rose to move That this Housetakes note of the report of the Economic Affairs Committee on the Economics of Climate Change (2nd Report, HL Paper 12).

The noble Lord said: My Lords, I am delighted to be able to introduce this debate. It is more than a year ago since our report was published, on the eve of the last G8 summit at Gleneagles. Since then we have had the opportunity in this House to discuss climate change in the debate on 10 November, which was initiated by the noble Lord, Lord May. But eight months later, the subject remains, of course, as topical as ever.

Like all economic affairs reports, this one is evidence-based and non-party political. And once again, the report has been agreed by all members of the committee. My first thanks are to my colleagues on the committee for collectively making it possible for us to deal in a dispassionate and, I hope, effective way with so sensitive and difficult an issue.

I also want to say a particular word of appreciation for the work of the late Professor David Pearce, our specialist adviser. David Pearce was one of the founding fathers of environmental economics in this country. His international reputation was reflected in the lifetime achievement award ofthe European Association of Environmental and Resource Economists, which he received in June last year, only weeks before the publication of our report. He was a truly outstanding adviser to the committee, and our report would certainly not have been produced without him. So his sudden and early death, only a month after our report was published, is a terrible loss, not only to his family and friends but to the world of environmental economists.

I also wish to say how much we appreciated the work of our Clerk and his advisers on the team. They were a great help to us.

The report received considerable publicitywhen it was published. Some of this reflected the international political context at the time. Climate change was central to the G8 agenda at Gleneagles, and the report appeared just as the world leaders were gathering. But I believe its reception also owed much to the fact that it was addressing the economic aspects of the subject. Many distinguished economists were working on climate change, and we took evidence from a number of them, but it is usually their scientific colleagues who receive the lion’s share of media attention.

Perhaps as a result of the relatively fresh perspective that I believe we were able to bring to the subject, most of the publicity received by our report on publication was very positive. Of course, there were critics too, although it subsequently emerged that some of them had not actually read the report when first pronouncing on it. When some later got round to doing so, one or two even acknowledged that they might have misjudged it.

However, the Government’s response, when it eventually emerged, was very disappointing—grudging in tone and generally negative on substance. I wrote in February to the then Secretary of State, Margaret Beckett, and to other Ministers, including the Prime Minister, to express our disappointment at the Government’s response. I noted that the response negativity was all the more surprising when it appeared increasingly that in important aspects, the Government’s thinking is close to the views set out in the committee’s report.

I referred then to the Prime Minister’s comments at the Clinton summit in New York in September and on subsequent occasions, which indicated a rather radical change in direction for the Government. The Prime Minister noted that he was changing his thinking on climate change and that there was a need for “brutal honesty” about the politics of how we deal with it. On Kyoto, he noted that there,

“is a disagreement…It’s not going to be resolved”.

He also said:

“I don’t think people are going—at least in the short term—to start negotiating another…Kyoto”.

All this was entirely in line with the thinking of the committee.

The energy review published this week appears to be the work of Jekyll and Hyde. On the one hand, there is a recognition that nuclear power must play a part in Britain’s energy supply mix. This realism is welcome—indeed, long overdue—but I fear it will take a number of years before there is a significant increase in nuclear generation. On the other hand, the shortcomings of the 2003 review, including in particular what we felt was the utter lack of realism about the role of renewables, has unfortunately been carried over into the recent review. However, I am always optimistic, and I hope that the noble Lord, Lord Rooker, whom I have known and admired for more than 30 years, since we entered the House of Commons on the same day, will produce a more measured, realistic and positive response from the Government that is more consistent with the realism of the Prime Minister than with some of the fantasies of the old Defra.

On the central point of our report, the Government did immediately follow the advice of the committee. Given the importance and complexity of the issues involved, we were very clear that the Treasury needed to play a much more extensive role on climate change within government, so we were delighted that within days of publication of our report, the Chancellor announced the review of the economics of climate change to be led by Sir Nick Stern. That was the correct thing for the Government to do and we congratulate them on their action. The committee has been following Sir Nick Stern's review with interest and we very much look forward to his report.

I am hopeful that the Stern review will readily endorse many of the committee's conclusions and recommendations. For instance, there is a risk that international negotiations will not secure large-scale and effective action on mitigation. The Stern review might take a more sanguine view of the risk than we did. But there is clearly some risk. We therefore want to see a more balanced approach to the relative merits of adaptation and mitigation, with far more attention paid to adaptation measures.

Another key recommendation in our report, which I feel confident the Stern review will go along with, is the need for a far stronger focus on technology and research and development. That does not, in our view, mean a little more of what is being done now. It means a step change to a research and development effort into carbon-free and low carbon energy sources of an altogether different magnitude. In our report, we suggested that the US Apollo programme to put a man on the moon provided a precedent for the sort of extraordinary effort and priority that is needed. On that point, the recent energy review is disappointing. I see no evidence that the Government are committed to an effort on the scale of what is required on that front.

As I have already said, I hope that the Sternreview will follow the Prime Minister as well as the committee in taking a “brutally”—the Prime Minister’s word—realistic view of the prospects for effective emissions controls. But, in any case, the committee outlined concerns about the workingsof the relevant international body, the Intergovernmental Panel on Climate Change. There is perhaps room for debate about the significance and full implications of the shortcomings in the IPCC process. However, the IPCC has an exceptional, largely unquestioned, authority in this area—perhaps unparalleled in United Nations agencies working in other fields. In such a situation, what seems indisputable is the need for an organisation and a process whose procedures, objectivity and balance are not only beyond question, but are seen to be beyond question. For all the fine work done by the IPCC, to which I pay tribute, I fear that that is not the present position.

Finally, I refer the House to the concerns that the committee expressed that UK energy and climate policy appeared to be based on some very dubious assumptions about the roles of renewable energy and energy efficiency. We also pressed for a proper carbon tax to replace the present climate change levy, and we urged the maintenance of as wide an energy portfolio as possible, with the retention of nuclear power. On that last point, the energy review is, as I have said, encouraging.

Although it is right that renewable energy and energy efficiency are given priority, it is disappointing not to find in the review much more realism about what they can be expected to achieve. Also disappointing is the lack of commitment to the introduction of a carbon tax. Some very distinguished speakers are taking part in this debate, which I am delighted about. Iam very much looking forward to hearing all the contributions, including the maiden speech of the noble Lord, Lord Teverson. I beg to move.

Moved, That this House takes note of the report of the Economic Affairs Committee on the Economics of Climate Change (2nd Report, HL Paper 12).—(Lord Wakeham.)

My Lords, I first congratulate the noble Lord, Lord Wakeham, and his committee on their report, which bears evidence of a great deal of thought and work. At least, it is a bit different to see something from a gaggle of economists writing on environmental issues. It is said that one advantage of being an economist is that you get to write about money without ever having to make any. I am pleased to see that this report is eminently practical in its implications.

In our society today—indeed, throughout the world—we are having to deal with the ripple of two types of intersecting shock. One is certainly climate change shock. For a long while, climate change seemed to many people to be a kind of abstract thing for the future—a possibility that was continuously disputed within certain sectors of the scientific community. Although I gather that some sceptics will speak later, having looked at the literature extensively for the past four or five years, I do not see how it is possible to hold that position any longer. Climate change is in the here and now. When a city in the richest country in the world can be overwhelmed by flooding within 24 hours, it is an indication that something is different in the world. Of course, we do not know whether what happened in New Orleans was influenced by climate change. But most of the models of climate change centre on the Caribbean as a source of major perturbations in world weather patterns.

Energy price shock is just as important. It plainly intersects with climate change shock because some of the solutions to the two clearly overlap. One can see the difference today even from a year ago in the report, which is quite muted on the theme of energy, but most people now agree that energy pricing looks set to increase and that many of the risks that we face in the world, including the risk of terrorism, overlap with these other two types of shock. Most noble Lords will know that there was a terrorist attack on one of the major oil installations in the Middle East about a year ago. That attack failed, but it could have taken out about one-tenth of the world energy supply in one single attack, so we are dealing with an overlapping range of risks here.

I find a lot in the report that I agree with. It is right to say that economics should be brought into the centre of debates about climate change and that the Treasury should play an important role alongside those arms of government that specialise in dealing with the environment. I am pleased to see that at least some progress has been made in that direction. I believe that it is right to put stress on technology and research and development, and what the report calls a “Kyoto plus”. We all know that Kyoto is inadequate, partly because the Americans have not signed up to it and because it covers only part of the world and, as we all know, even if it were fully signed up to, it would get nowhere near to resolving the issues that we face with climate change.

It is also right to say that every nation must have diverse energy sources and that nuclear power must be part of that mix—although even the advocates of nuclear power recognise that there are major problems with it. It is a long-term solution, and some of the crises involved have become short-term crises, especially around energy supplies. Having looked at this issue in detail recently in relation to European legislation, with which I was involved, I believe there are major problems in setting up a scenario in which the private sector would be able to play the major role in financing new nuclear power stations. We should all watch closely the experiment in Finland, with that country’s new nuclear power station.

However, there are three critical comments that I should like to make about the report. First, I am a bit puzzled by the fact that it does not mention the theme of ecological modernisation. That is perhaps the dominant theme of the relationship between economics and the environment and has been prominent in the literature for at least the past 10 to 15 years. The idea is controversial, but it proposes that there are many circumstances in which environmentally friendly technologies are also more efficient than those which are not environmentally friendly or not environmentally neutral, and that environmentally sophisticated technologies might in principle have bigger markets than those which are less sophisticated or polluting. Of course, you can supplement those things with a range of energy taxes to make them more saleable and marketable in local and global markets.

Let us consider the example of the Toyota motor car company. Toyota has recently overtaken General Motors to be the largest car manufacturer in the world. There are many reasons for this: Toyotas do not break down very often, as anyone who has owned one knows. But most analysts agree that it is also because Toyota is by far the most advanced manufacturer of environmentally friendly cars, especially hybrid cars such as the Toyota Prius. Toyota is also creating some very interesting innovations, well beyond the Prius. The next generation of Prius motor car, which is due out in a year and a half’s time, is reckoned to do more than 100 miles to the gallon and in other ways to be more environmentally friendly than most cars on the road.

In the report, the economics of the environment seem to be discussed almost wholly in terms of brute cost. It mentions the IEA estimate, which the noble Lord also mentioned; but one needs a much more sophisticated analysis than that of the net costs of the intersection between new technological innovation, global technological innovation and the costs of sustaining more environmentally friendly policies. That also has relevance for competitiveness because the Japanese are well ahead of the Europeans and Americans in some of these markets. If you go to California the Toyota hybrid cars are the most sought-after cars—there is a three-year waiting list for them there; so they are eminently marketable.

My second comment would be that we should put increasing emphasis on lifestyle change. The report says something to the effect that action to tackle climate change must be “potentially life-changing”; but there does not seem to be much development of that in the report. We cannot face up to the dual challenge of climate change shock and energy shock without lifestyle change. There are many areas here in which there is a win-win situation. We know, for example, that congestion charging has been successful in London. It certainly has an environmental impact and an impact on energy use. I fully support the Mayor’s intention to increase the congestion charge for the most environmentally unfriendly vehicles.

What we have to do is to rescue environmentalism from the hold of the Green movement, partly because the Green imagery is all wrong. You cannot go back to nature; there is no such thing as “nature”, in a sense, because technology is now so much involved with the natural world. Many things that we have to deal with are no longer directly natural. But also the Green movement tends to be hostile to science, and science and technology have to be at the front line in our attempts to cope with the influence of the dual agenda of shocks.

It is interesting to look at those countries thatare in the vanguard. In Sweden, for example, the Government have declared that there will be a fossil-free economy by 2020. That is not a long time ahead. One reason for that is that Sweden, unlike most other industrial countries, took action in the first oil crisis of the 1970s. So, too, did Japan, where consumption of oil has remained stable over the past 30 years even though the Japanese economy has grown by three times. If you look at the statistics, even the best performing European countries do not get close to that figure.

My third point is that not only economics are relevant to climate change and fuel change shock. The other social sciences are also relevant, such as sociology and psychology, because we are dealing with different risk situations from the past. We are dealing today with what I call new-style risks. Old-style risks are those that you can measure, as you do in an insurance company. Every time you step into a car, I can tell you what your chance is of being injured in an accident, but you cannot do that for new-style risks. Climate change is a manifestly obvious version of a new-style risk, but so are avian flu and the many things that now threaten us. In Britain we have been used to living on a fairly benign island, but catastrophic risk is something that every country has to face, and I am not sure that the UK is sufficiently mobilised to do that.

In conclusion, there is a range of studies, onwhich I am sure other noble Lords will speak, onthe intersection between competitiveness and environmental innovation. Among the best I know of are those by Michael Porter and his colleagues at Harvard, which show that the introduction of environmentally friendly technologies is at least neutral in respect of economic competitiveness in most situations.

My Lords, as a newcomer to the Select Committee on Economic Affairs at the time when it prepared its report, I approached the subject of climate change with some diffidence. That is not to say that I had no interest, either past or present. My present interest is as a member of the supervisory board of Siemens AG, a leading supplier of power generation plant and automotive equipment, among other things. My past interest was as a member of the board of the Mobil corporation, now part of ExxonMobil. Any lingering scepticism I may have had in that latter capacity about the gravity of the threat of climate change and the significance of greenhouse gas emissions has since gone. I believe that this is one of the greatest challenges to face us of all time, that the case for scientific action is made, and that the paramount issue now is what action to take.

It is here that my scepticism kicks back in. In choosing lines of action we must not miss the wood for the trees. We need to accept that the best that the UK can do of itself in controlling carbon emissions is to be exemplary—thoroughly desirable, but quite insufficient. Even if we cut the UK’s CO₂ emissions to zero, there would be no measurable impact on global temperature in the foreseeable future. Only Europe as a whole can make a dent in the problem. The totality of those who ratified the Kyoto Protocol—the Kyoto club—could make only a rather bigger dent. What we have is a manifestly global problem and it can be tackled effectively only on a global scale. The bulk of greenhouse gas emissions—and a growing proportion—comes from the developing countries together with the United States. If they are not party to the solution, there will be no solution.

So, if we think we can lean heavily on the Kyoto club’s carbon emissions trading schemes to provide a global solution to the problem, we are mistaken. Even if the current defects in the architecture of such schemes can be remedied, we cannot bank on persuading the developing world and the US to subject themselves to that level of discipline, certainly not in time to be effective. That is not to say that I am advocating the abandonment of a European emissions trading scheme; I am simply pointing out that, were it entirely successful, it would still be inadequate, and that consequently it would not be sensible to push it to the point of impairing the competitiveness of European industry. We also have to accept that we are not going to suppress an ever-increasing global demand for energy. It is wishful thinking to suppose that any scheme, no matter how elegant, has the power to halt the economic growth of, say, China or India, let alone induce the necessary behavioural change across the globe in time.

Face up to those facts and the issue becomesquite stark. We have to find the means of meetinga growing demand for energy, and indeed transportation, without emitting vast amounts of CO₂ into the atmosphere or creating other environmental disasters.

