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Climate Change: Carbon Budgets

Volume 715: debated on Tuesday 8 December 2009

Motion to Take Note

Moved By

That this House takes note of the Committee on Climate Change’s progress report: Meeting Carbon Budgets—The Need for a Step Change.

My Lords, the Government recognise that the challenge presented by climate change is enormous in both scale and urgency, as I know the vast majority of your Lordships are keenly aware.

The scientific consensus is unequivocal: the global climate is warming and this is caused primarily by human activity. The impacts of climate change are already being felt. That is why the House passed the Climate Change Act last year. As noble Lords will be aware, the Act establishes the world’s first long-term legally binding national framework to reduce emissions and support the UK’s transition to a low-carbon economy. It shows our commitment to playing our part in global efforts to tackle climate change. One of its core provisions puts in place a system of five-year carbon budgets to set the trajectory towards our long-term targets—to reduce greenhouse gas emissions by at least 80 per cent by 2050 below 1990 levels, and to reduce them by at least 34 per cent in the period 2018-22.

The Act also established the independent Committee on Climate Change, whose primary role is to advise government on the level of carbon budgets and monitor progress through annual reports to Parliament. This cycle of reporting plays a fundamental part in holding the Government to account in relation to their budgets and targets and providing a challenge to the action taken by the Government to meet them.

The Government very warmly welcome the committee’s first progress report entitled Meeting Carbon Budgets—The Need for a Step Change. This report makes an important contribution to the debate on how successfully we can make the transition to a low-carbon economy in the UK. The Government are considering the report in detail and we will lay a response before Parliament in January, but I hope this evening to give a broad outline of the Government’s position, and I welcome the opportunity to listen to the debate and to respond to the points made.

We agree with the committee that a step change is needed in the pace of emissions reductions. In calling for a step change, the report recognises the importance of the Government’s UK Low Carbon Transition Plan, published in July, in setting out how we will meet our budgets, through emissions reduction policies in each sector of the economy. Indeed, the committee’s report describes the transition plan as “ambitious” and “very comprehensive”.

The committee identified a number of areas, including in the power sector, buildings and industry, and transport, where it considers that further policy detail is needed to meet the ambition of the transition plan. We broadly agree with its assessment, and much of the work that it recommends is in hand. For example, the six draft national policy statements were published for consultation in November. These clearly set out how we will ensure that low-carbon and renewable power can be brought to the level necessary to make the right contribution towards our carbon budgets. Our framework for the development of clean coal announced on the same day establishes the most environmentally ambitious set of coal conditions of any country in the world.

These commitments clearly fulfil the action on coal recommended in the committee’s report. It also identified the potential impact of the recession in our performance towards meeting the first carbon budget. I agree with the committee that the recession will lead to lower emissions than would otherwise have been the case. But emissions reductions in the recession are no substitute for the permanent reductions that we need to decarbonise our economy and meet our 2050 targets. So, I can say categorically that there will be no let-up in our policy efforts because of the recession. We have the right framework in place—through the transition plan—and it is important to note that the plan will not be put off-track by the recession.

As well as the impact of the recession on emissions, the report recognises that the credit crunch has limited the finances available for renewable energy. I do not underestimate the impact of the credit crunch on lending to low-carbon energy projects, and the Government have acted to protect investment during the downturn. The Budget 2009 announced more than £1.4 billion in additional targeted support for the low-carbon sector, and last month a new lending scheme was launched by the European Investment Bank and partners that will facilitate investment of up to £1.4 billion in onshore wind projects over the next few years. Of course, we will continue to monitor the support required by the sector to see whether additional instruments may be needed.

The committee also concludes that the recession will result in a significantly lower carbon price in 2020 than previously projected, and recommends considering measures to strengthen incentives for low-carbon investments. The current carbon price is relatively low as a consequence of the downturn, but there are some risks that should not be ignored in attempting to manage the carbon price. Our view remains that the best approach is to set the right long-term regulatory framework. Under the revised EU Emissions Trading Scheme directive, the EU ETS cap will fall by a fixed percentage every year after 2013. That gives the long-term signal that investors look for, and EU leaders are committed to reviewing and tightening the cap further as part of a new global climate agreement at Copenhagen.

I agree with the committee that the EU Emissions Trading Scheme is not enough on its own to support all the investment in low-carbon electricity generation that is needed. We are taking action now to support or facilitate the low-carbon trinity of renewables, nuclear power and clean coal. I have already described our clean coal framework and the importance of the energy national policy statements in speeding up planning decisions on low-carbon energy developments. We are also working to ensure that access to the electricity grid is not a barrier to new low-carbon generation, particularly for offshore projects. By June of next year, we will introduce enduring new grid access arrangements.

Improving the energy efficiency of homes and communities is a crucial part of our strategy for tackling climate change. It already brings benefits by reducing fuel bills and reducing our reliance on imported energy. We have already delivered large volumes of low-cost measures such as loft and cavity-wall insulation through our carbon emissions reduction target—an obligation on energy suppliers—but we will need to ramp up delivery to meet our carbon budgets. I note that the Committee on Climate Change has acknowledged that, and the significant delivery challenge that we face.

Transport, too, has a major role to play in meeting carbon budgets. That was underlined in the committee’s report. Alongside the transition plan, we published Low Carbon Transport: A Greener Future, which sets out our strategy for reducing emissions from transport. We reckon that it will reduce domestic emissions by about 14 per cent by 2020, compared to 2008, in the period 2018-22.

Another important issue in the committee’s report was the establishment of a suite of indicators in key sectors of the economy, which the committee will use to monitor progress. Those indicators will be very important in ensuring that we understand what extra effort may be required to keep on track, to meet the budgets, and where in the economy it is needed. We welcome that approach, and will be following a similar approach in our own progress monitoring as we develop our plans for managing carbon budgets within the Government.

As set out in the transition plan, the Government are putting in place a strong internal mechanism to manage carbon budgets across Whitehall, so that all parts of the Government do their bit. A point made strongly to me by energy companies and others is that decisions made now on energy and other infrastructure are likely to affect our emissions for the next 30 or 40 years. That is why we are already looking beyond 2020 to our 2050 target, and in spring next year we will publish a 2050 vision setting out the path to a low-carbon economy by the middle of the century, which will complement the transition plan to which I referred. That will include looking at where we need to accelerate development of particular technologies.

My comments so far have focused on what the UK has to do to reduce its own emissions. But of course, this always has to be considered in the context of the global challenge. That is why the conference currently taking place in Copenhagen, which formally started yesterday, is so important.

All the developments since July 2009 show that publication of the UK Low Carbon Transition Plan was not the end, but the beginning of a process of implementation of new policies which deliver greenhouse gas emission reductions. The Government are fully committed to making the comprehensive strategy set out in the transition plan a reality. In doing so, we look forward to working with the Committee on Climate Change. In introducing this debate, I pay tribute to the committee and its members for the outstanding piece of work that they have undertaken. As I said, we will respond formally to the report in the new year. In the mean time, I beg to move.

My Lords, the whole House will be grateful to the Minister for the way in which he has introduced this very timely debate and given us some foresight on the Government’s response to the progress report from the climate change committee. I also paid tribute to the members of the committee. I am very pleased that during the course of the debate we will be hearing from two of its members, and from the noble Lord, Lord Stern, who in many ways set the agenda.

I should perhaps declare one interest, which is that I chair the partners’ board of the Living with Environmental Change Programme. This brings together the public funders of research into how we might respond to environmental change—not just climate change, but environmental change in its widest sense—for example, the impacts of population pressure on natural resources and ecosystems.

As we would expect at this early stage, the second year of the first budget report, the progress report is inevitably more about setting out a framework for emission reductions and policy options, rather than reporting on progress to date. As the Minister reminded us, and as the foreword to the progress report states, the economic recession could produce an over-rosy impression of progress against budgets. We must be careful to ensure that we have long-term targets in mind.

I must declare immediately that I am a fully paid-up supporter of the need to limit atmospheric concentrations of CO2 and equivalents to about 450 parts per million, the level believed to be consistent with a global average temperature increase of about two per cent. To those who say that the science is uncertain, I say that I agree, but given the risks, we have to be quite sure that the science is wrong before following the sceptics. To those who say that the costs of reducing emissions exceed the benefits, I would say that at least we can agree that the win-wins, the low-hanging fruit that the noble Lord, Lord Stern, identified in his review, should be harvested as soon as possible.

It is some of those win-wins that I want to refer to today. In later budget periods, we will be relying on innovation, highly speculative at this stage, such as carbon capture and storage, the development of long-life batteries and second-generation biofuels, to name just three. All will require massive international funding to develop those technologies. However, as the progress report reminds us, there are some less speculative, far less research-dependent measures that we can adopt immediately—and that we should adopt as soon as possible. I refer in particular to Chapter 5, which refers to the major opportunities for reducing emissions in buildings and industry through energy efficiency improvement. To you and me, that means lagging the attic and cavity-wall insulation. If we could just start with those two, we would make a pretty dramatic improvement on the present emissions from buildings.

The present framework policy for delivering residential emissions reduction is simply not appropriate. We rely on the energy suppliers to promote to their customers energy-saving measures—there is a contradiction. As the report states, it will take a long time—2022 is mentioned—before less than half the emissions reduction potential will be achieved. That is through using the procedure known as CERT.

The Government’s new policy framework sets out in the heat and energy-saving strategy three pillars for a new approach: a whole house approach; a neighbourhood approach; and new funding mechanisms. A retrofit programme aimed at improving all properties in England to EPC bands B and C, which, currently, only 6 per cent of properties achieve, would cost an average of about £7,000 a house, according to the progress report. Fuel bills per household would be reduced by an average of 46 per cent. To my mind, that is a win-win. You do not muck around. If you can achieve those sort of savings in emissions and in the cost of running a household, you get on with it.

The problem is that that is the average house. The report notes that a housing association based in Petersfield, the Drum Housing Association, was asked to do a pilot study on the less efficient houses, and found that that could work out at up to £38,000 a house. Of course, that is with all the bells and whistles. That is adding solar heating, PV and the like. I would simply say: stick to what will give you the quickest return and get on with it. Do the whole house audits, which will not cost a lot. Find the houses in which insulation will show the greatest return, and get on with it. At the moment, 40 per cent of the input is restricted to priority households: those on benefit or aged over 70. There is an economic case for widening that rapidly.

Heat is an important part of the equation. After all, heat accounts for nearly 50 per cent of final energy consumed and nearly 50 per cent of CO2 emissions. We must do something about the present, lamentable level of renewable heat—1 per cent. The progress report suggests that that figure might be improved, but not dramatically.

Again, I would look very quickly at where there is the most opportunity to provide renewable heat at competitive prices. So I think that you would have to look at houses that are not on the gas main, because they clearly will be far less inclined to change. We are looking, therefore, at rural properties where biomass heating plants could well be attractive. In other words, you have to develop a wood-chip, wood-pellet supply chain. This is not rocket science—it is already being done. A number of houses and neighbourhood developments have made it work, and work efficiently. Of course, if oil prices go up, it will be all the more easy to demonstrate the economic viability. But the real advantage—I hope the noble Lord, Lord Clark of Windermere, who chairs the Forestry Commission, might be able to add to this—is that, at the moment, about 70 per cent of our privately owned woodlands are either under-managed or derelict. That is because, since the war, there has never been a viable market for the by-products—the thinnings, the lop-and-top—coming out of these woodlands. Perhaps I should declare an interest here as a woodland owner myself in the south-east. This is true throughout the country. There are an awful lot of by-products coming out even from the commercial woodlands, such as the Forestry Commission’s woodlands, for which there is currently not an adequate market.

The improvement gained by going back to the sort of coppicing practices which we had between the wars, when there was a market for charcoal and the secondary crops, is that we will improve biodiversity and rural employment and much else besides. There are many win-wins here. It is very easy to set up: you really only need a hard hat and a chainsaw with instructions on how to use it. You will quickly find that you have on your hands a biomass resource that can serve competitively an awful lot of households, particularly in rural areas. But of course to get this going you need a champion and someone who will ensure that there is a guaranteed market for the chips, and this is happening very slowly at the moment. I would urge government procurement to play an important role in this. Whenever anyone is building a hospital, laboratory or any other development, they should think of the opportunities, particularly in rural areas, for putting in a biomass boiler and thereby securing all these win-wins.

Page 177 of the progress report refers to the uncertainty of the availability of sustainable biomass and, for that matter, biogas. Again, this is simply where we will need policies. Biogas can be provided from anaerobic digesters. There is a lot of biodegradable waste coming out of farms and the infrastructure can and should be put in place to feed into the gas main or to put the gas into generating electricity. There are waste materials that are underutilised and there for the asking.

While talking of waste, I would simply make the point that there has always been a great concern in this country to abide by what is called the waste hierarchy: you must always ensure that waste is used for the most conservationally acceptable purpose. That makes it very difficult to use waste for energy, but that is often the sensible thing to do. It saves using fossil fuels, it saves landfill, and it saves the littering that is a feature of so much of our countryside.

When we look at the policies that will deliver some of these win-wins and some of these easy benefits, we will probably have to upset some of these sacred cows. Another sacred cow, talking about land use, is that we have always seemed to have in this country the attitude that extensive farming will always be the most desirable in terms of conservation. But that is almost certainly not going to be the case when it comes to carbon footprint. I shall quote the English Beef and Sheep Production Roadmap produced by the levy board of the English beef and sheep sector. So the farmers themselves are saying:

“The fundamental differences between more extensive and intensive production systems are particularly clear in this context. The poorer quality nutrition and longer production times of hill sheep mean very much higher GHG emissions per kilogram of lamb produced”.

So in other words, when we get these policies, we will have to think very carefully. That is not to say that we should not be supporting hill farming, the biodiversity benefits or the ecosystem services that will arise from sustaining these extensive systems, but be under no illusion: if it is carbon footprint that you want, that is not necessarily going to be the answer. When the Government roll out the policies to meet the targets that have been set so appropriately by the climate change committee, there are going to be many hard calls, and I have referred to just one or two of them.

My Lords, I, too, congratulate the committee on this extremely readable report. It is a great asset to be able to debate a report that I sat down and read from start to finish only this morning, which is no mean feat considering how difficult the issue can be. I must also declare an interest as one of those involved in passing the Climate Change Bill. It is gratifying indeed to see this report come forward.

I start by saying that I am a sceptic, not of climate change—I think that that would be idiotic, a word which I use advisedly—but of the EU carbon trading scheme. I have set that out before. I therefore have a problem with the report. If you believe that the EU ETS will fundamentally not work because of the financials on which it is based, you will have a problem with how we are looking at carbon in the next few years. One of the interesting things raised by the e-mails, and the reason why the press jumped on them, is the fact that everyone is looking for a get-out by establishing that climate change is not happening and proving that the scientists are lying to us. The size of what we have to undertake is quite staggering. The report clearly sets out how little impact the measures we have taken over the past few years have had on our energy consumption. Calling it a step change is a slight understatement because we have to leap over a huge chasm.

