I beg to move, That the Bill be read a Second time.

I shall begin by declaring an interest. The Sustainable Energy Partnership has provided me with support in the preparation and development of the Bill. I also thank the 40 or more organisations, too numerous to name, that have given their backing to the Bill.

Hon. Members across the House will know that climate change is probably the biggest issue we face in the world today. I do not propose to repeat the arguments and facts that are well known to Members across the Chamber. Although most Members and, increasingly, the general public recognise the extent of the problem we face in tackling climate change and many want to do something about it, I have often found that there is increasing defeatism about climate change precisely because it is such a big issue. People sometimes feel resigned to the idea that things will get worse and believe that as individuals they can do little about it. It is important to show them that they can do something and that, although it is essential to get action from Governments and at an international level, individuals can do something to help tackle climate change.

My Bill seeks to link the action taken by the national Government and at an international level with the actions that can be taken by individual citizens—measures that, taken together, can make a significant contribution to reducing emissions and tackling climate change. The Bill is basically about seeking to engage and recruit the public—individuals, families and communities—in that effort.

I am grateful to the hon. Gentleman for giving way so soon. Does he agree that local authorities have a vital role to play? Some of them, including, I am sorry to say, my own district council, think that if there is a climate change problem, it has to do with sunspots and nothing to do with the intervention of man. Therefore, they are reluctant to support the Bill, a consequence of which will be increased expenditure by local councils. What would he say to my district council? How could he prove to it that there is a link, which it is not sure about, between mankind's intervention, rather than sunspots, and the climate change problem?

I suspect that the hon. Gentleman can persuade his district council about the reality more easily than I can, but my Bill will certainly place responsibilities on local authorities, so that they cannot escape from recognising that link and cannot fail to do something about it.

Is not part of the problem with the climate change debate that those of us who want action to be taken on environmental issues are depressed by the Government's record, because the fact is that carbon dioxide emissions were falling before they came to power and have been rising since?

The hon. Gentleman makes a party political point, which he is entitled to do. I think that this Government's record in seeking to tackle climate change has been excellent, but I want us to work on an all-party basis on practical issues that can take the issue forward. I suggest that he concentrate on that aspect of the Bill today, rather than on other agendas.

Does my hon. Friend agree that the almost unique aspect of micro-generation is that it can give individuals responsibility to produce energy in their own homes? For example, they can have photovoltaic cells producing energy on the roof of their house. Virtually all traditional forms of energy production rely on large power stations many miles away from people's homes.

Indeed. Had I waited a little longer to give way to my hon. Friend, I might have come to that particular section of my speech, which will now be somewhat shorter as a result. However, he makes a valuable point. Micro-generation, which is at the heart of the Bill, is simply the generation of energy—heat or electricity—by individual householders or small groups of householders. That can of course include photovoltaic installations, micro-combined heat and power systems, micro-wind, heat pumps, solar thermal systems, fuel cells and micro-hydro systems. A range of systems can be installed in individual homes making it possible for individual householders or groups of householders to generate their own energy.

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I shall give way in a second if my hon. Friends will allow me to make a little progress.

The key point to bear in mind is that micro-generation has immense potential. It is not an activity that needs to be restricted to the select few or that applies only to certain parts of the country. The estimates from the most reputable scientific sources suggest that between 6 million and 10 million homes across the UK could be involved in micro-generation of some form. Clearly, for some communities and households, some technologies will be better than others, but if we look at the whole package, micro-generation can make a major contribution to the country's energy needs.

Does my hon. Friend agree that the housing market renewal programme taking place throughout the country gives the Government a wonderful opportunity to ensure that what he is talking about is at the heart of new building, and the building of sustainable communities?

I agree absolutely. One of the advantages of micro-generation is that as well as contributing to the country's energy needs, it can help to tackle fuel poverty. If houses can produce their own energy and make maximum use of energy efficiency and energy conservation devices, people on low incomes will gain more from that. Particularly in rural areas, where houses are not linked to the grid, micro-generation has a real part to play—although that also applies to the larger urban areas, of course.

It would be helpful for the House if the hon. Gentleman could put this in context. Has he made any estimate of the contribution that micro-generation, even at the top end of his estimate—the 10 million homes—would make to total energy generation in this country? That figure would help us to put the idea in perspective.

The right hon. Gentleman will be aware that there are a whole range of estimates, but it has been suggested that the proportion could be as high as 10 per cent. I am not sure whether I would go as far as that, but micro-generation can certainly make a substantial contribution to the country's energy needs.

My hon. Friend mentioned rural areas. Does he see a role for parish and town councils in bringing communities together to try to develop micro-generation schemes?

Indeed I do. Part of my Bill deals with the promotion of what is described as "community energy". I shall come to that part later, and I hope that it will meet some of my hon. Friend's concerns.

Micro-generation and micro-power types of technology have clear economic and environmental advantages, but the market is small, which makes it less viable than it should be for households that wish to take advantage of that technology to do so, and for companies to invest in the technology necessary to manufacture micro-power units. The problem is that the installation costs of micro-generation can be quite high, and the payback period is relatively long. That makes micro-generation a niche product, available only to the better-off—although even now, prices are coming down.

Opinion across the industry and in the non-governmental organisations is that we need to get into a virtuous circle, in which prices come down so that the market increases in size, which would lead to further reductions in the price of the product so that we can really take advantage of the potential of micro-generation.

My hon. Friend mentioned companies and manufacturing. Does he agree that the Bill gives us the opportunity to come to the aid of a beleaguered manufacturing industry? Renewable energy technologies are labour-intensive, and international concern about climate change would provide huge opportunities for export markets, too.

Absolutely. One of the things that I have found out in working on the Bill, as I have developed my own research and organisations have contacted me, is how extensive employment in the renewables sector is already. I suspect that if they inquire, most Members will find that tens or even hundreds of people in their constituency are already involved in the industry in some way. The reality is now large, and the potential is even larger.

Does the hon. Gentleman agree that this country will have the moral authority to tackle India and China and encourage them to reduce their carbon emissions only if we can turn round the situation here? Does he agree that clause 2 of his Bill is a good way of bringing that about?

I certainly support clause 2 of my Bill! Yes, we must ensure that we meet our international targets if we are to call on others to do the same. The hon. Gentleman also highlights another opportunity—the fact that there is a market out there which could be immense, and which we could take advantage of if we had a strong domestic micro-generation market on which we could build export potential.

We need a kick-start for the micro-generation industry in the United Kingdom. That is an important feature of my Bill, as well as of another Bill to be debated later; I must not speak about it at this stage, but it too will have a bearing on this issue. The essential element in my Bill is that by setting targets to encourage the installation of micro-generation we would give a clear signal to the market and the industry that the Government are serious about micro-generation. The industry would then put in the investment to allow prices to come down, and create the virtuous circle of price reduction and greater take-up. The Government have already made a good start, with a micro-generation consultation, and the Bill will allow us to build on that in the most effective way.