In short, the key issue is technological. Technology and industry got us into this fix and it is for technology and industry to get us out of it. If we can accelerate—and acceleration is the key point—the provision, at scale, of competitively priced, environmentally friendly alternatives to fossil fuels or effective carbon capture, the problem will fade away. Remove the externalities and the market can be left to take care of itself. There is every reason to believe that technology will be able to meet that challenge. We also have a wide range of potential options to pursue: carbon capture, of course, as well as photovoltaics, hydrogen cells—you name it. The problem is not one of technological options but one of time. We need to bring forward solutions at scale, but to do that we need a massive boost in our efforts to address the technological and cost issues. That in turn means finding and applying sufficient financial and other resources to do the job.

The noble Lord, Lord Wakeham, mentioned the analogy of the moon shot as a means of marshalling the resources needed to speed up development of technologies. I think that a closer parallel would be that of an arms race. If we could provoke the equivalent of an arms race in the context of combating global warming, we would stand the very best chance of getting the right results in time. After all, if vast public resources can be found to accelerate technologies capable of destroying the world, surely it is not beyond the wit of man to devise the means of accelerating technologies capable of saving the world.

Where would the financial and technological resources come from? Here the members of the Kyoto club do have the resources to go it alone. They have the scientific base, the engineering capability and the economic strength not only to participate in such an environmental arms race but to get out in front. In our report, we urge the Government to take a leadin exploring alternative “architectures” for future protocols, based perhaps on agreements on technology and its diffusion. More experienced minds than mine will, I hope, take this forward, but perhaps I can make a few tentative suggestions.

First, reach agreement among the Kyoto club members to levy a straightforward carbon tax ineach of their countries. Secondly, agree to the hypothecation of the proceeds of that tax, in whole or in part, into a fund devoted to the accelerationof the development of competitively priced, environmentally friendly technologies for both power generation and transportation. The fund will be managed by representatives of the Kyoto club: Europe, Japan and so on. Incidentally, I believe that people would understand and accept such a tax. It would be levied not in an attempt to change our behaviour, which most of us tend to resent, or to offer us the moral comfort of donning an environmental hair-shirt, but simply to finance practical solutions to a problem that affects us all. Thirdly, do not specify the technologies to be used—governmental bodies nearly always get that wrong. Just set out the desired outputs, cost parameters and timescales and leave it to industry to take it from there.

Finally—and here is the sting in the tail—place the development contracts solely within the member countries of the Kyoto club. The resulting European-Japanese industrial axis would be sufficient to trigger our environmental arms race. The United States would have to follow suit; to do otherwise would be to risk being overtaken in the next generation of both power generation and transportation technologies. Neither is something that the Americans could really contemplate.

I appreciate that such an approach may seem too radical, too direct or just too simplistic, but I make no apologies for it. If ever there was an issue demanding radical and direct action, this is it. We must not let our understandable preoccupation with getting things right in the UK and the European Union lure us into thinking that that is all we must do. This is a global issue that demands global solutions. The Kyoto club has tried persuasion and leadership by example in emissions trading schemes, but it all has the makings of too little, too late. Now is the time for direct and focused intervention in the market and the application of financial and technological resources on a scale commensurate with the environmental threat. It is also an initiative where the UK Government might take the lead.

My Lords, I declare interests as a former chairman of Shell Transport and Trading and as a current adviser to Climate Change Capital and a variety of other bodies concerned with energy policy, climate change, investment and risk management. I, too, am grateful to the noble Lord, Lord Wakeham, for the opportunity to discuss the report of his committee. The report is very wide-ranging and I shall have time to touch on only a few aspects.

Modern civilisation has developed and prospered during a 5,000-year period of relatively stable and benign climate, and we have built a costly infrastructure of modern western society to fit those conditions. The rapid changes in climate that we are now experiencing will make many parts of that infrastructure inappropriate or insufficient and we shall have to do our best to adapt. That we do for ourselves. For our children and our grandchildren, we must at the same time tackle the causes of climate change and find energy sources—as I think all the previous speakers have said—that do not depend on fossil fuels. That is something that we shall have to do anyway within some decades as oil and gas become scarcer and more expensive.

It is therefore timely that we should consider the costs of these changes and what provision should be made for adapting to the new circumstances and for mitigating the causes of climate change. Both of those depend on the science, but the science of complex natural systems is particularly challenging. There is rarely, if ever, complete certainty and total understanding. I feel that the committee struggledin its efforts to come to terms with that. It ispretty meaningless to state, along with the US Administration, that the science is uncertain. Science is about uncertainty. It is not a matter of whether everything is known; it is a matter of whether enough is known to answer a particular question with a reasonable degree of confidence, and that may be a matter of experience and judgment. If that question is whether anthropogenic climate change is happening and is a threat to the planet, science gives an unequivocal affirmative. What is uncertain is how, when, where and how severely the consequences will be felt.

In the year since the report was written, the situation has become both clearer and more worrying. It looks as if 2005 was the hottest year since records have been kept, and that the two most recent decades have been the hottest certainly for 400 and possibly for 1,100 years. More worrying still is that, as is now recognised, the great masses of polar ice that help to keep the earth cool are being affected by rapid break-up processes that were not previously thought to be important. This is work in progress, but the implications are that both sea level and temperature rise may be faster than previously thought. Frankly, to assert, as some continue to do, that this is simply natural variation in the earth’s climate, when these changes are quantitatively and qualitatively predicted from our history of burning fossil fuels, seems to me perverse.

The Intergovernmental Panel on Climate Change, which comes in for some scathing criticism in the committee’s report, is a truly remarkable body. It is remarkable because it is unique in the history of science—more than 2,000 scientists from a wide range of disciplines and more than 100 countries collaborate in an attempt to analyse and understand the complexities of our climate. The process is not perfect, but the results are astonishing. The panel issues periodic progress reports. The one that the committee considered and criticised was published in 2001, reflecting work done largely in the 1990s. Some of the concerns that the committee lists in its conclusions had already been answered—for example, probability analyses of future temperatures, which had been available for some time. The committee quite rightly raises the question of political interference with the IPCC, but the report reads—perhaps this is not the intention—as if the fault rests solely with the IPCC. The greater responsibility is carried by Governments who fund the IPCC and without whose approval reports cannot be issued.

Indeed, in a different vein, in the course of a different inquiry, your Lordships’ Select Committee on Science and Technology received evidence that one of the largest corporations in the world had written to the White House urging that the appointment of a senior IPCC scientist of whom it did not approve should be blocked. When interviewed by our committee, the company did not deny this and was unable to give an explanation. I think everyone would agree that this is unacceptable.

The committee is right when it urges that more attention be given to adaptation to the likely effects of climate change. As more than one witness pointed out, both adaptation to climate change and mitigation of its causes become more affordable if we make the necessary changes as part of the regular cycle of infrastructure renewal. Things have to be renewed anyway and, if we do so with this in mind, it need not necessarily be more expensive. Much of our infrastructure is renewed every 30 to 40 years and potential costs could be avoided by acting now. The Association of British Insurers makes the same point in its paper Financial Risks of Climate Change. The vulnerability of flood defences, water resources and transport and energy infrastructure all have to be reconsidered.

Although our domestic agenda is important, the international agenda is more so. I am afraid that I totally reject the committee’s disparagement of the Kyoto agreement. Self-evidently, Kyoto will of itself do relatively little to achieve emissions reductions, as, indeed, the noble Lord, Lord Vallance of Tummel, pointed out, but this is the first unique and essential step to what follows in 2012.

That said, success or otherwise in controlling greenhouse gas emissions will not be determined in the UK, or in Europe, or in North America, but, as has already been pointed out, in the developing countries, particularly India and China. China is commissioning a large coal-fired power station every five days; its priority is to meet its burgeoning industrial energy needs and to mitigate the energy poverty that pervades the western two-thirds of the country. Capturing and storing the CO₂ from these power stations is essential but is currently seen as too expensive. It follows that success in controlling global emissions will depend on the extent to which the west is able to support the developing countries in achieving their industrial revolutions more cleanly than we did ours. Improved technology is part of the story, but it will also take money.

My Lords, I speak in this debate with some diffidence as my speech will be different from many of the others, not least because I am neither an economist nor a scientist. I feel as if I am entering an arena where angels, let alone bishops, should be fearful of treading.

I, too, congratulate the noble Lord, Lord Wakeham, and the committee on the report, but I think that I am not the only one who found some parts of it good and others disappointing. It is, if I may say so, a curate’s egg, and I know a bit about curates and their eggs.

In the very first sentence of the report’s introduction the words of the Government’s Chief Scientific Adviser are repeated. He said that,

“climate change is the most severe problem that we are facing today”.

Then as I read it, the report seemed almost to play down the seriousness of the problem: it does so as much in its tone as in its content. The very first page of the report states:

“UK energy and climate policy appears to be based on dubious assumptions”.

The report continues:

“If”—

we should note the word “if”—

“climate change is as serious as most scientists claim”.

But to be fair, at least the report goes on to say that the action required to tackle climate change will,

“have to be serious and potentially life-changing”.

It will certainly have to be serious. I believe that it will have to be not just potentially life-changing, but, as the noble Lord, Lord Giddens, has said, it will have to be for real. I find it surprising that we do not have more mention of the fact that reduction in emissions will have to play a key part in every aspect of our lives.

It is good that the report casts a critical eye over some of the more hyped-up claims about climate change, yet I wonder whether it has not given too much weight to a minority of scientific opinion, to such an extent that its perspectives have become a bit skewed. Why, for example, was so little evidence taken from the scientists on the IPCC? I wonder again whether too pessimistic a view has been taken—but I suppose that is what economists tend to do—about the will and capacity of human societies to do something about climate change. I wonder too whether the committee ignored what has come to be called the tipping effect—the time when growing human awareness and increased understanding of the impact of our behaviour leads to a tipping over into significant action.

All around the world people have begun to realise the seriousness of the situation that we have made for ourselves. All around the world people have begun to recognise that we have to begin to live differently, that we have to make different decisions about how we are to live our lives, and so do our legislators.

I had hoped that the committee would have taken more account of the Royal Society’s work, and thatof all the science academies of the G8 countries, together with China, India and Brazil, which make it crystal clear that climate change is real, is caused by human activities and has the most serious consequences. So what should we be doing? There is, of course, no single answer to the magnitude of the problem, rather a wide range of activities needs to be undertaken.

First, we can adapt to some change—that is where the report is strong. Secondly, we can reduce inputs of carbon dioxide by reducing wasteful consumption. Thirdly, we can capture some of the carbon dioxide released by burning fossil fuels; and fourthly, we need to move to the various forms of renewable energy that do not put greenhouse gases into the atmosphere.

The committee makes a strong case for adaptation. Faced with the issues of climate change, it states that we need to give greater recognition to the need to adapt. That argument appeals to that in human nature which wants to invent new technologies, which wants to do everything it can to ensure that the lifestyle that we have come to enjoy is not threatened, and certainly is not changed. The trouble is that it is the strong and wealthy societies and the strong and wealthy within those societies who are those most capable of adapting. Once again, it will be the poor and the weak who will suffer the consequences.

We all know that climate change will affect the poorer nations the most and that climate change is likely to result in an even greater economic divide between the richer and the poorer nations. One of my fears is that adaptation alone will be less a solution and more a postponement of the problem. One thing that is urgently needed is an estimation of the cost of adaptation for any scenario worse than the minimum one. I am surprised that, as economists, the committee has not encouraged that to be done. Furthermore, unless I am very much mistaken, the report did not take any evidence from the world of insurance. The people in that industry are the ones who know about the costs of risks.

Adaptation alone will never be enough to tackle the impacts of climate change. Rather, we need to tackle the root cause of the problem, which is the behaviour of humankind. To continue to adapt in the face of rising emissions is largely futile. We cannot ignore the causes any longer and deal only with the effects. We are going to have to recognise that climate change is a limit to our present lifestyles and ultimately to our greed. It is not simply another challenge to our present patterns of consumption which we need to find ways to overcome.

As we all know, the consequences of global warming will not go away. Reduction of emissions must be part of our response, as has investment in renewables, which is crucial. I welcome, too, the committee’s suggestion that carbon tax should replace the climate change levy for the reasons given by the committee. And I say with some reluctance that I have come to agree with the committee that the nuclear option will have to be pursued. But I would make a plea that nuclear fusion, which offers one of the few options of large-scale emission-free production, needs actively to be pursued, researched and resourced—not least the present work being carried out at Culham.

The future of God’s Earth is at stake here. In a universe in which I believe every part is created, known and loved by God and which has been entrusted to us as a gift for our responsible care and stewardship, every part—not just our own little part—matters. The simple test, as has already been mentioned, is whether we can leave this Earth a better place for our children and our children’s children.

A little while back I paid a visit to Botswana, where we have a link with that diocese. I was taught a lot there, not least an African insight that suggests that we are not the masters of nature, but we are all part of it. To meet the challenges of climate change, whether they are economic, scientific, social, spiritual, national or international, will take courage, commitment and the ability not only to think about ourselves, but to think about others and to act for others, including generations yet to come. We can best do that by laying aside all private interests, prejudices and partial affections. That is what we pray daily for in this House. So, I pray that, both as individuals and as a nation, we have the resolve todo that.

My Lords, I declare an interest as an adviser to Macquarie Bank, which manages and invests in infrastructure and utilities, including renewable energy. As a member of your Lordships’ Select Committee on Economic Affairs,I pay tribute to the canny and economical chairmanship of the noble Lord, Lord Wakeham, which certainly restricted our emission levels and brought us to a unanimous conclusion.

Our report, The Economics of Climate Change, was published almost exactly one year ago and since then the debate has moved on. Our report has contributed in part to the progress made since. While, last July, we welcomed the Government’s recognition of the central role of economics in considering climate change, we further argued that the Treasury should broaden the scope of its interests in aspects of climate change and that, in our view, it should look at those issues that demanded more attention. Our report asked that the public be told more clearly about the likely costs and benefits of climate change control and that there will undoubtedly be winners in some countries and losers in others. We also argued that if climate change is as serious as most scientists claim, that was all the more reason to be frank and realistic about the economic impact on individuals and countries.

Public attitudes may be more environmentally aware, but people should know the costs of controlling and mitigating greenhouse gas emissions and of moving away from our carbon-based economy. Our committee felt that scientific research, political policy and public debate were still overly focused on mitigation of greenhouse gases to the detriment of efforts to understand the relative costs and benefits of adapting our societies to what might well be the inevitability of climate change that is already under way. Mitigation and adaptation are not mutually exclusive by any means, but both are costly. Surely, then, the rigorous analysis of their competing priorities across Government would best be conducted by the Chancellor and the Treasury.