I, too, take massive issue with one part of the report—the part about aviation. It is interesting that we are talking about the aviation figures for 2050. It is interesting not because of the science on how much energy will be used—although I take on board the fact that a massive expansion in aviation will require a reduction in somebody else’s budget, an issue which I will move on to later—but because we are hitting peak oil, a fact which most people seem to ignore. Although the price of oil might fall during a recession, the price will rise massively as oil becomes scarcer and more industries want to use it. I believe that cheap air fares will not survive the next decade and that budget airlines will be seen as a blip. I do not see air travel in the same way as others. So, according to that view, there is no need for a third runway at Heathrow.

The report raises a real issue which I hope the climate change committee will take on board. It seems to be skewed towards electricity. When we talk about the energy needs of this country, many people talk as though electricity is the sole energy source. Gas, in the form of heating for homes, also is a major provider of energy. Of course, 50 per cent of our emissions come from homes and buildings. We should therefore not underestimate the problems with gas.

On electricity, I very much hope that the committee will start looking at balancing the grid, which is a major problem for this country. New nuclear power stations are planned but will not come online until about 2030. One of the issues is how we can best use our current energy infrastructure. I am particularly concerned about the grid, which seems to have been neglected in many of the reports. Many of the White Papers have not talked about the electricity grid itself. An inefficient grid will waste enormous amounts of energy. I very much hope that the Government will look over the next couple of years at the whole issue of energy storage. This is the holy grail of electricity. With energy storage, you could turn renewables into base load and vastly increase the value of energy coming from energy storage. I declare an interest as a shareholder in an energy storage company called Highview, which will produce electricity from liquid nitrogen. However, I shall not go any further into that because, whenever I mention it, it takes people a long time to work out how you can use liquid nitrogen. However, I believe that energy storage in many forms—whether through liquid nitrogen or batteries—will be a real issue. I know that the Americans are spending enormous amounts on this.

One real concern that I have is that we are underestimating a key contributor to carbon in this country: boilers. I am very boring on the subject; I have raised boilers a great many times, and it does not seem to catch the public imagination as it should. It is an issue. However, a group called G2Action has calculated that we have a slight issue with boilers; even if we start converting at the present rate to A-rated boilers, we will miss the target for reduction in CO2 from boilers that is set down by 1.5 billion tonnes by 2050. I went through the figures myself and the reason for that is that, although we can increase the efficiency of boilers so that they are at 97 per cent efficiency—and you cannot get very much more efficient than that—they are not being replaced fast enough. Even when you get to that efficiency rate, the increase in the number of households in the country negates that saving. It is a real concern. Therefore, we have to look at ways in which to deal with that.

Suggesting a change to an A-rated boiler would be a helpful hint to people. However, I have just changed my own boiler at a cost of £5,000. I know that I will save that, but it is a large financial leap. I have worked hard with Ofgem over the past two or three years to look at CERT on boilers to see whether we could come up with some financial incentives. Boilers have been included in CERT, but at an average of £65 per boiler it is insignificant and irrelevant. So CERT has failed as a financial mechanism for boilers.

The one way in which to deal with the problem of boilers is by decarbonising the gas grid. The only way in which we could look at doing that is by looking at renewable gas through biogas. This is an area that I am particularly keen on and have spent a great deal of time on recently. Indeed, I set up the Anaerobic Digestion and Biogas Association and became its chair to look at the anaerobic industry. We have been working very hard on that recently and found that there is probably about £680 million of plant under development or in the planning process at the moment. To give the size of the market that I believe will take place, there are probably about 1,000 plants; 75 per cent of those will be in the agricultural sector, while 25 per cent of those will deal with municipal waste. From those 1,000 plants, we could produce between 10 per cent and 20 per cent of our domestic gas. That will be vital because, by 2015, we will import about 80 per cent of our gas. Therefore, the more gas we can produce from the renewable sector, the more it will affect gas prices. We have a massive problem with gas storage, which leads to the fact that the spot price on gas is what we are paying, rather than the underlying price.

The report talks about the renewable heat incentive, and there were certain question marks over biogas. Gas produced by anaerobic digestion plants, of which there will be quite a large number, then pumped into the grid, is a form of heat, using the gas as an energy-carrier medium. It is probably one of the most efficient mediums to carry energy to the household, if it is fired through a condensing boiler, because you do not lose the heat through a district heating system in the process. That is of particular interest with regard to the renewable heat incentive; one application for that incentive that DECC is considering at the moment is how heat can be dealt with and subsidised. That is a real issue, and I very much hope that the consultation process that is starting in January is looked at carefully. We will have to look at a high price for the renewable heat incentive for biogas, but it will have a major impact on our supply chain and the cost of gas. Far more than that, it will have a massive impact on the carbon content of the gas going into the national gas grid. That is a fundamental issue that we will have to look at with the RHI. I hope that the renewable that everybody is talking about next year is anaerobic digestion and biogas and that the next document that comes before Parliament from the climate change committee looks carefully at its role.

My Lords, I thank the Minister for this opportunity to debate the climate change committee’s first annual report. I am delighted to hear the positive response that the Minister indicated the Government had made to the report. I declare an interest as a member of the climate change committee as well as the chairman of the Adaptation Sub-Committee of the CCC.

I will not live to see the potentially damaging consequences of climate change and, looking around the room, I believe that the same may be said of a number of other noble Lords in the Chamber. However, I have a two month-old grandson, who certainly will live to see the damaging effects of the profligacy of our generation. So it is certainly a moral imperative for us to do what we can to put right the damage that we have done to the planet, for the sake of future generations. It is also worth reflecting that the commitment made in the Climate Change Act, and on the basis of subsequent advice from the climate change committee, to reduce our greenhouse gas emissions to 80 per cent below 1990 levels by 2050 is based on an assumption of global equity. If in 2050 everybody in the world produces 2 tonnes of carbon per year, that would have a reasonable chance of stabilising global warming below the dangerous levels that would lead to tipping points.

I add an aside on climate change sceptics. There are those around who still do not accept the science behind climate change and the human impact. Of course, there are still many uncertainties in the science, and we should continue to improve our scientific understanding. However, in explaining this to people, I say that all they have to remember is three facts that are well established. First, carbon dioxide in greenhouse gases trap the sun’s heat and keep the earth warm; without them, we would be living at a temperature of minus 18 degrees. That was worked out in 1824 by the French scientist Joseph Fourier. Fact two is that carbon dioxide and other greenhouse gas levels have gone up in recent decades; indeed, since the start of the industrial revolution, CO2 has gone up by 30 per cent. The third fact is that that increase in CO2 can be attributed, by the isotopic signature of the carbon directly, to the burning of fossil fuels. Those three facts, together with the direct measurements that temperature has gone up by three-quarters of a degree since the beginning of thermometer records in 1850, is absolutely irrefutable evidence of global warming and that human activity has made a contribution.

I come to the points that I want to make about the committee’s report. In the UK, we are rightly proud of the fact that we lead the pack, as the Minister has said, in establishing a legally binding target for greenhouse gas emissions. Our intention and plans are very good. But before we let ourselves get too excited by our achievement we should ask what is happening to our national carbon footprint. As is so often the case, we appear to be better on process than on action, which was one of the headlines of the CCC’s report. Emissions need to go down between 2 per cent and 3 per cent a year to meet our target of 80 per cent reduction. But at the moment they are going down by less than 1 per cent a year, which is why the committee called for a step change. We have to triple our rate of greenhouse gas reductions if we are to meet the target. I am sure that other noble Lords will say more about the details in the committee’s report, which looks at how emission reductions can be achieved in relation to power generation in buildings and in road transport. But a central objective of the report is to decarbonise electricity generation and then use electricity as the energy source of choice.

I want to make simply one general point. Much of the policy of this and other Governments over recent decades has relied on the mantra of the market and individual consumer choice delivering the desired outcome. The climate change committee’s report makes it clear that the operation of the market and consumer choice will not deliver the required step change. More intervention, more tough choices and more leadership by government are required. That is true in relation to renewable energy and the switch to electric cars, as well as to increased energy efficiency in the home. Will the Minister confirm that the Government are, as recommended by the climate change committee, prepared to take a more interventionist stance to achieve their emissions targets? That may involve investment, incentivising individuals to make choices, regulation or, as referred to by the noble Earl, Lord Selborne, procurement decisions.

It is also clear that lessons may be learnt from what other countries have done. Germany, for example, is considerably ahead of the UK on wind power, even though we have the natural advantage of living on a very windy island with a huge coastline. How has Germany got ahead of us? I am told that two very simple measures played an important role. The first was the introduction of a guaranteed price for wind energy through a feed-in tariff that made wind farms a good investment for the private citizen as well as for businesses and the second was the requirement for local governments to identify suitable sites for wind farm development. Will the Minister confirm that the Government are prepared to learn lessons from other countries and apply them in an appropriate way in this country?

My final point is about adaptation to climate change. However successful we are at mitigation and even if Copenhagen exceeds the wildest hopes of environmentalists, which, in itself is most unlikely, we are committed to some climate change. The climate system is like a very large tanker. You cannot turn it around quickly. Even if we radically reduce greenhouse gas emissions globally, it will take some time for the climate system to respond. For example, it is estimated that 20 per cent of today’s carbon dioxide will still be in the atmosphere in 1,000 years.

The longer we go without a global deal to stem greenhouse gas emissions, the more important adaptation will become—not as an alternative to mitigation, but we need to prepare ourselves for the inevitability of some climate change. The impact of this change will be felt partly directly here in the UK and partly indirectly through the effects on other parts of the world that will have knock-on consequences for us. According to some climate models, a 4 degrees centigrade global temperature rise, which is within the range of possibilities, would make the Mediterranean basin more like the Sahara desert. We should pause to think of the consequences of this, not just for our holiday homes in Italy or southern France, but in terms of food production, climate migrants and tourism.

The Met Office Hadley Centre has produced projections for the UK up to 2080—the so-called UKCP09 projections. These projections should be treated with great caution because they are provisional and are pushing the modelling by climate scientists to their limits. Nevertheless, they give us an indication of what we are likely to have to adapt to. I hear some people say, “Global warming, bring it on. It will get warmer here and London will be more like Lisbon. Wonderful”. But we should stop to think about what it would be like to travel on the London Underground day after day, week after week, in 40 degrees centigrade temperatures. We in this country are not well prepared for a significantly hotter world.

Water supply may be at least as important as temperature rise in adapting to climate change, in the sense of both getting too much and having too little. One prediction of the climate models is for more frequent periods of drought and heat stress, particularly in the south-east, which is already water stressed. At the same time, heavier seasonal rainfall, as well as the possibility of a sea-level rise, will make many parts of the country more flood prone. While the recent floods in Cumbria, as well as the July 2007 floods, cannot as individual events be attributed to climate change, they could be an indication of what is likely to come. The Environment Agency has estimated that already one in six homes in England is at risk of flooding. The misery caused to the occupants and the problem of insurance are likely to increase.

Measures can be taken to adapt. We could stop building new homes in flood-prone areas. Equally, on water shortage, we could make more efficient use of domestic water by a range of measures. When you think of it, it is bizarre that most of us treat water as a more or less free good. The Environment Agency and today’s Walker report have already recommended that all homes should have metered water, which would cut consumption by an estimated 10 per cent to 15 per cent. It is further estimated by the Environment Agency that domestic water consumption could be cut by as much as one-third by installing grey water recycling systems. It is truly profligate that we wash our cars and water our gardens with purified drinking water. It is madness. I am told that the cost of fitting grey water recycling systems to new houses would add perhaps 1 per cent or 2 per cent to the overall price that people would pay for a house.

As with mitigation, the adaptation agenda will require leadership from the Government. I shall end with an echo of my earlier question on mitigation. Will the Minister confirm that the Government are prepared to take the necessary action to prepare us for the inevitable change to our climate that lies ahead, as well as the action to mitigate against further climate change?

My Lords, the problem with global warming and climate change is that the urgency of the task requires action. Moreover, it requires change and sacrifice. The church often prefers to deliberate, talk, reflect, pray, debate or plan. It prefers to do anything other than do something or, as in this case, stop doing things. It is clear from this debate that meeting carbon budgets is a precise, calculated and even legally definable science. Many noble Lords are telling us what we might do and how we might do it.

I shall offer some comments on the effects of global warming that can be observed, as the alarming photos of disappearing ice in the Arctic or on the alpine glaciers show. The deductions based on them virtually all point in one direction; namely, how we decide to live more frugally in energy terms. I believe that that is a precise and positive choice and not a matter to be left to economic laissez faire. This makes what happens at the Copenhagen summit all the more important. As we can see, the production of more evidence along the lines of the CCC’s progress report is not in itself enough to galvanise people to act. The more vulnerable nations already suffering from a less predictable climate are less able to help themselves, so significant efforts to cut emissions will be made only when the nations make a commitment to act in concert. To do that, their leaders need an indication that a decent proportion of their people are behind them.

It is the intention of the Church of England to persuade its members to support our Government in their endeavours to co-operate with other nations and, more significantly, to act itself. The most reverend Primate the Archbishop of Canterbury is going to Copenhagen to preach there and to make our support explicit. Last month, the church issued a seven-year plan to be implemented by its 16,200 churches and 4,700 schools across the UK in an effort to cut the combined annual carbon footprint of around 330,000 tonnes of CO2. The report, Church and Earth, includes emissions reduction targets for the church as a whole in line with the national target of 80 per cent by 2050, and with an interim aim of reducing the church’s carbon footprint by 42 per cent by 2020. This plan puts education and young people at the heart of the church’s climate change strategy, with all 4,700 church schools nationwide aiming to achieve “eco-school” status and implementing government policy on education for sustainable development.

It is not only the Church of England; the world’s major faiths have drawn up long-term plans which were discussed at Windsor in November by more than 200 leaders of faith groups as part of their programme for “seven-year plans for generational change”. The major faith communities worldwide recognise unequivocally that there is a moral imperative to tackle the causes of global warming. They have a crucial role to play around the world as key agents of change in pressing for changes in behaviour at every level of society and in every economic sector. Faith groups reach half of all the world’s schools and have been called on by the Secretary-General of the United Nations to,

“inspire people to change [by setting] an example for the lifestyles of billions of people, and encourage politicians to act more boldly”.

The churches have accepted the responsibility to learn how to live and develop sustainability in a world of finite resources, and we will redouble our efforts to reduce emissions that result from our institutional and individual activities.