I am grateful to the hon. Gentleman for giving way again; he has been very generous, and I agree with what he is saying. In my part of the world, one of the schemes that I have strongly supported is hydroelectric micro-generation. However, some of the people who have brought water mills into use and contribute a very small amount of energy to the grid, as well as supplying their own needs, are now concerned that they might be assessed for non-domestic rates on that small production. Does the hon. Gentleman agree that the Minister could put their minds at rest by clearly stating that such schemes will not be assessed for business rates, so that there will not be a further disincentive to installing them?

I have heard of that concern, and it would be extremely unfortunate if there were a disincentive to micro-generation as a result of that feature of the local rating system.

That leads me to the next point about micro-generation in the Bill. One of the measures is designed to make it easier for householders and groups of householders who produce electricity by micro-generation to sell to National Grid. This is not just a question of individuals' own energy needs; in some cases, surplus energy will be produced. That can be sold on, which makes the cost of installation more viable. Clearly, it is important that there should not be disincentives such as the hon. Gentleman described. Some electricity is already being sold back to the grid, but I understand that there are difficulties in certain areas, and the Bill will address those.

I represent a constituency where there is a great deal of interest in renewable energy, but many of my constituents who are most interested in it live in conservation areas. My hon. Friend has talked about the importance of households and groups of households taking forward what is proposed. Does he agree that it is important that the Minister for Energy, who is on the Front Bench at the moment, should liaise with the Minister for Housing and Planning, who has been in the Chamber this morning already, to examine the regulations that may be putting obstacles in the way of the developments that he suggests?

My hon. Friend makes a valid point, and I am sure that it has been heard by the Ministers responsible.

I congratulate the hon. Gentleman on his Bill. Does he acknowledge that there is a structural problem with the payback on investment in micro-generation, in that we have a habit of moving home regularly? Will he share with the House any views that he might have on the level of Government support required to bring the costs of the technology down to offset that factor?

I shall have to decline the hon. Gentleman's invitation, because to do so would take more time than I would want to spend on that subject today. It probably relates to a Bill to be dealt with later.

The key point of my Bill is to bring about reductions in the price of the technology by promoting the mass market. Many measures need to be brought into play to allow micro-generation to take off. My Bill concentrates on the target, the link to the grid and the ability of those who make use of micro-generation to get green energy certificates, which are especially important in making the installation of the technology viable for households for which it would not otherwise be viable.

I congratulate the hon. Gentleman on bringing this important Bill before the House. Does he agree that, if micro-renewables are to make the contribution that we all want, it is important to have stability in respect of a Government framework behind them and consistency of policy and funding? What does the hon. Gentleman make of the recent changes announced by the Department of Trade and Industry towards the funding of micro-renewables and the time scale over which it is likely to be provided?

I agree with the hon. Gentleman that consistency is important, but if he does not mind, I shall have to decline his invitation to comment on areas of policy that, though relevant to my Bill, would take us down a much longer road. I agree, however, that consistency is important and having targets allows us to show the industry and consumers that we have a clear strategy over a period of time.

Does my hon. Friend agree that, when it comes to practical action on the ground, cities are very much centre stage? Does he welcome the Mayor of London's initiative to launch a dedicated London climate change agency, which will work in partnership with the private sector to tackle greenhouse gas emissions in London? That is particularly important for the Olympics in 2012, as we want to ensure that the project is sustainable both environmentally and socially.

Indeed, the Mayor's initiative is remarkable and provides lessons for other cities and communities throughout the UK. It is important, however, to ensure that opportunities are available for all types of communities—from rural areas to urban areas and the largest cities. My Bill is thus designed to encourage the development of community schemes whereby local communities can set up their own renewable energy systems that give them a stake in local energy projects. Such projects are more likely to be accepted than if they are viewed as being imposed on communities from outside. Communities can sometimes be unhappy about certain aspects of those developments.

I strongly support the Bill, but I hope that the hon. Gentleman recognises that this is not a London or city-centric issue. To my knowledge, some 21 local authorities—including my own of Stockport, which is also represented by my hon. Friend the Member for Cheadle (Mark Hunter)—have expressed strong support for the Bill. There is considerable support for the Bill among the local government community as well as here in Parliament.

I am grateful to the hon. Gentleman for that intervention and for his support. I am pleased that local authorities throughout the UK have contacted me to express their support for my Bill.

My hon. Friend was dealing with community energy. As my hon. Friend the Member for Burton (Mrs. Dean) said, the Bill provides a good opportunity for rural areas that are not on the gas mains to avoid being compelled to buy oil for their heating. They will now have access to renewable energy for their community energy systems.

That provides a good example. One of the problems in the UK is that although we have some examples of community ownership, they are, by and large, fairly limited and on a small scale.

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Perhaps I should give way to the whole Liberal Democrat party.

I thank the hon. Gentleman for giving way and congratulate him on introducing the Bill. It represents an important step in ensuring that we try to meet our Kyoto commitments. He was just talking about the benefits for rural areas and earlier he mentioned the economic and employment benefits of promoting the renewable sector. I particularly welcome the Bill's commitment to renewable heat. If we can promote renewable heat in rural areas, it will also provide an outlet for farming communities that are having to make a transition in their economic activities. It is also important for the forestry industry, which faces the economic problem of what to do with the "thinnings". That problem is undermining the good management of the forestry, so I greatly welcome the hon. Gentleman's attempts to promote renewable heat.

I am grateful to the hon. Gentleman for that intervention. One of the clauses indeed enables the Secretary of State to introduce a renewable heat obligation. The hon. Gentleman is right about the immense potential of renewable heat in rural as well as urban areas. It can play an important role in combined heat and power, for example. Given the very welcome renewable fuel obligation announced by the Government yesterday, it is appropriate for a renewable heat obligation to be the third pillar of the package. It could make a huge difference.

I particularly commend the hon. Gentleman for his words on community ownership and community benefit. He will be aware of the Viking Energy project in Shetland, which is a significant community development of significant scale. However, it risks being thwarted by the transmission charging regime operated by Ofgem. The cap in energy legislation is not proving to be adequate in practice. The Bill could be a vehicle for an amendment to the Energy Act 2004. Has the hon. Gentleman heard from the Government whether they would be prepared to support such an amendment?

It is for the Minister to speak for the Government, but I am pleased to say that the Department has approached me about using the Bill as a vehicle for dealing with part of that problem. I hope that it will prove possible to do so. The issue is important not just to the hon. Gentleman's community, but to the whole of the UK. Evidence shows that the Scottish islands could contribute as much as 1 per cent. of the country's entire energy needs if the renewable sector fully reached its potential.

I congratulate my hon. Friend on bringing his Bill before Parliament. On the renewable energy clauses, has he made any assessment of the contribution that biomass could make to increasing the market for bioethanol products in this country? Our position on that is very low compared with the United States, for example. Clearly, another element of the Bill can contribute to the diversification of work available in rural areas.

My hon. Friend is right. That is why the proposal to make progress on renewable heat is particularly important.

I am in my place to support the hon. Gentleman's Bill today. He is discussing the renewable heat obligation, which is by far the most controversial and most complex aspect of the Bill. Progress cannot possibly be made without Government support. Has the hon. Gentleman heard from the Department of Trade and Industry about its attitude to that particular measure?