Our report had, of course, many other conclusions and recommendations, most of which other noble Lords will touch upon. That may explain why it took the Government four months to produce their official response. That response—like others I confess to having had a hand in while in Government—hadall the traditional characteristics of departmental defensiveness. But it was ever thus; and, anyway, by the time the response appeared, the dogs had barked and the caravan was moving on. More important was the fact that our Select Committee report anticipated, as the noble Lord, Lord Wakeham, said, the Prime Minister’s statement last summer that the international community should move beyond the limitations of the Kyoto process and explore a wider, more radical range of options.

Again, last summer, following our call forTreasury leadership, within weeks, an inquiry into the economics of climate change was announced under the leadership of the head of the Government Economic Service, Sir Nicholas Stern, reporting to the Chancellor and the Prime Minister. The Stern review has been active for almost a year and is expected to report later this year. It has already published useful discussion papers asking what the economics of climate change are. Our report concluded that some issues were still clouded by scientific uncertainty, as has been mentioned. However, the Stern review’s interim conclusions are interesting. They are that climate change is a serious and urgent issue which has already had significant impact; that uncertainties may remain about the nature and scale of longer term impacts, but some risks are more serious than at first appeared; that the problem is global, as are its cause and consequences; that impacts will be uneven and that the poorest countries may suffer the most, as has been noted. The Stern report states also that the current pathway of emissions is unsustainable and that we must therefore go far beyond the actions currently agreed if we are to stabilise greenhouse gases.

In other concerns that perhaps echo more closely our Select Committee’s report, Sir Nicholas also underlined that the economic challenges are complex and that effective collaboration must be based on shared incentives and effective institutions. He said that effective action requires an understanding of how the mitigation of greenhouse gases may affect economic growth and that, importantly, and as our committee noted, an equitable international response must include action on both adaptation and mitigation. These are not choices. If climate change is inevitable over the next 30 years, some adaptation is essential. Naturally, Sir Nicholas also concluded that a combination of policies, institutions and regulations are required, along with clear, long-term incentives for the private sector and for developing countries. Obviously, there is much there on which we can agree with Sir Nicholas, who has stressed the,

“need to have a deep understanding of the economics of this complex problem”.

Meanwhile, I welcome the other government initiatives that also address some of the concerns expressed in our report. This week, we have had the energy review from the Department of Trade and Industry with far-reaching proposals to ensure energy security and to counter the threat of climate change. Our Select Committee report argued for the retention of nuclear power. The energy review confirms that nuclear, as a low-carbon energy source, has a vital role to play and promises that the market will be given a clear basis for the necessary private investment in new nuclear power stations.

The Economic Affairs Committee also saw as a positive result—I am sure that many noble Lords will be thankful for this—the fact that there is a balanced approach in the energy review. The noble Lord, Lord Wakeham, expressed disappointment about the lack of realism surrounding the projections on renewable energy. That is certainly something to be argued about, but the review proposes increasing the output from renewable energy fivefold to 20 per cent, with new technologies also encouraged and new opportunities for smaller, decentralised energy sources. So we look forward to a more detailed explanation of how the difficulties in these areas will be overcome.

In addition, there will be a big push on energy efficiency. Inefficient electrical goods will be phased out, with potentially enormous gains. A remarkable7 per cent of household electricity can be consumed just by leaving products on standby. A further hope is that coal can be cleaned up and that carbon can be captured and stored safely in our old North Sea oilfields. We are promised that planning permissions will be accelerated, but we were promised that in the past and so we shall see. Let us hope that the inescapable consultations will also be accelerated.

We must now await the promised White Paper on energy at around the turn of the year, along with the Stern review on the economics of climate change. If both now come to their expected conclusions, I believe that this House, through its Questions, debates and committee reports, will have played a useful part in shaping both energy and climate change policies in more productive, parallel courses. As the noble Lord, Lord Vallance, and others have said, those original contributions continue. I trust that we have also played our part in getting Her Majesty's Treasury more fully engaged in co-ordinating and leading government policy on climate change.

My Lords, like the noble Lord, Lord Macdonald, I was a member of the committee and I echo his tribute to the superb chairmanship of my noble friend Lord Wakeham. I also echo my noble friend's tribute to the late Professor Pearce, our special adviser, and to our admirable Clerk, to whom we continue to be greatly indebted. I sense that in this debate I shall, to some extent, be swimming against the tide. That is a slightly slower process, so I apologise in advance to noble Lords if I take a little longer.

I start with what is indisputable, or at least what is generally accepted as fact. During the 20th century as a whole, the atmospheric level of carbon dioxide increased by around 30 per cent. There are natural sources of carbon dioxide, but it is likely that the increase was due overwhelmingly to man—that is, it was anthropogenic. At the same time, there was a warming, but it is surprising how small the increase in temperature was. Over the 20th century as a whole, the average mean global temperature rose by two-thirds of a degree centigrade. If the temperature tomorrow is two-thirds of a degree centigrade different from the temperature today, I wonder how many noble Lords will notice it. I am talking about a difference from one day to the next as compared with a two-thirds of a degree increase in temperature over the century as a whole.

Unlike the emissions of carbon dioxide in the atmosphere, that increase has not been a steady process; it has come in fits and starts. I shall give the broad figures, which are generally accepted, so I do not need to take much time over them. Before 1915, there was no change at all; between 1915 and 1945, there was a considerable spurt; between 1945 and 1975, there was a slight cooling—indeed, at that time Professor Lovelock and others were saying that this was the precursor of a further ice age; and, from 1975 to 2000, there was another spurt of roughly the same magnitude as the first. We know that there is natural variation in the climate as well, so how much of that second spurt was due to natural variation in the climate and how much was due to carbon dioxide emissions and their anthropogenic greenhouse effect? Of course, no one knows. The Government's response to our report states that the Met Office considers that more than 50 per cent of warming in recent decades is attributable to anthropogenic sources of greenhouse gases. Let us assume that the Met Office's best guess is right and that more than half the 0.4 per cent increase during those decades—in other words, about a quarter of a degree centigrade—was due to carbon dioxide. That is the 20th century.

I turn to the 21st century. I hate to differ fromsuch an eminent scientist as the noble Lord, Lord Oxburgh, but the Hadley Centre chart shows that there has been no further increase in global temperatures since 2000. I make nothing of that because no one knows what will happen in the future, but the warmest year is still 1998. So global warming has not yet happened to any significant extent, and yet one hears all the time that any unusual or television-worthy event—from Katrina downwards—must be due to global warming. But, again, that is not the view of the experts. The experts on tropical storms set up an international panel, which included the tropical storm expert for the Met Office. The panel reported:

“The main conclusion we came to was that none of these high-impact tropical cyclones could be specifically attributed to global warming”.

That is not surprising, because there is hardly any global warming anyway.

Why has the 30 per cent rise in atmospheric carbon dioxide had so little greenhouse effect? I am not a scientist, but it is not so curious when one recalls that the greenhouse effect is overwhelmingly a product of water vapour, whether in the form of clouds or otherwise. Again, experts differ in their views, but that accounts for between 75 and 95 per cent of the greenhouse effect. It is perfectly true that carbon dioxide is the biggest single component of the other5 to 25 per cent. That puts the matter into perspective.

Going off at a slight tangent, I should add that it also puts into perspective the view that is constantly put outside this place that carbon dioxide is a form of pollution. We have not heard that said here and I would not expect noble Lords to use those words. Carbon dioxide is no more a form of pollution than are clouds of water vapour. Carbon dioxide is a life force; plants require it to flourish. Indeed, the more carbon dioxide there is in the atmosphere, thebetter the development of plant life, which is notaltogether a bad thing. Incidentally, the process of photosynthesis is more efficient with a greater degree of carbon dioxide, so plants need to extract less water from the soil.

The past is clear and the argument turns to the future. As our report says, the IPCC, which is well known to this House, has a number of scenarios that suggest that over this century the temperature might rise between 1 per cent and 6 per cent. As we point out in our report, that is based partly on demographic and economic assumptions that are highly implausible and which are not in any way central. In other words, there is a considerable upward bias on the basis of those assumptions on the economic side. That is what generates the amount of carbon dioxide projected in the scenarios.

Then, of course, there are the computer models, which develop temperature increases based on a particular increase in the amount of carbon dioxide. As can be seen from reading the literature, that science is quite clearly not at all settled. In particular, the science of clouds is not settled and, as any climate scientist will tell you, that is the most difficult and intractable form of climate science to understand. What is the interaction between carbon dioxide and clouds of water vapour? That is extremely uncertain and critical. If what is put into the computer models is mistaken, the outcome in temperature projections will be mistaken.

Many scientists—I agree that they are a minority—differ from the scientists in the IPCC and the scientists at the Hadley Centre. For example, only last April, 60 or so scientists wrote a letter to the Canadian Prime Minister saying:

“Observational evidence does not support today's computer climate models, so there is little reason to trust model predictions of the future”.

Faced with this uncertainty, what should we do? Some people like to rely on the precautionary principle: because anything might happen, we must spend anything in order to prevent it. I have come to believe that, most importantly, the precautionary principle needs to be applied to the precautionary principle itself, otherwise we shall find ourselves doing very stupid things in its name.

Certainly Kyoto is not the answer. With the best will in the world, it is impossible to believe that it is. It is recognised on all sides that it is totally ineffectual in reducing carbon dioxide emissions or in reducing temperatures. However, those who support it claim that it is a first step to much more rigorous and tougher agreements of this kind. That is pie in the sky. It is pretty clear that even that step will not be met by 2012, so the idea that there is to be a tougher one is unrealistic to say the least.

More important, the United States refuses to be part of that process and the big developing countries—the big emitters—such as China, India and Brazil have no constraints under Kyoto and will not accept any constraint under a future Kyoto. The developing countries have a very good argument. They say, “You in the developed world became rich on the basis of cheap carbon-based energy and now it is our turn to do so. Why shouldn't we?”. They also say, “You have caused this 30 per cent increase in carbon dioxide in the atmosphere, so it is your responsibility to mitigate it if that is what you wish to do”. The terms in which they put that argument at a United Nations climate change conference last May are interesting. Mr Prodipto Ghosh, the permanent secretary of the Indian environment ministry, said:

“Removal of poverty is the greater immediate imperative”,

than action against global warming. That is their choice. Far from global warming being a threat to the poor, it is the measures to mitigate it in those countries that are a threat to the alleviation of poverty. That is absolutely fundamental and everyone has to understand and recognise that. Those countries are going ahead as fast as they can.

The noble Lord, Lord Oxburgh, mentioned the massive Chinese coal-fired power station programme: one new power station every five days for seven years. As a result of that, in the next 20 years, China will have overtaken the United States as the biggest single emitter of carbon dioxide. China will not undertake the huge expense of retro-fitting carbon capture and storage to stop those emissions. What will happen? Western taxpayers certainly will not pay the Chinese—that is also pie in the sky—to undertake such a huge programme. Western countries are being timid enough in raising funds to meet their own Kyoto targets, which are much less. The costs involved are very substantial.

The Kyoto principle is to raise the price of carbon-based energy to the level where non-carbon-based energy becomes economic. But that means that, as this process takes place, energy-intensive industries and processes in Europe will increasingly migrate to China or India, as the textile industry has done, to take advantage of cheaper energy there. We will meet our targets all right, but nothing will happen about global emissions; they will just come from China and India rather than from Europe. No wonder the Economic and Social Committee of the European Union warned last April that Kyoto could seriously damage the European economy, and prohibitively so,

“without having any tangible effect on climate change”,

especially if big emitters such as America, China and India are not brought in.

This week’s government energy policy conclusions need to be seen in that context. The nuclear optionis presented in two terms: security of supply and helping in the battle against climate change. On security of supply, I shall quote the words of Adam Smith, which will be well known to your Lordships.

My Lords, I am sorry to interrupt the noble Lord, but the Companion tells us that when there is no time limit on speeches, Back-Bench speakers are allowed 15 minutes.

My Lords, I shall quickly come to a conclusion, but, of course, that is advisory.

My Lords, it is advisory. The exception is if we are listening to a speech of exceptional and “outstanding importance”.

My Lords, advisory is advisory.

I leave the Government’s energy White Paper to say that, although the economics of nuclear are a bit doubtful, wind cannot be a serious option given that it is necessary to have full back-up conventional power for when the wind is not blowing. Electricity supply must be on tap all the time and electricity cannot be stored in large quantities except at prohibitive cost. That makes the cost completely prohibitive. Anybody favouring wind power as opposed to nuclear is wholly irrational.

In conclusion, the only way forward is what we have suggested in our report: adaptation. It is hubristic to imagine that we can change the climate. Adaptation is something we can and will do. It means that we meet the warming problem whether it is natural or the result of carbon dioxide emissions. It means that we can pocket the real benefits of climate change while mitigating the cost.

The more I see of this issue, the more it seems The Da Vinci Code of environmentalism. It is a great story and a phenomenal bestseller. There is a grain of truth, but a mountain of nonsense.

My Lords, some years ago I was a Member of the European Parliament, where great respect was paid to the work of this House and, in particular, its reports. It is a privilege for me now to speak to one of them as a Member of your Lordships’ House; indeed, a report considering one of the greatest challenges to us all.

One of the most important things the report does is to encapsulate and summarise some of the challenges and statistics we must confront. Every year, we are putting some 7 billion tonnes of carbon into the atmosphere. Over the last few hundred years, we have already increased carbon from 280 to 380 parts per million, with a target of 550 by the year 2100. That, even by those standards, will raise temperatures by 2.5 degrees centigrade by 2300. One of the key points of the report is the time lag; not the time lag of normal economic systems, but a stock of carbon that will last for 200 years. Our actions today affect not just our grandchildren, so often cited in environmental discourses, but future generations well beyond that.

I am aware that it is easy for there to be a doomsday scenario in environmental debates, which is perhaps exaggerated and might scare us away from any action. Indeed, there have been a number of successes in meeting UK carbon targets in the past, primarily due to gas-fired power stations. Germany also met its targets, partly through conversion of power stations, but also through the collapse of heavy industry in the former East Germany. Our track record is not good.

When I saw the title of this report, The Economics of Climate Change, I looked particularly at the bill. What was the cost to us, as a planet, of global warming? Indeed, the report quotes two figures: in net present values, one is $2 trillion, and the worst case scenario is $17 trillion—some 50 per cent of current global GDP. Those figures are themselves quite astonishing, yet the report manages to downgrade that risk to saying that, over a 50-year period, it might represent only 1.3 per cent of global GDP per annum. That almost leads us to the thought that this problem might therefore be quite manageable.

Those estimates are risky. I shall talk about where the report has highlighted important instances of danger, but not pursued them—specifically, the non-linear and irreversible effects of global warming. Most of them are listed in the report. Ocean circulation particularly affects the north Atlantic; there is little scientific evidence at the moment, but a case could be persuasive. Yet we know that if the Gulf Stream was not there, that would decrease temperatures not by the two-thirds of a degree we have had so far this century, but by some eight degrees centigrade. We would all feel that considerably. It is around the ice caps of Greenland and Antarctica, and the permafrost, particularly in the northern climes of Canada and the Russian Federation, where we would then have a methane loss which would have a double-whammy effect on global warming.

