My Lords, it is a great pleasure to follow the noble Lord, Lord Bradshaw, who has such a breadth of knowledge in this area, particularly in the realm of transport.
I thank my noble friend the Minister for setting out the effect of this order. Before I turn to it, I congratulate the Government on adopting the sixth carbon budget from the Climate Change Committee, covering the five-year period from 2033 to 2037. Doing so will set in law the ambition of slashing emissions by 78% by 2035, based on 1990 emissions levels. Also, significantly, this carbon budget will incorporate the UK’s share of international aviation and shipping emissions for the first time; that is most important. Indeed, this was an issue at Paris and since. I warmly welcome this.
The budget keeps us on track with the Paris Agreement goals. It is important to acknowledge the progress that has been made. We have overachieved against the first and second carbon budgets, and we are on target to outperform against the third. In the light of the significant cuts in greenhouse gases across the economy, in industry in particular and in the power sector, it is worth pausing to congratulate the Government on the success we have had. It is heartening, too, to see the G7 in a better place on this following strong leadership from President Biden and others—including, indeed, our own Prime Minister.
The order relates to the fourth carbon budget, from 2023-27. It limits the net use of carbon units for this budgetary period to 55 million carbon units or 55 million tonnes of carbon dioxide. That sounds concerning, but it follows the approach taken in previous budgets, and we have not used those carbon units at all. I understand that—it provides headroom for flexibility; the only danger, of course, is that it sends out a slightly contrary signal. On the other hand, it is most important that Governments are judged by what they do. Judged on the actions, we have a good story to tell, although more needs to be done.
The Minister and the Government have announced that they do not intend to use this facility, intending instead, as in previous budgets, to draw solely on domestic action to fulfil the ambitious budgets that have been set. I accept totally that this is the Government’s intention, and they are likely to achieve that aim based on past action. I support that flexibility. I accept that there is an argument about the signal sent, but it is more important that we have that flexibility.
Ahead of COP 26, can the Minister please seek to ensure positive action in other areas, in particular promoting electric cars, buses and other forms of transport, and battery storage and production? That is important for achieving our climate change aims, but it would also boost the economy. This follows on from the Stern report during the 2000s, and subsequently it has become clear that it is possible to achieve positive growth at the same time as reducing emissions, as the Government have demonstrated. But it is important that we press ahead with the electric transport market and the battery storage market in particular, in which we can be world leaders.
I want to ask the Minister about two issues. He touched on both but I want to push him a little further, if I may. First, when will we receive the carbon
budget for discussion in the House, with a view to ensuring that it is put into legislation? Are we still going to get it by the end of June, as originally intended? If not, when can we expect it? Secondly, will Northern Ireland, to which the Minister referred, continue to be treated separately? I was both an Energy Minister and in the Northern Ireland Office, so I know that the Northern Ireland market is separate. Will a separate position for Northern Ireland present any particular challenges regarding the EU ETS system?
In conclusion, I am keen to encourage the Government to take stronger action ahead of COP 26. We are in a strong position but clearly, more needs to be done. Overachieving in this area is certainly not a bad thing. I strongly support the order before us.
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