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Net Zero Review

Volume 806: debated on Thursday 1 October 2020


Asked by

To ask Her Majesty’s Government whether the Net Zero Review will take into account co-benefits, including those relating to (1) improved health, (2) productivity, and (3) employment, in calculating the costs and investments needed to reach net zero emissions.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I draw attention to my interests as set out in the register.

My Lords, the net-zero review will cover how the transition to net zero will be funded and assess options for where the costs will fall. This involves analysing the range of options for how households, businesses and the taxpayer could contribute to the costs of transition, as well as maximising opportunities for economic growth as we transition to a green economy. We will need to evaluate the trade-offs between costs, competitiveness, effects on consumers and impacts on taxpayers.

I am grateful to the Minister for that reply, and for her recognition that costs are not the only issue to be taken into account. The Covid crisis demonstrates to us every day the need to assess the effects of individual policies in the round, not simply against a single metric. So does the Minister agree that the magnitude of the threats from unrestrained climate change means that when we assess the cost of measures to meet our net-zero target, we need also to take into account the benefits to health and employment, and to sustainable economic recovery? Could we not set an example of good practice in overall impact assessment of climate measures as part of our preparations for COP 26 next year?

The noble Baroness is absolutely right to say that we need to look at these issues in the round. She referred to the impact of the Covid crisis, and to our aims for a green recovery. The Government have put huge emphasis on a green recovery, because not only will that help us meet our net-zero target in the longer term, but it has been shown that, in the shorter term, such policies bring extra economic benefit in their own right—and that is the exact approach the Government are taking.

My Lords, what discussions have taken place with the devolved Administrations to determine what contribution the different jurisdictions will commit to in order to achieve the overall UK target for climate measures? Perhaps the Minister could provide me with an answer in relation to that.

There are ongoing discussions with all the devolved Administrations on the issue of climate change, and I shall be happy to write to the noble Baroness with further details of those discussions.

My Lords, I refer noble Lords to my interests in the register, and I congratulate the Government on putting the green economy at the forefront of the work that we are doing. However, will my noble friend bear in mind the fact that industrial cities such as Leicester will need a lot of work to be able to produce the net-zero targets, especially as there are ever-diminishing green spaces in the city?

One of the things that the Net Zero Review is looking at is the role of technology and innovation that might help cities that could struggle to meet the net-zero target to make further progress towards it.

My Lords, my interests are as recorded in the register. May I ask the Minister whether the role of agriculture and domestic food production will be taken into account in the review, and also about the future of the emissions trading scheme?

Emissions trading is one aspect of meeting our net-zero target, so I think it will be taken into account in the review, as will nature-based solutions to climate change, which also form part of our strategy.

My Lords, what steps are the Government taking to ensure that all homes are insulated to a standard compatible with net zero?

The noble Baroness will be pleased to know that the green homes grant, launched yesterday for applications, will deliver £2 billion-worth of funding for home owners and landlords to upgrade the energy efficiency of homes and help us make progress towards that net-zero target.

My Lords, as the Minister will know, one of the biggest challenges of climate change is to bring our citizens along with us. If we do not do that, we will not achieve this. Will she give us her ideas on how we should accomplish that? How will we bring citizens along to agree to these changes?

My Lords, bringing people and our citizens along with us will be a big focus for our work on COP 26—making sure that it is not just Governments getting together but businesses and citizens from the UK and across the world. Part of the point of the review cited in the original Question was to have a clear and transparent analysis of the costs and benefits, and to look at how and where they should fall, so that everyone can understand the path towards transition and the contribution that we will all have to make towards it.

My Lords, will the Government commit to creating an open, shared resource, with all the data, conclusions, research and arguments generated as part of the Net Zero Review, so that we can all go forward and benefit, as professionals, from a shared resource in creating ideas and opportunities to make progress—and, in particular, reflecting what the noble Lord, Lord Teverson, said, so that we as citizens can share the conclusions that are reached, and the effects that they will have on us?

My Lords, I will take back to the Treasury the desire for the review to be as transparent as possible. I think that that is exactly the intention. We will publish an interim report this autumn. It will set out our approach to the review and will contain the analysis done to date, which will inform the final findings.

My Lords, in the Net Zero Review terms of reference, part 2, “Objectives”, begins:

“To consider how the transition to net zero will be funded and assess options for where the costs will fall. This will involve:”,

and then there are four bullet points, the second of which is:

“Identify mechanisms to create an equitable balance of contributions.”

Does the Minister not agree that this must mean that the issues raised by the Question asked by the noble Baroness, Lady Hayman, must be taken into account?

My Lords, I cannot pre-empt the findings of the review, but I can say that it will absolutely take into account the opportunities that arise from the transition, including for employment, productivity and economic growth. It will also consider just where the costs will fall and how they will be paid for.

I draw attention to my interests in the register. To build on the point made by the noble Lord, Lord Teverson, about citizen engagement, the citizens’ Climate Assembly UK made many great recommendations when it recently reported, many around business, which is vital to help reach net zero. Will the Government commit—as the citizens’ assembly, at 83%, agreed—to making sure that government contracts are given to responsible, low-carbon producing suppliers?

My Lords, the Government will look very closely at the recommendations of the Climate Assembly. The noble Baroness is absolutely right to say that we need businesses to be on board with this agenda. One of our focuses for COP 26 is green finance, and one of our aims there is to get as many private sector actors and businesses as possible subscribed to standards for green finance that can help transform the money going into businesses and how it is allocated, taking into account climate risk, in the future.

My Lords, following on from the earlier question, what thought have the Government given to the need for retraining to open up the new kinds of jobs that will ensue?

The Government place huge emphasis on the importance of training as part of our green recovery. The Prime Minister made a series of announcements yesterday on plans to upgrade skills, focusing not just on young people but on older people who did not originally have those skills, to enable them, where needed, to transition to new jobs in the green economy.

Is the Minister confident that the methodology used by the Treasury in the review will sufficiently factor in the costs of not tackling climate change, which the review carried out by the noble Lord, Lord Stern, in 2006 estimated would be 5% of GDP by 2050?

Yes, I can reassure the noble Baroness that it will. The review is not a question of whether we need to act to meet our net-zero target; it is about how we can act to meet it. That target is set out in law. We were the first major economy to commit to it, and the review is all about how we get there. So the question of the costs of not getting there, although important, is also, I hope, one that we have put to bed.

My Lords, all supplementary questions have been asked, and we now move to the next Question, the fourth Oral Question, asked by the noble Baroness, Lady Massey of Darwen.