Climate Change: Carbon Budgets

My Lords, it is entirely apposite that this debate is taking place at the same time as the meetings in Copenhagen. Whatever happens there, everyone recognises that there has been a tremendous change in global attitudes towards the risk of climate change; 192 countries are meeting there, and no fewer than 100 heads of state are attending. I join noble Lords in paying homage to my noble friend Lord Stern. I know that in technical House of Lords terms he is not my noble friend, but he is noble—is he not?—and he is a friend and colleague in the context of the London School of Economics, of which I am also a member. He has had a tremendous impact in raising world consciousness about the dangers that we face. In this country, as other noble Lords have remarked, we have been slow to introduce effective climate change and energy policy. Across the industrial world there is a cluster of avant-garde states that we lag behind, including Germany, as has been mentioned, Denmark, Sweden and even France, which gets nearly 80 per cent of its electricity from nuclear. With the Climate Change and Energy Acts, the Government can no longer be accused of not having seriousness of intent, but now the hard part starts. Ambition has to be brought into line with achievement, a truly formidable task. As the noble Lord, Lord Redesdale, has already said, the climate change committee’s progress report recognises that when it uses the term, ""the need for a step change"." I think we are talking about a revolution here. We are talking about a transformation of our society and our economy that is probably as far-reaching as the original industrial revolution. We have to think through the implications of all that, and we have to do so against the background of climate change, which is not a take-it-or-leave-it issue. You can say, for example, that global poverty is a terrible thing, and if the level of it is the same in 2050 as it is now, it will still be a terrible thing. But climate change is not like that; every hour, week, month and year that we fail to reduce the amount of greenhouse gas emissions going into the air—they are still climbing on a global level—we meet a future that leads to a potential catastrophe because, as has been mentioned, once the emissions are in the air we know of no way of getting them out again. The sheer scope of these changes requires a new political framework. We are talking—several noble Lords alluded to this—about a return to planning; to something like a national plan. When we do so, we have to ensure that we do not make the mistakes that were made in the 1960s and 1970s when planning was in vogue. I have four main comments on the committee’s report. The first echoes what other noble Lords have said: there are huge areas of contingency in all the policy innovations covered, especially when we are looking at targets relatively near at hand for 2020. It is like a spread bet. I am sure that most noble Lords will not be familiar with spread betting; in such a bet, you have to get a whole range of outcomes right—and you have to get all of them right if you are going to achieve your end. This is the case with the report; it reflects the fact that we start from so far back. Everywhere you look, that is the case. Some previous wind power projects have either been aborted or delayed for as much as 10 years. We need a big change in respect of planning permission and other things. Three new nuclear power plants are envisaged but planning permission for Sizewell B took something like six years, so a terrific change is required there. The report notes: ""Currently there are no electric cars and plug-in hybrids commercially available in the UK market"." The point has been made about CCS. We do not really know whether it will work or how available it will be commercially, and there are already quite big "not in my back yard" issues around CCS in several of the few plants that exist across the world. I was reflecting on what one can do about this. It is not the fault of the committee; it is due to the fact that we start from so far behind the lead states on all this. Two things occur to me. One is that we could be more radical in one or two areas to make up for potential shortfalls in others. One is the area noted by the noble Earl, Lord Selborne, the one where we know we have the technologies and where we know we can make a big difference quickly: energy efficiency and insulation. I suggest a more radical attack on that. We are talking about a national plan here. Therefore, it should be taken to the people; it should not be introduced from on high, as it were, because the co-operation of citizens will be needed if there is to be any chance of success. Secondly, I have objections to the form of the report, which essentially uses an additive or wedge approach. You get a certain proportion from this technology, a certain proportion from that technology, a certain proportion from this one, a certain proportion from lifestyle change, and so forth. The main problem is that the implications of each of these for all the others are not properly traced out. For example, new forms of taxation are mentioned at many places; they have to be put together and their overall implications assessed. If you recognise that we are talking about transformative change, you have to look at this holistically; you have to look at the impact of everything on everything else. I do not know what the noble Lord, Lord Stern, thinks—he may disagree—but it seems to me that even though the term "low-carbon economy" is readily bandied around, we do not really know what it will look like. We need to do a lot more intellectual work on it. It cannot possibly be an economy of the sort we have now, just with some renewable technologies grafted on. These sorts of transformations are pretty profound and therefore have implications for everything —employment, welfare, fiscal systems, skills training, and so forth. I see a huge task for economic, social and political theory in trying to work out what an overall low-carbon economy would be and how it would relate to active industrial policy, because it is plain that we must move back to that. Thirdly, having spent some two years immersed in the literature on this, I find it hard to believe that we can achieve the reductions in greenhouse gas emissions that we need without any sacrifice. Basically, we are living in an unsustainable civilisation and are coming up against the limits of that sustainability. Climate change is the most dramatic and radical expression of that, but it is more generic too. We have to take account of the discussion of growth and GDP and their connections with welfare, which has received quite a lot of prominence in recent years. We should be discussing the Sarkozy report; after all, a cluster of prominent economists worked on it, including Joe Stiglitz and Amartya Sen. In a previous debate on the gracious Speech, I drew attention to the work of the Sustainable Development Commission, which has been mentioned. Whichever way you look at it, the various reports produced by the Sustainable Development Commission, especially Tim Jackson’s book Prosperity without Growth? merit attention. He is right when he says that we do not have a macroeconomic sustainable economy, and we have to do a lot of intellectual work on that too. So far as I can see, we are looking for a different model of economic and social development. This will also apply to China, India and large developing countries. We accept that they can develop as we did, at least for a few more years, but at a certain point there will have to be a new model of development, and we have to pioneer what that would be. Fourthly, I have a specific question for the Tory Front Bench. I stress that I do not in the slightest mean this as party-political point-scoring. My view is that climate change is not a left/right issue; I am very pleased that there is a consensus across the parties in supporting the Climate Change Act and the Energy Act. My point concerns the point made by the noble Lord, Lord Krebs. When we were talking about a national plan, transformation and a guiding role for the state, the state will appear everywhere in effectively implementing the provisions of the report of the Committee on Climate Change. I take the liberty of quoting what it says about the electricity market, which I think is perfectly true. It says that, ""no other country has relied on a fully liberalised electricity market of the type that we have in the UK to deliver investments in low-carbon generation"." This applies to all areas of the document. We are talking about the return of the state, and in a big way. How will the Conservatives reconcile the need for the return of the state in what, after all, are big structural areas in our economy and society with their proclaimed intention to strip the state down?