The noble Lord, Lord Krebs, referred to water as a particular example. In the part of sub-Saharan Africa that I know well—Sudan—it is quite clear that water shortage is not only a present difficulty in environmental terms, but that it is also highly likely that access to water and, indeed, how the Nile is treated higher up than Sudan, will be the cause of major conflicts in sub-Saharan Africa in years to come. It is not just a matter of our carbon footprint now and over the next 20 years, it is also a question that profoundly affects the possibilities for peace in that very troubled area of the world. If Ethiopia were to cut off supplies from the Blue Nile, Egypt would at once become unsustainable and infertile. There would be an immediate and determined attempt by the Egyptians to try to enforce the plans and covenants they have tried to put in place over the waters of the Blue Nile. It is only one example of the way in which the patterns of our future lifestyle are interconnected and require us not merely to make national or even modest international progress in trying to act together, but to mobilise the community of the world. That is needed not only for the sustainability of our world in terms of lifestyle, carbon emissions and climate change governance, but also to provide for the world a pattern of living together in such a way that we will be able to avoid some of the conflicts that will inevitably come upon us if we do not take these options seriously.

Surely these kind of corporate commitments are preferable to what the report calls the,

“more forceful role for Government”.

That is not what we need. What we need is a greater degree of co-operation between the nations of the world, to act together in this, as in so much else.

My Lords, it is a privilege to participate in this debate and I am happy to follow the right reverend Prelate in his general thesis. I am persuaded by climate change. We need to act quickly and it means that we have to change our habits as individuals and, indeed, as a society and as a Government. That will involve hard choices individually, nationally and internationally. However, I would add a caveat in saying that. When we are talking about hard choices, we must ensure that there is a sense of equity, as the right reverend Prelate said, in the international context for the undeveloped world. Just as when we think about our own citizens, we must not get into a situation where there is no equity so that the poor end up paying a disproportionate price for the inevitable costly hard choices.

It is also clear that we must use science to help tackle this problem. I declare an interest as a non-executive director of Sellafield and a lifelong supporter of the nuclear industry. I follow the point made by the noble Lord, Lord Redesdale, in his special plea for the electricity grid. It is something that the Government need to be moving a little faster on. I clearly believe that at least one new nuclear power station is needed in west Cumbria, but I recognise the difficulties involved in getting the electricity on to the current grid system. We need to be thinking about to develop a grid that will have to run through a national park, and work needs to proceed to see how efficiently we can transmit that electricity under the estuaries—perhaps even across Morecambe Bay to Heysham power station itself. That sort of preparatory work could be taken forward now.

I also want to make that the point that it is not just window dressing when we talk about the economy of west Cumbria as the “energy coast”. It has gone right through and energised the local society, and I can cite the example of the town of Cockermouth, which has suffered so much of late. Recently a group of youngsters came down from the local comprehensive school. It was one of the most inspiring events I have been to. The key fact I want to impress on noble Lords is this: more than 90 young people from that comprehensive school are studying A-level mathematics, while more than 100 are reading A-level physics. That is a measure of the hope and expectation for science that we have in that part of the world. I believe that we need to use the nuclear industry as the non-carbon power base for our baseload of electricity.

The other thing is that we should not forget nature in all this. Any society in an increasingly developed world is becoming more and more removed and remote from nature. Although we see the great power of nature, as we did in Cumbria three weeks ago, sometimes we still think that we as mankind can do it better and more cleverly. In this climate change debate, we ignore nature at our peril. That may seem mere tautology, but I declare an interest as chair of the Forestry Commission. It is probably the last time I shall make that declaration because I finish my eight-year stint at midnight tomorrow. It has been a great privilege to hold that post because I started my life as a forest worker. The point made by the noble Lord, Lord Krebs, that climate change is long term and most of us will not see its effect, applies equally to forestry: you plant trees and very rarely see them harvested. Incidentally, this applies also to nuclear energy, which is another long-term industry.

I make that point because for the past two years I have been encouraging my director-general, Tim Rawlinson, to take a lead internationally to see what we can do in the forestry world. In many ways we are inspired to do so by the impressive work of the noble Lord, Lord Stern, on climate change. Although we may argue about the odd percentage, he made the point that about 18 per cent of greenhouse gas emissions come from deforestation. That is almost as much as the industrial emissions from the whole of the United States of America. It is a large contribution that we have to tackle. The level of deforestation is still proceeding, which all adds to the difficulty of the situation.

However, the Forestry Commission in Britain has taken the lead by establishing an organisation called the Global Partnership on Forest Landscape Restoration. It is not good enough to stop deforestation; we must start increasing afforestation. In degraded parts of the world and in areas that used to be afforested and are now just deserts, we can grow trees again. At a conference in London a couple of weeks ago, a number of European Ministers signed up to that. It was held in conjunction with the IUCN, and Latin American and South American countries and China have joined us in that effort. Reafforestation is an important issue.

However, it is not as simple as that because we do not know what the position is here in our own country. In order to find out, we asked the eminent scientist, Professor Sir David Read, a former vice-president of the Royal Society and an eminent professor of plant pathology at the University of Sheffield, to chair an inquiry by a group of scientists and he reported a couple of weeks ago. His remit was, basically, to analyse the position of forestry in Britain in relation to the mitigation of climate change. He has produced a sound report which is well worth studying.

In that report he picks up a number of points which we, as a Government, can utilise for the benefit of the country. The main point he makes is that sequestration of carbon by trees is beginning to decline in this country simply because our planting has tailed off. Having said that, he and his panel believe that if we increase tree cover by a mere 4 per cent in the United Kingdom, it would sequester 10 per cent of our carbon emissions. That is a significant percentage and we ought to address this issue. The percentage varies: coniferous forests, which are hated by many people, sequester far more carbon than the more natural and more acceptable oak. For example, he estimates that coniferous trees sequester 20 tonnes of CO2 annually whereas with oak it is 15 tonnes.

On top of that we can store even more carbon in the timber itself. It is therefore important that we use more wood in our construction industry because it would tie up carbon for many years, decades and occasionally centuries. We ought to do that. It is possible. Between 80 and 90 per cent of new houses in Scotland are built using the timber-framed method; in England, the figure is less than 20 per cent. The challenge for the Government is to give a lead to architects, developers and builders. It is not only a sensible way to store carbon but, given our climate, it is a cheaper way to build houses.

I hope I have made the case for an increased use of timber and an increase in forest coverage. I take the point of the noble Earl, Lord Selborne, that there are certain parts of the country, especially the south-east, where there are many wooded areas—the most wooded counties in England are Kent, Sussex and Surrey—but no market for the wood. However, as it is basically hard wood, it is ideal for burning and producing energy and biomass. We work very closely with the South East England Development Agency but more effort could be put in by regional development agencies to progress that issue.

People love trees and here we have something which can help us to fight carbon emissions and provide so many things for people—timber, recreation, biodiversity, conservation, health promotion; the list goes on and on. I am sure we will hear from the Minister today that the Government are keen to help the Forestry Commission to expand the tree cover in this country.

My Lords, in the first progress report of the Committee on Climate Change, one sentence on page 31 says it all:

“Whilst emissions currently appear to be falling as a result of the economic recession, this will be largely reversed when the economy returns to growth”.

So not much progress so far. This, incidentally, gives lie to the claim made by the EU Environment Commissioner, reported in the 27 November issue of Resource Management & Recovery, that emissions in the 15 oldest European Union member states had fallen by 4.3 per cent from 1990 levels by 2007. He made the misleading boast:

“These projections further cement the EU’s leadership in delivering on our international commitments to combat climate change”.

No doubt one could find similar empty claims made by national Ministers.

So all of our recent achievements, such as they are, have been derived not from our own efforts, strenuous and expensive though those have been, but as the result of an economic recession that none of us would have wished to happen—none of us, that is, except, conceivably, those diehard environmentalists and others who would prefer not to see economic growth and prosperity as priorities of policy.

The question is: will the future tell a different story? I shall confine my remarks to electricity generation, which accounts for the largest single demand for primary energy, ahead of transport, and is the primary energy-using sector with the highest CO2 emissions at about one-third of the total, ahead of both industry and transport. A recently published report by the leading engineering consultancy Parsons Brinckerhoff, entitled Powering the Future, forecasts that the United Kingdom generating capacity existing today will fall to a half of its present level by 2023 and will have disappeared almost entirely, with the sole exception of Scottish hydroelectric power, by 2040. So virtually our entire electricity-generating capacity will have to be replaced in the next 30 years. It will mean that new plant will have to be built at a rate at least equal to the highest historical rate achieved in this country and at a time when our own power plant industry is greatly reduced.

At the same time, the demand for electricity will surely rise, with, as the report before us shows, population expected to increase by 9 million by 2022, 3 million new houses likely to be built by 2020, road vehicle emissions expected to continue rising as they have in the past and demand for electricity itself having shown in the years leading up to the recession a secular increase of just over 1.5 per cent a year—and all that before the appearance of the electric car, for which the climate change committee also calls loudly.

Against this background of demand for new plant on an unheard-of scale for replacement of our existing power stations, and the likelihood of a substantial increase in the demand for electricity, unless it is stifled by the effect of environmental taxes, how does the committee propose the gap be filled?

It proposes three essentially carbon-free means: nuclear power, carbon capture and storage and wind power. The trouble with nuclear is that even the committee cannot see more than two new nuclear power stations coming on stream before 2020, by which time it would have liked us to reduce our CO2 emissions by 40 per cent. According to the table on page 146 of the report, the contribution of nuclear power will be less in the third budget period than it is in the first.

The problem with carbon capture and storage is that the committee and the Government are calling to their aid an unproven technology. It looks likely to be extremely expensive, requiring twice the amount of fuel perhaps to produce the same quantity of electricity. And if it comes at all, it will come too late, at any rate to help meet the targets. As the report sets out, there are still demonstration plants due to be built by 2016, and the first new full CCS plant is not due to appear until 2022.

It is no wonder, therefore, that the report is obliged to conclude on page 76:

“Investment in wind generation is key to necessary decarbonisation of the power sector in the period to 2020 and beyond”,

adding on page 112,

“because it is the only low-carbon technology that is ready for deployment now”.

So the immense reduction in CO2 emissions that the committee is looking forward to—40 per cent by 2020; even more than 50 per cent at one moment, as stated on page 93; 60 per cent by the third budget—is so far as electricity generation is concerned all to depend on wind power.

At what cost will that be and how realistic are those expectations? In the first place, wind can deliver only very modest amounts of electricity. Even Denmark and Germany, two countries renowned for their achievements in this field, get only 7 per cent of their annual electricity consumption from wind. The noble Lord, Lord Krebs, was right to say that Germany has gone ahead of this country: it has almost 10 times the number of turbines as us. But do we wish to follow it?

In this country, wind power is paid for by enormous subsidies, mostly indirectly from the consumer, to the tune of more £1 billion per annum today and likely to rise at least fourfold if the Government’s targets are ever to be met, pushing electricity bills through the roof. There is not much on that subject in the report.

Wind power is far into, but has by no means finished, the process of industrialising much of our finest countryside, which has been a magnet for visitors from all over the world and inspiration for some of our most famous artists. Here, I declare an interest in that I continue to oppose wind farm applications made close to where I live in the north-west of England.

Wind farms drag in their wake new transmission lines, bringing electricity from remote areas to where it is required at the other end of the country. Incidentally, these new transmission lines are in themselves inefficient, because they have to be capable of operating at a level of capacity which they are only occasionally required to reach.

Offshore wind is little better. It costs at least twice as much as onshore wind, takes twice as long to install and brings with it immense maintenance issues. It must be most doubtful whether the Government’s offshore wind targets are achievable. As the report points out on page 117, the United Kingdom will need to access no fewer than 10 additional installation vessels, which cost between £50 million and £150 million each, have a three-year procurement period and of which we currently have only two. Even if we had the vessels, the rate of wind farm construction that would be required has never been achieved anywhere else in the world.

Wind farms also eat up capital that should be spent on more appropriate efforts to resolve our looming energy crisis. In this regard, the chief executive of Ofgem had some ominous words for MPs last week when he told them that the major energy companies now had serious capital constraints and that the United Kingdom was in danger of losing its position as a prime place for energy investment. We do not live in a world in which we can afford to waste vast sums on the wrong priorities.

Aside from the expense and inefficiency of wind power, what about its justification in the climate committee’s eyes: its supposed capability for reducing CO2 emissions? Is it effective in that regard? It must always be borne in mind that the existence of wind power, however big the so-called wind estate, does not result in the closure of a single fossil-fuelled power station. On the contrary, conventional power stations on their own must always be able to meet peak demand, for there are moments, often coinciding with extreme temperatures, when no wind is available, often across the country and even across Europe.

Moreover, these changes occur abruptly and flexible forms of conventional generation must be ready to step in. Present nuclear plants are no good for that purpose as they can take 48 hours to warm up. That is one reason why far more gas-fired power stations than any other sort are now being built. These power stations are kept in a state of so-called spinning reserve and are constantly being ramped up and down, which of course produces additional CO2 emissions. Moreover, why is it right to ignore the CO2 emissions produced in the manufacture, erection and maintenance of wind farms and their attendant transmission lines, considering that they are all entirely surplus to electricity-generating requirements?

There is another factor. To the extent that the conventional power supply sees its CO2 emissions reduced by a move to nuclear power and, in theory, eventually to coal with carbon capture, wind power’s carbon emission savings are reduced because they are calculated by reference to the CO2 emissions from the other forms of generation for which wind is a substitution.

The Government have already conceded that wind farms save less than half the CO2 that they did a few years ago while gas has replaced coal. If the committee was to attain its eventual objectives for nuclear power and coal, wind power would cease to produce any CO2 savings. So even if wind power produces on balance some CO2 savings today—and even that is doubtful—one day it will produce none at all. Yet we will still have the wind farms, a blot on the landscape and a reminder of our past follies.

This report stands fully behind, indeed it shares a responsibility for, the Government’s commitment to spend staggering and ever-rising amounts of money—the agreed total at the moment seems to be something in the order of £200 billion by 2020—not in an attempt to ward off an energy crisis, nor to help this country achieve greater economic competitiveness, nor to try to uphold the standards of living of the people of this country, but to pursue a policy which has a negative impact on all those imperatives and to do so at a time of the utmost financial stringency and economic vulnerability. I cannot conceive of anything less in the interests of this country, the West or, indeed, developing countries.

One of the Miliband brothers called my noble friend Lord Lawson—who, with Christopher Booker, leads the climate change sceptics in this country—“profoundly irresponsible”. I very much doubt whether that will be the verdict of history.

