not on the gas main, because they clearly will be far less inclined to change. We are looking, therefore, at rural properties where biomass heating plants could well be attractive. In other words, you have to develop a wood-chip, wood-pellet supply chain. This is not rocket science—it is already being done. A number of houses and neighbourhood developments have made it work, and work efficiently. Of course, if oil prices go up, it will be all the more easy to demonstrate the economic viability. But the real advantage—I hope the noble Lord, Lord Clark of Windermere, who chairs the Forestry Commission, might be able to add to this—is that, at the moment, about 70 per cent of our privately owned woodlands are either under-managed or derelict. That is because, since the war, there has never been a viable market for the by-products—the thinnings, the lop-and-top—coming out of these woodlands. Perhaps I should declare an interest here as a woodland owner myself in the south-east. This is true throughout the country. There are an awful lot of by-products coming out even from the commercial woodlands, such as the Forestry Commission’s woodlands, for which there is currently not an adequate market. The improvement gained by going back to the sort of coppicing practices which we had between the wars, when there was a market for charcoal and the secondary crops, is that we will improve biodiversity and rural employment and much else besides. There are many win-wins here. It is very easy to set up: you really only need a hard hat and a chainsaw with instructions on how to use it. You will quickly find that you have on your hands a biomass resource that can serve competitively an awful lot of households, particularly in rural areas. But of course to get this going you need a champion and someone who will ensure that there is a guaranteed market for the chips, and this is happening very slowly at the moment. I would urge government procurement to play an important role in this. Whenever anyone is building a hospital, laboratory or any other development, they should think of the opportunities, particularly in rural areas, for putting in a biomass boiler and thereby securing all these win-wins. Page 177 of the progress report refers to the uncertainty of the availability of sustainable biomass and, for that matter, biogas. Again, this is simply where we will need policies. Biogas can be provided from anaerobic digesters. There is a lot of biodegradable waste coming out of farms and the infrastructure can and should be put in place to feed into the gas main or to put the gas into generating electricity. There are waste materials that are underutilised and there for the asking. While talking of waste, I would simply make the point that there has always been a great concern in this country to abide by what is called the waste hierarchy: you must always ensure that waste is used for the most conservationally acceptable purpose. That makes it very difficult to use waste for energy, but that is often the sensible thing to do. It saves using fossil fuels, it saves landfill, and it saves the littering that is a feature of so much of our countryside. When we look at the policies that will deliver some of these win-wins and some of these easy benefits, we will probably have to upset some of these sacred cows. Another sacred cow, talking about land use, is that we have always seemed to have in this country the attitude that extensive farming will always be the most desirable in terms of conservation. But that is almost certainly not going to be the case when it comes to carbon footprint. I shall quote the English Beef and Sheep Production Roadmap produced by the levy board of the English beef and sheep sector. So the farmers themselves are saying: ""The fundamental differences between more extensive and intensive production systems are particularly clear in this context. The poorer quality nutrition and longer production times of hill sheep mean very much higher GHG emissions per kilogram of lamb produced"." So in other words, when we get these policies, we will have to think very carefully. That is not to say that we should not be supporting hill farming, the biodiversity benefits or the ecosystem services that will arise from sustaining these extensive systems, but be under no illusion: if it is carbon footprint that you want, that is not necessarily going to be the answer. When the Government roll out the policies to meet the targets that have been set so appropriately by the climate change committee, there are going to be many hard calls, and I have referred to just one or two of them.