Climate Change Act 2008 (2020 Target, Credit Limit and Definitions) Order 2009

My Lords, I am not going to walk into that one. The research and analysis continue, we think that the IPCC process is robust. and we will be guided by the best available science. In the mean time, we believe that we should prepare on the basis of the science available to us now. I enjoyed the contribution of the noble Lord, Lord Leach, although I do not necessarily agree with it. He asked me if we had studied Professor Carter’s evidence. My understanding is that we have closely analysed and estimated the cost of emission trading, and we see that as set out in the impact assessment that was published alongside the carbon budget levels announcement on 22 April, to which noble Lords have referred. The second point made by the noble Lord, Lord Lawson, was also made by the noble Lord, Lord Leach: the cost of dealing with climate change, introducing carbon budgets and some of the other changes that have to be made as a result. Of course these figures look very high. A number of noble Lords referred to the noble Lord, Lord Stern, and wished that he were present in our debate—I certainly do—but your Lordships might observe that he has an Oral Question tomorrow on the whole issue of climate change to which I have the privilege of responding, which will give us all an opportunity to understand where he is coming from. We believe that the noble Lord has done extremely valuable work. He, in his review of the economics of climate change, said that the benefits of strong, early action on climate change outweigh the cost. Also, the noble Lord, Lord Dixon-Smith, was absolutely right to say, of course, that a lot of the costs and investment—if we think of energy policy in particular, given the rundown of many of our existing power stations—would have to take place in any case. The noble Baroness, Lady Wilcox, first asked me whether we will continue to listen very closely to the advice of the Committee on Climate Change. Yes, the orders reflect that we have taken the advice very seriously. She then made the important point that we want to ensure that the majority of carbon reduction takes place in the UK, rather than the UK having to buy in credits abroad. Also, is UK business in a good place to take advantage of a low-carbon economy? That is a very important point indeed. I will come in a moment to the lead-up to the negotiations in Copenhagen but, unlike some noble Lords who have spoken, I am optimistic about the outcome of those discussions. I believe it is absolutely clear that the world is on a path towards a low-carbon economy. The question for this country is: are we going to take advantage of that? Are we going to be a country that is at the forefront of technology innovation? Is it going to be British companies which take advantage of that technology lead that we have in many sectors? In the past, we have had the technological lead but have then lost the advantage to other countries; can we ensure that that does not happen again? The noble Baroness has asked one of the most important questions that ought to be before us this afternoon. Clearly, the Budget announcements, and some of the stimulus that has been given towards agreeing a low-carbon economy, are very important in helping British business ensure that we are at the forefront of leading towards a low-carbon economy. The noble Lord, Lord Lawson, asked me about negotiations, and he is rather more pessimistic than I am about the possibility of a deal. To clear up any confusion, I should say that in the orders we are debating interim budgets. Those are being set before a global deal is reached. If we are successful with a global deal, we will then ask the advice of the Committee on Climate Change about tightening the targets—the budgets—that have been set. Clearly, we very much hope that there will be a deal, that the advice of the Committee on Climate Change is indeed to tighten the budgets, and that I will have the honour of bringing further orders before your Lordships’ House to put that into practice. How confident are we about a deal in Copenhagen? Well, progress is being made. It is clear that the US Administration have signalled positive moves in helping towards a deal. My right honourable friend the Secretary of State was recently in China in discussion with the Chinese Government, and it would be fair to say that he feels a sense of confidence about our ability to come to international agreement. Of course, a lot of water has to flow under the bridge before we come to Copenhagen, but the preparatory work gives us optimism about successful conclusions. The international architecture is an important issue. I do not know the details of the DfID report, but I will certainly ensure that I study it closely. The noble Lord would expect me to say that we work closely across government, and of course we do. I can tell him that the international architecture is vital; it is important to ensure the integrity of any dealings in relation to international credits. Part of the agreement in Copenhagen will be about the actions that developed countries have to take, but it will also be about the actions that emerging countries have to take. However, we hope also that the vulnerable, poorer countries will commit to a low-carbon world. The international architecture that follows from that to ensure the integrity of the system as a whole will be vital. The noble Lord, Lord Marlesford, asked me about the definition of nuclear energy. In his not uncritical speech about the Government’s record, I detected at least some acknowledgement of the Government’s go-ahead for new nuclear energy in this country. He knows that the definition is quite straightforward. It is not defined as renewable in international definition terms, but the carbon emissions surrounding nuclear development are very low indeed. I agree with the noble Lord, Lord Dixon-Smith, on that point. It seems to me to be a rather theological issue, but there is no doubt that nuclear energy will have a very important role to play in the future. The noble Earl, Lord Onslow, referred to the announcement made only yesterday about major investment in wind farms in the London Array wind park, and he implied criticism. In any number of questions I have answered about renewable energy, noble Lords have complained that companies were not prepared to invest in renewables. We should rejoice that the announcement from E.ON came yesterday. Of course, it is an energy that is intermittent, and that is why you need back-up from other sources of energy. But in any case, noble Lords have consistently argued that we need a diversity of supply alongside—I was going to say "the dash for renewables"; it certainly will be a dash if we are to meet the 2020 targets. That is why we are glad to see the development of new nuclear energy and are delighted about the package of announcements around coal and CCS. I well understand the point raised by the noble Lord, Lord Freeman, in saying that as regards the announcement to be made in the summer, he hopes that "summer" will be defined as being before the Summer Recess and that a Statement will be made in your Lordships' House. He will know that I cannot absolutely commit myself to that, but as I hope I implied in committee, I take his point—although perhaps I did not imply that as I was rather cautious about defining the Department of Energy and Climate Change’s "summer". I certainly hope we achieve that. As regards coal and CCS, I am not ducking the questions that the noble Lord asked me but we are working on many of those matters. We will make further detailed announcements in the summer on how we are to take CCS forward. Given that coal is responsible for some 40 per cent of electricity generation globally, those of us who believe that we have to take climate change seriously consider that carbon capture and storage is absolutely essential to achieve the targets that we have set. It also offers huge possibilities for the UK. With the announcement of up to four pilot programmes, we have a wonderful opportunity to develop UK technology and export it to many parts of the world. I am delighted that we made the relevant announcement two weeks ago. Of course, this comes with a cost; there is no point in running away from that. I well understand the concerns expressed by my noble friend Lord Lea that these measures might have an undue impact on poorer people. I agree with him that it is absolutely essential that we consider the impacts of different measures to help meet carbon budgets, including their distribution across society. Of course, we wish to build social equity into all our policy-making. The impact assessment of the proposed budget levels assessed the impact of fuel bills on individuals and businesses. When we publish details of our proposals and policies for meeting the budget in the summer, we will consider these impacts in greater detail, including their effects on different groups in society. I believe that the creation of the new Department of Energy and Climate Change has allowed us to think carefully about needs in terms of creating a fairer society. This very much comes to the fore in relation to energy and climate change policy. I think that the noble Lord, Lord Teverson, referred to my next point. Energy saving constitutes a great part of moving towards a low-carbon economy. The challenge for us is to ensure that energy-saving proposals are more successful. This can have a very good impact on many poorer people if we ensure that measures are properly targeted.