Motion made, and Question proposed, That the sitting be now adjourned.—(Stephen Crabb.)
I am delighted to have the opportunity to lead a debate on the 2010 climate change conference at Cancun. I thank the Backbench Business Committee for its excellent judgment in allocating time for this debate.
I thank Green Alliance and Christian Aid for answering questions as I researched for the debate. I also thank the many constituents who impressed upon me their concerns and priorities for the Cancun conference, especially the climate activists I met as part of the Big Climate Connection. Their representations were a great encouragement. I do not have to choose between being an advocate for some of the most climate-vulnerable people in the poorest countries and representing my constituents, because the former is exactly what my constituents want me to do.
When applying to the Backbench Business Committee, I said that a third of Members are new and have not yet had an opportunity to debate climate change policy. Some of them are keen to take part in this debate; I particularly look forward to the contribution of the hon. Member for Liverpool, Wavertree (Luciana Berger), who speaks for the Opposition; like me, she joined the House of Commons this year.
I start by acknowledging the leadership of the last Government and the former Prime Minister, and the role played by the current Leader of the Opposition, in achieving a world first with the Climate Change Act 2008. I also acknowledge the contribution made by Members of Parliament from both sides of the House, many of whom are no longer Members, to strengthening that legislation. It is a record of leadership of which they can all be proud, and one that the new Government must build upon, not only with ambition and commitment but, crucially, in terms of delivery.
The Foreign Secretary has described climate change as perhaps the 21st century’s biggest foreign policy challenge. The Cancun conference is critical to the international response to that challenge. Not only has action become increasingly urgent, but disappointment about Copenhagen has led many to question the ability of the international frameworks of the United Nations to address that challenge. Prior to the Copenhagen conference, public expectations had reached fever pitch despite the opaque nature of those negotiations and the difficulty that many had in foreseeing the obstacles—and, for that matter, exactly who was putting those obstacles in the way.
The Foreign Secretary acknowledged in a recent speech in New York that Copenhagen had not delivered on these high expectations because of a “lack of political will”. Sadly, it seems that the easiest lesson to be learned from Copenhagen was how to manage expectations for Cancun. At Cancun, the world needs to make progress in making binding undertakings for mitigation and in funding commitments for adaptation. The best approach to undertakings for mitigation is to bring on board everyone that you can, and to make as much progress as possible, even if some parties are unwilling to come to the table. I hope that continuing progress in engaging the Chinese Government, as exemplified by Ministers in recent weeks, will allow substantial progress in that regard, even if some in the United States Congress continue to set their faces against the country’s global responsibilities.
I am sure that others will want to speak about mitigation and to suggest ways forward. However, in the time available to me I shall focus on climate finance. A report earlier this month by the UN Secretary-General’s High-Level Advisory Group on Climate Change Financing—the AGF—sets out a number of innovative ways to deliver the substantial Copenhagen target of $100 billion of climate finance a year by 2020. I congratulate my right hon. Friend the Secretary of State for Energy and Climate Change on his role on the AGF and his contribution to the report.
The advisory group report called the $100 billion commitment “challenging but feasible”. We must take on that challenge in Cancun, however gloomy the sky that heralds the conference. After all, feasible means achievable: we must not live down to expectations. That finance must be truly additional to aid. Global aid transfers amount to about $120 billion a year. Redirecting the bulk of that money would have disastrous effects on humanitarian provision across the globe.
We cannot fund climate adaptation by diverting and repackaging aid, or by cutting vital funds for urgent programmes such as the fight against malaria. Similarly, initiatives to harness private-sector expertise and finance in tackling climate change are welcome; they are critical to the solution and should be welcomed, but they should not be credited to the developed countries’ accounts. Their task, and their responsibility, is greater than that. What is more, many small-scale climate adaptation projects show no financial return, and remain stubbornly unattractive for private investment. I hope that the Minister will agree that although leveraging private finance is indeed important, public finance remains irreplaceable in meeting the climate needs of the poorest people.
I have already mentioned eye-watering sums. The accountant in me might stray into the sometimes dry subject of financial commitments; instead, I shall illustrate what this climate finance is for, and the difference it can make.
More than half of rural households in India still lack electricity. Fast-start finance funds off-grid, locally managed renewable energy schemes that deliver electricity to rural villages. Kasai village in Madhya Pradesh is not connected to the national grid. Since 2005, a small 10 kW biomass plant has generated electricity for Kasai. The plant provides lighting for houses, streets and the school, power for entertainment, and the electricity to run a flour mill, a milk-chilling unit and a water-pumping system. Kasai has biomass in abundance—wood, crop residues, oil seeds and cattle dung—and it is gathered by villagers. There is a maintenance fee and a user charge, and the scheme is overseen by a village committee of six men and five women.
The benefits of that scheme are manifold. Every house has piped water; far fewer residents migrate; agricultural production has trebled with the availability of water for irrigation; villagers can sell milk that previously went bad in the heat; and the new mill allows people to process wheat and rice and to sell the flour. The urgent need for a reliable energy supply is met, and the use of renewable energy means that growth in carbon emissions is limited. Those double wins are just one example of a fast-start-finance climate project allowing a village to thrive that once was dying.
At Copenhagen, developed countries pledged $30 billion in short-term finance for projects like that between 2010 and 2012. Of that $30 billion, $10 billion was pledged by the European Union, which has so far delivered about $7.8 billion through existing channels such as the World Bank and the EU’s global climate change alliance. When will the Government set out the timing and the delivery mechanisms for allocating the remaining fast-start finance that the Government have pledged? Is the £1.5 billion pledged for fast-start finance in the comprehensive spending review additional to the Government’s overseas development assistance commitments? If not, will the Minister at least assure the House that that is not a reflection of the Government’s attitude to long-term climate finance?
Developed countries can now respond to the progress of the advisory group, and to the menu of recommendations that it has made; they have clear practical choices on how to meet their obligations. This is a key opportunity for the Government to show leadership at Cancun, plotting the road map for mobilising finance and turning these innovative sources into a reality. The advisory group identifies a menu of options—the auctioning of emissions allowances, carbon taxes, levies on international aviation and maritime transport, multilateral development banks, and even a financial transactions tax. Those are realistic options that can generate serious revenue. I invite the Minister to give some indication as to which of the innovative sources of finance, identified by the UN advisory group, are priorities for his Department ahead of Cancun. Will he support a levy on international aviation and shipping? Will the British Government show leadership through the EU in co-ordinating a critical mass of developed countries to make possible a financial transactions tax?
Developing countries suffer more than 90% of the effects of climate change despite having done the least to contribute to its causes. Some 250 million people are directly affected by desertification and 1 billion are at risk. Another 135 million people are at risk of displacement due to the effects of environmental deterioration. Many of those people are the world’s poorest and most vulnerable citizens. Countries such as Malawi, Bangladesh and Sudan are the most vulnerable to the impact of climate change despite having done the least to contribute to rising carbon emissions.
This is all our doing, but it is the most vulnerable people in the world who face the consequences. We have a responsibility to them. That much was acknowledged at Copenhagen. Action on climate finance now is not some kind of vague add-on, something that would be nice to achieve, or even an apology for failing to reaching binding agreements on mitigation. It is an essential component in reaching an internationally just settlement as part of the response to this global challenge.
Our Secretary of State has clearly made good progress with his colleagues on the advisory group in pointing to how climate finance can be delivered. Now the world needs to move forward. We need concrete proposals and the Government to show leadership at these negotiations. We must seek to build international consensus; to co-operate and to get the negotiations back on track. It is too late to stop now.
Before calling the next speaker, may I say that it is the wish of the Backbench Business Committee that this debate continues only until 4.30? Therefore, I hope to call the Front Benchers at about 4 o’clock, so that we can give sufficient time to the second debate on our agenda.
I congratulate the hon. Member for Chippenham (Duncan Hames) on submitting to the Backbench Business Committee the idea of debating this afternoon one of the most important events that is to take place in the very near future. Many people discounted what happened after Copenhagen as being of marginal significance. Although a number of hon. Members have turned up to discuss this topic, they are, to some extent, people I would have expected to be present. Although I offer compliments all round, it is a matter of some regret that there is not a wider attendance this afternoon.