Not specifically listed as a non-linear, irreversible event, though mentioned in the report, is biodiversity. Biodiversity is literally a treasure house of our planet. There are clearly already signs that species are having to change range, with extinctions due to certain species being crowded out by others. Much of that is currently local, but it will become regional and global. We already have dying coral reefs, and a number of bird species have disappeared. I admit that predicting and taking strong action on these unpredictable events is difficult, but they are the largest impacts and something which we cannot ignore. Nor are they costed in this report.

I emphasise the fundamental argument of adaptation versus mitigation. The report says that there should clearly be more emphasis on adaptation. That is true; there must be adaptation activity, but it is a dangerous route to champion too strongly. It is tempting, because it seems a more manageable way forward and does not totally rely on global co-operation, so it is easier. However, the strategy clearly benefits rich countries and is unattainable to those of lower incomes.

I notice that the economic analysis of the report laid a lot of stress, as did the IPCC, on the convergence of developing and non-developed economies. While that might be true, there is going to be huge diversity within that convergence. That will clearly not be the case in Africa and much of south Asia, particularly countries such as Bangladesh. These areas will not be able to afford a strategy of adaptation well into the future. I question whether adaptation is an effective strategy for us as developed economies. Yes, we can build high walls that will keep out the sea, but I doubt that they will be high enough to keep out migrating destitute populations or migrating species posing a threat to our own ecosystems, let alone prevent our own species migrating elsewhere. Least of all will they be effective as walls against a crumbling economy in the developing world which, under our global trading systems, will inevitably affect us as well.

It is not just rich countries that will find that there is no dilemma. I come from the south-west. It is clear that, even in developing economies, we must make choices about where we adapt. If there is a choice between protecting London, the tube system and our financial centres, and keeping the waters out of the Isles of Scilly or the main railway line across the south Devon coast—even last year it cost £9 million to keep it in operation—it will be stark. As the noble Lord, Lord Giddens, rightly pointed out, in New Orleans we had an example of the richest, most successful economy in the world utterly failing to adapt sufficiently to a short-term measure. The cost to rebuild and protect New Orleans is estimated at£35 billion.

The report mentions a document with a seductive title about the social costs of carbon, which tries to add up the costs arising from damage by global warming. All sorts of figures can be arrived at, but they are not social costs—they are costs in human life and land, particularly in areas such as Bangladesh where a one-metre rise in sea level would put 17.5 per cent of the country under water and displace35 million people. The phrase “the social cost of carbon” is a euphemism equivalent to “friendly fire” and “ethnic cleansing”.

My Lords, it is my privilege to congratulate the noble Lord, Lord Teverson, onhis maiden speech. He has performed great publicand private services to the south-west, especially Cornwall, which he served as an MEP. It is fitting that his maiden speech has been in today’s debate because he belongs to a party that has contributed so much constructive thought on environmental issues in general and whose crowded Benches today testify to its commitment to discussing this subject.

The report we are debating today is welcome for its focus on the economic challenge of coping with climate change. However, I share the view of earlier speakers that its tone disappointed many people, not just the Government. The report unduly disparaged the IPCC and downplayed current scientific understanding. By highlighting gaps in our knowledge and by contending that,

“the scientific context is one of uncertainty”,

the committee aligned itself uncomfortably closely with lobby groups that use such rhetoric to oppose efforts to tackle climate change.

Of course, there are uncertainties in the science but they should not obscure the compelling consensus that climate change is a serious issue. Rising greenhouse gas concentrations in the atmosphere are already warming our world and making our oceans more acidic. The cumulative evidence has been documented in scientific papers by many thousands—the overwhelming majority—of independent researchers.

Even within the past year, the evidence has hardened. A discrepancy between temperature measurements on the ground and in the atmosphere has been resolved, and the evidence that the world is now warmer than at any time in the past four centuries—the “hockey stick” graph—has been firmed up by a reanalysis by the National Academy of Sciences, which pointed out that it was just one of several lines of evidence.

But the most important datum is entirely unambiguous. There is more carbon dioxide in the atmosphere today than there has been for at least half a million years: the level has been rising at about0.5 per cent per year. Even if no more CO₂ were emitted at all, there is so much inertia in the climate system that the warming could continue for decades.

Not all the impacts of climate change will be negative, though the benefits to crop yields due to rising CO₂ have recently been questioned. But the higher the greenhouse gas level climbs, the bigger the adverse effect will become and, still more disquietingly, the greater will be the chance of something grave and irreversible: the melting of the Greenland icecap, the quenching of the Gulf Stream and so forth.

The IPCC explored a variety of demographicand technological projections, and we expect improvements in future reports. Despite all the uncertainties, warming looms as a serious global problem for a wide range of plausible scenarios. The impending warming is threateningly disruptive because it will happen much more rapidly than naturally occurring climate changes in the historical past and will be too fast for human populations and the natural environment to adjust to it. Indeed, some species are struggling to cope with the climate change that has already occurred. The CO₂ concentration is now about 380 parts per million. If we go on as usual, it will rise to 550 parts per million—twice the pre-industrial level—within about 50 years. Whether that level is enough to trigger catastrophic changes, we just do not know.

The committee’s report noted that,

“many of the adverse effects of warming can be offset by adaptation”,

but, as the White Paper published this week by DfID cogently emphasises, the most vulnerable people are in Africa, Bangladesh and similar countries and they are the least able to adapt. If we continue business as usual, we will end up with vast areas of the world where no human populations could comfortably live, more extreme weather and sea levels that will eventually rise by tens of metres. The international response needs to be a combination of adaptation and mitigation with the economic burdens equitably shared.

According to Sir Nicholas Stern, the intricate economics of climate change is a subject that needs,

“all the economics you ever learnt - and more”.

We eagerly await the report Sir Nicholas is currently preparing, which may well have a different slant from the report we are debating today. I hope, in particular, that the Stern review will consider the costs and benefits of seeking international agreement for a challenging but attainable CO₂ ceiling, such as a limit of 550 parts per million.

As the noble Lord, Lord Vallance, reminded us, the UK directly contributes just 2 per cent of the world’s emissions. But the Prime Minister’s effective leadership at Gleneagles last year shows that we have some leverage over the G8, and the wealthy countries, themselves the greatest emitters, have the means and the obligation to take the lead. At St Petersburg this weekend, energy security will be high on the agenda.

As input to the St Petersburg meeting, the Royal Society has joined the science academies of the other G8 nations, plus those of China, India, Brazil and South Africa, to reiterate concerns about global warming and to urge two things: first, greater international efforts to promote, by appropriate policies and economic instruments, acceptably clean fossil fuel, nuclear and the near-market renewable technologies. Secondly, they urge investment in a wider range of exciting prospects that still seem futuristic. There is a substantial worldwide R&D programme into nuclear fusion, even though payback time may be 50 years ahead, but there are other equally challenging and exciting technologies, such as harnessing photosynthesis more efficiently, where the current worldwide R&D is disproportionately small.

Here, the UK can exert special leverage; indeed, we have a special opportunity because our nation punches well above its weight in climate research and in science and innovation generally. Recent government initiatives to promote public/private partnerships in energy research are welcome, as is Defra’s plan to establish an office of climate change.

But should we not we go further, and declare as a national priority the spearheading of the innovation and technology the world needs if the immense challenge of climate change is to be tackled? That will be a step change, as the noble Lord, Lord Wakeham, described it. Doing that would have an important bonus: channelling the idealism and commitment of young people towards a high-profile scientific goal would itself be of great educational benefit to the nation.

Scientists who study the earth realise that our planet's history spans millions of centuries, but even in that perspective, there is something special—unique—about our century. It is the first in which one species—ours—can ravage the entire biosphere and jeopardise life’s long-term future. Most of us have more constricted time horizons than geologists, but all of us in this Chamber can surely think in centuries, not just years. We are mindful of our heritage and of the debt that we owe to centuries past. History will judge us harshly if, in our stewardship of the planet, we discount too heavily what might happen 50 or 100 years hence. That is why we need a more sophisticated focus on the economic challenge of climate change.

My Lords, I echo the complimentary comments of the noble Lord, Lord Rees, to the noble Lord, Lord Teverson, on his maiden speech. It was very good and thoughtful and I look forward to hearing more from him. I also welcome the report, issued by the noble Lord, Lord Wakeham, which is very constructive and thoughtful although, like one or two others, I think that the tone is not quite right. It does not get over the importance of the issue. I can see the effect that the noble Lord, Lord Lawson, may have had on the Committee with his doubts about the importance and significance of climate change and whether it is really happening. Unlike him, I think that the precautionary principle is very important here.

I accept that the precautionary principle is a little like common sense. Common sense can turn out to be common nonsense. Plenty of people from the Middle Ages would now be shuffling their feet with embarrassment, having argued convincingly that the sun went round the earth because you can see it doing so. They would be embarrassed to discover that the reverse was true. In the same way, the precautionary principle can be overdone, but it is so important here because all the evidence suggests to me that climate change is happening and is driven, at least in large part, by human activity. We should therefore adopt the precautionary principle and try to address it. As several noble Lords have made clear, the big advantage of doing so is that, as the report says, if done well, it can be economically advantageous. That is an important point that we must all address.

Although I do not intend to speak primarily about aviation today, I will mention it, so I ought to declare an interest as campaign director of Future Heathrow. I want to focus on the growing public awareness of the issue of climate change—what the right reverend Prelate the Bishop of Newcastle called the tipping point of awareness. He is right. The public are increasingly willing to consider it as a serious problem. Like my noble friend Lord Giddens, I am somewhat critical of some of the green movement. I do not want to be too critical because, over the years, it has done a very good job, but I stopped supporting a couple of groups over the Brent Spar incident, when they resisted the sinking of the oil rig in the North Sea. They got the science wrong and, more importantly, as my noble friend said, seemed not to acknowledge that science and technology provide a large part of the answer to the problem.

The other reason that I am critical is that the green movement has a tendency to try to make people feel guilty about flying, driving or whatever. Guilt is a singularly bad way to try to change people's behaviour for a generalised problem of this type. It works with specific problems: “Don’t burgle someone's house or you will go to prison” is a perfectly good guilt complex to instil. But changing how people behave generally is much more difficult. What works is to make information about what we can do in all our walks of life much more readily available. In other words, this is not something just for Government, just for aviation, just for motor vehicles, or whatever; it is for all of us in all walks of life in everything that we do and say.

I want to spend a little time on that. My message would be the classic one of The Hitch-Hikers Guide to the Galaxy: “Don’t panic”. If the evidence from science was so strong that global warming was accelerating to the point where it was irreversible and catastrophic for life on this planet, I have no doubt that we would have to take action so drastic as to change the nature of civilisation and life as we have known it for hundreds of years. We would then go back to a pre-industrial society and heaven knows what the world would look like. It is not sensible to do that or even to talk about doing that unless the evidence is so strong that we have only a very short time to react.

Evidence at the moment suggests that if we take the right action, we can deal with the problem. It involves a combination of science and technology together with changing people’s attitudes and behaviour. I shall give a few examples, because this is where I want more assistance, including from the green movement.

I remember being in the studio of a well known, well respected radio programme. I was not there to talk about climate change—I was dealing with other political matters which, from time to time, come to pass—but climate change was being discussed. There was a lot of emphasis on what the Government should do, what certain industries should do and so on. The discussion was taking place in an office at least one-third the size of a football field, brilliantly lit with good light from natural sources—the windows. There were about six people working there because it was about 7 am. Every light was on in that office, yet the discussion concerned climate change.

Lest noble Lords think that I am picking on one particular media programme—I am certainly not, because I have a lot of respect for that programme—I say that if we look around this House of Lords, we should say, “Hang on a minute, are we doing as much as we could?”. Noble Lords may have seen me late at night scrabbling around behind 19th-century oak panels looking for light switches precisely because I think that we need to do more.

One thing that is not well known—this is where the green movement can do more to inform people—is that you can buy your electricity from renewable sources from most of the big producers. Old buildings of this type are ideally placed to do just that. Modern buildings can be built to much higher standards, so energy use can be low. That cannot be done so easily in older buildings such as this, but their electricity can be bought from renewable sources. I do that in my home. It is more expensive, but it pushes up the investment in renewables. That is another area where I should have liked there to have been more in the report. I want more information to be made available about what people can do with microgeneration. That is another area that should be developed. Many houses, blocks of flats and other places in Britain could be supplied either by wind or solar power to a large part, and feed energy back into the grid. The way forward on that is for the Government to change planning regulations and encourage it through local authorities. There is a lot more that we can do.

What does not help—here I touch on aviation—is if people run around saying, “You must not fly; you are going to fry the planet”. In fact, the most modern aircraft are not dissimilar in their carbon footprint per passenger mile to a family car. We are not far from the point where we can say that it is more environmentally responsible to fly to a destination in Europe than to drive there. Here we get into the psychology. If the green movement argues that we must all stop flying, people will not respond. They may feel guilty, but they will still do it, just as they may feel guilty hopping into their car to drive the kids to school and worry about whether they are frying the planet. It will not actually change their behaviour. Behaviour change is what we want and there are many other ways of doing that.

Greenpeace, Friends of the Earth, the Woodland Trust and others recently spent a large amount of money on adverts in national papers basically saying, “There are too many aeroplanes flying”. That is not a sensible response. It also has a dramatic effect: if you say, “We are going to bear down on some of the drivers of high technology and science”, you will produce the opposite effect of what you want, in terms of the changes we need in society. That, incidentally, is why I think those organisations are wrong on nuclear power. Although nuclear power is not what we would use in an ideal world, it is necessary for dealing with the serious situation we have.

My message on this issue is to all of us, myself and everyone else, not to individual industries. We should not pick on aviation, the car industry or the media. “Big Brother” probably produces more CO₂ than many other programmes, and I could make a good case for saying it is not necessary, but if people want to watch it I do not want to stop them. I want to ensure we reduce the carbon imprint overall, and the way to do that is to recognise, whether in our personal lives, our workplaces—like your Lordships’ House—or in industry as a whole, that we can deal with this problem. However, we will not do so with a panicked reaction that tries to take us back to a pre-industrial phase. For a country such as Britain, which led the Industrial Revolution and the science-based revolution, it would be a terrible mistake.

My Lords, like other speakers I start by congratulating my noble friend Lord Wakeham on the report and on the manner in which he has introduced the debate today. My noble friend gave a helpful two-paragraph summary of the report in the House Magazine supplement on House of Lords Committees. He said that it raises serious concerns, and this is just one: the preoccupation in international negotiations with setting emission targets and the failure to give sufficient attention to alternative approaches. That brings us neatly to the key issue, which has already resonated around this debate: to what extent can we rely on adaptation, and to what extent are international negotiations about setting emissions likely to fail or be relevant?

