My Lords, it is little more than a week since we received notification of the publication of the Government’s response to the outcome of the consultation exercise on zero-carbon homes and the so-called allowable solutions. Already there has been a flurry of government amendments to the Bill in the name of the noble Baroness, Lady Kramer, based ostensibly on these responses. They have been followed by contrary amendments in the names of the noble Lords, Lord Teverson and Lord Tope. There is clearly a division of opinion among the coalition on these issues.
Much in the Government’s document ought to be considered in detail, but at a glance it is easy to recognise its salient characteristics. It exemplifies the doublethink that we have come to expect of the Government in connection with environmental issues. It also illustrates the perspectives of the persons responsible for drafting the legislation, who have given expression to a kind of neo-liberal economic thinking that was at the heart of the Energy Bill which we considered last summer. I shall attempt to characterise those perspectives but, for a start, let me talk of doublethink.
The consultation document on zero-carbon homes and the Government’s response both declare an earnest intention of staunching the emissions of carbon dioxide, yet ultimately subvert these intentions.
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As we have already heard from my colleague, Lord McKenzie of Luton, it has been calculated that 37% of greenhouse gasses emanate from buildings and, of that quantity, 66% is estimated to come from domestic dwellings. At a time when there is a need to build more houses, there is also an opportunity to ensure that strict limits are imposed on their emissions of carbon dioxide.
Within the Teverson-Tope amendments are the figures for the reduction of emissions that were originally proposed by the Government, but which, now, they wish to alleviate. Again, as we have hard, these were reductions of 60% for detached houses, 50% for attached houses and 44% for flats. These provisions were strongly supported by 70% of respondents to the Government’s consultation. They are quite stringent requirements, and I imagine that there has been strong opposition among members of the Conservative Party to them. The consequence is that the Government have had to find what might be described as wriggle room. This is the latitude to appear to be fulfilling a declared objective, with all the credit that comes from doing so, while in truth allowing the intentions to be utterly subverted in favour of appeasing the opposition within one’s own party.
The wriggle room will be provided by a system of so-called allowable solutions and exemptions that will be the subject of secondary legislation. Housebuilders will be able to compensate for a shortfall in attaining
their targets by pursuing other activities that have the appearance of carbon abatements. These may be achieved in other locations, apart from that of the houses in question or, indeed, through other enterprises. To be granted leave to pursue such allowances, I believe that the builders would need to fulfil only 20% of their emissions reduction targets.
Allowances could be obtained in various ways. The housebuilders might claim that they have achieved sufficient carbon abatement onsite via efficient communal heating systems or via low-intensity street lighting. They might obtain allowances by offsite activities, including the retrofitting of existing buildings with extra insulation. The housebuilders could pay another party to deliver carbon abatement or they could pay into a fund that has the ostensible purpose of carbon abatement. Finally, if they are building on a small scale, they can effectively avoid the requirements altogether. All of these allowances detract from the purpose of the Bill, which is to ensure that new homes will be carbon efficient over the long run. They relate to measures that should be pursued in any case. Therefore, there can be no justification for such allowances.
The arrangements proposed by the Government are reminiscent of the scam that accompanied the provisions of the original Kyoto protocol, which was aimed at reducing global emissions of greenhouse gasses. The protocol allowed nations to evade the targets to reduce their emissions by taking offsetting measures aimed at absorbing carbon dioxide. Tree planting was the favourite measure. Forestry programmes that were already under way were taken into account as part of the carbon-offset. Other nations could be paid to undertake forestry projects, which might be a cheaper way. These provisions encouraged acts of duplicity as much as examples of doublethink.
Now I wish to talk briefly of the curious neo-liberal economic philosophy that suffuses this part of the Infrastructure Bill as well as other acts of this Government. The philosophy favours economic freedom at all costs, even when universal restraint is called for. The philosophy favours the monetarisation of all manner of social transactions and the establishment of markets where none has previously existed. Thus, in the early stages of the deliberations that have led to the present proposals of the Government, there was thought of establishing a system of marketable emissions permits. The abatement of the emissions would be achieved by limiting the number of permits. A market would be relied on to determine the price at which the permits were traded as well as their eventual distribution. But there are only some dim reflections of those thoughts in the consultation document and in the Government’s response.
The disadvantage of such a liberal system of emissions abatement is the way in which it is bound to invite all manner of infractions. The system needs to be rigorously policed in order to ensure that there is not widespread cheating.
If it is to be effective, such a system of verification is liable to be very costly and highly bureaucratic. Even in their present form, the Government’s proposals would have to rely on such a system if they were to be at all viable.
Instead of the system of allowable solutions favoured by the Government, what is required is a straightforward system of regulation. That is what is called for in Amendment 93B in the name of the noble Lord, Lord Teverson, and I strongly support it.