Turning to COP 16, we should remind ourselves that Copenhagen was one in a sequence of conferences of the parties. In hindsight, we can see that it was perhaps over-hyped. A huge number of Heads of State were present and the expectation, or the fervent hope—a hope that I shared—was that a binding agreement would be signed at Copenhagen and that the notion of COPs would move to a different level. Sadly, that proved not to be the case, so we move to Cancun with much lower expectations. Indeed, Cancun is the opposite of over-hyped—it is under-hyped, I think. The presence of key negotiators and relevant Ministers, as opposed to Heads of State, produces an entirely different outlook on the conference. I think the general expectation is that Cancun will produce very little.
What is important is that we in the UK do not dilute our ambition as a result of the apparent dilution of the ambition of others. It is essential that a high level of momentum is maintained where Cancun is concerned. I say that not because I expect Cancun to produce any form of breakthrough, despite what a few people say, but because unless it makes substantial progress in bringing negotiation frameworks back into play, the real prospect of COP 17 in South Africa resulting in the signing of a binding international deal will be lost.
The Kyoto agreement runs out in 2012 and even a binding deal in South Africa would give precious little time for the process of ratification, given the various accompanying hurdles and snares. Nevertheless, the goal of securing a binding commitment in South Africa rests securely on the ability of Cancun to move substantially in that direction. Britain has a leading role to play. At the very least, it must ensure that post-Cancun there are the momentum, commitment and structures that will enable the real, breakthrough progress to be made in South Africa.
Because it is considered reasonably unlikely that Cancun will lead to anything conclusive, we should not feel that nothing will come out of Cancun. There are key goals that Britain needs not only to be very clear about, but to take a leading role in securing. They include the commitment on reduced emissions from deforestation and degradation—REDD-plus—which I believe can be concluded at Cancun. That would be a real breakthrough in the way developing and developed countries work together to tackle the consequences of deforestation, and even turn it back.
We must ensure clear examination of the so-called gigatonne gap, which is the difference between what the two-page document at Copenhagen stated and noted about the need to remain beneath a 2° increase in temperature across the globe by 2050 and the actual commitments, as yet ungratified, on carbon reduction by the various countries. How can we ensure better methods to examine the gigatonne gap, in terms of upcoming Intergovernmental Panel on Climate Change reports and other mechanisms, to get a much clearer picture of the relationship between what Copenhagen committed itself to, at least in outline, and the action that therefore needs to be taken? Hopefully, such action can be ratified consequently.
As the hon. Member for Chippenham mentioned, the question is how we move forward from the outline $100 billion global finance fund that was floated and generally accepted at Copenhagen. Again, precious few details or mechanisms by which it might work were attached to it. The AGF report, which he also mentioned, set out mechanisms, which some people have said are ambitious, but I think that most of them, in the context of the present emergency, are thoroughly realistic about the need to ensure that the fund is properly financed between developed and developing countries, and that the mechanisms by which it is financed are enduring, and are not simply Government commitments that disappear as quickly as they are made and as soon as the spotlight is turned off the issue and its consequences, as we have seen previously.
The reality of financial transaction taxes and how they can be introduced internationally is a key issue that needs to be progressed. Such taxes would be an important mechanism, in conjunction with additional taxes on the aviation and shipping sector, which are greatly overdue. Without those taxes and arrangements, the national commitments to be made on emissions will have little meaning. International capture of emissions from aircraft and shipping is important not only to measuring accurately what the commitments really are, but to making a substantial contribution to the reality and long-term sustainability of the global finance fund.
The UK can play a leading role precisely because it has, in effect, a low-carbon action plan: the Climate Change Act 2008. The consequences of the Act—the five-year carbon budgets, the clear trajectory towards a binding and lasting reduction in UK CO2 and other greenhouse gas emissions in 2050 and the demonstrated mechanisms by which that will be achieved—are being looked at by other countries. South Africa, for example, is likely to adopt similar legislation in the next year or so, and countries in Europe and across the world are looking at how their mechanisms might take our experiences into legislation.
The moral leadership presented by what we have done in this country is an important part of our approach to Cancun. If we resile from the efforts to increase the EU commitment to 30% reductions in CO2 within interim target periods, we will undermine the commitment recently made in the Act. There is a great deal for the UK to do at Cancun, even if the expectations for the conference are not high. The key to Cancun being as successful as it can be is countries such as the UK going into it with their ambition held high. If we succumb to a collective lack of ambition, there will not only be nothing at Cancun, but nothing in South Africa and a dribbling away of targets and their achievability.
We have a task ahead of us. I look forward to hearing from the Minister that the UK Government intend to be as ambitious as I hope they will be, and that they will go to Cancun and fly the flag for the achievability of agreements—not necessarily made at Cancun, but based on what happens there—and the achievability of real gains, which will lead to success in the near future.
I shall touch on three specific areas where the UK can have a particular and significant impact. The first is global fossil fuel subsidy reform. Hon. Members are probably aware of the joint International Energy Agency, Organisation of the Petroleum Exporting Countries, Organisation for Economic Co-operation and Development, and World Bank report, which was provided to leaders at the G20 summit in June. It stated that fossil fuel-related subsidies amount to almost $700 billion a year, roughly equivalent to 1% of world GDP, and if we phase out those subsidies, we could see a 10% reduction in world greenhouse gas emissions by 2050 compared with the business-as-usual scenario. I welcome the Foreign Secretary’s recognition that
“removing fossil fuel subsidies will reduce wasteful consumption and inefficient production, and will improve economic efficiency and energy security and decrease carbon emissions”.
Ahead of the Copenhagen summit, he echoed the words of the Secretary of State for International Development when he said that fossil fuel subsidy reforms should be
“at the top of the diplomatic agenda”.
The trouble with those aspirations is that very few people believe that the emerging economies will implement the national commitments, which were flagged up, to reduce fossil fuel subsidies domestically. The non-OECD countries of the G20 account for the significant bulk of the subsidies—for example, Argentina, Brazil, China, India, Russia, Saudi Arabia and South Africa. It is apparent from written answers that I received from the Foreign Office, the Treasury and the Department of Energy and Climate Change that there was no discussion of fossil fuel subsidy reform with those countries between the G20 summits. Will the Minister use his influence to ensure that there is a diplomatic offensive across Departments to raise that issue up the international political agenda? Will he also press for a clear statement from the Government that they would like World Bank lending for fossil fuel projects to end? According to the Department for International Development, the World Bank supported fossil fuel extraction and transportation projects to the value of $3.6 billion between 2005 and 2009.
The second area relates to rainforest finance. I am sure that all hon. Members appreciate the importance of halting global deforestation, so I will not repeat the arguments. I warmly welcome the Government’s confirmation of £300 million-worth of fast-start finance to help rainforest nations to safeguard their forests. Unfortunately, as most people would accept, we are a long way from any meaningful agreement on the inclusion of rainforest in the carbon markets. However, we have seen the emergence of agreements between countries to protect standing forests—for example, the widely reported deals between Norway and Guyana and Norway and Indonesia. Does the Minister agree that, in the absence of a REDD agreement, the UK should find innovative ways to use some of the agreed £2.9 billion of international climate finance, which was put aside in the spending review, to pursue bilateral deals with rainforest nations?
Finally, global aviation emissions account for about 3% of global greenhouse gas emissions, but the sector is widely predicted to grow significantly. In addition to the other sources of potential finance already identified by speakers today, will the Minister press for a deal at Cancun that includes aviation?
I acknowledge the increased levels of public scepticism towards the climate agenda. To the climate sceptics I say that, for all our sakes, I hope they are right, but, though I doubt that any scientific thesis has ever generated as much attention or attracted more scrutiny, the vast bulk of scientific opinion still holds that man-made climate change is a real threat. I accept that few things are truly certain in science, but even the most committed climate sceptic would have to accept that there is a possibility that the majority scientific position is correct.
I am told that Vice-President Dick Cheney declared that if there was a 1% chance of a nuclear scientist helping al-Qaeda to build a nuclear weapon, we should treat it as a certainty in responding. Climate change seems far more likely, and the risks are certainly far greater. In addition, whereas the costs of inaction are incalculable, most of the steps necessary to deal with climate are steps that we must take irrespective of climate change. Surely it makes sense for us to apply the same logic. Thank you, Mr Chope, for the opportunity to speak.