I have had an indication, but let us see what the Minister says about that. The debate about how best to progress renewable heat obligations is still ongoing.

One difficulty is the fact that the Inland Revenue frequently seeks additional sources of revenue. From time to time I have heard about the possibility of the Revenue obtaining national non-domestic rates from domestic micro-generation. I note that one clause deals with fiscal incentives, but one hopes that the Bill will also deal with preventing fiscal disincentives, perhaps looking for a threshold level at which generation rates become free.

The hon. Gentleman makes a very important point. If I can make some progress, I may be able to say a few words about that part of the Bill later.

I want to deal with community ownership. The United Kingdom has an opportunity to take advantage of developments that are already evident in other parts of Europe. In Denmark, for example, 50 per cent. of the country's wind power capacity is owned by individuals or co-operatives. Similarly large schemes exist in Austria and Germany—and even in the US. We should try to promote community energy here in the UK.

As I said in reply to earlier interventions, the Bill is designed to promote renewable heat, but it also recognises that micro-generation must be part of a wider agenda and overall Government policy. That is why the Bill has 12 important clauses that place a duty on the Government. The first relates to maximising the use of fiscal incentives. We have already seen a number of valuable measures in that respect, but a whole array of measures could further encourage energy efficiency and micro-generation. They include council tax rebates for householders who install energy-saving devices, stamp duty rebates for house purchasers, measures to encourage the purchase of energy conservation materials for houses, and so forth. Many measures could be taken and it is important to examine them collectively across government. That is what the Bill is designed to do.

The hon. Gentleman is being generous in giving way and I am delighted to be able to support his Bill today. Does he agree that it is important to give equal emphasis at local and national level to measures to introduce energy efficiency savings? Discussing different methods of generating power is not good enough on its own; we must also place great stress on implementing measures to save energy.

Absolutely—the two go together. We could make immense savings through energy efficiency alone, and if we combine it with micro- generation, we could make a real impact on the country's energy needs and consumption, and on tackling our climate change targets.

I thank my hon. Friend for allowing me to intervene in this debate, and may I add my voice to those who welcome the introduction of this Bill? We hope that it has an easy passage. Does my hon. Friend agree that, although climate change is one of the biggest challenges faced by our generation, too many people feel that there is little that they can do as individuals? Micro-generation is exactly the sort of thing that people can do, and it is encouraging to hear that in Denmark, 50 per cent. of wind generation is created by people's own individual wind plants.

I agree absolutely. In developing this Bill, I discovered that there is a real interest across the country in these issues. People want us to facilitate such developments.

I thank the hon. Gentleman for giving way. One of the big attractions of micro-generation is that, because electricity generation takes place far closer to where the electricity is actually used, it automatically improves efficiency of energy delivery. Micro-generation would reduce the transmission and distribution losses that this country currently suffers from as a result of most of our electricity being generated away from big population centres.

I agree entirely.

I thank my hon. Friend for giving way and I congratulate him on introducing this important Bill. The majority of my constituents live in council or social housing, and although they would very much welcome the benefit to their pocket of reduced energy costs, they are not in control of such matters. What discussions has he had with the Minister for Housing and Planning on how to support social landlords and councils in providing such facilities in council housing?

The detail on this subject is probably more a matter for my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who seeks to introduce a Bill on related matters later today. However, in promoting not only national but local authority energy conservation targets, my Bill would encourage discussion with local communities about how best to meet those targets and to promote micro-generation. Such developments can benefit communities of all types throughout the country.

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I want to move on, but before I do so I give way to the right hon. Member for West Dorset (Mr. Letwin).

I am grateful to the hon. Gentleman. Does he agree that one of the most encouraging things about this morning's debate so far is the sign that not only the shadow Minister for Energy, my hon. Friend the Member for North Essex (Mr. Jenkin), and I, on behalf of the Opposition, but the Liberal Democrats and, it appears, the Government, support the general thrust of his Bill? Does he also agree that this should be the harbinger of things to come—a tripartite effort to advance the climate change agenda, of which his Bill could be the signal beginning?

The more of a genuine consensus that we can achieve on the way forward—not only in Parliament, but among the public and communities as a whole—the better. I look forward to the Bill's proceeding through the House.

In the spirit of the comments made by the right hon. Member for West Dorset (Mr. Letwin), will my hon. Friend also pay tribute to the role of the Co-operative party, the co-operative movement and Labour/Co-operative MPs in supporting his Bill and the principles behind it?

As a Labour/Co-operative MP, I am certainly happy to pay tribute to us all individually, and to the Co-operative movement's support for the promotion of community energy, which is a key aspect of this Bill.

As I said at the beginning, this is an issue that requires not only individual and community action, but national and international action. An important part of this Bill is the clause requiring an annual report on the how the UK is performing in meeting its greenhouse gas emission targets; on areas where we have, and have not, been successful; and on what we are doing to ensure that we meet our climate change targets. We need to ensure that this issue is at the centre of Government policy, which is why we must also see micro-generation in the context of the contribution that it can make to the country's overall energy needs.

I, too, welcome this Bill, especially its emphasis on reporting on targets. Does my hon. Friend agree that it would be beneficial if, as part of corporate responsibility reporting, organisations reported how much of their energy is generated through micro-generation?

That is an interesting suggestion. Some companies already do so, and such an idea is worthy of consideration by other companies as well.

I, too, congratulate the hon. Gentleman on getting his Bill before the House; he is demonstrating that it is great fun to introduce a Bill in the House of Commons. Should not Government Departments also be subject to the injunctions just described? Should they not have an obligation to generate a certain amount of energy from renewable sources? Is such an idea included in his Bill?

This is only a humble Back-Bench private Member's Bill, and there are limits to how much I can achieve with it; but yes, it has certainly been fun introducing a Bill. I am not sure that Front Benchers always regard the introduction of Bills as fun, but I have certainly enjoyed introducing mine.

I have been genuinely surprised at the level of support that the Bill has received throughout the country. There is a real wish on the public's part for the Government to facilitate the development of such activities. People want to contribute to tackling climate change, which is why it is important that the Bill proceeds and emerges at the end of the process—assuming that a Second Reading is granted—in sufficiently comprehensive a form to ensure that it makes a real difference.

I have had some productive discussions with the Department of Trade and Industry and the Minister for Energy. I shall hear in due course what aspects of the Bill the Government are happy with; there are doubtless other aspects about which they have reservations. I certainly look forward to working with them to try to get a Bill that reflects my aspirations, and the aspirations of those who sponsored it. I hope that during its subsequent stages—if it gets that far—we will recognise that the public genuinely want us to allow them to make this contribution to tackling climate change. It is important that we do not let them down—either today or during the Bill's future stages.

I, too, congratulate my hon. Friend on the Bill. Does he agree that there is growing interest, especially among young people, in issues such as micro-generation, and that we must ensure that such technology is produced on a larger scale and more cheaply, so that low-income families can afford to use it and to contribute to the reduction of carbon emissions?