The report calls for a balance. I think, particularly having heard the speech of the noble Lord, Lord Lawson, that that is clearly a case for more reliance on adaptation, and more reliance on adaptation than would be wise. Paragraph 2 of the report correctly warns us that the science of human-induced warming remains uncertain. That uncertainty dictates caution and taking out of insurance against the worst risks. I agree; this is all about risk assessment and what isthe necessary insurance. The United Kingdom Government, and other Governments, have a responsibility on behalf of present and future generations to determine what insurance is appropriate, and to take the best advice on what the worst risks might be and the order of probability. It should then be possible to determine what insurance is the most appropriate, and indeed what is most equitable, between generations, between developed and developing countries and between affluent communities and the impoverished.

There is impressive agreement on the scientific advice. The noble Lord, Lord Oxburgh, acknowledged that it is a remarkable phenomenon to have this number of independent scientists working for the IPCC come up with the sort of results they have achieved. The report notes that majorities do not necessarily embody the truth, but that the major associations of scientists have adopted similar positions. It would be reasonable to expect that we treat with care and caution any recommendations coming out of the IPCC with clearer judgments on the probabilities of the projected temperature increases.

The report calls for the IPCC to pay more attention to those dissenting scientists who do not accept the scientific consensus, and claims there are weaknesses in the way the scientific community, and the IPCC in particular, treats the impact of climate change. It calls for a more balanced approach. Yet the committee states in paragraph 4 that it decided to restrict the scope of its investigation to certain aspects of the economics of climate change. I find that rather modest aspiration difficult to reconcile with the sweeping judgments on the IPCC, its scientific conclusions and its process of operation.

I will mention just one risk that is referred to several times in the report, and for which a judgment by international Governments has to be made on what insurance, if any, is appropriate. It was mentioned in the excellent maiden speech by the noble Lord, Lord Teverson, and is referred to in paragraph 38 of the report under the heading “Large scale one-off changes”. The paragraph draws attention to the reversal or shutdown of the Atlantic thermohaline circulation, known to us, somewhat inaccurately, as the Gulf Stream. The probability of a shutdown is not yet known, but the report acknowledges that it might happen after the next 100 years or so. The trigger could be the melting of the Greenland ice sheet, which has been variously calculated as likely to happen when temperatures increase by at least two degrees centigrade over pre-industrial levels.

Since the report was published last year, Professor Bryden and his team at the National Oceanography Centre in Southampton published in Nature, on21 December 2005, measurements of the strength of the meridional overturning circulation, which seems to have weakened by about 30 per cent in the past decade or so. Such a slowdown has been predictedby some climate models, and I believe these measurements are evidence that the models could be right. If circulation were switched off we would seea change in temperature in north-west Europe happening relatively quickly, and the consequences would be very far-reaching. More measurements will be needed over the next decade or more to say with greater certainty if changes observed from 1957 to 2004 represent actual long-term changes in the meridional overturning circulation.

In paragraph 40 the report acknowledges that these risks are being monitored, and says there is a balance to be struck. The report always comes back to this word “balance”, which I believe is code for saying “more reliance on adaptation”. I would say there is a decision to be made based on the scientific evidence which is consistent with these models. Do we continue to try and adapt, or do we mediate? How on earth do you adapt to turning off the Gulf Stream? That is not something for which there is any method of adaptation. We have to recognise that there is a risk of a major shift in our global climate through disrupting thermohaline circulation, or THC, as it is referred to in the report. It has happened before, possibly more than once since the last ice age, and at least one of the events was a direct result of the Earth becoming warmer.

The United Kingdom Government are right to be preoccupied with setting emission targets. The message from the debate today must be clear and unequivocal: we cannot rely solely on adaptation and alternative approaches as the main strategy for managing climate change. That is not a realistic option in the light of the scientific evidence available to us today. We must continue to try and set emission targets at the international level, recognising, for all the reasons set out in the debate today, how difficult that will be. The noble Lord, Lord Oxburgh, reminded us that we need to recognise that the energy requirements of China and India will be the key to trying to achieve international emission targets, which are certainly a challenge.

My Lords, I too add my tribute to the maiden speech made by my noble friend Lord Teverson. I thought it was a major contribution to the discussion.

One or two speakers have suggested that, although they generally agree with the House of Lords report on the economic effects of climate change, it struck the wrong tone—the balance was not quite right. I take rather a different view, because discussions on environmental issues tend to suffer from hyperbole. I shall give an example: the question of nuclear power, which could play a major role in dealing with climate change. Greenpeace, which seems to regard the risk of radiation from nuclear power as a risk almost as great, or as great, as that from global warming, said recently that the outfall from Chernobyl would be more than 100,000 deaths. I have argued, in this House and in print, that the dangers of radiation are greatly exaggerated, that the linear no-threshold theory on which most of the prognostications were based is not supported by evidence, and that small doses of radiation seem to be helpful or beneficial.

I do not know how many noble Lords saw the “Horizon” programme last night, which was an unusually good television programme on science. It produced convincing evidence that the number of deaths to be expected as a result of Chernobyl— which has generally been around 4,000, not 100,000—was greatly overestimated. It showed that people living in areas of high natural radiation are less likely to suffer from cancer; that the linear no-threshold theory is mistaken and not supported by the evidence; and that evidence from animals examined in the Chernobyl area indicates that small doses of radiation can protect against the risk of cancer. I mention that because it shows that we must judge conventional wisdom, particularly alarmist prognostications, by evidence and not hype. To echo what the noble Lords, Lord Soley and Lord Giddens, said, scare stories spread by Greenpeace and Friends of the Earth must be treated with great caution. Generally, they do more harm than good. As the noble Lord, Lord Giddens, said, the environmental movement should be rescued from some of the green activists.

That brings me to climate change. I was a sceptic about climate change because I remember the confident warnings when we were thought to be facing a new ice age. But I became convinced not only that global warming was happening, but also that there was a very significant anthropogenic element. I read through most of volume 1 of the report from the International Panel on Climate Change. Incidentally, it is a formidable volume which I have had out of the Library for more than one and a half years. Unlike most publications one borrows, there has been no request for its return; so, clearly, no one else has bothered to read it.

It convinced me because it was a very balanced report that does not deny uncertainties and some conflict in the evidence. Take, for example, the melting of the ice caps and the retreat of the glaciers. The rise in ocean levels is regarded as one of the most serious consequences of global warming. A great deal of panic is created because we are always shown the pictures of the ice caps by the West Antarctic Peninsula falling into the sea and the melting of the Greenland ice caps. The report points out that in the Antarctic continent the ice is thickening with a small decreasing effect on ocean levels.

Recently, I read in the report by Sir Nicholas Stern that we must take the collapse of Greenland ice seriously, which is caused because at the heart of Greenland the ice is thickening through precipitation and is pushing the fringes into the sea. At the present rate, he said, sea levels will rise by 0.05 millimetres per year, which is 0.5 centimetres in 100 years. The IPCC report estimates that the main effect will be from the warming of the oceans. Even then it estimates the actual sea rise levels as between 11 and 77 centimetres. That is serious because the rise will be very different in different parts of the world. It could be catastrophic for some people living in the delta areas of the world, but it is not necessarily catastrophic overall. We could, for example, provide aid to Bangladesh to enable it to take the kind of defensive measures which the Dutch have taken. Incidentally, its estimate of sea rise levels was somewhat less than that in the second assessment of the IPCC.

The noble Earl, Lord Selborne, mentioned the disturbing findings by Professor Bryden. But we also heard evidence, in the hearings in the committee on water management, from one of the experts of the Hadley Centre who said that it had not made the Hadley Centre change its basic estimate that there was a very small risk of something very serious happening. One cannot discount that risk, but there are many places where the Gulf Stream has to be measured. It is obviously disturbing that it has slowed down in one place, but in other places, it may have accelerated. The speed of the Gulf Stream changes.

Storms are most frequently mentioned. In its scientific report—there is a slightly different emphasis in the political report—the IPCC stated:

“Recent analyses of changes in severe local weather (e.g., tornadoes, thunderstorm days, and hail) in a few selected regions do not provide compelling evidence to suggest long-term changes”.

I mention that because the IPCC’s scientific section acknowledges these uncertainties, but it still comes to the firm conclusion that global warming is manmade, which is one of the reasons why I find the report convincing. Certainly, the evidence since that report was published suggests that the fourth assessment in 2007 will be more pessimistic than the third, because a number of recent developments suggest that the danger is greater and has strengthened the case that global warming is happening.

I thought that the House of Lords report was a breath of fresh air because it was much more balanced. It came to the conclusion that we cannot look towards Kyoto, which does not include the nations whose actions will be of vital importance. As the noble Lord, Lord Vallance, said, it concludes that in the end the answer must come from technology and creating the right framework for technological development. It will not necessarily come only from technology. Maybe a major part will be played by changes in lifestyle. I do not think that lifestyles will never change. We have changed attitudes towards drinking and driving and there are ways in which people change their attitudes. But I do not altogether place as much hope on this as the right reverend Prelate the Bishop of Newcastle because I do not see that the nations that will make the major contribution to global warming will change their lifestyles. India, China and the other developing nations will not renounce economic growth. To ask people to change their lifestyle fundamentally will not have the effect that we need.

We do not need imbalance in reporting, exaggeration which is not justified by the evidence and, above all, constant predictions of catastrophe. That approach will undermine the credibility of the threat. It will induce a mood of fatalism. If we are doomed anyway, the attitude is likely to be “Well, let’s make hay while the sun shines. Let’s enjoy life while we can”.

My Lords, I have of course read the report of the Lords committee and most of the evidence, and I am staggered by Members’ erudition, for which I express the usual gratitude. In my youth, I took a degree in agriculture, with agricultural economics as a special subject. It now dawns on me that it was the economics paper which ensured that I got only a fourth class degree, a phenomenon which some noble Lords may remember existed in those days. Although the subject of my speech falls fairly and squarely within the title of the report, I will concentrate on agriculture, which on the whole has been neglected in this debate.

The other day, some of your Lordships were present at the gathering which listened to Vice-President Al Gore’s speech. For many noble Lords, as for me, little that he said was new. However, there was one statement which was new to me, which sent me scurrying to your Lordships’ Library to ask our splendid research staff to find substantiation for it. At first, they could not, but eventually they got hold of a copy of the Vice-President’s book, An Inconvenient Truth, and found that the statement was fully substantiated in the text. On page 121, it states that in the United States and elsewhere soil moisture evaporation increases dramatically with higher temperatures and that unless we act dramatically to contain global warming pollution, one at least of the great bread baskets of the world will disappear within the next 10 years. That spells out catastrophe to us in these overcrowded islands, for which we as Parliament are responsible.

Since about 1951, economics—that dismal science—has told us that it was perfectly all right to rely on imports to feed our people and in the course of doing so to allow the small farming industry of this country to disappear and farms to get ever larger, following the rule that we achieved optimum outputs per pound invested in large units. We could forget about food security, that principle which kept us alive during the 1940s.

Today we have think about it again since imported food is going to become less available, and as it does so, a great deal more expensive. The economicsof global warming will dictate that we measure profitability not in terms of outputs of capital but in the total amount of food we can produce. We will find, as we have found before, that that comes from small units of production which have the added advantage of being good for biodiversity, about which we heard in a very good speech made a little earlier in the debate.

If our grandchildren are not going to starve—and if that sounds overly dramatic, let us remember how close we came to it in the early 1940s—we will have to look after our soil, our small farms and our skilled labour. Some noble Lords may have seen a fascinating series of programmes shown recently on TV about introducing black youths to farming in Devon. We are going to need all those who have a gift for farming, and it is not all that long since a great number of the population did have that gift. I remember when in the course of persuading the Church of England that I was a fit person to become a clergyman, I was involved with a troop of Boy Scouts in Hackney, many of whom were the sons of my mother’s Girl Guides from when she was Guide Commissioner for North London. I came across one boy who had a real gift for growing things and a deep feeling for nature, but I was able to do nothing to stop him going into a factory making lavatory-paper rolls.

We are going to have to use all our resources to feed ourselves, and incidentally it will mean saying goodbye to those rather good schemes, popularin your Lordships’ House and which I have enthusiastically supported over a period of time, for biofuels. When it comes to the crunch we will need all the fertile soil available for the growing of food. If I have to choose between consuming diesel and consuming potatoes, I will choose potatoes every time.

Much the most important function of government is to protect the population from harms, and by far the most fundamental of those harms is hunger. It is for that reason that I urge that this debate and others like it should bring about a complete revolution in our agricultural policy in this country.

My Lords, as a member of the committee and an economist, I begin by paying tribute to an outstanding economist and wonderful person, Professor David Pearce, our adviser throughout the inquiry—and one might almost say our tutor. His sudden death is a great loss to my profession.

The noble Lord, Lord Lawson, said in his conclusion that much of the concern about global warming was a “mountain of nonsense”, so I must begin with four remarks about the science of climate change before turning to the way forward. First, there is of course a scientific consensus today that manmade emissions are raising world temperature and will continue to do so at an alarming rate unless action is taken. The consensus includes all but a very few climatologists. However, what is much more significant for us is that it is supported by our own Royal Society and by the American Academy of Sciences. I do not really see how non-scientists can take a different view from those bodies unless we want to question their motivation. These bodies are not composed primarily of climatologists, who might want to exaggerate the importance of their subject, but of those best placed to appraise the work of climatologists—and of course they are bodies whose reputations are on the line if they give rise to alarms that prove false.

Secondly, the scientific evidence is not in the form sometimes suggested post hoc propter hoc. It begins with the basic science which shows that increased greenhouse gases would, other things being equal, increase temperature. Only then does it visit the historical record and explain the evolution of the earth’s temperature from the Ice Age to the present day using basic science to make the links.

Thirdly, a key feature of the science is the very long lags in the system, which help to explain some of the paradoxes referred to by the noble Lord, Lord Lawson. I do not know whether noble Lords realise it, but the greenhouse gases we are producing today will remain in the atmosphere for an average of almost 150 years—until 2150—and the effect on temperature will be still further delayed by roughly another 50 years after the build-up of greenhouse gases, so today we are contributing to the world’s temperature in 2200. Given that science, it is absurd to say that we should wait and see. The argument is untenable when the effects are so long delayed. It is interesting to note that, as the scientific evidence accumulates and the models become more firmly based and powerful in their explanation of all the different phenomena referred to by the noble Lord, Lord Lawson, some American economists who at one time advocated a “wait and see” approach are increasingly abandoning that position.

Finally, the science is in one sense uncertain, but in another it is certain—a point made by the noble Lord, Lord Oxburgh. It is uncertain exactly by how much the temperature will rise but it is virtually certain that it will rise substantially. I should like to give noble Lords some figures because not everyone understands why it is almost certain that that will happen. If greenhouse gases stabilise at 550 parts per million, the temperature would eventually rise by between 2.5 and 5.3 degrees centigrade above the pre-industrial level. Those are limits with a 90 per cent probability according to the forecasts of the Met Office’s world-famous Hadley Centre. To give an idea of the scale of the change, even the lower of those figures would have some devastating effects, which I shall come to, but the higher figure is as big as the difference between the temperature today and what it was in the Ice Age; it is not a tiny change as suggested earlier in the debate. Nor do these estimates allow for any of a number of major discontinuous risks, such as the melting of the Arctic permafrost, which would have an even more dramatic impact.