My Lords, in his first party conference speech after the Labour Party won the election in 1997, the Prime Minister, Mr Blair, took climate change as his major theme. He distributed a 5,000-word essay on the subject by his Chief Scientific Adviser. This set the tone for a Government whose recognition of the problem and the concomitant need for action, both national and globally co-ordinated, has been world-leading and much to their credit. Jonathon Porritt recently stepped down as chair of the Sustainable Development Commission, which he chaired with a fascinating mixture of distinction and occasional exasperation. He said,

“the Climate Change Act … for me stands out as the single most important addition to the Statute Book that this Government has achieved”.

I concur with that appraisal. It brings me to today’s debate, in which I want to make three points, at diminishing length. I shall spend most of my time on the first point.

As we have heard, the Committee on Climate Change, which was established by the Climate Change Act, recently issued its first annual report. I declare my interest, as I have been one of the eight members of that committee from its inception. The most significant aspect of the report is embodied in its title, Meeting Carbon Budgets—The Need for a Step Change. To draw an analogy that comes comfortably to an Australian, the simple fact is that we are falling behind the run rate—not just the run rate for 2050, but for 2022. It is understandable, but unfortunate. It essentially derives from the gap between the Government’s sincere aspirations and the fact that many of the consequent actions run up against political difficulties. Let me give the House four examples.

My first example is nuclear energy. In 1997, the amount of electricity on the grid coming from nuclear had just slipped below 30 per cent. Today, it is below 20 per cent, and we have heard of the difficulties of ramping it back up. Of course nuclear has problems, as does, essentially, every method of generating energy. On the other hand, expert opinion—the Government have come round to this view more recently, but the lag will linger—sees it as a necessary component, along with other things, in the medium term. It was a difficult issue to deal with because it lay on the fault-line between old Labour and new Labour.

My second example is wind power. My noble friend Lord Krebs has already pointed out that wind power—and I shall not take a detour to respond in detail to the jeremiad we have just heard on the subject of wind power—is not the answer, but it is part of the answer. Those who feel it is a blot on the landscape may do well to read Ruskin on the Monsal Dale railroad and reflect on that as they walk on what is now one of the treasures of the dales. The noble Lord reminded us that other countries—Denmark and Germany—are doing markedly better in this respect. The Committee on Climate Change has had a little study done on how Germany is doing much better than we are in insulating houses. As he said, and as I shall not further elaborate, part of the answer is that Germany has a more interventionist approach—almost shading into a command and control thing—whereas we are still too committed to what Jonathon Porritt, in his vivid prose, would call the fundamentalist neoliberal financial orthodoxy. It has its merits, but there are other ways of getting things done and some things that other countries are doing better.

My third example is the one I find most upsetting. We, like other countries in the OECD and elsewhere, have a massive stimulus package, and properly so. However, it is fairly generally agreed that if one rates it as a green package, it can be put generously by saying that it is not in the top half. One specificity that I find frankly incomprehensible was the scrappage package for older cars, the £2,000 intervention to help people trade them in. The CCC promptly suggested that some limit on the grams of carbon per mile should be added. On that topic, the Treasury gave us two fingers.

My fourth example is more general and picks up a theme that has already been sounded by the noble Earl, Lord Selborne. Perhaps some noble Lords are not aware that Selborne is a particularly resonant place to be the earl of because the first serious work on ecology is Gilbert White’s The Natural History of Selborne. The noble Earl is a worthy—not genetic—heir of that tradition. My noble friend Lord Krebs, who I more commonly think of as John Krebs, and the noble Earl, Lord Selborne, reminded us that climate change is only part of a gestalt of problems that roil together and are made up of increasing impact per person and increasing numbers of people. It is curious that we are focused on total impact in the UK and have not talked much about numbers of people. This is a more general question globally, and there are uncertainties about that that are not as explicit in the report as I perhaps would have wished. The current population of Britain is 61 million or 62 million. We do not know; most countries do not know to within 1 or 2 per cent what their population is. Projections for 2050 range from a low of high 60 millions or low 70 millions to a high of high 80 millions, and there is even an EU projection that suggests that by 2050 we will have the highest population. This is not me wishing to set an agenda for the BNP, but it is another issue. It has more general implications for educating women in the developing world and in our own country and empowering them to make non-coerced choices about families.

Ultimately, our trajectory to the Committee on Climate Change’s 2050 target and to sustainable development more generally depends on us all co-operating nationally and internationally in equitable proportions. Unfortunately, an increasing number of studies and experiments on how people co-operate, such as games played by university students as metaphors for addressing a co-operative phenomenon such as climate change, show how easily, “I will if you will” slides into, “I won’t if you won’t”.

This, as many noble Lords know, is Darwin’s year, and I have given more lectures than I care to remember on that. My standard Darwin lecture, which I will not inflict on the House, is about Darwin’s great unsolved problem, the remaining puzzle of how we became a co-operative group once we had got bigger than bands of closely related hunter-gatherers. It is a problem that underlies much of the discussion, and it leads me—this is a bit of a leap—to the conclusion that in many ways, given that we have no evolutionary experience of acting today on behalf of a seemingly distant future, voluntary bodies and NGOs are none the less more effective in delivering such things than are the more process-oriented machineries of government.

Others have made many requests of the noble Lord, Lord Hunt, but my one request is that we give a bit more consideration to distributing some of the money for initiatives to some of these voluntary bodies. The Ashenden Foundation, with which I have no association, made a particularly favourable impression on me. It has an annual awards ceremony in which it has a hierarchy of awards to primary school kids—so you hear six and seven year-olds talking about what they have done to try to sensitise their fellows to being less wasteful—up through secondary school and on to local councils. There is an understanding that if you get one person in a street to make their house more energy-secure, you will generate demand for the whole street. It needs a fairly minimal subsidy to get that kind of ball rolling. This echoes a theme that I went on about at excessive length in the debate on HIV not long ago: how much more effectively we could be acting on sexual health if we gave more of the money to voluntary bodies.

My third and final point is that we need to stop thinking about the unwelcome question of the costs of these actions. In the world that we are heading towards, the actions recommended in the climate change committee’s report and accepted by the Government and which will produce the step change, uncomfortable, awkward and difficult though some of them may be, will have net benefits to the UK in energy security, food security and other respects, regardless of whether other countries are shouldering their burden. It will put us ahead of the curve for a future that will be different from the past, and where those who act early will benefit.

My Lords, it is entirely apposite that this debate is taking place at the same time as the meetings in Copenhagen. Whatever happens there, everyone recognises that there has been a tremendous change in global attitudes towards the risk of climate change; 192 countries are meeting there, and no fewer than 100 heads of state are attending.

I join noble Lords in paying homage to my noble friend Lord Stern. I know that in technical House of Lords terms he is not my noble friend, but he is noble—is he not?—and he is a friend and colleague in the context of the London School of Economics, of which I am also a member. He has had a tremendous impact in raising world consciousness about the dangers that we face.

In this country, as other noble Lords have remarked, we have been slow to introduce effective climate change and energy policy. Across the industrial world there is a cluster of avant-garde states that we lag behind, including Germany, as has been mentioned, Denmark, Sweden and even France, which gets nearly 80 per cent of its electricity from nuclear. With the Climate Change and Energy Acts, the Government can no longer be accused of not having seriousness of intent, but now the hard part starts. Ambition has to be brought into line with achievement, a truly formidable task.

As the noble Lord, Lord Redesdale, has already said, the climate change committee’s progress report recognises that when it uses the term,

“the need for a step change”.

I think we are talking about a revolution here. We are talking about a transformation of our society and our economy that is probably as far-reaching as the original industrial revolution. We have to think through the implications of all that, and we have to do so against the background of climate change, which is not a take-it-or-leave-it issue. You can say, for example, that global poverty is a terrible thing, and if the level of it is the same in 2050 as it is now, it will still be a terrible thing. But climate change is not like that; every hour, week, month and year that we fail to reduce the amount of greenhouse gas emissions going into the air—they are still climbing on a global level—we meet a future that leads to a potential catastrophe because, as has been mentioned, once the emissions are in the air we know of no way of getting them out again.

The sheer scope of these changes requires a new political framework. We are talking—several noble Lords alluded to this—about a return to planning; to something like a national plan. When we do so, we have to ensure that we do not make the mistakes that were made in the 1960s and 1970s when planning was in vogue.

I have four main comments on the committee’s report. The first echoes what other noble Lords have said: there are huge areas of contingency in all the policy innovations covered, especially when we are looking at targets relatively near at hand for 2020. It is like a spread bet. I am sure that most noble Lords will not be familiar with spread betting; in such a bet, you have to get a whole range of outcomes right—and you have to get all of them right if you are going to achieve your end. This is the case with the report; it reflects the fact that we start from so far back.

Everywhere you look, that is the case. Some previous wind power projects have either been aborted or delayed for as much as 10 years. We need a big change in respect of planning permission and other things. Three new nuclear power plants are envisaged but planning permission for Sizewell B took something like six years, so a terrific change is required there. The report notes:

“Currently there are no electric cars and plug-in hybrids commercially available in the UK market”.

The point has been made about CCS. We do not really know whether it will work or how available it will be commercially, and there are already quite big “not in my back yard” issues around CCS in several of the few plants that exist across the world.

I was reflecting on what one can do about this. It is not the fault of the committee; it is due to the fact that we start from so far behind the lead states on all this. Two things occur to me. One is that we could be more radical in one or two areas to make up for potential shortfalls in others. One is the area noted by the noble Earl, Lord Selborne, the one where we know we have the technologies and where we know we can make a big difference quickly: energy efficiency and insulation. I suggest a more radical attack on that. We are talking about a national plan here. Therefore, it should be taken to the people; it should not be introduced from on high, as it were, because the co-operation of citizens will be needed if there is to be any chance of success.

Secondly, I have objections to the form of the report, which essentially uses an additive or wedge approach. You get a certain proportion from this technology, a certain proportion from that technology, a certain proportion from this one, a certain proportion from lifestyle change, and so forth. The main problem is that the implications of each of these for all the others are not properly traced out. For example, new forms of taxation are mentioned at many places; they have to be put together and their overall implications assessed. If you recognise that we are talking about transformative change, you have to look at this holistically; you have to look at the impact of everything on everything else. I do not know what the noble Lord, Lord Stern, thinks—he may disagree—but it seems to me that even though the term “low-carbon economy” is readily bandied around, we do not really know what it will look like. We need to do a lot more intellectual work on it. It cannot possibly be an economy of the sort we have now, just with some renewable technologies grafted on. These sorts of transformations are pretty profound and therefore have implications for everything —employment, welfare, fiscal systems, skills training, and so forth. I see a huge task for economic, social and political theory in trying to work out what an overall low-carbon economy would be and how it would relate to active industrial policy, because it is plain that we must move back to that.

Thirdly, having spent some two years immersed in the literature on this, I find it hard to believe that we can achieve the reductions in greenhouse gas emissions that we need without any sacrifice. Basically, we are living in an unsustainable civilisation and are coming up against the limits of that sustainability. Climate change is the most dramatic and radical expression of that, but it is more generic too. We have to take account of the discussion of growth and GDP and their connections with welfare, which has received quite a lot of prominence in recent years. We should be discussing the Sarkozy report; after all, a cluster of prominent economists worked on it, including Joe Stiglitz and Amartya Sen. In a previous debate on the gracious Speech, I drew attention to the work of the Sustainable Development Commission, which has been mentioned. Whichever way you look at it, the various reports produced by the Sustainable Development Commission, especially Tim Jackson’s book Prosperity without Growth? merit attention. He is right when he says that we do not have a macroeconomic sustainable economy, and we have to do a lot of intellectual work on that too.

So far as I can see, we are looking for a different model of economic and social development. This will also apply to China, India and large developing countries. We accept that they can develop as we did, at least for a few more years, but at a certain point there will have to be a new model of development, and we have to pioneer what that would be.

Fourthly, I have a specific question for the Tory Front Bench. I stress that I do not in the slightest mean this as party-political point-scoring. My view is that climate change is not a left/right issue; I am very pleased that there is a consensus across the parties in supporting the Climate Change Act and the Energy Act. My point concerns the point made by the noble Lord, Lord Krebs. When we were talking about a national plan, transformation and a guiding role for the state, the state will appear everywhere in effectively implementing the provisions of the report of the Committee on Climate Change. I take the liberty of quoting what it says about the electricity market, which I think is perfectly true. It says that,

“no other country has relied on a fully liberalised electricity market of the type that we have in the UK to deliver investments in low-carbon generation”.

This applies to all areas of the document. We are talking about the return of the state, and in a big way. How will the Conservatives reconcile the need for the return of the state in what, after all, are big structural areas in our economy and society with their proclaimed intention to strip the state down?

My Lords, in thanking the Minister for introducing this debate, it is only natural that I, like everybody else, should pay tribute to the Committee on Climate Change which has generated the report that is the background to all that we have heard. As always when I take part in one of these debates, I am impressed by the breadth and depth of experience which constantly confirms my feeling of privilege to be a Member of this House. Even my noble friend Lord Reay, whose contribution and approach to the subject are totally opposed to mine, made an important point. He drew attention to the vulnerability of our energy supplies in this country at this time, due in no small part to the dilatoriness of the Government over the past decade.

That said, we have a very serious subject to debate today. I want to step back from the report for a few minutes in order to look at the background in a bit more depth. The problem which the report addresses on a purely national level, as so many other noble Lords have said, is part of a very great international problem. In the end, every other country in the world must face the issues that we face today. Even those countries in the less developed world, which think that the whole problem is the problem of the developed world—and to a certain extent it is—cannot solve their problems and aspirations today without taking the same sort of steps that we will have to take. If they do not, climate change will not be arrested if, as we in the developed world run down our greenhouse gas emissions, countries in the less developed world simply increase theirs. That is not a solution: it is a recipe for a continuing risk of disaster.

The implication that lies behind this is that the technological answers that we find have to be capable of development across the globe: if they are economic here they will be economic across the globe, and if they are not economic here they will not be economic across the globe. I will return to that point in a little while.

My second point is one that the Minister has touched on already, although very indirectly, when he said that we would have a debate some time in the new year on the implications for 2050. The focus of the report, quite naturally, is where we are now, what we can do now and the start of the process. The focus is inevitably short because there is too much consideration, in my view, of 2020 issues which have been established as a target by the European Community. But the critical target for this country and across the globe is the 2050 target, which might suggest some rather different, more radical approaches from anything we are doing at present.

I have said before that the shape of the 2050 economy can already be predicted in broad scope. By then, our 80 per cent reduction on 1990 levels implies, quite clearly, that only essential emissions will be acceptable after that date—emissions that can otherwise not be avoided. One could begin to list them. I declare an interest as a farmer, because agriculture is essential if we are to maintain our food production. We cannot do without livestock, and regrettably, that means greenhouse gases. We cannot do without the smelting industries that provide our metals, nor cement manufacture. I suspect that we cannot do without aviation and shipping although those can, like every other aspect of the economy, become more energy efficient.