I thank the hon. Member for Chippenham (Duncan Hames) for securing this important debate. According to the Prime Minister’s own words:
“The dangers of climate change are stark and very real. If we don’t act now, and act quickly, we could face disaster.”
I agree absolutely, but that action must be driven by science, not political expedience. Although I welcome the fact, for example, that Britain is leading the way in passing climate change legislation, the targets in that legislation must be commensurate with the scale of the challenge that we face.
The Potsdam Institute for Climate Impact Research suggests that if we are to have a good chance of keeping the atmospheric temperature rise to less than 2° C above pre-industrial levels, thereby significantly reducing the likelihood of catastrophic climate change, average global emissions must be reduced by far more than the figures being bandied about in political debates. The institute discusses an average global emissions reduction of about 60% of the 1990 baseline by 2030. That is a global average: the responsibility of developed countries is even greater, because of course we are and have been overwhelmingly responsible for climate change. That responsibility equates to a 90% reduction in emissions by developed countries by 2020.
We face a monumental challenge, but it is important to put the figures on the table in order to remind ourselves of the scale of that challenge, as well as to remind us that equity and social justice must be at the heart of any new climate agreement. Many models have been proposed that encapsulate equity, ensuring that we move towards a situation in which each person has an equal right to a certain amount of emissions per capita. The models involve technical terms such as contraction and convergence, but they are essentially concerned with ensuring that we tackle climate change equitably. There is no way that we will get an agreement at Cancun unless equity is at the heart of it.
One of the biggest obstacles to progress at Cancun will be a potential lack of sufficient finance on the table for developing countries. International climate negotiations have stalled, not least because developing countries have no great faith that the industrialised north will deliver on its financial commitments to help poorer countries tackle their emissions.
At the Copenhagen summit last December, world leaders pledged £100 billion by 2020 to fight climate change. First, that figure, although welcome, is not enough. Secondly, the history of such pledges is not a happy one. Far too often, the pledges are not kept. If the money is forthcoming, it is simply re-badged money that has already been committed, rather than genuinely additional resources. Although I welcome the £2.9 billion committed by the Government to climate finance, I also understand that that money is not additional to the existing aid budget. Will the Minister clarify that? It is crucial, as the hon. Member for Chippenham said, that the money is additional and not a redirection of existing aid.
It is also clear that even with the £2.9 billion, we will need further, innovative financing mechanisms to raise more money urgently. A range of options has been discussed this afternoon, including a tax on aviation, but I want to discuss the so-called Robin Hood tax. It could be a critical instrument in helping to break the deadlock on global climate agreement negotiations. A tiny bank levy on financial transactions, if applied globally, could generate billions of dollars a year and provide poor countries, which have done the least to cause climate change, with the money required to cope with its impacts and to develop in a greener way. Although a Robin Hood tax would certainly be more effective if it were implemented globally, it need not be. It is important not to go away with the idea that it can only be done globally. Plenty of research suggests that it could be done nationally without giving the UK a massive competitive disadvantage, that we could take a lead on that positive initiative and that, even if the tax were only imposed in this country, it would still generate significant amounts of money.
Rich countries and corporations have grown wealthy through a model of development that has pushed the planet to the brink of climate catastrophe. We have overused the planet’s ability to absorb greenhouse gas emissions. As I said, developed countries representing less than one fifth of the world’s population have emitted almost three quarters of historical emissions. In a sense, the rich world has colonised the Earth’s atmosphere, and that process has mirrored and perpetuated the vast economic inequalities that persist in the world today.
Meanwhile, poor communities—those least responsible for climate change—are already facing its worst impacts. It is happening now to people in Bangladesh, for example, and in many other parts of the world. Sometimes I hear people say, “We need some climate disaster to happen to wake the world up to the seriousness of climate change.” Those disasters are happening now, and we need to wake up, make that link and put them on the front pages. Because of the rich world’s historical responsibility for climate change, we have a duty to compensate the world’s poorest people. That means finding climate-friendly ways to meet their energy needs and providing resources to assist them in coping with the effects of climate change.
The rich world’s climate debt can be described as mitigation debt and adaptation debt. I will give a few more numbers, as they sometimes help to concentrate the mind. They are large numbers, but they remind us of the scale of the challenge that we face. A report published last year by the World Development Movement and the Jubilee Debt Campaign calculated that based on its historical responsibility, the UK’s adaptation debt equates to at least £5.5 billion a year over the next 40 years, provided that it stops increasing that debt immediately: in other words, provided that we start absolutely reducing our emissions now. The same organisations make the case that we owe at least £11 billion a year for the next 40 years in mitigation debt. Those resources must be made available to enable us to share low-carbon technologies freely with the developing world and to fund low-carbon infrastructure. I acknowledge that that is an enormous amount, and we must use every tool available to generate it. Models such as the Robin Hood tax are some of the simplest and most effective that we could develop.
Cancun is just a few weeks away. Industrialised countries desperately need to be able to go to those talks with a new, big commitment on finance if we are to have any hope of reaching agreement. I hope that the Minister will tell us today that some new financial commitment can be made, and that he will say whether he supports the principle of contraction and convergence, or any similar model of dealing with climate change that has equity at its heart and is based on the idea that we must converge to a situation where everybody in the world has an equal per capita emissions right. That will not happen in the next years—it will take several decades—but we must get to the point where equity is at the heart of climate change negotiations, because right now it is not.
I will end by reflecting on political will. I am haunted by the words of the actor Pete Postlethwaite in the film “The Age of Stupid”. For those Members who have not seen it, the film is based on the assumption that some kind of climate catastrophe has occurred 50 years hence and that Pete Postlethwaite’s character is the sole survivor. He looks back to today and asks, “Why is it that, knowing what we knew then, we didn’t act while there was still time?” Those words haunt me, because we have the information, technology and, frankly, the money that we need to act. When it came to bailing out banks, we found billions in a few days. If the planet were a bank, it would have been sorted out a long time ago.
The issue comes down to political will. It can be stated simply. Will we generate sufficient public and political will to tackle climate change fairly in the time available, or will we go down in history as the species that spent all its time monitoring its own extinction rather than taking active steps to avoid it? It worries me that only about a dozen hon. Members are here today. This Chamber should be packed—there ought to be a presence on the streets ensuring that it is packed—because this is the most important issue that we face.
Finally, if we were to take climate change seriously and introduce the measures that we urgently need, those measures would create hundreds of thousands of green jobs and improve our quality of life. For example, we would have fuel-efficient homes—people would not die from the cold in the 21st century—because we would have a proper programme of home insulation. We would have affordable, efficient public transport—they seem to manage it on the continent, but it somehow still evades us in Britain—and we would have kids playing in the streets again because our roads would not be packed with cars. We would also have a quality of life that, in many respects, would be more fulfilling and, crucially, there would be more jobs. At a time of economic austerity, people need jobs and there is no quicker means of job creation than to have a programme based on green jobs, insulation, environmental efficiency and renewable energy. I hope very much that the Minister will be able to tell us that he has got some good news on all of those issues when he sums up.
I congratulate my hon. Friend the Member for Chippenham (Duncan Hames) on securing the debate and making it happen. This is a critical issue. Like other hon. Members, I would have preferred to see more people in the Chamber, but it is up to us to promote the problem of climate change and to excite people’s interest in the subject. It is also up to us to come up with ideas and solutions that bring about the scale of interest that we undoubtedly need. The truth is that, even if we did just a little better than we have done thus far, we would still be facing a worsening situation in terms of CO2 output. That is the reality. We need to embark upon a huge set of policy initiatives if we are to see a significant degree of improvement.
We have been talking about Cancun, but let us talk briefly about Copenhagen and why nothing happened there. The real reason nothing happened was that the United States and China got together and decided that nothing much should happen. The first and most important lesson for all of us in this room and beyond to learn is that Europe has huge responsibilities and a range of opportunities to influence the debate. Europe must play its part in a significant and resolute way if we are to start to secure the kind of agreements that are necessary. I hope that Britain plays a powerful role at Cancun, but we must also engineer a strong European voice; otherwise the same sort of thing will happen.