That is the scenario at 550 parts per million, but how likely is it that greenhouses gases will reach that figure? It is virtually certain unless we change course almost immediately. Again, I am going to bore noble Lords with some numbers because they are important and help to put these arguments out in the open. At present we have 425 parts per million. At the current rate of emissions, greenhouse gas concentrations are rising by two parts per million per year. We can all do the arithmetic to calculate how long it will take to get from 425 ppm to 550 ppm—we will get there well before the end of the century, and even then the concentrations would continue to rise. That is the scenario if emissions were to remain at their present rate—if China and India do not grow and if no one else increases emissions. Even with no increase in emissions, it is a horrifying prospect. But no one expects emissions to remain constant. A typical forecast suggests that they will grow by 2 per cent a year, and we know how that will accumulate.

The committee had to consider many different controversies on the assumptions about economic growth that go into the forecast, and of course we need the best estimates for that. But noble Lords can see from the simple arithmetic with which I have bored them that it is not that important how fast economic growth in the future is; all it does is to slightly affect the date on which the awful thing arrives. It does not affect the fundamental structure of the problem in any way at all; it is a diversion.

Unfortunately, it is not easy to forecast the economic effects of any given temperature and our committee rightly stresses that much more work is needed on that. But all analyses agree that higher temperatures will cause more variable weather—more droughts, more floods and more hurricanes. It takes only a 10 per cent change in the Indian monsoon to cause a drought or a flood. As many people have said, the main groups affected by global warming will be the poorest people in Africa and Asia. The effects of the inevitable global warming are almost certain to cancel out any level of aid which is likely to come about, at least in terms of economic development; AIDS control is a different matter.

We should of course discuss the possibilities of adaptation. There will certainly have to be a great deal of adaptation in the coming years, given what is already inevitable. But, as the noble Lord, Lord Oxburgh, said—this is a very important point—the world’s temperature has been fairly stable for most of recorded history, and the whole pattern of human life and human settlement is adapted to that temperature. To adapt to a much higher temperature may well require the migration of billions of people, with all the political and social problems that we know migration involves. Migration is a central issue, in a sense, in the adaptation debate. It could make sense to accept that migration only if the cost of avoiding it were also very large—but I do not believe that it is.

That brings me, finally, to the way forward. I support very much the splendid speech of the noble Lord, Lord Vallance. The obvious solution is to meet our energy needs without the release of carbon. Very interesting evidence originated from the International Energy Agency on the cost of making photovoltaic energy, biomass and carbon sequestration competitive in price with gas and oil. The estimate was that to get these technologies to that point there would have to be a major effort of basic and applied research. This would not be undertaken by the private sector—certainly not the basic science because the results could not be captured by any one company—so there would have to be a charge on the public of the world. The scale would be 2 per cent of one year’s world GDP. This compares, for example, with the moon shot, which was 2.5 per cent of one year’s GDP in the United States at the time. If you take 2 per cent of one year’s GDP and spread it over 20 years, that is 0.1 per cent of world GDP, which is not a large amount to spend on saving the planet.

I support the way in which the noble Lord, Lord Vallance, recommended that should be organised. As has been said many times, the Treasury has taken up our recommendation. I think the Stern inquiry is going along the right lines. Radical proposals are needed because of what is happening at this moment and its long-term effects. In particular, it is time we had an international technology treaty aimed at stabilising, in the end, the world temperature at the one we have got used to, which means cutting carbon emissions by two-thirds.

My Lords, like many other speakers who have entered the debate, I congratulate the noble Lord, Lord Wakeham, and his erudite committee on the time they have spent and the work they have done. It is a little discourteous that that very important report remained so long gathering dust on a shelf. It is slightly out of date, which is its only weakness, and it is a great pity that it was not debated earlier.

I am not really qualified to take part in this debate. Like the noble Lord, Lord Beaumont of Whitley, I got a very poor degree—it was in medieval history rather than agriculture—when we were at Cambridge together. My only claim to fame, as I have said before, is that I was an early whistleblower on the greenhouse effect some 30 years ago. But I have had a Damascus road conversion in regard to climate change which is based on the report before us. Having read it, it appears to me that the climate does not change but it changes; it has changed and will no doubt change again in the future. Therefore I wonder whethera more accurate title for the report would not beThe Economics of Climate Changes rather than The Economics of Climate Change.

Ask any meteorologist and they will say that every day is meteorologically different. No one day is the same as the last; the wind, the clouds, the pressure and the temperature will always be slightly different. So it is with climate. It is well known that the Milankovitch cycles, the procession of equinoxes and the variations of the Earth’s tilt have been the main contributors to major climatic changes in the distant past. More recently, as shown in the hockey-stick graph before us, the climate has apparently been stable for the past 1,000 years and then changes with a sudden rise in temperature in the northern hemisphere. This upward turn has given the graph its title, because of its outline.

But the question I ask is: is it historically true? There may be a problem with this graph in that it seems to have become the sacred mandala of the Intergovernmental Panel on Climate Change and is, in effect, the basis of all eco-fundamentalism. It has been strongly criticised by scientists who are outside the loop of the IPCC and who have given written or oral evidence in the report. These include Professor Ross McKitrick, at page 262, and Professor Richard Lindzen, at pages 45 and 49. Having read their evidence, I have a feeling that the hockey-stick graph could be fatally flawed but, like most members of the general public, I am not qualified to say so. If it is flawed, the whole question of the reports on the effects of global warming is put in some doubt.

I received a letter from my long-standing friend,Dr Michael Cole, a distinguished doctor of science from Cambridge, who has advised me as a non-scientist how one might approach this anomaly. I shall try to encapsulate his advice, which I consider to be quite fair and helpful to this controversial debate, which is far from one-sided. The critics of the global warming theory propounded by the IPCC are dismissed as a small number of people who do not know what they are talking about. Thousands of scientists connected with the IPCC are unanimous in perceiving the manmade disaster lying ahead, so it is very difficult—certainly as a non-scientist—to say anything against it. But this may not be the case at all because its critics include a large number of well respected scientists in major world-class institutions. The main thing that they have in common is that they are not funded by or connected with the IPCC.

In the report, the global warming protagonists make two important claims. The first is that the current increase in atmospheric carbon dioxide is causing the current climate to go through an unprecedented warm period, reaching the highest temperature for a millennium, and that this will inevitably lead to a serious catastrophe in global warming. This has been repeated time and again by other speakers. The second claim, based on computer models, is that dangerously high temperatures will lead to damaging weather conditions in a few decades ahead.

But a brief look at medieval history—I am trying to remember some of it—shows that between 900 and 1300 AD the climate was considerably warmer than at present. Why is it that the Viking farmers were able to farm part of Greenland, so named because it was, presumably, green? Why is it that the ocean east of Greenland towards Iceland was largely free of ice and routinely navigated, as was the ocean to the west of Greenland towards Baffin Island? Why is it that in England, successful vineyards were in production as far north as Northumberland? When I look out of the window of my house in Scotland, I see signs of cultivation on the northern face of hilltops which are 600 feet to 900 feet above sea level. Why is tree level in the Alps 200 metres above the current level?

This warm period was known as the medieval warm period. From the middle of the 14th century, the climate cooled abruptly, causing widespread crop failure in Europe and Greenland and the Greenland farms to be covered in permanent ice. The old sea passages to Iceland and Baffin Island became impassable because of the ice. The cool period, which lasted until the mid-19th century, has been known as the mini-Ice Age. We are now seeing a recovery from this period, according to the scientists I read, and may be heading towards temperatures which existed in the medieval optimum.

There is nothing new or startling about the current rise in temperature. The IPCC’s first report on global warming produced a graph of temperature versus time, clearly showing temperatures in the medieval warm period climbing to levels higher than those we are experiencing today. There was no hockey stick in that graph then. I speak as an ordinary member of the public trying to read the report; why did the IPCC’s third report produce a different graph of temperature versus time, showing a more or less flat temperature between 1000 BC and 1850 AD, followed by a steep rise thereafter, thus coming to be known as the hockey-stick graph? This graph has been strongly criticised by Professor Ross McKitrick, as I have already said. If the graph is wrong, so is everything else, and there may not be a crisis. I am sure there is a very simple answer to this question, and I would like to hear it.

There is another problem, which I hope the economists will not take amiss. The projections of carbon dioxide in global temperature are based on computer models. There is a difference between economists and stockbrokers. Economists deal with computer models and graphs, and look to the future; stockbrokers deal with the market forces of the day. Why are stockbrokers richer than economists? It is because they are working with the real facts of the reality of the day-to-day market, while economists use projections. Even the smallest variation in a projection that takes place in the years ahead completely unbalances it.

Who are the beneficiaries of the Kyoto mitigation policies? Nobody has said. The earth might be—although I am not so sure that it will be—but so are the ministries, bureaucracies, consultants and quangos. A number of speakers have said how many such policies have to be produced because people are so worried about what is happening. That is why I think that mitigation has a lot of self-interest; a lot of the areas involved are government-connected.

The noble Lord, Lord Soley, rightly referred to the guilt complex. The eco-mullahs will turn up in the form of Ministers, advising us that we should not go over 60 miles an hour on the motorway because we are adding to carbon emissions. I came here in a car which is powered by the equivalent of 500 horses—one would have done. I do not feel guilty about it, but it will not be long before I do. And I will certainly be taxed on it, if the Mayor of London has anything to do with it, because my car has a big engine. These are small things. Why should not people travel on economy jets to their destinations? Why should they be made to feel guilty? This is what will happen.

I will not be convinced about this until the hockey-stick graph has been explained to me. Are our temperatures higher or lower than those in the medieval warm period? If they are lower, let us, asthe noble Lord, Lord Taverne, implied, lie back and enjoy it.

My Lords, the noble Lord, Lord Wakeham, has chaired the Economic Affairs Committee over a fair period and we all appreciate the way in which he has, with little difficulty, obtained the necessary consensus. The noble Lord, Lord Lawson, began his speech by saying that he would be swimming against the tide; I will limit myself to paddling against it.

Looking into the future of climate change can obviously be very speculative, but I find the way in which some of the forecasts anticipate the situation 100 years from now almost absurd. In 1850, probably the most important concern involved the depletion of coal, on which industry and the world’s economic future depended. Much future assessment was based on the depletion of the most important energy that was available and practical. Disasters were widely predicted. No one could anticipate the various fuels that would subsequently become available—nuclear, gas and oil—and the situation today is similar.

We cannot make assumptions about energy availability and its use at the end of the century. There is so much unknown in the century ahead. To make suggestions about such a long-term future may be acceptable, but the dogmatism that has been poured into the argument is not. We can certainly look ahead to the next 30 years. That is a sensible time period, and the dependency on oil over that time is unquestionably a matter that we have to consider.

In his evidence to the committee, Professor Colin Robinson said, on page 2 of the report,

“past experience suggests that once a consensus emerges and passes into the conventional wisdom—as the climate change consensus has done—it is difficult to dislodge by the normal processes of scientific challenge”.

He goes on:

“The scientific establishment comes to depend on research grants which are most easily obtained if research projects appear to deal with accepted problems. Consultants gear their efforts to advise on these same issues. The media constantly run stories that appear to reinforce the consensus. For all these reasons, the consensus is highly resistant to change”.

That consensus needs examining. What concerns me are the measures that we are proposing to take to deal with the problem of the heating of our planet. In Britain, we are responsible for between 2 per cent and 3 per cent. China, India and the USA are the energy problem countries—China and India in particular will increasingly be responsible for global warming. Compared with these countries, our 2.7 per cent is an insignificant amount. While we must of course try to reduce it, other countries must face up to their responsibilities.

One aspect of global warming concerns the melting of the Antarctic ice cap. Sea levels are expected to rise and low-lying countries will be affected. That is undoubtedly a world problem, but it needs to be addressed substantially by the major polluting countries themselves. They have the problem at their doorstep. Meanwhile, I hope that the IPCC will deal with the questions that have been raised about the emissions scenario and will conduct the reappraisal that our report recommends. It has assumed 3 per cent as the annual rate of economic growth over the next 100 years and further assumed a convergence of the economies of all countries over that period. I find it quite ridiculous to make these assumptions over such a long period ahead. The IPCC needs to improve the way in which it makes future estimates and it should make its estimates over a more sensible time period. That is a weakness that we express in our report. Of course, it is right that we take an international view of these problems, but since we are much less affected by it, if at all, we should express our views and take the minor role in assisting in dealing with the situation.

One important matter raised in our report is whether the damage from climate change is likely to be more in the developing than in the developed countries. The Nordhaus estimate, which we mention in our report, is that for a 2.5 degree centigrade rise in world warming, world GNP could decline by 1.5 per cent to 2 per cent, but in Africa the figure could be4 per cent and in India 5 per cent. That shows that the damage is not evenly spread and that the developing countries generally tend to lose more than the developed countries. The question following from that is why we are at the forefront of pressing for action on climate change when the problem for Britain is so much less than it is for other countries. Obviously, we must play a part in helping to deal with world problems, but when so many in the countries most affected appear almost indifferent to the problems that will affect them most, our role should not be the dominant one.

The further question that we have to ask is whether the costs of warming control is in a number of cases greater than the benefits of dealing with the problem. One might look at this matter differently: it is not out of the question that we in Britain could actually benefit from global warming. One scenario might be that the north of England and Scotland acquire a climate similar to that of the south of England, with the south of England acquiring a Mediterranean climate. I personally am very happy with the climate that we now have, but possible changes could be perfectly acceptable and in the eyes of many could even be an advantage. What troubles me is that we who have less to lose than so many other countries should anticipate spending so much more than some of those countries that have far more to lose.

My Lords, I begin by declaring a personal interest, since I shall shortly become chairman of a company investing in low-carbon technologies. That reflects my belief that there are opportunities for business to create employment and profits from the technologies required for a low-carbon economy. I am also a director of Siemens UK, which has interests in renewable energy as well as in non-renewable energy. But it is on public policy that we focus today.

Last year’s report made a very important contribution to the debate about public policy. But there are dangers, as illustrated by some of the press reporting of the report, that the report’s important analysis of uncertainty and of some methodological issues can be misinterpreted as suggesting that the threat of climate change is less significant than commonly believed and that the need for early action is therefore less. That risk arises in respect of several elements of the report’s analysis but, as we are time-constrained today, I shall focus on only one area of analysis.

The report questions the robustness of the economic assumptions that underpin the IPCC’s emission scenarios. It makes two specific criticisms. First, it says that the IPCC was wrong to use market exchange rate measures of GDP growth rather than purchasing power parity measures. Secondly, it says that it was politically constrained from including scenarios in which the developing world or particular parts of it were unsuccessful in achieving convergence towards developed world living standards.

The first criticism is entirely justified. The market exchange rate approach is simply wrong and the PPP approach correct. The percentage of respected economists who say otherwise is as small as the percentage of respected scientists who deny that human-induced climate change is occurring. The second criticism is also valid. Almost no economist would assume a common rate of convergence across all developing economies. Many would suggest that the best current assumption is that some parts of the developing world—China and other Asian countries in particular—may be achieving historically rapid rates of growth and convergence, while others, including several African states, are sadly not yet on any clear convergence path at all. These are important methodological points and, although it does not follow that better methodology will necessarily produce materially lower estimates of economic growth, emissions or concentrations than those in the IPCC scenarios, there is a danger that the casual reader, or the reader searching for reasons to justify a policy of inaction, will slip to that conclusion.

The market exchange rate versus PPP distinction is important but, as the report itself makes clear in table 3, the impact on concentration levels likely to pertain in 2100 is fairly slight. The illustration given shows an adjustment in one predicted concentration level, on one scenario, from 731 parts per million to 678, which in terms of possible long-term climate effects is no more than a shift from the absolutely disastrous to the very slightly less disastrous. More important, it is not clear that slipping to more differentiated and realistic approaches to convergence and growth will produce lower growth rates, since if current growth assumptions look rather optimistic for Africa, they may well be too pessimistic for China, India and other Asian countries.

The IPCC scenarios assume that world GDP will grow somewhere between 2.2 per cent per annum and 3 per cent per annum in the 110 years between 1990 and 2100, but the IMF's latest world economic outlook database figures, which are correctly weighted on a PPP basis, show that global growth is now running at 4.9 per cent per annum. The combination of the past 15 years of historical experience, which are facts, and the IMF’s forecast for the next six years—and it is pretty good at medium-term forecasts, so the figures are fairly good—suggests that the average over the years 1990 to 2011 will be 3.9 per cent per annum. So for 21 years at least, almost one-fifth of the entire forecast period, we are likely to be running well above the upper end of the IPCC forecast range. While the report quotes a Treasury official as suggesting that sustaining a global growth rate of 3 per cent over a century is unprecedented, it somewhat oddly does that precisely two inches away from a table—table 1 on page 36, drawn from Professor Madison—that illustrates that the average global growth rate throughout the 20th century was, in fact, 3 per cent.

Future global growth forecasts are highly uncertain, but one of the central economic facts of the past 15 years is that the increased integration of the global economy—the great power of the global free-market system—is unleashing, at least for a time, a major acceleration of growth in developing Asian economies which account for more than 40 per cent of the world's population. Once we allow for that phenomenon—which was rather strangely unreferred to in a report to do with the economic input into climate change—it is quite possible that the more robust methodologies for which the report rightly argues will suggest estimates for 21st-century growth at least within the 2.2 per cent to 3 per cent range and possibly even above it.

So it is really not the case, as the noble Lord, Lord Lawson, suggested, that the global growth forecasts in the IPCC are clearly biased upwards. I find it difficult to understand how he can stress at one point in his speech the rapid pace at which China is growing and building coal power stations and the fact that it may rapidly become the world's biggest emitter, but then assert in the same speech that we know that the IPCC forecasts are biased upwards.

My Lords, perhaps I may intervene as the noble Lord has mentioned me by name, twice I think. What concerned me most was that, whereas the energy intensity of growth in the world in recent years has steadily diminished, the IPCC economic forecasts show that that will be reversed and that energy intensity will increase—according to those forecasts. That makes an enormous difference in carbon dioxide emissions.

My Lords, I agree entirely with the noble Lord that, in addition to growth rate, it is important to consider the issue of the carbon intensity of growth. However, he very deliberately drew attention to the fact that Chinese growth is being driven by coal power rather than gas power. One of the key drivers of the increasing carbon efficiency of growth—of falling carbon emissions relative to growth over the past 20 years in the developed world—has been the increasing use of gas. But if China is growing rapidly, and powering itself extensively through coal, we may well see a major growth spurt that is very carbon intensive. The noble Lord seemed to deploy a debating technique whereby, to argue that Kyoto is completely ineffective, he drew attention to China’s rapid growth, but then, to argue that the IPCC emission forecasts are too high, he simply ignored it.

As the noble Lords, Lord Oxburgh and Lord Rees of Ludlow, stressed, there are uncertainties in the details of climate change science, but extremely high probabilities, bordering on certainty, that the scale of global warming could be significant and harmful if concentration levels of greenhouse gases rise even to the IPCC’s middle scenarios, let alone to its high scenarios.

A similar situation applies to the economics. There are uncertainties and it is important continually to improve forecast methodologies and the clarity of communication. But if the global market economy is even reasonably successful in delivering widening prosperity across an increasing proportion of the developing world—an outcome that we should surely desire in human terms, and which at present, at least for some regions of the world, looks extremely likely—it is almost certain that, unless we take deliberate countervailing action, concentration levels of greenhouse gases will rise to at least pre-industrial levels, and to levels not seen for hundreds of thousands, and possibly millions, of years. It is vital that that near certainty remains clear to people even as we note important uncertainties in the detail.

My Lords, it is hard to think of a debate that it is more of a privilege to listen to. I warmly thank the noble Lord, Lord Wakeham, for giving us the opportunity to debate this issue and to listen to such thought- provoking speeches.

I congratulate my noble friend Lord Teverson on his maiden speech. He is a tremendous addition to the Liberal Democrat Benches, with his experience in economics, politics and finance. As we have heard, he is a very passionate exponent of the issues that will face us in the future.

We all might have expected the G8 summit to put climate change at the top of its agenda, but yet again it has been overtaken by tragic events which it will no doubt have to spend much time debating instead. Although it may still touch on climate change, its fate is never to be the urgent issue of the day. Politicians will continue to struggle with that. That is why the remark of the noble Lord, Lord Oxburgh, was so important. Kyoto is not an end in itself, but it is a unique first essential step along the path of some international agreement on dealing with this threat. Of course, it is imperfect in its current form and I have no doubt that it will not be perfect in its post-2012 form, but it is very much a first step and a statement that the world wants to take action. That is why it is so important that the developing world states that it will join in that, and that it is concernedabout it.

Some interesting issues have been raised; for example, whether the green movement is hostile to science. That is like asking whether scientists are hostile to the environment. It is a non-question. I am sure that some green activists might be regarded as Luddites because of their life style changes, but many people in the green movement are busy developing cutting-edge technology, among them many eminent scientists, of whom it certainly could not be said that they were hostile to science. It is a very unfortunate path to pursue.

The committee’s evidence is excellent and makes interesting reading. As one would expect, it reveals varied opinions, and interesting, thought-provoking questions were asked. As I have said, the debate today has been excellent, but I join other speakers in expressing a certain disappointment about the report. Others have mentioned the tone of the report, but perhaps I could be slightly more forthright in saying that one of the weaknesses of the report is that it started out with an assumption which it then set out to prove.

Professor Colin Robinson was quoted by the noble Lord, Lord Sheldon. At the start of the evidence volume, Professor Robinson makes the point that economists are not qualified to comment in detail on the methods used by scientists to model climate change. But the tone of the report is set by his comment that those who call for substantial action are,

“alarmist observers, like doomsters of earlier times”.

That sets the tone for the report, which spends an undue amount of time questioning the intricacies of the modelling and the scenarios behind some of the predictions of the IPCC.

I could not better the analysis of the noble Lord, Lord Turner, and I certainly would not wish to try. I will read his speech in Hansard. He encapsulatedfar more eloquently than I would many of my reservations about the assumptions that had been made about the IPCC. Other noble Lords, including the noble Lord, Lord Rees of Ludlow, said that the very questioning and wishing for certainty in scenarios that are of their very nature uncertain is unrealistic.

Those of us who opened the report with anticipation felt that because the committee was so over-determined to pursue that one issue at length—whether the IPCC was too politicised—it was to the loss of other issues that were not explored. Noble Lords have mentioned some of them. My noble friend Lord Vallance made a particularly powerful speech about the technologies and the potential behind them. I would have expected the committee to spend two or three chapters on the optimism reflected in his speech about those possibilities, rather than one chapter.

The noble Lord, Lord Giddens, mentioned lifestyle change, which was perhaps slightly outside the remit of the committee. Nevertheless, the willingness of people, given the potential, to change their lifestyle and to adapt is worth exploring. It is cynical to say that people want to carry on regardless. Many surveys have shown that when confronted with choices, one of the most important things to people is their children’s future. After all, that is what people are striving for, that is what people are educating their children for, and this is about the sort of inheritance that people want their children to have. When confronted with the scenario that warming may produce, people would be very willing to change their lifestyle. It is simply about having the tools to enable them to do so.

The committee had some strong evidence fromthe Royal Society, which outlined 12 misleading arguments that it refuted at length and in detail. Nevertheless, those misleading arguments have been advanced again today. The noble Lord, Lord Sheldon, mentioned a cosier, warmer climate; the very thing that the Royal Society refutes on page 302 of its evidence. Paragraphs 149 to 155 of the report seem to reproduce those misleading arguments. I wonder whether the committee had really taken to heart the evidence given by the Royal Society, which explained why those arguments were wrong.

However, I would not want to leave that point without saying that the report had some particular strengths. For example, paragraph 180 on adaptation becoming the norm of policy thinking was very important. Paragraph 181, which talked of a carbon tax replacing the climate change levy as the way forward, and paragraph 182, which again emphasised innovation regarding climate change, were also important.

Before this debate I asked myself whether at this point we would be able to ask if the committee had moved on in its thinking from last year. A number of speeches—those of the noble Lords, Lord Layard and Lord Vallance, in particular—indicated that times had changed and Members of the committee have said that a year has passed. We now have the Stern review which is able to build on the committee’s work. It was not clear whether the Stern review happened because of this report and whether the Treasury was pushed into such a review, but that is not important.

I hope that the Stern review will concentrate on the issue of mitigation or adaptation. Of course it is not a choice; it is a bit like asking, “Do we need food or sleep”? Clearly, we need global mitigation action. In our reaction, that of the developed world, we will not be the first countries to suffer catastrophic effects, but that does not mean that in the short term we should not worry about the catastrophic effects on others and, in the long term, the catastrophic effects on the developing world will mean catastrophic effects on us, as my noble friend Lord Teverson so dramatically described when he talked about migration.

Many noble Lords mentioned the predictions about warming as measured by the air. The noble Earl, Lord Selborne, mentioned the work of the National Oceanography Centre, Southampton. The Plymouth Marine Laboratory has been carrying out some extremely interesting work regarding the deep oceans. Even if you argue this way or that about warming in the atmosphere, what is happening in the deep oceans should give us all great cause for concern, because it takes far more to warm a small amount in the deep ocean than it does in the atmosphere. The deep oceans are a real indicator of the extent of the problem, according to the information given to me by the laboratory.

The debate today has been extremely illuminating. The noble Lord, Lord Wakeham, said that the report was evidence-based and not party-political. I would gently say to him that there is no excuse for the sort of party-political propaganda in the box on page 61, which claims that the 1992 targets were achieved largely by electricity privatisation introduced by the Conservative Government. It could equally be argued that the targets were achieved by the “dash for gas”, which depleted our gas stocks, so that we now rely increasingly on gas from abroad, and shut down the coal industry at a time when we should have been investing in the clean coal technologies that would be taking us forward now.

As my noble friend Lord Teverson said, the reports of your Lordships’ House are held in high regard. It would be unfortunate if they became party-political or anything less than evidence-based. This House has a reputation for an extremely high standard of report, which I for one would be anxious for it to maintain. We can be in absolutely no doubt about the quality of the debate today, and I very much look forward to reading it.

My Lords, I begin by expressing my thanks to the Economic Affairs Committee for its immense amount of hard work, under the chairmanship of my noble friend Lord Wakeham, in producing this report. I add my thanks to my noble friend for introducing it.

One of the great virtues of the committee reports of this House is that they are subsequently submitted quite literally to Peer review, which is very much what we are indulging ourselves in today. That is rather important. If I were to make a suggestion about the future treatment of this report, it would be that the Hansard record of this debate should be attached within the cover of its future editions. That would be immensely worth while.

It is now more than 12 months since the report was published and what a year it has been. We had a major energy crisis last winter; we have seen the price of a barrel of oil double on the world markets; and we have had commensurately large increases in all other energy prices. We have also seen the arrival of the European Emissions Trading Scheme, which was supposed to put a proper cost on carbon emissions. Its failure to do so does not reduce the significance of its arrival but it does mean that some fairly rapid revision work needs to be done to ensure that it becomes an effective mechanism. One effect of that failure has been that carbon certificates have been cheap and, because of that, in last winter’s electricity generation we used more coal than we were accustomed to do and yet again—surprise, surprise—our carbon dioxide emissions have risen.

We have another energy review, which, rightly, keeps open all the options for energy supply in the future. That is immensely welcome. I wish that I could feel a little more confident about detecting within that review the urgency for change which the situation now requires. There is talk of a White Paper in the autumn but there is no mention of legislation, and some of the proposals in it will be dealt with in the spending review of 2008. That is beginning to press out the decision-making mechanism.

In the mean time, energy security has becomea much higher-profile matter for all countries, particularly the United States. Beneficially, the relative cost of green energy is rapidly moving in a favourable direction so that, now, onshore wind is competitive, biofuels are likely to be competitive within less than a decade, and so on. Twelve months ago, who would have imagined such a script? I almost feel the ghost of Harold Macmillan standing behind me whispering over my shoulder, “Events, dear boy, events”.

The report deals with the relationship between two highly controversial matters. The first is global warming. One had only to listen to the “Today” programme on Thursday, 6 July, when Professor Lovelock was discussing the issue with some of his contemporaries, who equally believe in global warming, to realise that the subject, even for those who are totally convinced that warming is happening, is highly controversial. That is important.

The other part of the debate is the economic effect. The economy has been controversial throughout my whole public life, even when we did not have this problem. With such a recipe, and looking over a seriously long timescale such as the next century—or perhaps even longer, because the implications for mankind go further than that—it would be remarkable if strong views were not expressed and, indeed, if there were not a strong degree of dissension. To me, the remarkable thing is that the IPCC, which brings together so many scientists from so many different nations, has arrived at a consensus. But it has, and that gives particular integrity to its recommendations.

For me, the significance of the report is that it calls for more and better focused research both from the IPCC and on the economic front, particularly with the involvement of the Treasury. My noble friend Lord Wakeham mentioned that in his introduction and the noble Lord, Lord Macdonald of Tradeston, noted that the Stern review is going on. That has to be welcomed.

We must also recognise that the pool of relevant knowledge continues to expand and to develop. I can give two examples. First, on 30 June this year an article appeared in the American magazine Science. It is surprising how much good and relevant research is done on the subject in the United States of America when, in international circles, it has such an impossibly bad reputation in this area. The article was entitled “Food for Thought: Lower-Than-Expected Crop Yield Stimulation with Rising CO₂ Concentrations”. That reported on the difference between experiments that were done 10 or 15 years ago and more recent experiments which have been carried out with more appropriate technology. A significant aspect used to calculate food production capacity in future environmental concentrations of CO₂ has been somewhat eroded. I put it no higher than that. I have remarked before in this House that, in any event, there is insufficient land to produce both food and energy for mankind.