That implies that the whole of the domestic sector, the whole of our industrial and commercial sectors and the whole of our land-based transport sector have to have zero emissions. We need to think about the technologies that will make that possible. The noble Lord, Lord Redesdale, thinks a great deal—and I have every sympathy with him—about anaerobic digestion producing gas, but that is but a step in the process. The gas can be used to produce electricity and post-2050 electricity will be the energy source that we use almost universally. There is a question mark over road transport, which I will not go into now because I have before. That is the background to where we are. One of the step changes we need to make is to stop looking at the 2020 targets and look very seriously at the 2050 target and the international implications of that.

We should not overcomplicate the issue. I hear so much about what needs to be done in the domestic sector. The Royal Institution of Chartered Surveyors has said that if you want to produce a top-quality energy-efficient house, the additional cost of doing so is £17,000 on the average home. But we have 23 million existing houses that have to be adapted and the cost of doing that is probably not that dissimilar if you are to do it to the highest quality. But I can make my home zero emission very simply for far less. All I have to do is use immersion heaters for my hot water system, put space heaters in my rooms and cook with electricity and my home has zero emissions. That might cost me £2,500.

Of course, that depends on my electricity supplier being emissions free, but we will have to make the electricity supply industry emissions free anyway. I wonder whether we should not focus our finance and resources entirely on making sure that that is what happens and not worry quite so much about the domestic consumer. The domestic consumer already has responsibility for the energy efficiency of his own home and will have to make his own decisions. There was a time when I was responsible for the whole of the built estate for Essex County Council and a major consideration was the question of energy efficiency. Energy projects went in and out of programmes with amazing rapidity depending on the wildly fluctuating state of the then economy. We need to recognise that the important thing is that the decision to invest—and energy efficiency is an investment—belongs to the property holder and property owner and we should not take it away from him.

I have two questions for the Minister. One is almost a complete digression, but it has an important aspect to it. First, nuclear power is at the moment the only greenhouse gas-free energy source that we have in this country that is not dependent on the weather, which is an important criterion. Can the Minister give us any encouragement about the position of applicants with planning applications for nuclear power stations coming forward so that once the planning policy statement is approved and the planning commission is at work, there will be applications immediately for consideration? Going back to what was said by my noble friend Lord Reay, that work should really have been done last week.

My second question is slightly different and not intended as a red herring. Under the European Commission’s environmental directives, if one interferes with an environmentally sensitive directive of major international importance, one has an obligation to replace the interfered-with assets as part of the project. The greatest difficulty with this process arises particularly in relation to the Severn barrage—the Severn estuary being the second most powerful potential electricity generator at the moment. We may not see how to undertake that scheme at present, but the time may well come when we can. We need to bear in mind that if we fail on the climate change initiative in toto, the Severn estuary will be ruined anyway, by rising sea levels and rising temperatures. Would it be worth approaching the European Commission for a derogation from the obligation to replace environmental assets where necessary in order to prevent the catastrophic change that is possible if we do not get the environment under control?

My Lords, on first reading the Committee on Climate Change’s latest progress report, I found it an impressive document. It was broad in scope and very detailed. But the more I dug into it the more troubled I became. Below the surface there are serious questions about the foundations on which it has been constructed. There are questions in four areas—the framework created by the Climate Change Act 2008, the policy responses at EU and UK level, the estimate of costs and finally the scientific basis on which the whole scheme of things rests. I will consider each in turn.

Unlike many of those involved in the climate change field, I have no pecuniary interest to declare, but I am a founder trustee of the Global Warming Policy Foundation, which seeks to bring rationality, objectivity and, above all, tolerance to the debate.

I have long been in the camp of what might be called the semi-sceptics. I have taken the science on trust, while becoming increasingly critical of the policy responses being made to achieve a given CO2 or global warming constraint. First, let us look at the Climate Change Act, which has been highly praised, even today, as the most comprehensive and ambitious framework anywhere in the world—a real pioneering first for the UK. However, it has serious flaws. It starts by imposing a completely unworkable duty on the Secretary of State to reduce greenhouse gas emissions by 80 per cent by 2050, even though many of the actions required lie outside his control. It would have been better, as the noble Lord, Lord Crickhowell, and I argued, for the duty to be connected to what the Secretary of State can control, such as his own actions and policies, and not the outcome, which he cannot.

In the Act’s passage through Parliament, the target was raised from 60 per cent to 80 per cent, with little discussion of its costs or feasibility. It is a simple arithmetic calculation to show that if the UK economy continues to grow at its historic trend rate, we will need, only 40 years from now, to produce each £1,000 of GDP with only 8 per cent of the carbon we use today. That is a cut of 90 per cent. Many observers think that this is implausible. A recent report by the Institution of Mechanical Engineers reported that the rate of improvement in carbon intensity/productivity would need to quadruple from the 1.3 per cent achieved in the five years up to the recession to around 5.5 per cent. It would need to be even higher at the end of the period to make up for what the noble Lord, Lord May, calls falling behind the run rate.

Professor Dieter Helm has pointed out that the measurement system used in the Kyoto framework and in the UK’s carbon accounts is a misleading guide to what is really being achieved. The carbon accounts use the territorial method—that is, the emissions from UK territory. In this way, the UK is able to claim that CO2 emissions have been reduced, but that is a misleading way of measuring a nation’s carbon footprint and its impact on the world. It should include the carbon in its imports. If this was done it would show that we are going backwards, since we would be forced to take responsibility for the manufacturing that we have outsourced to such countries as China but are still consuming. The current method is, of course, politically very convenient as it allows us to label China as the world’s largest emitter. The embedded carbon calculation is, I accept, far more complicated, but it is far more honest.

Another flaw in the framework is that the targets are unconditional. It is a legal duty, irrespective of what other countries achieve. Some, including me, argue that there should be two targets: one of which is a commitment, and a higher one which we will argue for internationally but only undertake as part of an agreement. Ironically, this is precisely the approach that the EU is taking with its 20 per cent reduction target by 2020, which would be raised to 30 per cent as part of an international agreement. The danger is that by going it alone we could face a double whammy, paying for decarbonising our own economy, yet still having to pay for the costs of raising our sea defences if others do not follow suit.

Secondly, let us consider the specific policies that have been adopted. Current EU policy follows two inconsistent paths. On the one hand, the ETS seeks to establish a common price for CO2, against which various competing technologies can be measured. The market share of each is determined by the relative costs. This is attractive to economists, since it allows the cost per tonne of CO2 abated to be equalised at the margin, thereby ensuring that the cost of achieving any CO2 target is minimised. The problem is that, despite its theoretical attractions, the ETS is failing. It provides no clear signal on the price of carbon on which investors can base their decisions. The committee, in this report, estimates that the ETS CO2 price in 2020 will be around €22 per tonne. The committee has rightly identified the central contradiction in its own report: the carbon price will be too low and too uncertain to stimulate the low-carbon investments needed to validate the committee’s projections.

At the same time, the EU is following a different approach under its 20:20:20 plan—to achieve a 20 per cent reduction in CO2 by 2020, with 20 per cent of energy coming from renewables. In this way, it predetermines a market share for a technology—renewables—rather than letting the merit order decide. The danger is that in pressing to achieve this target, which implies that over 30 per cent of electricity generation will come from renewables, some renewables capacity will be created which will be more expensive than other responses.

There is also a lack of clarity about the true cost of wind power, once we factor in the cost of retaining a large amount of underutilised conventional capacity, and the extension of the grid. The noble Lord, Lord Reay, has said more than enough on that so I do not need to follow that line of argument.

There is illogicality in the treatment of nuclear energy in the climate change levy. It is ridiculous that nuclear power, as a low-carbon source, is still in the taxable box. For 50 years, a major experiment has been conducted just 20 miles off our coast. France has generated three-quarters of its electricity from nuclear power. The French believe that it has been a huge success, delivering electricity which is secure, cheap and stable in price. France’s carbon intensity is 0.3 of a tonne per $1,000 of GDP, compared to 0.42 in the UK, 0.51 in Germany—so much for it being a market leader—and 0.63 in the US. However, the French option has barely been considered in this country.

As part of the EU plan, 10 per cent of road fuel is mandated to come from biofuels, but by the time this was enacted the credibility of first-generation biofuels had collapsed. Finally, our policy framework lacks balance. It is almost exclusively focused on mitigation through CO2 reduction, The Institution of Mechanical Engineers has argued for what it calls a MAG approach, with effort being committed not just to mitigation but to adaptation and geo-engineering.

Thirdly, there is the issue of cost. All we had to go on at the time when the target was set more ambitiously was the estimate by the noble Lord, Lord Stern, of 1 per cent of GDP. Many people were sceptical at the time and probably even more are now, including, it seems, the noble Lord, Lord Stern, himself. It was reported in the press last week that he now thinks that it might be 2 per cent, but could rise to 5 per cent. I hope he will clarify this when he speaks to us shortly.

In the document that we have before us, the committee says that it previously estimated that costs in 2020 would be about 1 per cent of GDP. That is consistent with its view that it might get to 2 per cent by 2050. In the new report it simply reaffirms the 1 per cent figure in just one paragraph in 250 pages. That is it. I have to say to the noble Lords, Lord Krebs and Lord May, that I do not think that that is adequate. It is difficult to relate these figures to what we are observing on the ground about the difficulties and costs of bringing on stream different technologies such as offshore wind and CCS.

One of the problems bedevilling the debate is the lack of transparency over the huge cross-subsidies that are being created by the renewables obligation and the regime for feed-in tariffs. There is no assurance that their extent is commensurate with the benefits in CO2 abated. My electricity costs me 11p per kilowatt hour. If I erected a wind turbine, I could sell the power I produced to the grid for a whopping 23p. I think I would go out and buy a gizmo which linked my inward meter to my outward meter. That excess cost is averaged over the bills of consumers as a whole, but how much is it in total, or for individual consumers? Here I differ from the noble Lord, Lord May. The whole issue of cost must be given far more attention. The Government cannot ask people to make radical changes to their lifestyle without being more open about the costs that they are being asked to bear.

I accept that “do nothing” is not the right option. Some measures, such as energy efficiency, heat recovery from waste and biomass, and stopping deforestation are probably justified on their own merits. More nuclear power, which in turn would open the way for electrification of our transport fleet, would enhance security of supply. Other measures may be justified as pure insurance, given the uncertainty that we face. But what is badly needed is a consistent metric that allows us to judge whether any given objective is being achieved at minimum cost. The recent book by Professor MacKay, the newly appointed scientific adviser at DECC, provides an excellent starting point. I also very much welcome the intervention by the noble Earl, Lord Selborne, debunking the waste hierarchy and the act of faith that that embodies.

There is the issue of the science, which I had previously taken as given; but many people’s faith is being tested. We are often told that the science is settled. I suppose that is what the Inquisition said to Galileo. If so, why are we spending millions of pounds on research? The science is far from settled. There are major controversies not just about the contribution of CO2, on which most of the debate is focused, but about the influence of other factors such as water vapour, or clouds—the most powerful greenhouse gas—ocean currents and the sun, together with feedback effects, which can be negative as well as positive.

Worse still, there are even controversies about the basic data on temperature. The series going back one, 10 or 100,000 years are, in the genuine sense of the word, synthetic. They are not direct observations but are melded together from proxies such as ice cores, ocean sediments and tree rings.

Given the extent to which the outcome is affected by the statistical techniques and the weightings applied by individual researchers, it is essential that the work is done as transparently as possible, with the greatest scope for challenge. That is why the disclosure of documents and e-mails from the Climatic Research Unit is so disturbing. Instead of an open debate, a picture is emerging of selective use of data, efforts to silence critics, and particularly a refusal to share data and methodologies.

It is essential that these allegations are independently and rigorously investigated. Naturally, I welcome the appointment of my old colleague, Sir Muir Russell, to lead this investigation; a civil servant with a physics degree is a rare beast indeed. He needs to establish what the documents really mean and recommend changes in governance and transparency which will restore confidence in the integrity of the data. This is not just an academic feud in the English department from a Malcolm Bradbury novel. The CRU is a major contributor to the IPCC process. The Government should not see this as a purely university matter. They are the funders of much of this research and their climate change policies are based on it.

We need to purge the debate of the unpleasant religiosity that surrounds it, of scientists acting like NGO activists, of propaganda based on fear for example, the quite disgraceful government advertisement which tried to frighten young children, the final image being the family dog being drowned—and of claims about having “10 days to save the world”. Crude insults from the Prime Minister do not help.

The noble Lords, Lord Krebs and Lord May, and their eminent colleagues on the CCC have a choice. They can take the policy framework as given, the policy responses as given, the costs as given, and the science as given, and then proceed to churn out more and more sophisticated projections, or—as I hope—they can apply the formidable intellectual firepower they command and start to find answers to many of the unsolved questions.

My Lords, this is an important time to be discussing the first report of the climate change committee. It is a great pleasure to follow the very cogent analysis of the noble Lord, Lord Turnbull.

This report was produced with commendable speed. I declare my interests as a professor of climate modelling at University College, a director of an environmental company and an active member of two NGOs. Over the past 10 years the temperatures over the land areas of the world have been rising steadily; indeed, over China—as it reports—they have risen by 1 degree in 10 years, a remarkable rate, so the 4 degrees expected in China by 2100 may well be exceeded. The UK, thanks to ministerial intervention—the noble Lord, Lord Lawson, was present at that time—publishes temperatures over the land areas of the world, unlike most countries and the IPCC, which present data over the land and the sea.

The constant global average temperatures over the land and sea for the past 10 years are due to one of the periodic, but huge, fluctuations in the oceans’ temperatures when cool water is brought to their surface, and this cooling affects the global climate. We are probably now moving again into the El Niño phase when the surface waters warm and the climate changes. When this happened in 1998, some leading United States climate scientists, who should have known better, erroneously hailed the sharp rise in global temperatures at that time as a signal of global warming, and that has caused some of the subsequent confusion. Indeed, the IPCC 2001 report could have been clearer on that point. Parliamentary aficionados with long memories may remember that in 1971 Prime Minister Heath blamed inflation on the rising price of cattle feed due to the El Niño phenomenon, so even economists should believe in this phenomenon.

At a recent conference, Met Office climate scientists stated confidently that the long-term rise of global warming would be seen in annual temperatures as we moved forward. I share with other noble Lords the belief that vigorous debate on this is very important. John Stuart Mill wrote in his essay On Liberty that opinions and practices, particularly those central to government policies, should be questioned and debated.