Indeed. The interesting suggestion has been made that every school in the country's having a micro-generation device would not only contribute to their energy needs, but would in itself be a good educational tool.

I congratulate my hon. Friend on introducing this Bill. I want to point out that my local authority was the first in the United Kingdom to publish its own climate change strategy. My colleagues in, and the officers and members of, Bury metropolitan district council will be delighted to see the Bill before the House today. Clause 1 uses the phrase "viable . . . energy supply". The Government normally use the phrase "security of energy supply". Does my hon. Friend agree that the advantage of micro-generation is that it enhances our security in terms not only of self-sufficiency, but of safety? In the world post-9/11, can he envisage any circumstances in which a terrorist organisation would be interested in mounting an attack on a wind turbine?

My hon. Friend makes an interesting point.

I thank my hon. Friend for giving way and I, too, welcome his Bill. There appears to be an emerging consensus across the House. It will be interesting to see whether the right hon. Member for Bromley and Chislehurst (Mr. Forth) enters into that consensus.

No.

I thought that might be the answer.

I am interested in my hon. Friend's speech—whenever he gets the chance to make it. He has talked about targets and encouragement: we definitely need the Government to move on research into renewable resources, but there is no mention of that in the Bill. Is that research an important consideration?

It is, indeed. Obviously, the Bill as it stands will encourage research, but my hon. Friend will appreciate that it is a private Member's Bill and there was only so much that I could cover. I resisted the temptation to set out my personal energy policy on every aspect of Government activity, trying to restrict the Bill to some achievable goals.

In response to an earlier intervention, the hon. Gentleman made an important point about the role that schools can play. Is he as depressed as I am at the Government announcement on 2 November that the single source of grant from the Department of Trade and Industry for school and other community projects has come to an end? The replacement for photovoltaic and clear skies programmes will commit less money per year than they did. Are the Government not moving in the wrong direction?

The hon. Gentleman will, I am sure, understand that I want to concentrate on the positive things that can be achieved from the Bill, but he has made his point.

I thank the hon. Gentleman for being generous in giving way to me, having given way to so many hon. Members. Does he agree that setting clear targets for increased take-up of micro-generation will create the conditions in which a market can develop in that technology? Hopefully, that will bring prices down and make the technology more available to anyone who wants to be involved in cutting carbon emissions and tackling climate change.

Absolutely. That takes me back to where I was a little while ago before I received a few more interventions than I had expected.

We have an opportunity to encourage the market and the industry to respond to undoubted public interest. If the Bill obtains a Second Reading today, we must make sure as it goes on that it reflects public concern and interest. This is an immense opportunity for the United Kingdom. Let us take it, and let us go forward on the basis outlined in the Bill.

I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) most sincerely on an extremely valuable Bill, which I hope will receive its Second Reading. I also congratulate all the Members, across the parties, who have added their names in support of it, including my hon. Friend the Member for Hazel Grove (Andrew Stunell).

The background is the threat from climate change, and, like the hon. Member for Edinburgh, North and Leith, I do not want to go into that in great detail. Suffice it to say that predictions from scientists become more rather than less apocalyptic as time goes on. It is clear that we need drastic action domestically and internationally, and tackling energy issues is a key part of that.

The Government's climate change review, coming up shortly, gives them an opportunity to recognise what has gone right and what has gone wrong, to take stock and to come forward with measures that may differ from what they have advocated before in order to meet the Kyoto target this country has set itself and the domestic target of a 20 per cent. cut in carbon dioxide emissions. They will not do that successfully if they rely on pulling the same levers as they have used in recent years. Without wishing to appear partisan on a non-partisan Bill, I may say that it is a matter of fact that carbon emissions are rising in this country, and we therefore need a step change in how we approach them.

The Bill successfully and innovatively challenges the basis on which energy is delivered in this country. Hitherto, energy has been about big sources of power in certain strategic locations, with huge swathes of power lines taking power from those sources to where it is needed elsewhere in the country. That has been the case with coal-fired power stations, oil-fired stations and nuclear stations, and the same principle is, arguably, being applied to wind farms. The Bill rightly turns that on its head, saying that there is a better way to meet our energy needs in the 21st century.

One way to do that is undoubtedly energy efficiency; that is, in an over-used cliché, the low-hanging fruit yet to be picked by the Government. A huge amount could be done to tackle carbon emissions if we had a sensible energy efficiency strategy. Another way to deal with it would be to promote micro-generation. It makes no sense to have an electricity grid, with all the investment that requires and with power lines stretched across the country, simply to meet winter peak demand. That energy grid is simply not being used at capacity, except on a few occasions over the year. Yet we carry on building the grid, building power lines and disfiguring the country with pylons.

Is my hon. Friend aware of the work commissioned by Greenpeace on the importance of local generation and of moving away from the old-fashioned national grid, which was designed for a different age and which is not fit for purpose in today's world?

My hon. Friend is absolutely right: the Greenpeace document on centralising energy has much to commend it, and I hope that when the climate change review is published—whenever that will be; it seems to be slipping, and perhaps the Minister might tell us today—it will reflect some of the sensible proposals set out in the Greenpeace document.

As well as dealing with the old-fashioned grid to which my hon. Friend referred, the Bill localises energy in an entirely desirable way. It applies the proximity principle. It empowers people and local communities.

Will the hon. Gentleman join me in welcoming the work of Woking borough council—a Conservative council, as it happens—in proving that in practice? By decentralising energy, it has reduced carbon emissions by more than 70 per cent. Will he join me in acknowledging that success?

Indeed, I will, and I think the figure is 77 per cent. Woking has done extraordinarily well, and I hope that that lesson can be picked up by other local authorities and the Government. By the way, that also shows the value of not tying the hands of local government, allowing it the flexibility and space to develop such ideas, which can then be rolled out elsewhere in the country when they prove to be a success.

It is important, too, to involve the National Assembly for Wales and the Scottish Parliament in these measures. A lot of issues around energy efficiency lie within their remits. Has my hon. Friend any views on the involvement of the devolved Parliament and Assembly?

I agree that we need to involve both the Scottish Parliament and the Welsh Assembly, as well as local councils, community groups and individuals. The Bill is about devolving responsibility to individuals, which it is absolutely right to do.

The old system of power delivery simply is not fit for purpose. It is not working to deliver the environmental, economic and social objectives that we all want promoted. Of all the energy generated from fossil fuels, 61.5 per cent. is lost through inefficient generation and heat wastage, which leaves 38.5 per cent. to go into the national grid. Some 3.5 per cent. is lost in transmission and distribution, leaving 35 per cent. that actually gets somewhere, of which 13 per cent.—roughly a third—is wasted through inefficient end use. All that means that barely a fifth of the energy generated is actually used. Given the challenge of climate change, that wastage is intolerable.

We are in danger of confusing transmission of electricity, which goes over a long distance at high voltage, with the local distribution of electricity at a lower voltage on a far more local level. This country's national grid has the most robust transmission system in the world, and while I favour micro-generation, I do not think that we should gainsay the effectiveness of the national grid.

I can happily pass on to the hon. Gentleman a parliamentary answer detailing transmission losses from the national grid, so there is an issue there. The point about localised energy, as opposed to distance energy, needs to be recognised.

Woking borough council, as mentioned, has slashed 77 per cent. of its CO 2 emissions by setting up decentralised energy networks and instigating energy efficiency measures. That shows the potential that can be achieved across the country. The right hon. Member for Bromley and Chislehurst (Mr. Forth) asked about the potential of the Bill. If half the homes in Britain installed 1 Kw micro-CHP or micro-wind turbines, it would provide as much winter generating capacity as all our nuclear power stations put together, so the potential is enormous.

Does my hon. Friend agree that a further potential benefit of the Bill is that it would help to tackle fuel poverty, which is a particularly important issue at the moment, given rising fuel prices—especially of heating oil—in areas that do not have mains gas supply, such as the Highlands and Islands? That is another reason to support micro-generation through this Bill.

It is always spooky when someone intervenes to make the next point in my speech, and I am grateful to my hon. Friend for that point. As well as tackling fuel poverty, the Bill would be useful in rural areas. For example, domestic heat pumps are already in use in Cornwall and other areas where there is no mains gas. That has an empowering effect and also tackles the carbon emissions that would result from oil use or inappropriate gas use.

Does my hon. Friend agree that while wind power has its place, one of the great frustrations for people in rural areas is that they are beginning to feel like the new macro-energy producers? It is as much a scourge on local communities to be surrounded by large wind turbines as it was to live next to a large power station.

I must say that I would rather live near a wind farm than a power station. It is right to try to localise energy supply wherever possible, and I have supported individual wind turbines in my constituency and elsewhere, which can meet local needs. If such initiatives are pursued, people will feel ownership of the structures, rather than feeling that they are simply there to serve somebody else.

The hon. Gentleman's constituency, like mine, has several farming communities that have experienced a relative decline, especially in hop gardens and fruit crops. A big expansion in the use of biomass fuel could help to regenerate some of those local communities before it is too late.

I agree. There is a wonderful opportunity for a win-win situation, with the production of less carbon-producing energy that also supports our farming industry. That potential has not yet been maximised. We need to do more, and I welcome the biomass taskforce report from Sir Ben Gill, although I was surprised that it did not recommend a renewable heat obligation. That is included in the Bill, and I shall be interested to hear the Minister's view on it. I am in no doubt that a renewable heat obligation would be valuable, and that is why I tabled an early-day motion on the matter in 2004. Indeed, the Government signed up to the renewable transport fuels obligation only this week, and they have signed up to a renewables obligation generally. So the Government recognise that the mechanism works, and I look forward to the Minister saying why he does or does not agree with its use for renewable heat.

The hon. Gentleman mentions Sir Ben Gill's taskforce. Is he aware of other reports, including one by the Scottish Executive, that supported the renewable fuel obligation? The Scottish Executive report also pointed out that such an obligation could create 2,000 jobs in rural areas of Scotland.

The hon. Gentleman makes a valuable point and I hope that the Minister will bear it in mind when he responds.

The Bill would also require an annual report on greenhouse gas emissions, which is a sensible idea. Indeed, hon. Members may have noted that the right hon. Member for West Dorset (Mr. Letwin) and I have suggested something similar. We should have targets, an annual debate with a Government response, and external audits of what the Government are doing.

Some stress has been laid this morning on targets and reports, but how impressed has the hon. Gentleman been with the Government's track record on the plethora of targets that they have set in the past eight years and the avalanche of reports and reviews produced? What results have flowed from those, and why is the hon. Gentleman so optimistic that the reports that the Bill would generate would have any more positive results?

There is a tendency to set targets for a long time hence and then find that they have not been met. The Bill would have annual targets, externally audited, with a requirement to report to Parliament. That is a much more vigorous and sensible approach than the use of targets so far, which has been rather loose.

I am delighted to support the Bill and that it has cross-party support. It is strongly supported by the Liberal Democrats, as shown by the strong turn-out of my colleagues, and I hope that it will have a safe passage through its remaining stages.

Action to tackle climate change is a vital global challenge and I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on introducing the Bill. I am very pleased to be listed as one of its supporters and I hope—the signs are encouraging—that it will have enough support from other hon. Members and the Government to receive a Second Reading this afternoon, along with the Management of Energy in Buildings Bill, on which I congratulate my hon. Friend the Member for Southampton, Test (Dr. Whitehead).

As we have heard, the Bill would encourage and facilitate domestic micro-generation, the promotion of community energy, and the development of a renewable heat obligation. All that makes very good environmental sense and very good economic sense, but I want to say a word on why it also makes such good political sense. That is not only because it responds to a growing concern among many of our constituents that if climate change is really such a threat, we should do more about it. It is also because people are enthusiastic to do more about it in their everyday lives.

I do not know whether the right hon. Gentleman has had an opportunity to open his post this morning. I have of course opened mine, as I do every morning, and studied it carefully. By coincidence in today's post, I received the results of a survey conducted by MORI on behalf of EDF which asked what the most important issues were for the people of this country. Global warming and climate change came a poor seventh in the list. I point that out because I do not want the House to run away with the idea that everybody has global warming and climate change at the top of their personal agendas: they do not.

One can draw whatever conclusions one wants from surveys that arrive in the post. All I can say is that in my regular street surgeries in Oxford, one of the main issues raised recently was not the Terrorism Bill, nor even the NHS or education, but climate change, the importance of plastics recycling and the environment in general. In my surveys of young voters in particular—I am sure that other hon. Members have had similar experiences—climate change, and the need for more local action, are consistently some of the top issues raised.

It is crucial that such matters be not left to G8 summits and world conferences, but that people see what they can do in their own homes and neighbourhoods. Micro-generation enables people to think globally and act locally. I am pleased that the Bill includes a duty on the Secretary of State to promote community energy. In Oxfordshire, at Watchfield, we have an exciting project to build Westhill wind farm—the first in south-east England. One of the reasons it will be the first is the difficulty that community renewable energy schemes face. Projects with a capacity below 5 MW and a significant community buy-in are unattractive to conventional developers, who prefer the wholesale energy market. Advice and risk finance are difficult to obtain. The Bill will help by allowing the Secretary of State to allocate funds to promote investment in community energy schemes and provide them with advice. A lot could be achieved with modest amounts of money including, for example, for grants that could be repaid by successful schemes.

A conference will be hosted in Oxford next April—the world's solar cities conference—where local authorities and local initiatives across the world will share ideas and expertise. I hope colleagues will encourage constituents to take part, and I shall circulate details. It would be great if delegates from the UK were able to tell others what a boost progress on the Bill is giving micro-generation.

If we are to give the Bill a Second Reading, we need to keep our remarks brief so I shall mention only a couple of barriers that I am glad that the measure addresses. Obtaining green energy certificates for micro-generation can still be difficult and expensive. In some cases renewable obligations certificates cost more than a micro-generator is worth. Ofgem should tackle the regulatory burden of the certificates by making them accessible for the householder, so that micro-generators can benefit from Government support for renewables. I welcome the provisions that would minimise the cost and administrative burdens of domestic micro-generation.

Like community energy schemes, micro-generation suffers from the structure of the traditional energy market. Unlike large generators, householders are not in a position to undertake complex commercial negotiations with energy suppliers. I especially welcome clause 7, which takes a crucial step forward in requiring energy suppliers to offer to buy micro-generated energy from householders at the market rate. Household energy generation would be put on the same terms as household energy supply—a straightforward and commonsense approach which empowers consumers who are producers.

Taken together, those steps and other aspects of the measure would ensure that micro-generation makes a significant contribution to hitting the 10 per cent. target for energy from renewable sources by 2010. As other Members have pointed out, the Bill offers real opportunities to address fuel poverty, as well as benefits to poor countries through technology transfer.

In conclusion, climate change, energy conservation and sustainable energy are vitally important, as more and more of our constituents recognise. This is a crucial time for taking the decisions and action necessary to determine how to meet our commitments on climate change and put the future of UK energy production on a sustainable basis. The Bill tackles regulatory and financial barriers that hold back community energy and the potential of micro-generation. It will promote sustainable energy, improve community involvement and encourage people to save energy. Passing the measure will help to ensure that climate change and sustainable energy are at the very top of the political agenda. Its provisions are good for the environment, good for the economy and will enable people to combat global danger with local action. I commend the Bill to the House.

I add my support for the Bill. I have received more letters on climate change than on any other subject. Since the election, I have received more than 50 representations, including one from the Southfield school for girls. I commend the students and their head of geography, Mrs. Christine Lunt, who lobbied me on climate change on their own initiative, not in response to any campaign. As the right hon. Member for Oxford, East (Mr. Smith) said, it is clear that the younger members of our communities hold strong views on climate change.

My hon. Friend has just boasted that he received 50 representations since the election. Will he remind me of how many voters there are in his constituency?

There are 81,000 voters, so I concede that 50 is a small percentage, but it is still the largest number of representations that I have received on any issue. In my view, that reflects serious concern in the Kettering constituency.

The survey conducted by MORI for EDF to which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) referred earlier also demonstrated that, when people were asked about electricity generation, about 79 per cent. of the sample regarded the reduction of carbon dioxide emissions as the most important thing. Although the Government's failures on crime and health rank higher in the public's mind, energy matters and the reduction of carbon dioxide are also important.

I thank my hon. Friend for that helpful intervention.

I am disappointed that we should be forced to discuss these issues in private Members' time. If the Government were really serious about tackling climate change, they would have already adopted the proposals in the Bill and presented their own legislation to the House in Government time. It is disappointing not only that we are retreating on our carbon emissions targets, but that the Government have yet to demonstrate that they are taking the issue seriously. The Bill's proposal that the Government come to the House once a year to present a report on how they are tackling carbon emissions would be a welcome addition to the transparency of the process.

I am particularly excited by the idea of extending renewable obligation certificates to individual householders to export their electricity to the local distribution network. That could become the new green pound. It would not force people to take up micro-generation but would act as a powerful financial incentive for those who wanted to implement such schemes. Once the idea caught on, it could become extremely popular. The Bill has tremendous potential to help our local farming communities, many of whom in the Kettering constituency have written to me on the subject. Farmers could grow crops to turn into electricity that would supply local communities.

Although I am disappointed that we are not discussing the subject in Government time, as we should, I welcome the proposals introduced by the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz).

I want to make a few points, but first I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) on such a good Bill. In his remarks, he concentrated on micro-generation, but I want to say something about the renewable heat obligation, as it is a vital part of the Bill.

I am aware that Sir Ben Gill's taskforce recently came out against renewable heat obligation, but I also note that the Royal Commission on Environmental Pollution recommended such an obligation. Furthermore, as I mentioned in an intervention, a report from the Scottish Executive showed that biomass could not only contribute to reducing climate change, but create about 2,000 jobs in rural areas of Scotland. Our farming and forestry industries face tough times so that would give them an important boost.

Yesterday, when the Government introduced the renewable transport fuel obligation, the National Farmers Union in Scotland issued a press release that can only be described as glowing—the first time it has ever done so for a Government policy. That just goes to show what those obligations can do for industry in rural areas, in England as well as in Scotland. The renewable heat obligation would not only tackle climate change by reducing carbon dioxide emissions, but would stimulate the biomass industry and help with energy security. We worry about having to get supplies of gas from places such as Kazakhstan and Russia, and we worry that coming winters may be extremely cold; the measure would do more to assure energy security with supplies from small-scale developments in our own nation.

The Bill mentions fuel poverty, although not in great detail. A worrying thing in Scotland is that a rising number of people are suffering fuel poverty as the cost of energy increases. All the energy companies recently announced high hikes in both gas and electricity prices, which puts thousands more Scots, and other people in the UK, in fuel poverty. Renewable fuel obligations would help to diversify energy supply and thus tackle fuel poverty. However, when considering all such schemes, we must bear in mind the fact that costs are important. To reduce fuel poverty, we must reduce the cost of electricity to consumers.

We should not get carried away by micro-generation. Renewable energy also means that we have to feed into the national grid. The Minister will not be surprised to hear me mention transmission charges; my colleagues and I have tackled him on that subject on many occasions, going back to the Standing Committee on the Energy Act 2004. It is something that we are very concerned about, because the transmission charge regime proposed by Ofgem will be a huge detriment to the development of renewable energy in the north of Scotland—an area that is particularly suited to the development of renewable energy. The 10-year cap is too short to allow a payback on many of these developments, and of course they only get the full 10 years if they are up and running when the cap comes into being.

This is a serious issue. I know that the matter is out to consultation. I do not expect that the Minister will have anything to say about that today, but it is an important arm in dealing with renewable energy. The Bill will go a long way to help the provision of renewable energy, but there must be action on transmission charges to ensure that we get the benefit from the massive potential from wind, wave and tidal power that there is in Scotland, and which may well be crippled by the transmission charge regime that is currently proposed.

I, too, commend the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) for his foresight in introducing the Bill. I very much welcome the contribution that he has made by encouraging a progressive and sensible response to climate change. The time is long overdue for us to confront this ever-present and growing concern, so I should like to talk about the broader principles that the Bill addresses.

We must all recognise that we face an overriding problem when dealing with climate change. My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) identified the difficulty during the Opposition day debate on tackling climate change. He said then that

"we are unlikely to make progress on climate change until the public take it more seriously, and . . . we have all failed in doing that job".—[Official Report, 12 October 2005, vol. 437, c. 365.]

That very much backs up the point that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) made. This is not a high priority on many people's lists. When lists are published they include crime, health care and law and order, all of which are far more pressing issues on people's minds. However, as my hon. Friend the Member for Kettering (Mr. Hollobone) and thee right hon. Member for Oxford, East (Mr. Smith) said, this is indeed a pressing matter, particularly for young people. They are the people who send me letters and make representations to me on the subject.

I am sure that my hon. Friend, taking the interest that he does in the subject, is absolutely familiar with the excellent report recently produced by the House of Lords Select Committee on Economic Affairs, which, if I get a chance to catch your eye, Mr. Deputy Speaker, I may want to expand on. Is my hon. Friend aware of their lordships' excellent conclusions, and if so what weight does he give to them?

I very much appreciate my right hon. Friend's guidance on this matter. I confess that I have not had the time that he has had to study it in the depth that he probably has, but that does not necessarily negate the argument that I am making.

If we continue to talk of climate change in terms of international accords and global trends, we shall continue to fail in winning over the public. Kyoto is important and effective carbon trading is important, but if ever an issue needed to be tackled at a grass-roots level it is climate change. That is why I believe that the Bill raises a very important principle.

It seems that we have two options for encouraging a change in public opinion. The first is to continue with sporadic warnings about the dire consequences of doing nothing. They will unfortunately occasionally be backed up by tragedies, like Boscastle, or farces like the annual water shortages caused by the wrong kind of rain. The alternative is to provide meaningful and accessible incentives—I use that word as opposed to regulations or directives—for ordinary people to contribute to the country's energy efficiency.

In 2002, domestic users accounted for about 24 per cent. of the UK's greenhouse gases and 27 per cent. of carbon dioxide emissions. Three quarters of that figure results from heating and hot water alone. Indeed, domestic users are the largest single group of energy users in the UK, which is another reason why I find the Bill extremely attractive.

About 140,000 new houses are built each year, and that could increase to 260,000 a year in the light of the proposals arising from the Barker review. Building regulations were upgraded in 2002 to increase the performance of new dwellings by 25 per cent., and I welcome the increase of another 25 per cent. this year. However, regulations are not quite the same as incentives and they are not nearly as effective. Regulations do not generally encourage anyone to exceed the acceptable minimum standards. I therefore believe that the right thing to do is to offer fiscal incentives for energy efficiency.

I shall address the proposals in clauses 3 and 5 with reference to the example set by my own constituency of Braintree. Braintree council recently introduced a pioneering scheme to offer council tax rebates to home owners who install cavity wall insulation. Residents who join the scheme get a £100 council tax rebate for spending £170 on having their walls insulated. It is possible to save £100 on heating bills in the first year alone. That in itself must be attractive, and probably far less costly than perhaps even the micro-generation proposals that were mentioned earlier.

My hon. Friend knows my concern—we discussed it earlier. The Braintree scheme is admirable, but there are parts of the country where, owing to the nature of historic building construction, many householders do not have the option of installing cavity wall or similar types of insulation. If a local authority, on its own initiative, offers a council tax rebate to those householders who install insulation, those householders get a double benefit—they save some fuel costs and they get their council tax rebate. However, without support from the centre, that council tax rebate is effectively funded by other members of the community who are not fortunate enough to be able to make the energy saving. Will my hon. Friend address that point?

My hon. Friend makes an excellent point. I believe that the scheme extends to loft insulation, as well. Councils throughout the land are increasingly having what we would all refer to as green agendas, and that scheme is very much part and parcel of an excellent green agenda for Braintree council.

My hon. Friend makes an interesting point, and the intervention on him was particularly interesting. He mentioned loft insulation. Does he accept that thatched cottages offer tremendous insulation? He will have noticed, for example, that when there is snowfall, the snow evaporates quite quickly from conventional tiled houses, whereas it remains on thatch. Could it not be argued that there ought to be some financial incentive for people with thatched houses, too?

I am sure that my hon. Friend is an expert on thatched coverage to the upper regions of one's house, so to speak. He is absolutely right—thatch is indeed an excellent form of insulation, as is white snow.

The Braintree scheme illustrates how quickly energy savings can repay capital investments. Tax incentives ensure an even quicker return, although I sound a note of caution about fiscal incentives. I believe that Braintree district council's scheme has been so successful because it is simple and easy as well as cost-effective. It is helped, of course, by the fact that the council tax is very much on everyone's mind at the moment—especially pensioners and the less well off—and any opportunity for a discount would immediately be attractive. The Association for the Conservation of Energy has said of fiscal incentives for energy efficiency that

"there is no doubt that consumers like to think they are getting something for nothing, especially if it is some kind of valid avoidance."

I am grateful to my hon. Friend for highlighting the Braintree example because it is hugely important. The chief executive of the Energy Saving Trust told the Environmental Audit Committee that more than 600 households have applied for the rebate in just the few months since its implementation. Does not that information confirm my hon. Friend's thesis that exactly that type of short, sharp and simple fiscal incentive will break through the consumer apathy that has been the brake on attempts by successive Governments to make a breakthrough in the energy efficiency agenda?

Indeed, my hon. Friend makes an excellent point. In fact, I had an opportunity to speak to the councillor who is leading the charge on this—Councillor Walters—who said that he has been inundated by e-mails from other councils that want to introduce such a scheme into their local communities because of its simplicity and cost-effectiveness.

My hon. Friend has already quoted what one if not two single-interest, publicly funded quangos have said on this subject. Does he have the same scepticism about their advice as the House showed to the chief police officers' advice that was so much criticised by Opposition Members just the other day? I hope that he is not suggesting that we should all accept uncritically what a single-interest, publicly funded quango says about something.

Once again, my right hon. Friend makes an excellent point. I am always very sceptical about what comes from quangos. However, I also believe that it is important that we listen and then, having listened to whatever outside parties are involved, we reach our own conclusions and judgments. So having listened and read probably in a far more limited way than my right hon. Friend—I am sure that, as a much more learned Member, he has done much more work on this—I have reached my own conclusions, which I am presenting to the House today.

We must be conscious that not all fiscal incentives are so easy to understand. Clause 3 will require the Chancellor of the Exchequer to publish a strategy for fiscal and economic measures that will assist micro-generation and energy efficiency. The concern must be that the Chancellor's fascination with Gordian taxation schemes will run amok once again. An incentive is of no use if it cannot be readily appreciated as such by those people whom it exists to try to benefit. The danger is surely that the Bill will be railroaded into becoming yet another excuse for increased regulatory burdens in return for obscure tax credits.

My hon. Friend makes a good point about Gordian tax complexity. One or two Members have already mentioned the pitfall that those who set up micro-generation capacity might face if they find themselves with a liability to national non-domestic rates—business rates, to the layman—but there is also a risk, given the Chancellor of the Exchequer's well-known propensity for revenue raising, that household consumers who sell micro-generation capacity back to electricity companies might find themselves, either now or in future, taxed by the Chancellor on those revenues.

I thank my right hon. Friend—[Interruption]—my hon. Friend. He is not right hon. yet. I meant right as in correct. I thank him for his contribution once again.

The paper, "Economic instruments to improve household energy efficiency", jointly published by DEFRA and the Treasury in 2003, lists no fewer than 12 separate economic instruments to encourage energy efficiency, including council tax and stamp duty rebates, which have already been subject to an early-day motion. I will not emit any further CO ₂ on the proposals listed in that report, except to say that we must be wary that the list does not grow unchecked. I have no hesitation in speaking in support of the principle of the Bill, but we have a duty to ensure that its provisions will be implemented as well as they have been drafted.

I note that the Bill's principle purpose is to consider the effects of climate change and the United Kingdom's contribution to it, so I want to dwell for a moment on the opening comments of the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) and the point raised in an intervention about the Government's strategy. The hon. Gentleman has been quoted as saying that there is a worrying trend that the UK will struggle to meet the 20 per cent. reduction in greenhouse gas emissions by 2010, and that he wants the measure to help the Government to get on track. He recognises the disappointment that many people feel about the Government's approach.

My hon. Friend the Member for Salisbury (Robert Key), who is no longer in his place, referred to some scepticism in his local authority area about whether climate change was happening and whether it was being driven by man-made effects. The science is clear that climate change is happening and that it is being affected by man's intervention, but there is a point that gets less coverage. I am grateful to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) for drawing to my attention the very excellent report of the House of Lords Select Committee on Economic Affairs entitled, "The Economics of Climate Change", which I have had the opportunity to study in detail. The Select Committee draws attention to the fact that although climate change no doubt exists, the conversations about it and policy making are very much focused on the environment and science and have, to date, paid much less attention to the costs of climate changes and of the many measures that can be taken to deal with it.

I do not know whether my hon. Friend will come to this at some stage in his speech, to which I shall listen with fascination, but will he talk about scenarios and temperature ranges? Various things came out very clearly in their lordships' excellent report. For example, in paragraph 72, they say:

"We received a significant amount of evidence on the realism of . . . emissions scenarios, and doubts were raised, particularly about the high emissions scenarios."

That all sounds very technical and obscure. Of course, for understandable reasons, the Bill's promoter did not want to detain the House for too long on the underlying principles of climate change, but will my hon. Friend consider any of that during his remarks?

I am grateful to my right hon. Friend for that intervention. I am afraid that my background is based rather more on the finance and economics of the argument. I am not an expert on engineering and technical matters—I know that some hon. Members are—so I probably will not dwell on those scenarios. I want to focus on the economic costs and the alternative ways to deal with climate change. Many hon. Members have referred to a view of the debate that is shared on both sides of the House. Everyone accepts that climate change is happening and causing a problem, but there is not universal consensus about the best way to deal with it and the way to do so most economically.

Before my right hon. Friend intervened, I was making a point about the different options that are open to the Government. I look forward to the Minister's remarks in response to the debate about the Government's policy and the way that they have analysed their different options and the most cost-effective ways to address climate change. Certainly, their lordships' conclusion in their report:

"We are concerned that UK energy and climate policy appears to be based on dubious assumptions about the roles of renewable energy and energy efficiency and"—

most importantly—

"that the costs to the UK of achieving its objectives have been poorly documented. We look to the Government, with much stronger Treasury involvement"—

I hope that the Minister will focus on this at least briefly in his remarks—

"to review and substantiate the cost estimates and to convey them in a transparent form to the public."

The public could then be properly cognisant of the costs and trade-offs that they must consider when looking at energy policy.

Government energy policy has been touched on at some length. When questioning the hon. Member for Edinburgh, North and Leith, my right hon. Friend the Member for Bromley and Chislehurst touched on the potential for micro-generation in dealing with our total energy capacity. The hon. Gentleman said that people have estimated that micro-generation could achieve up to 10 per cent. of generation capacity, although he would not necessarily go as high as that. My concern is that trends are developing, particularly with nuclear energy and its decommissioning—

Order. The House will now stand and observe two minutes silence in remembrance of those who gave their lives for their country.

Just before we were very valuably interrupted, I was touching on Government energy policy. The hon. Member for Edinburgh, North and Leith said that he would not go as far as to suggest that 10 per cent. of our energy capacity should come from micro-generation, but a number of us are concerned by what will happen to our other generating capacity. No doubt, the Minister for Energy will comment on that. Something like 23 per cent. of our energy needs are supplied by nuclear power and many in the House will know that that figure will fall tremendously over the next 20 years.

Those outside the House, particularly the younger members of the community to whom my hon. Friend the Member for Kettering (Mr. Hollobone) drew attention and who have taken part in community micro-generation and driven up renewable energy generation in this country, will be disappointed if fossil fuel generation comes in to fill the gap because decisions are not taken about the renewal of our nuclear capacity. That would negate all the work that the hon. Member for Edinburgh, North and Leith suggests that we do. I hope that the Minister will comment on where the Government's review of energy policy has reached and when he might bring forward to the House thoughts on where the Government stand, particularly on their plans for nuclear generation and whether they see that as having a role. The cross-party Committee that drew up their lordships report said:

"We think that current nuclear power capacity, before further decommissioning occurs, should be retained."

The only technical point that I shall make relates to something that my right hon. Friend the Member for Bromley and Chislehurst said. Many Members have drawn attention to the range of technology solutions that are referred to in the Lords Committee's report. Table 8 on page 46 contains a whole list of emission-reducing technologies that Professor Dennis Anderson of Imperial college, London, has put together. It refers to a whole range of things, including the biofuels that have been mentioned by hon. Members and the photovoltaic solutions that are possible in micro-generation. The report says:

"Given the wide array of potential technologies . . . we are surprised that the Government's Energy White Paper should place such emphasis on just one technology, wind energy."

It would be helpful if the Minister could explain the breadth of energy solutions that the Government are considering. What contribution does he think that micro-generation could make to our total energy requirement and how does the cost of that compare with other solutions?

Is my hon. Friend convinced that the costings of all the alternative methods of producing energy, such as the building and maintenance of windmills and the production of photovoltaic cells and their disposal after their working life, have been fully considered? Does he believe that the analysis of their lordships or of others takes full account of the whole-life cost of various types of energy production and, not least, the costs of their environmental disposal at the end of life?

My right hon. Friend makes a very good point. I do not think that that has been done. One of the concerns that their lordships raise comes down to the public's scepticism about politicians. If we do not run through all the solutions, include all the costs and have a full and frank discussion with the public about the costs of climate change and of dealing with it, their lordships argue:

"Ultimately, a public that is not adequately informed may react adversely to the discovery that more and more cost burdens will fall on them, and on their children, in the name of warming control."

Their lordships refer briefly to the fuel protests in 1999 and 2000 as an illustration of what happens and how sensitive the public are to even relatively modest increases in the cost of energy. I hope that the Minister will give us an idea of how the Government see the costs of energy panning out over the next few years and how the proposals in the Bill might impact on that.

Having dwelt for a few moments on climate change and the thoughts of their lordships, I now want to turn to the Bill and make a couple of comments about it. The hon. Member for Lewes (Norman Baker) referred to targets in his speech and my right hon. Friend the Member for Bromley and Chislehurst asked him whether a strategy of having targets and reports had been very effective. I am a little more sceptical than the hon. Member for Edinburgh, North and Leith about the likely success of such a strategy.

The most important provision in the Bill appears in clause 2 on an "Annual report on greenhouse gas emissions". Clause 2(1) lays

"a duty on the Prime Minister in the course of each year to lay before Parliament a report on—

(a) steps the government has taken to reduce emissions of greenhouse gases . . . and

(b) the level of emissions of greenhouse gases in the United Kingdom".

That just asks the Prime Minister to lay before the House a report, even though, as my right hon. