Climate Change: Carbon Budgets

My Lords, it is a great pleasure to respond to this very interesting debate. I should like to welcome the noble Lord, Lord Marland, on his debut at the Dispatch Box, but I do not share his rather bleak assessment of progress being made. In the light of various comments made recently on climate change by members of his party in the other place, the veneer of greenness is slipping a little from his party. It was a nice try for him to ask me to anticipate the PBR, but I shall have to resist that temptation. Many comments have been directed at the Climate Change Committee. It is very valuable to have this debate in anticipation of the Government’s formal response in the new year. But I am sure that this might encourage the committee to think about how it can have further dialogue with parliamentarians in the months ahead. I am also sure that this has been extremely useful. I agree with the noble Lord, Lord Teverson, on lifestyle changes. I guess we all hope that this can be done without difficult changes in lifestyles, but none of us is quite convinced of that. I would welcome the committee giving further advice. All of us will have experience of public bodies proposing changes. In Birmingham, the introduction of city centre car parking charges is an interesting example of the tension between action required and public support. In the end, we will not achieve lifestyle changes without public support. Advice in that area would be gratefully received. I should like to say to the noble Lord, Lord Turnbull, that it was right that the UEA decided on an independent review. We are all looking forward to the outcome of that. It is right to repeat what I said at Question Time today. We think that the global temperature analysis is robust. The work of UEA is supported by two separate independent analyses in the US. The evidence for climate change also comes from many other facets and observations, but it is right to see the outcome of that review. The noble Lord, Lord Krebs, wondered whether we would live to see the outcome of our own damage to the planet. He said that if we did not, certainly our children and grandchildren would. The noble Lord, Lord Stern, really made the point about how can we take that chance, which was very much a call to arms. The noble Lords, Lord Krebs and Lord May, said that a step change is needed, which was the conclusion of the Climate Change Committee. The noble Lord, Lord Krebs, posed a question as to whether the market and individual choice alone would deliver the step change. I believe that that would be so up to a point. I agree with the noble Lord, Lord Stern, that we have a responsibility to make the market work. But of course the Government have a strategic leadership role and a duty to intervene. One of the most visible signs of that is recent legislation. The Energy Act, the Climate Change Act and the Planning Act are examples of strong government intervention. The incentives that have been brought into place in relation to the development of renewable energy is another example. In terms of driving forward the policies, it is interesting that very few noble Lords mentioned carbon budgets. They are likely to be the most powerful driver of policy change going forward, whether in relation to energy performance in government buildings or through targets. I thought that the party of the noble Lord, Lord Marland, was opposed to targets and so I would be interested to hear his comments on that. Carbon budgets are very important in forcing policy changes. I think back to my former department, Defra. The point was made earlier about the agricultural sector’s contribution to greenhouse gas emissions. Essentially, carbon budgets will force the pace of Defra having to work with the agricultural sector to do all that can be done to reduce emissions. It will of course be the same for my own and other government departments as well. I believe that carbon budgets will be a powerful determinant of change. We will learn lessons from other countries. The feed-in tariffs for microgeneration that are due to come forward in April are a good example of where we have learnt from the experience of others. But I would say that this country has shown leadership. I mention the Climate Change Act 2008 itself, the offer that we encouraged Europe to put on the table at Copenhagen, the fact that my right honourable friend the Prime Minister was the first global leader to signal that he would be going to the summit, and that in offshore wind power we are the leading nation, a point to which I shall return later. I mention also wave and tidal, the introduction of smart meters, and our leading role in carbon capture and storage. I must admit that I am a little tired of hearing about the leadership position of the Germans. When you go to Germany, it is interesting to note that many Germans are deeply concerned about their energy policy and wish that they could have followed our decision in relation to new nuclear build. We need to be careful not to underestimate this country too much. My noble friend Lord Giddens talked about the tremendous change in global attitudes and of the formidable challenges we face in this country. He is also absolutely right to say that the history of planning in this country in relation to energy has been nothing short of a disaster. But the changes that have been made in the Planning Act 2008 and the development of national policy statements, which is the subject of parliamentary scrutiny at the moment, will lead to a sea change. On CCS technology, we have an opportunity to play a leading role and I am confident that we can do this. We have the competition, we are working on the financial package and we have consulted on the levy to be taken forward, so we can do a lot in this area. My noble friend also talked about the need for a national plan and for it to be taken to the people, as well as for an active industrial policy. I agree with him that the Government and the state have a more important role to play in the future. I could give a number of examples of where we are playing that role at the moment. The noble Lord, Lord Dixon-Smith, made the important point that 2050 is the critical target date. I want to reiterate that we are working hard on the period 2030-50 and we hope to publish the results of that work next year, which I am sure will be the subject of a debate. However, he is right to stress the importance of this work. The noble Lord, Lord Turnbull, went back to a point that we debated as the Climate Change Bill went through—what he described as the laying down of an unworkable duty on the Secretary of State in relation to the 80 per cent target by 2050. Again, I come back to him with carbon budgets. Because government departments have to take responsibility for emissions in their own sectors, I think that this is the way to drive forward change and why it is right that the Secretary of State accepts that responsibility. I am not going to comment much on carbon price, although I understand the issue. It is our hope that the tightening of the cap, which has already been agreed, and the influence of Copenhagen which we hope will bring Europe back to the table to discuss a tougher target for 2020, will have the necessary impact on carbon price. It is our preference to go down that route, but of course I understand how important this is for those who need to invest large sums of money over the next few years. I pay tribute to my noble friend Lord Clark on his outstanding work as chair of the Forestry Commission, an appointment which I think comes to an end in 24 hours’ time. He made very important points about the contribution that forestation and reforestation can make and about the decision to embark on nuclear new build. I want to reassure my noble friend, the noble Lord, Lord Dixon-Smith, and other noble Lords that we see huge potential in the reinvigoration of the nuclear sector in this country. My understanding of the current intention is that the companies which signal an interest in developing new nuclear would build up to about 16 gigawatts of new nuclear capacity. The national policy statement names 10 sites as being potentially suitable for new nuclear development by 2025. It states that, looking at the mix of energy going forward over the next 20 years, it is envisaged that about 24 gigawatts of low carbon non-renewable energy will be required, and there is nothing to prevent the nuclear sector from putting in applications that would meet that figure. I hope that will give a positive and powerful signal.