The urgency of dealing with climate change still needs to be debated. However, my criticism—no other speaker has made this criticism in the debate—is that, even in this fortnight of the Copenhagen conference, people are right to be somewhat sceptical about the real commitment of Governments and leaders in this and many other countries. Why is the heating in buildings still set so high? By contrast, in Japan in the summer people now turn down the air conditioning. As noble Lords know, the Japanese Prime Minister no longer wears a tie. They call this “cool biz” in the summer. In the winter, people in the Mitsubishi offices wear jerseys, and they call that “warm biz”. However, these symbolic changes are absent elsewhere.

I return to the report. Its central recommendation is for the UK to press ahead with non-fossil energy sources—wind and nuclear. However, I take the point made by the noble Lord, Lord Reay, that gas is a very important part of our energy, and has a lower carbon impact than coal. Not everyone may know that Denmark has a significantly higher carbon use per head than the UK because it uses coal for 80 per cent of its energy—only 20 per cent is wind—and there are, I believe, seven pigs per person in Denmark, as the noble Lord, Lord Dixon-Smith, will know. This leads to a very substantial carbon impact. I believe that the House of Lords kitchens use Danish pork. There has been a debate on that matter.

The important point about wind is that we should certainly focus on wind energy offshore. Again, I support the views of the noble Lord, Lord Reay, on that matter. However, as a fluid dynamicist and meteorologist, one notes that the highest winds are often very close to the coast on a lee shore, as sailors well know, so there are aesthetic and planning problems. There is still a lot of science and engineering to overcome in the design and operation of wind farms. However, the reliability is significantly increasing, so the slightly pessimistic estimates on that of the noble Lord, Lord Reay, may well be vitiated shortly. However, the major worry about wind—others have commented on this—is that with climate change there will be substantially more periods in the summer with very low winds, and these will extend over large parts of north-west Europe. But the wider the area covered by wind machines, the likelier it is that at least some parts will be in a windy environment in these extreme conditions, so we need wind energy but we also need back-up systems of nuclear power stations. In France in 2003—I say this to show the danger here—and in Germany many of the nuclear power stations had serious difficulties in operating as the rivers heated up and their water levels fell.

The Government, with the support of the Conservative Party, and, as I hear—this is confidential—the support of 45 per cent of the Liberal Democrats, are now strongly promoting nuclear, although I am surprised at how long it has taken for this consensus to emerge. When going round the country, talking to groups, I have certainly noticed that wherever there is a nuclear power station, there is considerable enthusiasm for having another one—for example, in Middlesbrough, which has been afflicted by the loss of its steelworks. I hope that Middlesbrough will push ahead with new nuclear.

There are two ways in which the new energy policy and the work of the Committee on Climate Change could be improved. First, it should be by considering the integration of mitigation and adaptation policies, as the noble Earl, Lord Selborne, and my noble friend Lord Giddens mentioned. I hope that I am wrong in my impression that economists find integration a difficult concept. Many environmental economists have made this point. The noble Lord, Lord Stern, will speak after me, and he may deny this canard. However, the fact that we have the noble Lord, Lord Krebs, on both committees will enable us to keep this integration.

For example, in the Netherlands wind machines are placed on the dykes, which are constructed to avoid flooding and sea-level rise. If you put a windmill on a dyke, its cost is reduced because 40 per cent of a wind machine is the foundation. That requires, even in Holland, two government departments to get together. It was quite a struggle for them to do it, but they have done it. If you fly into Rotterdam you can see all the windmills on the dykes. That does not happen in the UK, although it may happen on the Severn barrage.

This assumes that the UK knows where it wants its coastal defences to be. There is no clarity on that, except as regards the preservation of London. That also affects the planning of future nuclear power stations along our coasts, which are clearly the places where they should be. Again, an integrationist policy may be needed in which nuclear power stations’ massive foundations could usefully be part of coastal defences.

There is another aspect to nuclear power stations. They provide warm water. It is well known that in Essex—the noble Lord, Lord Dixon-Smith, will know this—they help the oyster farms in Bradwell, and a member of the Conservative Front Bench involved in the fishing industry makes use of the warm water from Gravelines nuclear power station for breeding fish.

The most significant contribution to integrated policies would be to establish district heating in housing near power stations. That was the initiative of Woking borough, which, as many noble Lords will know, is the exemplar in the UK. It reduced energy by about 50 per cent and carbon by 70 per cent over 10 years in all the buildings and structures owned by the council, and district heating through combined heat and power was one of its methods. This only goes to show that intervention can be local as well as national, and I endorse the remarks of other noble Lords on the importance of a directed approach. The other important point is that the scheme was local. Globe and other NGOs mentioned this afternoon are working with many local groups to enlarge target-setting measurements, not only of temperature and pollution but to demonstrate to communities that working for climate change also helps their environment. It was one of the tragedies of the recent document by the Prime Minister on the future of Britain that he mentioned climate change but not the environment. The two are intimately connected.

The Government should be integrating their actions and policies on climate change mitigation as regards sustainable economic growth. Perhaps the Government should even consider delaying some of their installation plans for wind and nuclear, until the UK has the manufacturing capacity to carry out much of the work in the UK. At present, if there is a massive drive in this direction, it looks like it will all come from imports. The UK does not have a steel plant to make the forgings for the nuclear power stations, nor the manufacturing plants to construct the tall towers of wind machines, although I understand that we will have a new plant for the fabrication of blades. However, as I learnt recently, Sheffield and Wales continue to have world-class steel technologists and the know-how.

The last time that there was a surge of building power plants in the UK was in the 1960s, as the noble Lord, Lord Reay, said, when I worked for the CEGB, and I was a trade unionist there. All the plants were built in the UK and exported. This is a critical moment for the UK, where we have enormous investment potential; but where do we have the industry to do that? There is no doubt what Mr Sarkozy would do, but will Mr Brown and my noble friend Lord Mandelson? Unless we do this, the message to students and engineers will not be as positive as it should be.

We need an imaginative leap, as well as this revolution, in the presentation of the urgency of this issue. I was going to ask how many people in the Danish big building will be wearing jerseys this week. We must somehow connect with people, but we must also think strategically and politically in leading forward to new economics and lifestyles. The revolution mentioned by my noble friend Lord Giddens is exactly in the right direction.

My Lords, I warmly welcome the report of the Committee on Climate Change and I thank noble Lords who have made kind comments about the Stern review. The climate change committee is doing its job. It is charting a path and is holding the Government to account. It is doing that, as can be seen in its recent progress report, with a clarity and quality of analysis that we should warmly welcome. It is an excellent model for other countries, as is the cross-party support for the work of the committee. This is mostly about private investment. That is a long-running story, and private investors need to have the confidence that the rules will not suddenly change and that there is a broad shared understanding. That is an important part of what we have seen in the UK.

The report, as a first progress report, sets a strategy and lays out key indictors. It has done that clearly, but it has also sent a clear message to us all that we need a very strong acceleration. It is called a step change in the report. We have been reducing our emissions by less than 1 per cent per annum. We have to increase that figure strongly to 2 per cent or 3 per cent. As the Minister said, that is consistent with the low-carbon strategy that the Government set out in July 2009, but the climate change committee has sent a strong and important message that we have to move very fast if we are to have any chance of achieving the most sensible targets that have been set.

The good news is that we can see how to do it. We can see the technologies and how rapidly they are developing. It is hard to give a talk on this subject without having with your pockets filled with the business cards of people who are making new discoveries. Even if only 20 per cent of those are sane and 80 per cent are whacky, we still have a rate of technical progress that is enormously encouraging.

We can see the economic policies, too. Regulation and standards will be part of the story. But in large measure this is about correcting a market failure associated with not paying for the damage that you do when you emit greenhouse gases. This is about making markets work well; it is about policies that correct markets, work with them and promote the right kind of private investment.

What will it cost? We estimated in the Stern review that to achieve concentrations of less than 550 parts per million of CO2 equivalent, it would cost about 1 per cent of GDP. I now argue, and have been arguing, that we should stay below 500 ppm, and that is why it may cost us a little more—perhaps 2 per cent of GDP. That is equivalent to a one-off 2 per cent increase in prices. You shift over, do things differently, it is a bit more expensive, and that is why it is a one-off cost in increased prices across the economy as a whole. That is significant, but surely it is something that we can absorb. As we learn over time, those costs will reduce, and we are learning rapidly. Those are the estimates that I have been working with. In response to the question of the noble Lord, Lord Turnbull—my friend and former colleague in the Civil Service—if he looks at other estimates such as those of International Energy Agency, McKinsey or the Potsdam Institute for Climate Impact Research, he will find that most estimates are lower. However, we should not see these as costs and burdens, but as investments of great creativity and enormous importance.

The main focus of my remarks is on COP15—the Conference of the Parties No. 15 of the United Nations Framework Convention on Climate Change, which has already begun in Copenhagen. I believe that, given what is at stake, it is the most important international gathering since the Second World War. I should declare an interest in the sense that I will be at Copenhagen for the second week, working very closely with the European Commission. I am an adviser to President Barroso, as a member of his so-called high level committee on energy and climate change. I shall also be working very closely with the Prime Minister of Ethiopia, who is speaking on behalf of the African Union, and principally with the Danish authorities in trying to put a good agreement together. I also declare an interest in that I sometimes speak and advise on this subject, including to HSBC and IDEAglobal, but I have no shares in these or any other companies, and I am not a director of any company, be it connected with climate change or anything else.

What about Copenhagen? What are the stakes that we are playing for? We have heard from the distinguished scientists here today. If we do nothing and allow emissions to accumulate, they will reach around 750 parts per million CO2 equivalent by the end of this century. The level is already at around 435 and we are adding two and a half per year. Therefore the figure is going up and, with business as usual, we will add at least 300 parts per million over the course of the century and will reach 750 parts per million. That implies roughly a 50:50 chance, although of course we do not know these things for certain—this is about risk management and probabilities. However, we would have roughly a 50:50 chance of being either side of 5 degrees centigrade—a level that this planet has not been at for about 30 million years.

In pre-industrial terms, which are the benchmark here, the planet has not been at 3 degrees centigrade above the norm for about 3 million years. We, as humans, even on a very generous definition of homo sapiens, have been around for about 200,000, and we have never seen anything like that. The temperature reached 5 degrees centigrade lower quite recently—in the last ice age, about 10,000 or 12,000 years ago. The ice sheets came down to a latitude roughly where Watford is and people lived closer to the equator. These kinds of temperature increases rewrite the physical geography and therefore the human geography of the world and thus dictate where people can live. A rise of 5 degrees centigrade upwards would have the same effect. It would reconfigure the coast, the rivers and the track of hurricanes. Hundreds of millions—perhaps billions—of people would have to move, and that would lead to severe global conflict. Those are the stakes for which we are playing.

What about the other route? What if we go for low-carbon growth? We can see some of that and will discover lots more of it along the way. I believe that the transition over the next two or three decades will be the most exciting period in economic history. It will seem bigger than the introduction of the railways or electricity; I agree with my colleague at the LSE, my noble friend Lord Giddens, about that. What does low-carbon growth look like? It is more energy-secure and is cleaner, quieter, safer and more biodiverse. Surely the choice is crystal clear. The noble Earl, Lord Selborne, made very clear the appropriate risk analysis in this area. If we go ahead and ignore the warnings of the science, it will be very difficult to back out of the position that we find ourselves in because of the longevity of greenhouse gases, particularly CO2. If the risks turn out to be lower than we currently think them to be and we go down the more sensible route, we will have a more energy-efficient society, we will have an economy and new technologies, and we will be more biodiverse. On any commonsensical analysis of risk, surely the path to follow is clear.

What should we be looking for in Copenhagen? We should be looking for strong results on emissions reductions and on finance. On emissions reductions, we should be looking for a path that gives us roughly a 50:50 chance of being either side of 2 degrees centigrade. Above 2 degrees centigrade, the risks, as the scientists have taught us, get bigger and bigger. So what do we have to do? The answer concerns initiatives. We are currently at a level of around 47 billion tonnes of CO2 equivalent a year, and these numbers matter. The figure would have been about 50 billion had it not been for the slowdown in the world. We need to get that figure down to about 44 billion tonnes in 2020, well below 35 billion tonnes in 2030 and well below 20 billion tonnes in 2050. That target for 2050, or a good bit lower than that, is what my noble friend Lord Krebs described as around 2 tonnes per capita, compared with the 10 or 11 tonnes per capita that is currently the case in the UK. That is the measure of the required radical change.

The good news here is that, if you add up the pledges that people have made over the past few weeks and months, you will see that we are not far away from that target. We could get a good result in emissions reductions in Copenhagen if everyone moved to the upper end of their ranges and if we found just 2 billion or 3 billion tonnes more. We could reach the emissions reduction target, but more worrying is where we are on finance. This is a profoundly inequitable phenomenon. The rich countries are responsible for the bulk of the greenhouse gases in the atmosphere but the poor countries will get hit earliest and hardest, although we will all be very badly hit unless we control emissions in a responsible and sensible way. However, the situation is deeply inequitable. We must support the developing world in the action that it takes. I have argued, and continue to argue, that that support should be at least $50 billion per annum by 2015 and at least $100 billion per annum by 2020. The target of $50 billion per annum by 2015 equates to 0.1 per cent of rich-country GDP. How can we tell the people of the world, and how can we argue to ourselves, that climate change is the most important challenge that we face and not find 0.1 per cent—one in a thousand—of rich- country GDP to provide assistance to the developing world?

The priorities should be adaptation in vulnerable countries, particularly in Africa, strong support for the battle against deforestation, and strong support for the development and deployment of new technologies in the developing world. I believe that we can find new sources of finance but we must make sure that they are additional to development aid. We do not want any funny accounting which takes out of one pocket and gives to another. We can do all those things, particularly if we find new sources of finance, which might be auction revenues, carbon taxes, taxes on international aviation and maritime taxes. We can look at using the special drawing rights that have just been created in the International Monetary Fund and we can look at Tobin taxes. We can, and should, investigate a whole range of new instruments to make sure that the money that the rich world offers for 2015 and 2020 is truly additional.

I welcome the start-up funds, which are now under intense discussion and will be discussed in the European Council at the end of this week. I trust that tomorrow in the Pre-Budget Report we will see strong additional start-up finance in the next two or three years that will enable us to provide strong support for the developing world. We will be looking to tomorrow’s Pre-Budget Report to take the UK on to a path which could, in about 2015, mean $3 billion or £2 billion of support per annum, roughly in proportion to its share of rich-country GDP.

I believe that we can get a strong result in Copenhagen. I believe that the support of the British Government, acting directly and through the EU, will be very important. I welcome and support the fact that the Prime Minister is urging the EU to go to its 30 per cent target. Finally, I believe that the Committee on Climate Change has shown that country by country, community by community, we can make the changes that will make a difference here and that, in doing so, we will find a creative and attractive path to low-carbon growth.

My Lords, I mentioned to the noble Lord, Lord Teverson, that my name was intended to be on the list, but owing to a misunderstanding it was left off. As it happens, I have set out my analysis of this question in this week’s House Magazine, so I can be relatively brief.

The debate has been interesting in that it has been rather polarised—highly polarised in some respects. No harm in that—I would say that it is rather healthy. That is how we often make progress. I find myself, very scientifically, exactly half-way between the two polar opposites. I am afraid that I cannot join my noble friend Lord Giddens in paying homage to the noble Lord, Lord Stern. I think that his report was overpraised. It did not solve the Rubik’s cube on the economic side; I am nearer to the noble Lord, Lord Turnbull, on that. A good deal of the report was wishful thinking, but I repeat that I am not a member of either of the two main camps. I support the EU position in Copenhagen. Surely the China, India and USA offers are largely referring to reductions in their carbon co-efficients of growth—now called carbon intensity of growth. I do not think that they are talking about absolute reductions at this stage, as the noble Lord, Lord Stern, implies.

One thing that should be coming through our debate much more strongly—this is a point that I made strongly in our debates on the Climate Change Bill, when the role on the Front Bench was taken by the noble Lord, Lord Rooker—is that if there are to be painful trade-offs, which there will be, growth and employment must be at centre stage much more than they have been. I am dubious about the Stern economics, if I am allowed to call them that, because there is a low discount rate to make the arithmetic work in 2050, but we are taking a normal market discount rate for infrastructure projects in the here and now and trying to do it. There are huge contradictions that we may have to live with in how much subsidy we have to pay for carbon capture and storage. If it needs €100 a tonne to make it work, which I think is true—it is only €20 at the moment—the job is being subsidised by 80 per cent. There are many other investments that we are subsidising by 80 per cent. That is funny economics, if that is how we are going to reconcile the arithmetic.

My second point is that we are not in a two-part world—north and south—but in a three-part world. The OECD is no longer the biggest contributor to greenhouse gases. Non-OECD has already overtaken it and by 2030, non-OECD at 26 billion tonnes of greenhouse gases will be double that of the OECD. The noble Lord, Lord Krebs, asked us to imagine everyone in the world producing two tonnes. Well, dream on. Some people might call that a nice communist principle with everybody having the same, but that is not the real world. We have to have price and tax rises to choke off demand for carbon intensive forms of production; we have to subsidise these new technologies and agree a financial—

Can my noble friend bring his remarks to a close? In the gap my noble friend has four minutes and we are over that time now.

I did not think that I was technically in the gap because my name should have been on the list. It was not my fault that it was not there. Anyway, I shall shortly draw my remarks to a close, but I want to make one more point.

The rising world population should be brought into the debate. I can say to the right reverend Prelate that I know that the Vatican is against discussion of family planning, but if the world population keeps doubling, ipso facto that doubles the amount of carbon being produced. Whether it is in a coral atoll or anywhere else in the world, we should bring the issue of population prominently and centrally into the debate.

This has been an authoritative debate, and I thought that one or two speeches were particularly good. The noble Lord, Lord Turnbull, mentioned the consumption measurements that we discussed a little in the reply to the Queen’s Speech. I look forward to him supporting my Private Member’s Bill, which is exactly on that subject, if it ever reaches a Second Reading, which I hope it might. Maybe we could postpone the election beyond March, and it might make it.

The noble Lord quoted Dieter Helm, who we always seem to quote when we have a debate on energy. There should be a rule that if someone gets quoted so many times, he gets the right to become a Member of this House so he can say what he thinks himself, rather than be quoted all the time. I suspect that many of us quoted the noble Lord, Lord Stern, several thousand times before he became a Member of this House, and now that he is here we are all rather more careful of the quotes that we attribute to him. It is so much better to hear him say what he thinks himself rather than hear various interpretations around the House.

I was interested in what the noble Lord, Lord Hunt of Chesterton, had to say. I am very good—we all are—at looking at sustainability indices in the European Union and proving that Britain comes bottom. But with the pig-per-person index from Denmark, perhaps we will come to the top of the league, with Denmark, which is normally the good guy, at the bottom. Maybe that example can be a key performance indicator for the Minister in future.

I thank the Minister and the Government for making sure that this debate took place, because it is important. What better place to debate it, as one-third of the membership of the committee comes from your Lordships’ House? I was particularly delighted that two members could contribute today. I was concerned about the noble Lord, Lord Turner, taking up the appointment at the Financial Services Authority so soon after his Committee on Climate Change role. I thought that that would change, but I am pleased that it is not the case. That is excellent.

All sides of the House during the passage of the Bill were concerned that the resources of the Committee on Climate Change and its authority should be increased. The reports so far have shown that. In many ways we wanted the committee to be not just a bean counter or an auditor of climate change; it could have been under the draft Bill, but it became much more a way of enforcing and ensuring that the facts came through. It was in some ways a nagging spouse to government—a nanny to the state in many ways, and certainly a friend of Parliament in bringing the Government to account on this important area. The report achieves that very well.

I looked back at one of the previous reports on the first carbon budgets, which came out almost a year ago, I think. I started to go through it, but as it is about 480 pages I gave up after about page 5. I then turned to the executive summary, which was 17 pages long, gave up on that and went on to the A5 12-page version, which listed the key messages. That listed—this returns us to the point made by the noble Lord, Lord Giddens—the things that we have to do to solve climate change for the UK. They were dead straightforward. One was to make sure that we made buildings efficient. The second was that we decarbonised transport. The third was that we decarbonised power supply. The next was that we decarbonised another area—I forget which. The last was that we decarbonised industry—concrete producers, and so on. If we did all that, it would cost us between 1 and 2 per cent of GDP.

That was very easy to deliver—or so it sounded. It did not mention that there would need to be any change in lifestyle. That comes back to the issue: what does the decarbonised economy look like? Can we actually get away with it for free, or for 1 or 2 per cent of GDP—a cost, but without fundamental lifestyle changes? That is one area in which we in the political classes do not like to delve too much, because at that point it becomes even more difficult in elections and trying to take public opinion with us. At the moment, we have to stay at the level of saying that we can achieve it without fundamental lifestyle changes. I am an optimist on that: I think that maybe we can deliver that, but the jury is still out. That may be part of the work that the Committee on Climate Change will have to do in future.

This is the first annual report. The committee does not even have the official carbon production footprint figures for 2008, so it cannot consider them. Its major work is looking more generally at the issues and what the lead indicators might be. We look forward to seeing those next time. It points out strongly the slow progress that has been made to date, which has already been mentioned by several noble Lords. It also mentions that not only has progress been slow, but that most of that progress has been in non-CO2 gases. It is CO2 itself where the big challenge will be from now on. That will be the difficult area, whereas the non-CO2 gases—the nitrous gases, the CFCs, et cetera—are the ones that we have already addressed.

The report states that there are two key areas. One concerns power supply and the other concerns homes and efficiency. The key messages to me from this report, which have been mentioned by many noble Lords, are about the real risk that during this recession we take our eye off the ball. It lays down two challenges to the Government on which I would be interested to hear from the Minister. The first is that the Government will not take the existing targets as given, but will stretch them and make them more difficult—I will be interested to hear whether the Government will listen to that message. The second is that any gains or savings made above budget in the first period should not be able to be banked in the second period. I would be interested to know whether the Government share that view.

This has been mentioned, but the report also says that the carbon price by 2020 will probably be only about €20, rather than the €50 that it should be—although I notice on my weekly update by e-mail that the carbon price has risen to €15 from €13 in the past week. I do not know whether that is a good sign going up from Copenhagen.

The other point is investment, which partly comes down to carbon price but also involves the credit crunch, which the Minister mentioned in his opening remarks. The report states very clearly—this is analysis that I have not seen before in any detail—that unless we change the way that pricing structures work, business risk requires that the investment will go towards conventional, understood, low-risk carbon technologies, not renewables or even, probably, nuclear means. There has to be a way in which we give greater certainty, through tax, feed-in tariffs or carbon price, to ensure that those investment decisions are right.

On transport, the thing that perhaps took me aback most in the report’s statistics was that it was expecting a quarter of a million electric vehicles by 2015—five years away—when we do not even have an electric car infrastructure that I could use if I purchased one such car now, although I do not think that many are available. By 2020, that is supposed to rise to 1.7 million. I do not understand how that is going to be delivered. It is a major lifestyle change in our motoring habits, and I do not understand how it will work.

On neighbourhoods, the report makes it very clear that what we are doing at the moment on energy-saving is not working. There was a lovely phrase, damning by a certain amount of praise, about the CERT programme being particularly successful in distributing low-energy light bulbs—it pretty well said that that was all that it had achieved. Whether or not that is true, if there is anything on which we need a step change, it is the message of street-by-street, neighbourhood-by-neighbourhood investment in replacing the 12 million non-condensing boilers, and insulating the 10 million roof spaces and 7.5 million cavity-wall dwellings. That is one of the big challenges that the report lays down. I am not saying that the finances or the accounting of that is easy, but that must be one area where a major change takes place.

The other message—and the last one that I want to mention from the report—concerns carbon capture and storage. Again, from these Benches, I strongly recommend that the Government move into energy performance rules for power stations. Although we are heavily committed to the CCS programme, it is extremely slow in moving forward and in companies willing to come forward to take the financial risks. Yet our coal-based economy, which will still be an important feature of energy generation, is an issue that we need to address.

The climate change committee has today also brought out the air traffic report which my noble friend Lord Redesdale mentioned. It is staggering. It is really just a matter of arithmetic and the Government’s own targets that if aviation emission levels remain the same in 2050 as they were in 2005, they will comprise 25 per cent of the total. I wonder whether that is the right balance for the economy, but perhaps that debate is for another time.

I am delighted that a Member of this House, the noble Lord, Lord Stern, will be at the centre of the Copenhagen negotiations alongside President Barroso and others. It is a very good thing to hear. However, we should not underestimate what needs to happen at Copenhagen. Some 119 nations are there, whereas Kyoto involved only 47. At Kyoto they were looking for reductions in the developing world of 5 to 7 per cent, whereas we are now looking for reductions of 50 per cent globally in a period which is not much longer and with global emissions peaking in 2020. That is a huge agenda.

Britain has its part to play in this, and with Europe it is part of the integrated European climate change negotiations. That is difficult to deliver. Unlike some of my colleagues, I think that it is right to approach this by negotiating on 20 or 30 per cent. I think that negotiations are the right way forward. However, it is a tremendous challenge. The climate change committee should be thanked for this report, which lays out the issues well. I particularly look forward to next year’s report when we have a few more data. The challenge is there. Exactly as has been said, Copenhagen is probably the most important international conference since Bretton Woods and Yalta at the end of the Second World War.

My Lords, I crave your indulgence as this is my first speech from our Front Bench. I feel slightly like a student giving a dissertation; will I or will I not pass under such scrutiny from the eminent gentlemen in this room? It has been a privilege to listen to the debate and to the contribution of the noble Lord, Lord Stern, which was of course brilliant, and to witness again the noble Lord, Lord Giddens, whose tennis I have already witnessed. In the past three weeks, I have heard two very illuminating speeches on this subject. I also congratulate the noble Lords, Lord Krebs and Lord May, who, as authors of this report, have produced a fine document which we value on these Benches. I also thank my noble friends on this side of the House for their contributions. I look forward to hearing the Minister, whom I have admired for his great skill, with which he has dodged bullets and sometimes defended the indefensible. He will have to do so again now. However, I thank him for allowing us to debate this.

My own modest interest is that, as a fellow of the Royal Society of Arts, I have sponsored a carbon footprint research programme, and I am chairman of the Harnham Water Meadows Trust, which is on the doorstep of the right reverend Prelate the Bishop of Salisbury. However, I shall confine myself to the report.

With the backdrop of Copenhagen, this report is an indictment of the Government’s claim to be a global leader. It states unambiguously:

“Emissions reductions in recent years have been very modest”.

The Government have for 13 years wasted many opportunities, and the Committee on Climate Change is still trying to persuade them to act on matters of importance on which there should be no disagreement. Yet the Government seem to be doing very little about it.

The noble Lord, Lord Krebs, says that the Government are better on process than on action. Under Labour, we have seen an 11 per cent increase in emissions from transport and a 12 per cent increase in coal generation over the past year alone. Indeed, under Labour our reliance on fossil fuels has actually grown. As the noble Lord, Lord Stern, said, from next year, if Copenhagen is successful, our emissions must be cut by 3 per cent per annum. The Government have come nowhere near that figure so far. We are currently languishing, as the report tells us, at 1.74 per cent, below the 2 per cent target. As the noble Lord, Lord May, said, the Government have fallen behind the run rate.

It is therefore no surprise that the Government cannot keep their own house in order. Government buildings became 18 per cent less efficient between 2006-07 and 2007-08. What steps are the Government taking to improve the embarrassing performance of their departments? The Government have also failed to meet their manifesto emissions target, and their renewable energy target and have failed to set a microgeneration target. What radical change of policy are the Government planning to set them on course to attain those targets?

I fully endorse the committee’s warnings that the Government must not take any cuts in emissions that result from the recession as a sign of success in their policies. I hope that the Minister will agree with the committee’s conclusion that the rosy figures for last year indicate a cyclical trend rather than underlying improvements and that the Government will not try to claim credit for reductions that are entirely down to the recession.

This is an excellent report. My right honourable friend David Cameron has led the way in forming concrete policies to address climate change and cut emissions; many of those policies are endorsed in the report. In answer to the noble Lord, Lord Giddens, our role is leadership, which, as the report states, has not been forthcoming from this Government. That is a pledge from our party. The report highlights just how damaging to the long-term outlook of this country this dependence on carbon-heavy energy resources is. The Government have taken a long time in implementing even pilot studies around carbon capture and storage. The necessary legislation is only just now before Parliament. The report also makes it clear that we cannot rely on the price of carbon remaining high enough to drive CCS development. Our policy of ensuring that every new power station meets a carbon emissions performance standard is critical if we are to avoid short-term fluctuations in pricing mechanisms, setting back our long-term drive to cut emissions.

We also find it difficult to understand why the Liberal Democrats walk out of tune with this report and continue to oppose any nuclear power stations, despite their low-carbon advantages. It has taken a very long time to extract the necessary planning, which we quite understand, but it has now arrived and I hope that the Government will move forward rapidly in this area.