Related to that, but just as important, is the role of the BRIC—Brazil, Russia, India and China—economies as emerging economies. It is not just a matter of what China and the United States are doing; it is about what those four economies do next. We must encourage them to pursue policies that are CO2-responsible. For example, there is evidence that technology we have in my Stroud constituency is being exported to Brazil and elsewhere. It is critical to encourage such a relationship at national level, as well.
May I address some of the issues raised? My hon. Friend the Member for Richmond Park (Zac Goldsmith) talked about fossil fuels and the fact that they are subsidised in countries where we should not be subsidising them at all. Instead, we should be encouraging the right kind of technology. That is an opportunity for us and a necessity for those countries. I urge the Government to think carefully about that. The Government should not simply say that subsidising fossil fuels is bad; they should start to think about what is good for the economy as a whole. We need to promote that strong message.
Given the constituency of the hon. Member for Southampton, Test (Dr Whitehead), it was interesting that he talked about shipping and aviation. It is true that both shipping and aviation produce emissions that are damaging. However, we must get the proportion and scale right, because some 90% of trade is actually shipped. We must bear in mind that if we do not ship certain things and decide to produce them here, it could do more damage in terms of CO2. We should not worry too much about shipping. We must get the proportion and our understanding of the questions of transport versus production exactly right. Talking about aviation taxes is not necessarily the right thing to do at this point, because I understand that aviation accounts for just 2% of emissions. It is much better to strike at the very heart of the problem and deal with the big issues that really matter: energy production and domestic transport.
The hon. Gentleman observed that although I represent a port constituency, I said that international bunker taxes ought to be introduced on shipping. That should also be the case for aviation, not necessarily because of the percentage of emissions that shipping and aviation currently represent, but because there is an upwards trajectory in the percentage they will represent in the future. Indeed, we are assuming that our own carbon budgets are included in emissions totals. We would have to make unbelievably high reductions in emissions elsewhere in the economy if that is not the case, bearing in mind the trajectory increase. It is also true that, per kilometre tonne hauled, shipping is not remotely as emission-concentrated as aircraft. Nevertheless, taken in the round, the increase is very apparent, which is why I said what I did.
I thank the hon. Gentleman for that helpful intervention. I still think it is a question of proportion. That is something we should have a discussion about. I started off by pointing out just how steep the challenge really is and I think all hon. Members in this room would agree with that. I think we all recognise that significant CO2 reductions just have not happened thus far—in fact, there has been an increase.
I shall end by mentioning the point made to me very forcefully earlier this week by the Institute of Mechanical Engineers—I think my hon. Friend the Member for Chippenham also heard what was said. The institute rammed home just how big the challenge is and how important technology will be. It talked sensibly about the need for Britain to push ahead with the development of technology. I hope that the Government will continue to reassure us that that is exactly the direction in which they intend to go and that renewable energy and so forth will be promoted. We need to create a secure market for all of those things. It is crucial that we set about producing an infrastructure that is responsive to the new types of energy that will be feeding in, so that we can distribute easily. I am not just talking about a national infrastructure; I am talking about a European infrastructure. Renewable energies have their geographic suitabilities—for example, wind in one area and solar and hydro in others. We need to be flexible enough to benefit in big ways from all of those through a proper infrastructure.
Last but not least, if we are to start taking remedial action, which we need to do because of the scale of the problem, geo-engineering is a way forward. The Institute of Mechanical Engineers also made that point. I understand that we are not yet really in that development area, but we should be, because that is something in which Britain could play a part. We need to start to think carefully about our commitment to geo-engineering as a demonstration of how we will deal with the problem. Involvement would also bring about obvious advantages in terms of jobs and economic growth for ourselves and anybody else who cared to help us.
Those are the points I wanted to make. I can sum them up in this way: first, let us recognise the gravity of the problem. Secondly, let us recognise that solutions will, first and foremost, be international, which is why we must frame our argument along the lines I have described. Thirdly, we must encourage the right technology and implement it where we can.
Setting out a realistic ambition for the United Nations Framework Convention on Climate Change at Cancun must begin with a clear understanding of what happened at the fifteenth session of the conference of the parties in Copenhagen in December. It also demands humility on the part of the UK and the EU. In the UK we often behave as if we are the acknowledged global leaders on climate change, and as if we believe we punch above our weight. Indeed, that has already been suggested in this debate. It may be worth reminding ourselves that the final negotiations in Denmark took place between the leaders of China, the US, India, Brazil and South Africa. The meeting itself may have been in Europe but Europe was not in the meeting.
Europe has no leader, which means, in summit politics, that it has no voice. To say that EU negotiators played a considerable role in crafting the accord may be true, but in the final frame Europe was not present—never mind the UK. Europe needs to become a player once again. We have certain unique contributions to make to the ongoing debate, but we shall not be able to make them if we cannot agree on a spokesperson who is taken seriously by the leaders of the emerging powers and the USA. The problem may not manifest itself so much at Cancun, because we do not expect the influx of world leaders that went to COP 15. However, the situation is more likely to be a problem in South Africa in 2011 at COP 17, and it certainly will at the Rio plus 20 summit the following year. It needs to be addressed now.
There is no common narrative about Copenhagen. The western media proclaimed COP 15 a failure because it did not deliver a legally binding agreement. Cancun will not deliver a legally binding agreement either. The truth is somewhat more complicated. As the world’s largest emitter of greenhouse gases, the USA is a critical player, but it has refused to ratify the Kyoto protocol because of the concern that it might damage US economic growth. Given the fact that Kyoto places no binding commitment to emission reductions on major developing countries such as China and India, the USA has made it clear that it is unlikely to join any post-2012 framework based on Kyoto. By contrast, developing countries are concerned that annexe 1 countries have failed to live up to the commitment that they took on at Kyoto. They want a second commitment period under the protocol, as that guarantees the important—in their view vital—principle of common but differentiated responsibility, which reflects the greater historic responsibility of the developed nations as well as their greater wealth and capacity to act.
Another group of countries, which includes Japan, Australia, Canada and the EU, believes that it is essential to bind in the United States to any future agreement, and wants the major developing nations to take on commitments of their own. The first commitment period of the Kyoto protocol will conclude in 2012, and most parties are conscious that we must establish a post-2012 settlement that is comprehensive and preferably legally binding. Copenhagen failed to do that. So will Cancun.
In the mean time the Copenhagen accord created a loose, open-architecture structure, which is very much a coalition of the willing. Under the accord, countries put on the table the national actions that they are prepared to take to reduce their emissions—nationally appropriate mitigation actions. They monitor their success in achieving their own targets. Interestingly, although the western press accused China of spiking an agreement at the time, that is precisely the sort of structure that China had already proposed two months before Copenhagen. It has the benefit of preserving sovereignty while maximising commitment. Obama’s insistence on international monitoring of China’s voluntary actions within the Kyoto process, when the USA had not even ratified the Kyoto protocol, was less informed diplomacy than strategic media grandstanding. The world’s press fell for it, but we should not.
President Obama’s political capital has now been expended on a weak health care Act. The cost is his inability to get a climate change Bill through what was the most amenable Congress in decades. The mid-terms have configured a very different Congress, and we in the UK must now consider where future progress on climate change can best be pressed to advantage. One thing is clear: that place is not America.
China’s 12th five-year plan was announced last week. It will be published in detail in the spring, and it makes it clear that China is looking to create an emissions trading scheme. In Europe we have considerable experience, both positive and negative, of the EU ETS and the EU must work with China to help it to learn from the initial mistakes that we made in setting it up. Indeed, those discussions are already going on at a high level.
It is time for the UK and Europe to refocus our efforts away from the United States to form a more strategic alliance with China. Last week I participated in a Global Legislators Organisation for a Balanced Environment forum on climate change in Tianjin—I refer hon. Members to my entry in the Register of Members’ Financial Interests—along with 70 legislators from countries ranging from South Africa to Brazil. Sixteen of the G20 countries were represented, including the US. It is clear to me that a radical programme for climate change would mean the EU joining forces with China, ultimately to create common standards in products, and a joint carbon market establishing an international price for carbon around the globe. That would be a game changer. More than that: it could be a game changer that market makers in the US would suddenly find extremely threatening. America can resist any opposition to its policies. What it cannot take is being sidelined or ignored. Let us imagine that the biggest pressure on President Obama to sort out climate change came not from the liberal left or even from some “blue dog” Democrats in the Senate, but from American industry and Wall Street itself. What if Wall Street were saying to Obama: “Climate change? It’s all about the economy, stupid!”
As we approach Cancun we need to be clear about why the accord is not sufficient and what is required to take the negotiations on a trajectory that may be able to deliver a legally binding agreement. The total emissions reductions pledged so far under the accord by the US, Japan, Europe and the major developing economies fail to match the scientific calculations on targets for stopping dangerous climate change: the accord agreed on a rise of no more than 2º C. The accord makes no enforceable provision for funding of capacity building in developing countries. It creates no binding obligation on developed countries to finance adaptation, or to effect technology transfer. It creates no structure to reduce emissions from deforestation and degradation. I will try to deal with each of those aspects of the matter.
First, as to emissions reductions, currently almost 50% of global emissions come from the developed world, which represents just 20% of the global population. The World Resources Institute estimates that the developed country commitments at Copenhagen would reduce those countries’ emissions by no more than between 13% and 19% below 1990 levels. The IPCC has called for between 25% and 40% reductions. Therefore, the commitments from the developed world fall well below the minimum that the IPCC believes is necessary to avoid dangerous climate change of more than 2° C. Among the major countries, the USA has offered to reduce its emissions by 17% by 2020, but only below 2005 levels, which equates to a reduction of just 3% below 1990 levels.
Let us now look carefully at our own suggested target of at least 80% reductions from 1990 levels by the developed world. Why has that not been welcomed more fully by China and other G77 nations? Let us cash out the numbers. Global emissions in 1990 were 21 gigatonnes—21 million metric tonnes—so the global reduction of 50% required to sustain a 2° C trajectory would give the world a total of just 10.5 million tonnes of emissions annually to play with. In 1990, the developed countries emitted 15 million of those 21 million tonnes, so an 80% reduction would mean that they should emit no more than 3 million tonnes by 2050, or almost 30% of the world’s total annual emissions.
Today, the developed world accounts for just one fifth of the global population, and the proportion is estimated to fall to just one eighth by 2050. Why should we expect China and India to think it fair that one eighth of the world’s people should get 30% of the world’s emissions capacity? It would mean that developed countries would have exactly three times the emissions per person of developing countries, which is hardly the basis for a just and sustainable international settlement.
To date, the mitigation debate has been locked around a failure to agree on emissions reductions targets that will equate to a rise of no more than 2° C. The reason it has always stalled there is that the Chinese and the Indians are good mathematicians and so refuse to lock themselves into what is a manifestly unjust equation.
Let us now turn to finance. At Copenhagen, developed countries under the accord pledged a significant amount of money—$100 billion annually by 2020—as has already been mentioned. There is also fast-start funding approaching $30 billion cumulatively through 2012 for developing country mitigation and adaptation. However, that created new questions on both the sources of that money and the policies that it is supposed to pay for. Those are fundamental issues of trust between developing and developed countries. The accord did not specify how, from where or under what conditions the funding would be transferred, and developing countries urgently need that clarification before they commit themselves to the way in which they will account for how the funding is used.
Developing countries, on the other hand, first seek clarification on how the money they commit will be used. They want a clear system for measurement, reporting and verification—MRV—of the developing country mitigation actions. Understandably, we say that we cannot send our taxpayers’ money to pay for mitigation projects without a clear mechanism for MRV to hold people accountable and show that the money is actually achieving the desired outcome of emissions reduction. That has created a chicken-and-egg problem in the negotiations; developed countries are unable to provide clarity on financing until developing countries provide clarity on their mitigation measures, and vice versa.
How can we break that stalemate? The proposed wording mentioning the Copenhagen accord’s figure of $100 billion has made it into the negotiating text for Cancun, albeit as one of hundreds of phrases and options that are currently in brackets. Some parties have suggested referring to the $100 billion that is otherwise mentioned only in the Copenhagen accord, but not all parties have yet agreed to do so. Potentially, a critical bulldozer to remove the roadblocks is the high-level advisory group on climate change financing, which has already been mentioned, which was created by the UN Secretary-General after Copenhagen. Heads of state and Ministers have been studying sources of revenue for the promised $100 billion a year by 2020. That group has completed a report that will be released just before the negotiations in Cancun, and the sight of money on the table might be what is needed to restore the lost trust between the parties.
In addition, negotiating sessions since Copenhagen have produced general agreement on a fund that will channel rich countries’ financial contributions to poorer nations’ mitigation actions, and both developing and developed countries have put forward constructive proposals on how that fund could be operationalised. That means that Cancun could see a COP decision officially creating that fund and procedural rules relating to it. In Europe, we should certainly press for that to happen. With more clarity about the money, developing countries might be willing to agree to let the international community measure, report and verify what that money is used for. MRV of mitigation actions in developing countries is, in my view, the essential key to unlocking those funding flows. We should emphasise that point to everyone in the negotiations. What is required at Cancun is a clear decision on how such reporting will take place and possibly some sort of global registry of mitigation actions that can be scrutinised and verified so that funds can begin to flow.
At Cancun, a goal for REDD-plus—a development of the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries—should be written into the preamble of the decision text. That goal could be to reduce emissions from deforestation by 50% by 2020, for example. The type of activities recognised as part of the REDD-plus decision, however, must be nailed down. The REDD-plus decision text includes references to reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest and enhancement of forest carbon stocks. The accord, however, only mentions the first three goals. To clarify which activities will receive compensation, the definition of what constitutes REDD-plus needs to be made consistent within the UN process.
Another uncertainty relates to the mechanisms used to fund REDD-plus activities. The Copenhagen accord, like the Bali action plan, states that there should be positive financial incentives for countries that take action to reduce deforestation and degradation, but how countries would receive that money is still up in the air. It could be through a carbon market, a dedicated fund or something else. That question needs to be resolved in the REDD-plus decision text.
Industrialised countries expect a market mechanism for REDD, with the exception of Norway, whose Government, commendably, is donating billions to rainforest protection. Rich countries envisage significant participation of the private sector in REDD financing, through market incentives such as the clean development mechanism. On the other hand, developing countries are wary of markets, preferring direct Government-to-Government funding for REDD. Although the current negotiating text contains proposals in brackets that explicitly forbid the use of markets and the creation of offsets for REDD, it also leaves the key phrase “options to use markets” in brackets.
Several parties to the REDD discussions have highlighted in their statements the importance of maintaining the environmental integrity of any market mechanism associated with REDD. That shows that they still consider a market mechanism to be a potential outcome. Outside the negotiations, Governments have created infrastructure for REDD finance but will not necessarily come through with their financing pledges—again, something that was alluded to earlier. Donor members of the REDD-plus partnership—a group of more than 60 nations that have either pledged to fund REDD efforts in developing countries or are slated to receive them—are having trouble making good on their financing promises, and some donations constitute rebranding of previously allocated funds. Our own Government should take note of that.
In contrast, the private sector has shown real interest in REDD credits on the voluntary carbon market, presumably for both marketing and speculative purposes. For instance, the first REDD project is expected to be approved under the voluntary carbon standard this December. In addition, BNP Paribas has set up an option to buy up to $50 million worth of potential forest credits from an African project. If developing countries continue to perceive private sector interest in market mechanisms for their mitigation actions while they are waiting for industrialised Government funding to come through, they may remove barriers to markets in the negotiating text and thus open up the option for business to participate in global emissions reductions through tradeable REDD credits. That is another aim that our Government should pursue at Cancun.
Mr Chope, I seek your guidance on time. I wonder how we are doing.
The hon. Gentleman has been speaking for 21 minutes, according to the clock. I know that at least one other Member who has not yet spoken hopes to be able to chip in something to this debate. If the Front-Bench spokesmen take 10 minutes each and push right up to half-past 4, that means that we will have to start the Front-Bench speeches at 10 past 4, but they may want a bit more flexibility to answer some of the points that have been made. I do not know whether the hon. Member for Truro and Falmouth (Sarah Newton) wishes to participate.
I am grateful to you, Mr Chope. In that case, I will not pursue my remarks on land use, land-use change and forestry—LULUCF—because I believe that the Department is already familiar with what I would say. I understand that it is looking carefully at ensuring that there will not be half a gigatonne of free credits in any post-2012 LULUCF settlement, the fear that has been expressed by many.
Perhaps the most difficult question for this conference of the parties is whether it is possible to move forward on all of the issues without first dealing with the elephant in the room: the stalemate about the overall form of the agreement. The US has contended that all the elements of a global deal should be pursued simultaneously, and it objects to an approach that it says cherry-picks—that takes areas where we think progress may be likely, such as, for example, REDD-plus. However, if negotiators continue to pursue the so-called American balance package, they may spend so much time and effort discussing the form of an agreement after 2012 that they fail to take even relatively easy decisions that could achieve real progress.
Over the past two years, GLOBE legislators—legislators participating in the Global Legislators Organisation for a Balanced Environment—in 16 of the G20 countries have been discussing the architecture of a post-2012 deal. They have put forward a proposal that suggests a way forward that might be politically acceptable to the major economies. Negotiations under the Bali action plan are currently taking place on two separate tracks. The first is the Kyoto track—those who support Kyoto—whereby Kyoto parties are considering further targets for a second commitment period beyond 2012. There is also the convention track, where long-term co-operative action involving all parties including the US and major developing economies is considering how to strengthen action taken under the convention.
Based on those discussions over the past two years with more than 100 legislators in different countries, we believe that certain elements could be part of a politically acceptable deal: first, agreement on the overall level of ambition that has already been stated in the Copenhagen Accord to hold the increase in global temperatures below 2oC; secondly, a decision under the Kyoto track that commits annexe I Kyoto parties—the developed countries—to a second commitment period, 2013-17, and involves quantified, economy-wide emissions reductions targets and the associated commitments of finance and technology, subject to addressing satisfactorily the issues of hot air and the rules for accounting for forestry emissions; and, thirdly, either a new parallel treaty under the convention track or a set of COP decisions under the convention track that place comparable commitments on the US without its having to join the Kyoto protocol. Such commitments could include an economy-wide emissions reduction target and a commitment to provide financial and technological assistance to developing countries, and formalising the actions of the major developing countries—for example, on carbon or energy intensity targets, renewables targets, efficiency targets, sustainable forestry targets and other central policies—with a commitment to increased transparency through national communications under the United Nations Framework Convention on Climate Change. We believe that that could be achieved through the recognition of national legislation and the role of Parliaments in monitoring, reporting and verification.
Hon. Members have alluded to many other aspects: air and sea bunkers, the EU position and whether we should have a more or less robust position in the negotiations. It is clear that Europe is split at the Commission level on European targets. They were offered at 30% if others participated and came in with further commitments before Copenhagen, and repackaged afterwards by Commissioner Hedegaard in such a way as to imply that they were good for our industry anyway, and we should just get on with it.
I met both Commissioner Hedegaard and Commissioner Oettinger the other day. In the morning, Commissioner Hedegaard told me that it was absolutely vital that we proceeded to reduce emissions by 30% by 2020. In the afternoon, Commissioner Oettinger told me that it was absolutely impossible to do so. The Commission is irrevocably riven on the subject, and there is clearly no desire to adopt a more robust position at Cancun and going forward.
I believe that we are not looking for a legally binding agreement at Cancun but for small stages of progress that can take us forward to Johannesburg in the following year, and to Rio plus 20 in 2012. However, we need to adopt a much more radical approach in the alliances that we form. We need to look across the globe to China and other BASIC countries—Brazil, South Africa, India and China—to see how we can develop common standards and frighten American business and industry into realising that they are being left behind, and that they need to come into a common framework under the UNFCC.
Members might be relieved to know that I will keep my contribution short. The hon. Member for Brent North (Barry Gardiner) spoke with far more knowledge and detail and far more eloquently than I can, and covered many of the points that I wanted to make. That will, no doubt, come as good news to all. I wish to thank my hon. Friend the Member for Chippenham (Duncan Hames) for securing the debate. Our attendance today suggests that we need no reminder that climate change affects us all.
A perpetual challenge for climate change conferences is matching up the microcosmic with the macrocosmic: from the level of individual action to regional, national and international action. Putting that scale of possibility for action together is often the challenge that international climate change conferences run into.
Sidetracking for a moment, I am very proud to be a representative of Bristol North West. Bristol is a city that I will often criticise, but it has done extremely well in making itself a green city, with biomass plants in the Blaise nursery in my constituency, and in pressing for the wider, global impact of planning applications to be taken into account in the planning process. It might be slightly odd to raise a local issue when we are discussing such an international matter, but it demonstrates that to make progress we need not only ambition—an abstract thing—and legally-binding targets that embed hope in a legal framework, but action and strategy.
The hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned equity, the hon. Member for Brent North talked about China, and my hon. Friend the Member for Chippenham mentioned climate finance, and I shall talk briefly about those issues. Climate finance is an absolutely key issue. In recent discussions with some representatives from the Chinese Communist party, we talked about the perceived luxury of morality that developed countries have when it comes to climate change. As the discussion progressed, we began to unravel that the problem was having a judgmental morality rather than an enabling one. If I can suggest anything to people far more knowledgeable and experienced than me in these climate talks, it is that we need to shift from a judgmental morality to an enabling one, and to understand where countries such as China and India are coming from and the trade-offs that they have to make to reach the position—to which they aspire—of having the luxury of the morality that we enjoy.
The hon. Member for Brent North covered this issue in comprehensive detail, but I wonder whether we should flip the coin, and change from black to white, from sticks to carrots, and from constraint to opportunity. As he said, China has already demonstrated encouraging signs—perhaps surprisingly for much of the British media—that it is looking at climate change far more proactively than we may think, not only from the point of view of morality, but because it sees a great economic opportunity. Europe likes to think of itself as a leader in green technology, but we might have to start stepping up our game because China—this should be good news to everyone—is also stepping up its game substantially. It has already started to put climate change measures into legislation for the congress in 2011; it has committed to reducing its carbon intensity by 40 to 45%; and it might even, as the hon. Member for Brent North said, be willing to sign up to emission cuts, which is something that we can work on.
In particular, if we look at what Europe, and Britain as part of Europe, can offer, and at what we can bring to the table in an arena with two extremely big players, China and the United States, I suggest—and I recognise that I do not have as much knowledge and experience as other contributors today—that the best thing that we can offer is leverage. We could provide a lever to use China’s motivations and the opportunity they provide to nudge the USA into a far more co-operative position. We cannot do that by simply pushing; we cannot do it by endlessly enunciating ambitions; and we cannot do it by just creating expectations, embedding them in legislation and then somehow hoping that the existence of legislation makes things a reality. We have to be very strategic. The low expectations for Cancun are a massive opportunity, as are the low expectations of China. I very much hope that Cancun can be a massive surprise.
It is a pleasure to serve under your chairmanship, Mr Chope, and I, too, congratulate the hon. Member for Chippenham (Duncan Hames) on securing this timely debate.
The UN summit in Cancun is a chance for world leaders to make vital progress toward a legally-binding treaty, and it is only right that this House has the opportunity to debate the issues. We should all be in no doubt that climate change is the greatest threat facing our generation. It will have an impact on a global scale. We can expect to see greater hunger due to increased water scarcity, extra health risks from diseases such as malaria, the impact of rising world temperatures on agriculture, and more climate-related disasters. The threat is both real and urgent.
This year has been one of the hottest on record. We have seen extreme weather events across the globe, with mudslides in China, forest fires in Russia, floods in Pakistan and the breaking-off of a massive ice sheet in Greenland. Millions of people have seen their homes destroyed and their lives shattered. This is a global threat, and it will require co-ordinated global action. As my hon. Friend the Member for Southampton, Test (Dr Whitehead) said, expectations for Cancun have dampened since Copenhagen, but it is clear that progress can be made, especially on climate finance. Making real progress on that at the forthcoming summit must surely be a priority.
Vital to any progress towards a global deal on emissions is the provision of sustainable and predictable sources of climate finance for developing countries. Without that, many of the gains that the world’s poorest countries have made in development over the past 50 years will be lost. Climate finance is necessary to help vulnerable people and poor countries cope with the impact of climate change and develop in a carbon-constrained world. I urge the Government to press other countries, particularly those within the EU, to deliver the $30 billion in fast-start funding pledged at Copenhagen, as soon as possible. By delivering early on our promises, developed countries can send a powerful message to developing countries.
Delivering on the fast-start finance is important, but we also need to look beyond 2012 and work to develop a substantial long-term finance package. As other hon. Members have said, the UN Secretary-General’s High-Level Advisory Group on Climate Change Financing has just reported on a range of financing sources that could be used to provide the $100 billion pledged at Copenhagen. I welcome the Secretary of State for International Development’s commitment in a speech today at a Climate and Development Knowledge Network event that the Government will seek to make progress on that at the summit. I also welcome his announcement of the Government’s support for a climate advisory fund, which will provide access to legal and technical support for the poorest countries, to secure their participation in reaching an equitable deal. A bold solution to financing must be reached, as relying on private sources alone will not be enough.
Given that the hon. Lady mentions the AGF report, I wonder whether she would share my view that an important and helpful next step would be some quantification of the potential contribution of the options in that report towards the $100 billion a year target. The advisory group has not yet done that, but it would certainly help to concentrate minds.
I thank the hon. Member for his contribution, and I accept that quantification would be warmly welcomed.
Not only is it vital that long-term finance is made available, but we should also be clear that the money must not be repackaged aid. The $100 billion pledged at Copenhagen is a similar amount to current annual global aid transfers. At a time when aid budgets are stretched, redirecting the support to global climate financing would inevitably have serious consequences. Under the Labour Government, there was a cap on UK climate finance spending, which ensured that no more than 10% of the money could come from the aid budget. Although the Government’s planned spending for this year will not exceed that cap, so far we have not received any confirmation that the 10% cap will remain for the long term. We are clear on this side of the House that the vast majority of the aid budget should remain focused on tackling poverty, and that the UK’s commitments to climate finance should supplement our aid commitments.
We need to hear from the Government what they plan to do after 2013. Will they keep the cap, or do they plan to cut the aid budget to fund international climate finance commitments? Strong leadership from the British Government is vital to ensure that we make progress on tackling climate change, and such leadership is needed both at home and abroad.
At home, we need to do a lot more to build a low-carbon economy. We can only show leadership globally when we practise what we preach. The Government inherited a strong green legacy from Labour. The Climate Change Act 2008 was the first of its kind in the world, and it is widely acknowledged that Britain has made huge environmental progress in recent years. It has been at the forefront of tackling climate change on the international stage. The Government deserve some credit for building on Labour’s legacy by bringing forward proposals for a green investment bank and the green deal. The intentions are good, though at this stage the details are thin.
In Europe, the Government need to push our European neighbours to commit to a second phase of the Kyoto protocol, which focuses on developed countries cutting their emissions first and fastest. There are grave doubts on both sides of the House, even from members of the Government, as to the Prime Minister’s ability to lead on the issue in Europe.
On 22 April, the Deputy Prime Minister said,
“I think if you’re going to lead on this, of course you have to lead at home, but you also have to lead in Europe. There’s no point clubbing together as David Cameron has done with people who even deny the existence of climate change in Europe.”
We all saw how the Prime Minister was marginalised last week at the G20 summit. We can only hope that the same does not happen again, because the UK must be at the heart of Europe pushing for an ambitious global plan on climate finance. This Government will never be the greenest ever unless they back up their soundbites with strong leadership, decisive action and determined commitment domestically, in Europe and on the international stage.
There is much to be achieved at Cancun. I urge the Government to be at the forefront of the discussions and to take a lead in ensuring that the summit delivers on climate change.
It is a pleasure to serve under your chairmanship this afternoon, Mr Chope. We have had a good, productive debate; it has been thoughtful, considerate, passionate and wide ranging. Although the numbers have not been as great as we might have wished, the quality of the debate could not have been better. People looking at it from outside will have perceived the genuine commitment of everybody who spoke to get the best possible deal out of Cancun and to make real progress. One of the most important roles of the Backbench Business Committee is constantly to raise ambition; to push and encourage the Government to do more; and to encourage the Government to be realistic, but ensure that we know we have the support of parties in all parts of the House in raising the ambition for what is possible.
I commend the hon. Member for Chippenham (Duncan Hames) on the way he introduced the debate. He made an extremely effective contribution in which he raised many important issues. I hope to deal with those points and everything else in my response. He rightly paid tribute to the work of the last Government. One of the most important aspects of the progress that we can make in this country is the degree of cross-party agreement on what needs to be done. The commitment to an 80% reduction in carbon emissions by 2050 had the support of a broad coalition. Members of the Opposition in the last Parliament pushed the Government to go further, and the Government responded positively. It was therefore possible for this country to give a global lead towards achieving our aims. The hon. Gentleman was also right to say that we need to bring as many people on board as possible. He talked about China and other parts of the world, because this is not something we can do on our own or purely with Europe. This is a global challenge requiring a global response.
I was also impressed by contributions from hon. Friends and hon. Members, including the hon. Member for Liverpool, Wavertree (Luciana Berger), speaking for the Opposition. My hon. Friend the Member for Richmond Park (Zac Goldsmith) is completely right in saying that we have to win hearts and minds. That is where his measured tones are so much more effective than a hectoring style. That type of tone, reasonableness and thoughtfulness, help to win people round and to understand the extent of the challenges we are facing. As the hon. Member for Brighton, Pavilion (Caroline Lucas) says, climate change is happening now—a point supported by the hon. Member for Liverpool, Wavertree. We only need to look at what has happened this year to realise that time is not on our side. We have to act now and constantly up the pace at which we tackle these issues.
My hon. Friend the Member for Stroud (Neil Carmichael) talked about the need to encourage progress, not just to penalise bad behaviour. That is at the heart of the tone that we should be adopting. If we want to encourage people to change, we should be showing how much better things can be, rather than constantly telling people how bad they are at the moment.
My hon. Friend the Member for Bristol North West (Charlotte Leslie) picked up that theme. I liked her analogy of moving from judging to enabling—that is an effective comparison. She mentioned, as others did, the importance of China. I know that when the Prime Minister and others were in China last week, they were constantly impressed that China is not a laggard. China is determined to lead the world in clean technologies. It is rolling out onshore and offshore wind and other low-carbon technologies, and seeking to take a lead in carbon capture and storage. China sees an extraordinary business opportunity and wants to ensure that it takes a global lead.
As has been constantly emphasised, the scale of the challenge shows that we must have international action; it is not something that the UK can do on its own. Our proportion of global emissions is just 2%, so even if we managed to obliterate those over the next few years, without action being taken across the world we cannot begin to make the necessary progress to limit global temperature increases to no more than 2%. We all know that beyond 2% the risks of dangerous climate change are greater and the costs associated with managing the impacts rise sharply. That is why we are committed to working towards a global deal to limit emissions, and to provide support for developing countries to adapt to the inevitable consequences of climate change.
I did mean 2°C, and I am grateful to the hon. Gentleman for clarifying that for me. I am not sure what 2% would work out at, but 2°C is the figure we should be working to. I am grateful for that clarification and correction.
A legally binding global deal is the best way to secure a stable, transparent framework for action, build confidence for investors and reassurance for the developing world that developed countries will deliver their commitments, but as Copenhagen showed us, we must be realistic about when such a deal can be achieved. We all now recognise that expectations at last year’s Copenhagen conference became over-inflated. That is a point brought home by the hon. Member for Southampton, Test (Dr Whitehead), who speaks with such expertise on many of these matters. In reality, there was a lack of political will on the part of too many countries to reach a comprehensive deal. We need to win the argument that it is in countries’ political, economic and security interests to move towards low-carbon economies.
Although we will not agree a full legally binding treaty in Cancun, we can and must make solid progress. Cancun can set the stage for future negotiations and provide an essential stepping stone towards a legally binding agreement in the future. Our preferred outcome at Cancun would be to make solid progress on a package of issues that would benefit both developed and developing countries. That package could include bringing the emissions reductions offers countries have made since Copenhagen into the UNFCCC process; strengthening the measurement, reporting and verification arrangements, which will ensure progress on emissions is transparent; and establishing the structures for climate finance beyond 2012, including an international green fund for climate change.
Achieving even that will be challenging. All countries must be prepared to show flexibility in their positions to maximise the chances of success and progress. That is why the EU has signalled its willingness to sign up to a second commitment period of the Kyoto protocol, subject to certain conditions being met. But success does not depend solely what happens at the negotiating table. Given the challenges in securing a global deal, we must increase our support for practical action on the ground, in parallel with negotiations if we are to persuade other countries that taking ambitious action is in their economic and security interests. We must demonstrate the benefits of moving to a low-carbon economy domestically, and support others who are willing to do the same; encouraging them to deliver on their existing commitments to reduce emissions and go even further.
In that respect, I believe we have a strong record as a new Government in trying to achieve progress. We do believe in showing global leadership in the measures we are putting place to mitigate climate change. We have allocated £1 billion to the green investment bank, even in these difficult times, and made a commitment to come forward with additional funding. We are encouraging the most ambitious programme of energy efficiency improvements through the green deal, which will be the centrepiece of the energy Bill this winter.
We are providing £1 billion of investment to support the demonstration of carbon capture and storage technology—the most any Government anywhere in the world have allocated to a single project—thereby ensuring that the UK will continue to lead in that critical technology. The internationally renowned “2050 Pathways Analysis” helps us to consider some of the choices and trade-offs that we will face over the next 40 years if we are to move to a secure, low-carbon economy, and it allows us to explore the combinations of effort that will be needed to meet our emissions targets while matching energy supply and demand. We are taking action to switch from fossil fuels to cleaner and more sustainable green sources of energy by taking forward the renewable heat incentive, a world-leading scheme that provides long-term support for renewable heat technologies. There are also the feed-in tariffs to encourage microgeneration.
My hon. Friend the Member for Bristol North West mentioned the biomass facility that I was delighted to visit with her in her constituency. Another change that we have made will enable councils to generate their own electricity and sell it to the grid, freeing up a fantastic potential that has not been delivered in the past. My hon. Friend the Member for Stroud spoke about the critical use for technology in that area. British universities have global leading potential in the area. The genius of invention and innovation that is found in so many of our universities can provide fantastic opportunities to deal with the challenges we face. I am delighted that my hon. Friend, and many colleagues from all parties, are engaging with the Institute of Mechanical Engineers, because of the contribution that it can bring to the debate.
I shall now respond to some specific issues that have been raised. The hon. Member for Chippenham, and many others, raised the question of long-term financing. The United Kingdom is making a significant commitment to support action on the ground. The spending review provided £2.9 billion of international climate finance through the international climate fund. That will allow the UK to help developing countries to adapt to the impacts of climate change and move on to a low-carbon growth path. That fully funds the UK’s pledge to deliver £1.5 billion in fast-start finance between 2010 and 2012, including £300 million for reducing deforestation.
The £2.9 billion is new in that it is drawn from the rising aid budget. Part of the £1.5 billion to which I have referred relates to the fiscal years 2011-12 and 2012-13. That is included in the figure of £2.9 billion. Funding for years three and four of the spending review period represents a further commitment of resources for climate finance. The hon. Gentleman may like more detail on that, and I would be more than happy to correspond with him if any further clarification is necessary.
Such figures demonstrate the UK’s commitment to scaling-up climate finance to meet its fair share of the $100 billion of public and private international finance per year from 2020. We welcome the recent report from the UN Secretary-General’s advisory group on climate finance, which makes a number of recommendations on how to meet the $100 billion goal. We look to make good progress in implementing its recommendations.
We need things to happen now, and that is why we call for international bodies such as the United Nations framework convention on climate change, international financial institutions, the International Civil Aviation Organisation, the G20, and others, to take action in their areas on the back of the report, so that we can deliver progress at Cancun with a view to producing concrete proposals by the time of the climate change negotiations in South Africa next year. It is clear that public finance alone is not enough; we also need to mobilise private investment. That is why we have launched the capital markets climate initiative to help create the right commercial conditions to drive economic investment in emerging economies.
The fast-start programme has been mentioned. As I have said, the United Kingdom will provide £2.9 billion through the new international climate fund and the spending review to help developing countries to adapt to the impact of climate change and move to a low-carbon growth path. That fully funds the UK’s commitment to deliver £1.5 billion in fast-start finance between 2010 and 2012. My hon. Friend the Member for Richmond Park asked about the importance of bilateral agreement. We are absolutely clear that any action must be taken through bilateral and multilateral discussions. It will be a priority to deploy some of the finance to tackle deforestation.
The hon. Member for Brent North (Barry Gardiner) asked whether developed countries need to be clear about the finance they will provide to developing countries. We could not agree more about that, which is why we are pushing other countries to be transparent about how and where they are spending their fast-start finance. We support a Dutch-led website that allows countries to make information about their fast-start spends publicly available.
In his opening comments, the hon. Member for Chippenham asked about which AGF sources are a priority. He asked about the levy on aviation and shipping and the financial transaction tax. The report identifies a range of proposals on how to achieve the goal of £100 billion, and we now need to work with others to make that happen. The United Kingdom continues to work with the International Civil Aviation Organisation and the International Maritime Organisation to develop co-ordinated global solutions to tackle emissions from those sectors. Many questions need to be explored about whether proposals for a financial transaction tax offer a stable and efficient mechanism to raise revenue. Those are issues that the Government will take forward.
My hon. Friend the Member for Richmond Park asked about aviation, and we want to ensure that action to limit emissions from aviation is discussed at Cancun and in further negotiations next year. However, we must look at the potential perverse consequences that can sometimes emerge. It is clear that some freight is being brought by air into mainland Europe and then by lorry into the United Kingdom because of different levels of aviation tax in different countries. If we act unilaterally, we must be aware that the ingenuity of the business community will find ways around that, and it could be British consumers who end up paying without the important carbon savings being delivered.
My hon. Friend also asked whether the United Kingdom would support an end to World Bank lending to fossil fuel projects. As my right hon. Friend the Secretary of State for International Development said this morning, we will press the multilateral development banks to support a shift towards climate-smart lending across their portfolios. As part of that, the Government are reviewing the role of the multilateral development banks in energy lending. My hon. Friend the Member for Richmond Park has publicly asked the Department for International Development questions about that, and I am sure that the Secretary of State will be aware of the comments that he has made during this debate. He also asked whether we will press for reform on fossil fuel subsidies. We strongly support the G20 commitment to phase out inefficient fossil fuel subsidies. That commitment was restated at last week’s G20 summit, and I assure my hon. Friend that we will continue to raise the issue in our bilateral contact with counterparts in other countries.
We have covered many issues during the debate, but I will conclude with the extent to which there should be international agreement. We would all like to see the EU take an international leadership role in these debates, but we must also recognise that we have our own national perspectives to push forward. As a country with a strong Commonwealth link, we perhaps have a different perspective from that of other countries in the EU. Although we would all welcome greater EU co-ordination and a greater ability to speak with one voice on such matters, we also greatly value the ability of independent nations and Governments to speak on behalf of their own populations and the expertise that they bring to the debate.
The situation is not about us and China against the United States. This is a global issue and we must bring the United States with us. I am not sure that trying to bully the American business community will work. We must build bridges with the American people and the American Government to persuade them of the urgency of doing what needs to be done. We know that they are facing particularly difficult times, as are we. The work of international organisations such as GLOBE International plays an extremely important part, and in that respect I pay tribute to the work carried out by many hon. Members of this House. If we are to make progress, we must do so in a co-ordinated way.
My final point relates to forestry, and a couple of contributions have mentioned the programme on reducing emissions from deforestation and forest degradation in developing countries—REDD-plus. Our overarching goal is to maximise the contribution to global mitigation from forest and land management action in developing countries. We seek to achieve that by agreeing to strengthen the UNFCCC rules on counting emissions from forest management action towards the targets of developed countries. Those rules should incentivise action beyond business as usual and ensure environmental integrity, but avoid unfairly penalising countries that are practising sustainable forest management. We are also seeking an ambitious deal on reducing emissions from deforestation and forest degradation.
The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who leads on these matters in the Department, is talking to some of his international counterparts at this moment, which is why I have been standing in for him and responding to the debate. I hope that I have been able to reassure my hon. Friends and the Opposition Members who spoke that this is a matter of profound importance to the Government and we are determined to continue to make progress.