Climate Change: Carbon Budgets

My Lords, I mentioned to the noble Lord, Lord Teverson, that my name was intended to be on the list, but owing to a misunderstanding it was left off. As it happens, I have set out my analysis of this question in this week’s House Magazine, so I can be relatively brief. The debate has been interesting in that it has been rather polarised—highly polarised in some respects. No harm in that—I would say that it is rather healthy. That is how we often make progress. I find myself, very scientifically, exactly half-way between the two polar opposites. I am afraid that I cannot join my noble friend Lord Giddens in paying homage to the noble Lord, Lord Stern. I think that his report was overpraised. It did not solve Rubik’s cube on the economic side; I am nearer to the noble Lord, Lord Turnbull, on that. A good deal of the report was wishful thinking, but I repeat that I am not a member of either of the two main camps. I support the EU position in Copenhagen. Surely the China, India, USA offers are largely referring to reductions in their carbon co-efficients of growth—now called carbon intensity of growth. I do not think that they are talking about absolute reductions at this stage, as the noble Lord, Lord Stern, implies. One thing that should be coming through our debate much more strongly—this is a point that I made strongly in our debates on the Climate Change Bill when the role on the Front Bench was taken by the noble Lord, Lord Rooker—is that if there are to be painful trade-offs, which there will be, growth and employment must be at centre stage much more than they have been. I am dubious about the Stern economics, if I am allowed to call them that, because there is a low discount rate to make the arithmetic work in 2050, but we are taking a normal market discount rate for infrastructure projects in the here and now and trying to do it. There are huge contradictions that we may have to live with in how much subsidy we have to pay for carbon capture and storage. If it needs €100 a tonne to make it work, which I think is true—it is only €20 at the moment—the job is being subsidised by 80 per cent. There are many other investments that we are subsidising by 80 per cent. That is funny economics, if that is how we are going to reconcile the arithmetic. My second point is that we are not in a two-part world—north and south—but in a three-part world. The OECD is no longer the biggest contributor to greenhouse gases. Non-OECD has already overtaken it and by 2030, non-OECD at 26 billion tonnes of greenhouse gases will be double that of OECD. The noble Lord, Lord Krebs, asked us to imagine everyone in the world producing two tonnes. Well, dream on. Some people might call that a nice communist principle with everybody having the same, but that is not the real world. We have to have price and tax rises to choke off demand for carbon intensive forms of production; we have to subsidise these new technologies and agree a financial—