If we have a modest disagreement with the report—and it is modest—it is that it suggests that there may be scope for up-front financing. We think that there is scope for such financing, and we would immediately introduce a “green deal”, giving every household up-front funding worth £6,500 for efficiency work, which would be paid back out of future savings. How do the Government intend to meet their carbon credits without up-front pricing support for work such as solid wall or loft insulation? Our green deal is a practical solution to that, and I hope that it will be embraced by the Government.

We also fully support the report’s concern for energy-efficient appliances, but we ask the committee to give consideration to the fact that the average boiler lasts only 10 years, whereas the committee is talking about replacing them in the next 12 years. We hear rumours, which we find encouraging, that the Government intend to give a little support to people to upgrade their boilers. If that is true, we would be very grateful to hear from the Minister.

The report makes very interesting reading on the steps necessary to reduce emissions from cars. For example, it identifies the need for a reliable network of public charging points, as referred to by the noble Lord, Lord Giddens. What are the Government going to do to roll out that network and keep up with their international competition? The difficulties facing the scheme are a timely reminder that everything possible must be done at an international level as well as at a more local one. We watch with interest to see whether Copenhagen makes significant progress, or whether it will just be a talking shop.

This report shows, and many here agree, just how much has yet to be done to ensure that the UK plays its proper part in developing and implementing a low-carbon economy. The Government have, I am afraid, grandstanded and spun a tale and have failed to deliver either consumer incentives or long-term strategic goals for investors. They must now show, as the noble Lord, Lord Krebs, said, some form of leadership. This report calls for a step change. What will that step change be?

My Lords, it is a great pleasure to respond to this very interesting debate. I should like to welcome the noble Lord, Lord Marland, on his debut at the Dispatch Box, but I do not share his rather bleak assessment of progress being made. In the light of various comments made recently on climate change by members of his party in the other place, the veneer of greenness is slipping a little from his party. It was a nice try for him to ask me to anticipate the PBR, but I shall have to resist that temptation.

Many comments have been directed at the climate change committee. It is very valuable to have this debate in anticipation of the Government’s formal response in the new year. But I am sure that this might encourage the committee to think about how it can have further dialogue with parliamentarians in the months ahead. I am also sure that this has been extremely useful. I agree with the noble Lord, Lord Teverson, on lifestyle changes. I guess we all hope that this can be done without difficult changes in lifestyles, but none of us is quite convinced of that. I would welcome the committee giving further advice. All of us will have experience of public bodies proposing changes. In Birmingham, the introduction of city centre car parking charges is an interesting example of the tension between action required and public support. In the end, we will not achieve lifestyle changes without public support. Advice in that area would be gratefully received.

I should like to say to the noble Lord, Lord Turnbull, that it was right that the UEA decided on an independent review. We are all looking forward to the outcome of that. It is right to repeat what I said at Question Time today. We think that the global temperature analysis is robust. The work of UEA is supported by two separate independent analyses in the US. The evidence for climate change also comes from many other facets and observations, but it is right to see the outcome of that review.

The noble Lord, Lord Krebs, wondered whether we would live to see the outcome of our own damage to the planet. He said that if we did not, certainly our children and grandchildren would. The noble Lord, Lord Stern, really made the point about how can we take that chance, which was very much a call to arms. The noble Lords, Lord Krebs and Lord May, said that a step change is needed, which was the conclusion of the Committee on Climate Change. The noble Lord, Lord Krebs, posed a question as to whether the market and individual choice alone would deliver the step change. I believe that that would be so up to a point. I agree with the noble Lord, Lord Stern, that we have a responsibility to make the market work. But of course the Government have a strategic leadership role and a duty to intervene. One of the most visible signs of that is recent legislation. The Energy Act, the Climate Change Act and the Planning Act are examples of strong government intervention. The incentives that have been brought into place in relation to the development of renewable energy is another example.

In terms of driving forward the policies, it is interesting that very few noble Lords mentioned carbon budgets. They are likely to be the most powerful driver of policy change going forward, whether in relation to energy performance in government buildings or through targets. I thought that the party of the noble Lord, Lord Marland, was opposed to targets and so I would be interested to hear his comments on that. Carbon budgets are very important in forcing policy changes. I think back to my former department, Defra. The point was made earlier about the agricultural sector’s contribution to greenhouse gas emissions. Essentially, carbon budgets will force the pace of Defra having to work with the agricultural sector to do all that can be done to reduce emissions. It will of course be the same for my own and other government departments as well. I believe that carbon budgets will be a powerful determinant of change.

We will learn lessons from other countries. The feed-in tariffs for microgeneration that are due to come forward in April are a good example of where we have learnt from the experience of others. But I would say that this country has shown leadership. I mention the Climate Change Act 2008 itself, the offer that we encouraged Europe to put on the table at Copenhagen, the fact that my right honourable friend the Prime Minister was the first global leader to signal that he would be going to the summit, and that in offshore wind power we are the leading nation, a point to which I shall return later. I mention also wave and tidal, the introduction of smart meters, and our leading role in carbon capture and storage. I must admit that I am a little tired of hearing about the leadership position of the Germans. When you go to Germany, it is interesting to note that many Germans are deeply concerned about their energy policy and wish that they could have followed our decision in relation to new nuclear build. We need to be careful not to underestimate this country too much.

My noble friend Lord Giddens talked about the tremendous change in global attitudes and of the formidable challenges we face in this country. He is also absolutely right to say that the history of planning in this country in relation to energy has been nothing short of a disaster. But the changes that have been made in the Planning Act 2008 and the development of national policy statements, which is the subject of parliamentary scrutiny at the moment, will lead to a sea change. On CCS technology, we have an opportunity to play a leading role and I am confident that we can do this. We have the competition, we are working on the financial package and we have consulted on the levy to be taken forward, so we can do a lot in this area. My noble friend also talked about the need for a national plan and for it to be taken to the people, as well as for an active industrial policy. I agree with him that the Government and the state have a more important role to play in the future. I could give a number of examples of where we are playing that role at the moment.

The noble Lord, Lord Dixon-Smith, made the important point that 2050 is the critical target date. I want to reiterate that we are working hard on the period 2030-50 and we hope to publish the results of that work next year, which I am sure will be the subject of a debate. However, he is right to stress the importance of this work.

The noble Lord, Lord Turnbull, went back to a point that we debated as the Climate Change Bill went through—what he described as the laying down of an unworkable duty on the Secretary of State in relation to the 80 per cent target by 2050. Again, I come back to him with carbon budgets. Because government departments have to take responsibility for emissions in their own sectors, I think that this is the way to drive forward change and why it is right that the Secretary of State accepts that responsibility.

I am not going to comment much on carbon price, although I understand the issue. It is our hope that the tightening of the cap, which has already been agreed, and the influence of Copenhagen, which we hope will bring Europe back to the table to discuss a tougher target for 2020, will have the necessary impact on carbon price. It is our preference to go down that route, but of course I understand how important this is for those who need to invest large sums of money over the next few years.

I pay tribute to my noble friend Lord Clark on his outstanding work as chair of the Forestry Commission, an appointment which I think comes to an end in 24 hours’ time. He made very important points about the contribution that forestation and reforestation can make and about the decision to embark on nuclear new build. I want to reassure my noble friend, the noble Lord, Lord Dixon-Smith, and other noble Lords that we see huge potential in the reinvigoration of the nuclear sector in this country.

My understanding of the current intention is that the companies which signal an interest in developing new nuclear would build up to about 16 gigawatts of new nuclear capacity. The national policy statement names 10 sites as being potentially suitable for new nuclear development by 2025. It states that, looking at the mix of energy going forward over the next 20 years, it is envisaged that about 24 gigawatts of low-carbon non-renewable energy will be required, and there is nothing to prevent the nuclear sector from putting in applications that would meet that figure. I hope that will give a positive and powerful signal.

My Lords, what the Minister has said is very encouraging but the question was specific. Does he know whether there are companies with applications in the offing so that when the system becomes active the applications can go in straightaway?

I am hopeful, my Lords. Clearly we need to go through the process of scrutiny of the national policy statements and, following that scrutiny, adopt any changes. However, already two reactor designs are going through the generic design assessment process by the Nuclear Installations Inspectorate to identify regulatory issues at an early stage. I hope that when the time comes the companies involved will be ready to go as quickly as possible. The noble Lord will know that one company intends that its first nuclear plant will be up and running by Christmas 2017. That is the kind of timetable that we want to fit to.

My noble friend Lord Hunt of Chesterton reminded us of the importance of engaging young people and ensuring that we have the skilled people ready to take advantage of the nuclear and other energy sectors. I agree that that is very important.

On the issue of costs and funding, the noble Lord, Lord Teverson, warned me of the great risk of quoting Stern in front of Stern. I know and understand that there are concerns about the cost to the UK of measures to reduce our emissions. However, our analysis is consistent with the review of the noble Lord, Lord Stern, and what he has said today. The important point is that, as the Stern review stated, it is the high cost of inaction which persuades us that it is right to expend resource at the moment. As the noble Lord, Lord Stern, said, we should see this investment as part of an exciting transformation which will provide secure, cleaner, more efficient and safer energy. I say to my noble friend Lord Hunt of Chesterton that, yes, there is great potential in the nuclear supply chain, and we are keen to work with industry to ensure that this country makes the most of it.

The right reverend Prelate the Bishop of Salisbury gave an impressive description of the role of the Church of England in relation to climate change, both through encouragement and practical action. It was good to hear of the work that the Church is doing in its own schools. I should like to leave it to him to respond to my noble friend Lord Lea on population issues, which I suspect we will be debating in the months ahead.

I should say to the noble Lord, Lord May, that the right reverend Prelate’s remarks emphasised the point that the noble Lord made about voluntary organisations. I was at the Halesowen scout hut on Saturday with the Deputy Speaker of the other place, Mrs Sylvia Heal, where 40 or 50 people turned out for a two-hour discussion on climate change. It was a fascinating debate which showed that people are ready to engage if we give them the opportunity.

I note what the noble Lord, Lord Teverson, said on banking. We strongly support the principle of banking where it encourages early action to reduce emissions. Rewarding it by allowing it to be counted against future targets is a discretionary provision under the Climate Change Act and a decision on whether the provision should be used can be made at the end of each budget period.

Some important points were made on transport. I know that there is concern that we have not been able to make enough progress, but we have agreed to provide an incentive for the purchase of electric vehicles by 2011. We are also providing £30 million to help lead cities and regions put in place electric vehicle-charging infrastructure. I well understood the point about the need for infrastructure.

The noble Lord, Lord Reay, raised electric-generating capacity, as have other noble Lords in the past. Yes, major investment is required. I remind noble Lords that we have more than 20 gigawatts of electric generation in construction, consented or seeking consent. Yes, there are issues about nuclear, timing, CCS and reliance on wind. I say to the noble Lord, Lord Reay, and my noble friend Lord Hunt that we think that wind has an important role to play in the next decade. We are confident that we can ensure that we have the required capacity. It will be possible to generate significant amounts of electricity from wind for most of the time, which will reduce fossil fuel consumption and carbon emissions. I understand the point made about the grid. It is important that we have an enduring grid access regime and it is our intent that that will happen. We are placing particular focus on ensuring that grid access is not a barrier for the up-to-40 gigawatts of offshore wind power that we will need.

On whether we can take advantage of renewable energy in terms of technology and manufacturing, I am confident that we will hear some positive announcements about manufacturing capacity in this country. I remain confident that there is great potential also for tidal and wave power. I noted the comments of the noble Lord, Lord Dixon-Smith, about Severn tidal power. We are going through the process of evaluation of the shortlisted schemes. We will probably be in a better position to come to a conclusion next summer. I understood what the noble Lord said, although I am not sure that the EU is in a position to agree to the derogation that he wishes for, but it is clear that compensatory action will figure largely in any evaluation of Severn tidal.

The noble Lord, Lord Redesdale, made an important point about boilers. I am well aware of his views on the potential for anaerobic digestion and am glad to continue discussions on it. He mentioned the renewable heat incentive and the work that we are doing in relation to renewable heat. We are aiming to develop details of the scheme, on which I hope we will be able to consult shortly.

On aviation, I think that, given the time, I should say just that the committee’s work has been published today. It will warrant considerable reading and, no doubt, debate in the not-too-distant future. We need also to discuss shipping, because it tends to be ignored in many debates. We should not ignore emissions from the shipping industry. It would be good to see more leadership from the industry in that regard.

I agree with all the comments made about the importance of energy efficiency in the home and businesses. I understand the concept of whole-house energy efficiency schemes. We are looking at how they can be financed. I understand why noble Lords are attracted to a home-by-home, street-by-street approach. I often think back to my days as a councillor in Birmingham in the 1970s when we developed the concept of enveloping, which involved the complete refurbishing of older inner-city houses. It rescued much of our housing stock and proved to be outstandingly successful.

The noble Lord, Lord Turnbull, raised adaptation. I am delighted that the noble Lord, Lord Krebs, is chair of the adaptation sub-committee. Having had a little hand in that, we have every confidence in it. Adaptation is vital. Some climate change will happen, and we need to prepare for it. The Government can ask public service organisations to report on how they address the risk from climate change and what their adaptation strategies will be. The Government have been working very hard on this. The culmination will be a report that will be laid before Parliament. All departments are to produce adaptation plans by spring 2010. The point is clear: given the inevitability of some climate change, it is vital that public bodies start planning now for 20, 30 and 40 years ahead. I do not think there is any question about the integrity of the Hadley projections; they provide a fantastic source of information on the probabilities of the kind of climate we will face. From that, we can work through what needs to happen in relation to roads, buildings and defences and where we should be building things. It is important work.

The noble Earl, Lord Selborne, made some important remarks, and I shall make sure that they are considered in our response. His point about biogas energy efficiency was well made.

We are delighted that the noble Lord, Lord Stern, is acting as an adviser to the EU and that he will shortly be going to Copenhagen. We wish him and all the negotiators every success. It is important that we have a strong and fair agreement, that finance is dealt with and, above all, that the UK can show leadership in helping the world community come to a hard, fair and meaningful outcome. Much is riding on the discussions in Copenhagen. It would be foolish to be overoptimistic. There are formidable challenges ahead before agreement is reached, but there are some grounds for optimism. I am convinced that out of it we can achieve the kind of step-change in this country and in the world that the Committee on Climate Change has so wisely suggested we need.

This in an interesting process as we are having a debate before the Government have had an opportunity to make their formal response. On that basis, this has been a good opportunity for us to air some of the issues. I thank all noble Lords who have spoken in this splendid debate. We have not agreed on all the issues, but this has been a thorough debate. I hope that the Committee on Climate Change and its members who are here will feel that their report is being treated with great seriousness. We look forward to continued debate on this important area for government, Parliament and the community as a whole.

Motion agreed.