The second aspect—I shall not go into any further detail—is the temperature hockey stick with which the noble Lord, Lord Rees of Ludlow, has dealt with greater expertise and knowledge than I possibly could. It is worth noting that the latest research report, undertaken on behalf of the United States Congress, interestingly enough, largely vindicates the researchers’ work—Professor Mann et al’s hockey stick graph, first published in 1998. It concludes:

“Based on the analyses presented in the original papers by Mann et al. and this newer supporting evidence, the committee finds it plausible that the Northern Hemisphere was warmer during the last few decades of the 20th century than during any comparable period over the preceding millennium”.

That needs to be stated. It is no criticism of the committee that it reported as it did, because that was the state of knowledge when the report was written. We all need to be aware that knowledge is developing constantly and that, from time to time, some research will prove to be uncomfortable to us all, whatever our views. That is the nature of the difficulty that we face.

We are not dealing with one or two hockey sticks—the one I have just mentioned and the hockey stick that deals with carbon dioxide in the atmosphere—but four hockey sticks all pointing in the same direction. The other two hockey sticks are the rapid increase in the human population and the rapid increase in industrial and economic growth. When four hockey sticks are all going the same way, perhaps we need to take note.

We must take account of and somehow explain what is already happening around the world. Arctic temperatures are well up and Arctic ice, as has been said, is diminishing. The Greenland ice cap is retreating. I draw attention to a slightly different point in the Antarctic from the ice problem: in the western Antarctic a small increase in water temperature is putting at risk the future of krill, the basic food for so many species of fish in that part of the world that support a large industry.

Only last week, the Sunday Times reported that the Eiger glacier is now 140 feet lower at its top, below the north face of the Eiger, than it was a little over 100 years ago. That is a local matter. Kilimanjaro used to have a permanent snow cap but has now almost lost it. In my industry, the northern limits of crops such as maize, sunflower and soya creep inexorably to higher latitudes. This is an adaptation reality. Of course, mankind has the capacity to change what and where we cultivate. But that raises a slightly different question: whether the natural fauna and flora have the same flexibility. When migration routes for birds are set over millennia of experience, when they are dependent on particular foods being available in particular locations, they do not have the luxury that we do. I fear is that the extinction rate is likely to increase.

The Association of British Insurers, which really must do a good risk assessment, sent an interesting brief in which it projected what is likely to happen to its industry and the volume and costs of the economic impact of climate change. It makes the point that, if future levels of carbon dioxide are at the lower end of the projected range, the increase in damage might be reduced by up to 70 per cent. If ever there was an argument in favour of mitigation, that must be one. We cannot wait until the sea overtops the Thames Barrier before we take action to ensure that it cannot do so.

This is yet another report on global warming, an issue on which we have had some very interesting debates in this House over the last year. The report is another in what I expect to be a succession on the subject. I am grateful to all who have contributed to this debate and look forward to the Minister’s reply.

My Lords, we have had a fascinating debate, but, with my time limit, I am not going to be able to do justice to all 20 speeches. At the outset, however, I must congratulate the noble Lord, Lord Teverson, on his maiden speech. He came to the House with a good track record, and he has certainly shown how seriously he takes this issue. As I was watching names being added to the list through the week, I thought that, with all the new Peers coming in, this would be an opportunity for lots of them to make their maiden speeches. I was surprised that we only got one, but the speech was incredibly valuable and I congratulate the noble Lord on it on behalf of the House.

Before I get into my set piece, I shall mention a couple of preliminary points so that I do not forget them. On Stern, which I will mention, we will have the report, and the Government will publish an energy White Paper following on from the energy review, by the end of the year. Remarks were also made, which I appreciate, about the setting up of the office of climate change, which we want to be a shared resource across the Government.

I shall not get involved in the arguments that have gone around the House regarding the green movement. The fact of the matter is that, when scientists are conducting experiments to discover possible changes in the environment, and when those studies are interfered with by those who do not want to know what the results are so that proper results cannot be obtained, that undermines everything else that the green movement says. If you want to use science to discover the effects, destroying the experiments is not a good idea.

I do not know the reasons for the delay in the debate on the report, but I understand that deeper waters—not a good phrase—have flowed on this. There have been important developments in our understanding of climate change in the 18 months since the Economic Affairs Committee began its inquiry into the economics of climate change. Significant progress has also been made in the national and international policy framework to address the climate change threat, and I will address some of those points.

The vast majority of scientific evidence continues to corroborate the scientific consensus that human activities currently represent the major influence on global climate change. Arguments disputing the science have been found to be indefensible in some ways and some apparent inconsistencies are still to be reconciled. In fact, the latest science suggests that the risks could be greater than we previously thought. For noble Lords who want to spend some more time on that, I assume that this book, Avoiding Dangerous Climate Change, is in the Library. It containsthe papers of the Defra-sponsored international symposium on the stabilisation of greenhouse gas concentrations that took place at the Met Office in Exeter between 1 and 3 February 2005. It is published by Cambridge University Press and is a large and rather heavy volume. If it is not in the Library, I will make sure that a copy is placed there. The latest science suggests that the risks could be greater than we previously thought.

There were references to increases in temperature. Something is happening, and whatever one argues about 100 years or 30 years or whatever happened in other ages, it is a fact that, of the hottest 10 years ever recorded, nine occurred in the past 10 years.

There was considerable reference to the Intergovernmental Panel on Climate Change and, by and large, there was a good degree of support, as well as some criticism; it was also criticised in the committee’s report. The Government’s view is that the IPCC has performed and continues to perform its role in a balanced and objective manner. There is no comparable scientific assessment process in terms of scope, depth and international representation. The Government therefore fully support the work of the panel and are confident that the forthcoming fourth assessment report, which is due in 2007, will make yet another contribution to our understanding of climate change.

A number of speakers—I shall not mention names, as that would not be fair—queried the growth figures underpinning the IPCC’s emissions scenarios. This is a technical issue, but it is relevant to the debate. The IPCC will be assessing the academic literature on scenarios in its next assessment report, which is due out next year. It will be encouraging the scientific community to do more work on developing emissions scenarios. While the exact path of future emissions will depend on many factors, it is clear that, without concerted policy action, emissions will continue to rise in this century. At current rates of growth, we are likely to see by the middle of this century at least a doubling of concentrations relative to pre-industrial levels. That level of climate change would have wide-ranging impacts on societies and economies far beyond what has been discussed today.

On the other hand, the majority of the economic literature concludes that stabilising concentrations of greenhouse gases at safe levels would not involve unacceptable costs, provided that the right policies are in place, existing technologies are developed and deployed and sufficient time is allowed for the transition to a low-carbon economy.

Uncertainty is no excuse for inaction. The risks that we face and the balance of costs of action and inaction are not symmetrical. On the one side, we are faced with the risks of large, irreversible damage costs. On the other side is the demanding but achievable and, we believe, ultimately affordable challenge of reducing emissions while simultaneously adapting to unavoidable levels of climate change.

Just after the reshuffle, I visited a Defra laboratory—the Centre for Environment, Fisheries and Aquaculture Science, which is based in Lowestoft, although most of its work is done around the world—to pick up on what the scientists had been doing to measure what has happened recently in the oceans. As good, communicative scientists, they are always trying to give examples that mean things to people, rather than just trotting out statistics. They pointed out to me that the data-run models over the past 30 years show that approximately 18,000 cubic kilometres of fresh water has been lost from the Arctic Ocean—that includes the whole area, not just the ice. They were considering how to explain that to people, because it is a huge concept. It is basicallythe equivalent of France covered in water by up to35 metres. They said that the scientists who had put that example together were clearly not wine fanatics but had done so to illustrate the amount of fresh water that has come into the oceans during the past 30 years. So movements are under way that we must take account of.

Society has not only a rationale but a duty to act to reduce emissions and to adapt to unavoidable levels of climate change. Several noble Lords mentioned adaptation versus mitigation. There is not time to go into great detail, but the answer to the question whether adaptation to unavoidable climate change should receive more attention as part of the policy response is yes. The Government recognise the importance of choosing the appropriate policy response to climate change, including the balance of mitigation to prevent the worst risks from climate change and adaptation to unavoidable climate change.

The UK is leading internationally in developing a coherent and robust adaptation framework, which we hope will set out a rational structure for the roles and activities of different organisations. Those range from central Government down to individual actors. It is about allowing people, as well as Governments, the facility to see how their individual actions can make a contribution. If the connection is not made, people will not change their activities. They must see a connection between their lifestyle changes and the greater good of everyone. There is no doubt that saving energy is a major contribution to reducing climate change and we must do more on that, as the energy review has made clear.

My background briefing notes do not make it clear whether the Stern review was set up as a result of the committee’s report. It came just afterwards. There has been criticism of the Treasury, which is an important engine of finance. It is crucial that we create new markets, new businesses and a new energy to effect change. The Government cannot impose that; we need the market mechanism to play a role. The Stern review was set up to give a deeper understanding of the economics of this complex issue.

We are confident that the review, which was launched in 2005, will provide a solid analysis of the challenges around climate change and a basis for good policy-making at national and international levels. The past 18 months have seen unparalleled international action and agreement on climate change and energy, especially during the UK presidencies of the European Union and the G8. We secured several important agreements: the need for urgent action to reduce greenhouse gas emissions; the Gleneagles plan of action; and the strengthening of the Kyoto protocol in Montreal with the adoption of the Marrakech accords.

Notwithstanding the two issues that the noble Baroness raised, at the G8 summit this weekend the Prime Minister will continue to press for urgent action and movement on his two key priorities for climate change. They are, first, international agreement and consensus on a long-term stabilisation goal to limit emissions and ultimately further temperature rise and, secondly, to start seeking agreement on a post-2012 framework that the major players—the United States, China, India and the European Union—buy into and which is underpinned by the stabilisation goal. We are encouraging debate in various forums and forging partnerships with key countries such as India and China.

There have been several references to China and India, which will be the generators of a lot of emissions in years to come. Why should they pull back from economic change? Because of advances in technology, we have an opportunity to assist those nations to make their economic progress not as damaging as it would have been if we did not have those technologies. We have already launched an initiative to create and develop near-zero emissions from coal using carbon capture and storage technologies, which could be used in China. There could be a demonstration by 2020. Having more coal-fired power stations is not a disastrous scenario if we can use that technology, which we can develop based on our own experience.

Engaging the United States will continue to be essential. The US is actively seeking alternative multilateral approaches to move beyond the disagreements over the Kyoto Protocol. That is obvious and well known. The focus on research and development and technology alone, although essential, will not suffice; we think that it must be coupled with an attempt to resolve the externality of emissions that inhibit the innovation process. We therefore think that a carbon price is important. Prices will only be developed through scarcity, so targets have an important role to play in driving emission reductions. We think that that is essential to cost-effective solutions, such as the cap-and-trade system.

There have been some references to the EU emissions trading scheme, on whose progress after its first year we made a Statement just a few weeks ago. Europe is a key progressive force internationally, and the successful launch of the trading scheme has indeed helped to drive climate change up the agenda of business and the wider community by giving carbon emissions a commercial value. The results of the first year, published in May, show that the scheme has got off to a good start. The infrastructure is functioning well and forms a sound basis on which to build for the future. As I said, when we made our Statement, the scheme had only been going for a year. There is still tweaking and other work to do.

The United Kingdom announced at the end of June that we would build on phase 1 of the emissions trading scheme by setting an emissions cap for phase 2 of 238 million allowances, which represents a saving of 8 million tonnes of carbon each year. The United Kingdom is urging the Commission to improve the enforcement of tough caps and the priorities forthe review of the scheme post-phase 2, announced in the energy review earlier this week, show our clear commitment to making the scheme work.

On domestic action, it is pointed out, fairly, that we are responsible for only 2 per cent of the world’s emissions, but the fact is that we started the industrial revolution and perhaps in a way started pollution in this phase of the world’s history. However, that means that we have experience to work from. We have technology and wherewithal that we can use for the advantage of everyone else—and for our own economic advantage, if we are clever about it.

We have to do things internationally. Our credibility will rely on what we are doing on the home front. We have to lead in creating a low-carbon economy. If we can do that, we are more likely to be listened to on the international front. We do not think that this will be at the expense of our economic and social objectives. If the challenge of climate change is to be met, all parts of British society will have to play their part. If we get the message and see the role that we can play, the small changes in behaviour that we make as individuals—switching off electrical appliances rather than leaving them on standby, as was discussed earlier this week, or making the right choice of those appliances in the first place—can make a tremendous difference to energy use in this country. We have to set ambitious long-term goals, though, and the Government can therefore play a critical role in enabling a low-carbon economy.

The energy review that we published earlier this week contains ambitious proposals for getting us on course to achieving real progress in emission reductions by 2020 and remaining on the right path to achieving our domestic goal of a 60 per cent reduction in CO₂ emissions by 2050. Overall, the package of measures in the energy review could deliver between 19 million and 25 million tonnes of carbon savings by 2020. These would be achieved through several levers, including new measures for the transport sector, which are long overdue; the removal of barriers to distributed generation and new nuclear; measures to support renewable electricity; and a big push on energy efficiency. All those have a roleto play.

I know that your Lordships’ House will come back to this issue and probably spend more time on it than the other place will. With the range of expertise in this House, this is an ideal place for a mature and considered debate on climate change. The next years will be crucial in defining the response of the economy and society to changes in climate in our country and the rest of the globe. The Government have already contributed to shaping the European and international agendas on climate change, including multilateral agreements, emissions trading and initiatives on energy efficiency. We must push on faster and further and it is essential that we continue this momentum to encourage global action on climate change. Without that, we are in real trouble.

I would not want to give a view that had not been expressed in your Lordships’ House, but two or three speeches seemed to suggest that we might have to give up the ghost and make hay while the sun shines. Well, we want the sun to carry on shining; we want to carry on making hay; and we want to have progress. But that will mean concerted action and going with the science, taking some bold decisions on changes in society and our economy—there is no question about that—and not believing that the Government can do it all. It is Parliament’s job to get the message across to individuals and businesses on how they can play their role. If individuals can see how playing a role is important, they will do it and will end up doing the job for us all, because we are all in this together.

My Lords, I am very glad that the noble Lord, Lord Rooker, ended on a cheerful note and has not let me down when I say how much I have admired him over the years. I thank all noble Lords who have taken part in this extremely good debate. In a way, these occasions show the House of Lords at its best. There has been a whole range of views—not all the same by any manner of means—nearly all put overwhelmingly clearly and concisely. I am very grateful for that.

The more perceptive of noble Lords might even have noticed that in the committee that I chaired there was perhaps a slight difference of emphasis on some of the points that we discussed. All I need to do at this stage is repeat that the report was unanimous. Everyone agreed with what was in it. There was no sign of any partisan or party interest at all. I assure the noble Baroness, Lady Miller, that even the bit about electricity privatisation was agreed by the Liberal Democrat members of the committee, who, incidentally, played a very full and effective part, for which I am very grateful.

We have had a good debate and I am most grateful to everyone. All that remains for me to do is to say that I commend the report.

On Question, Motion agreed to.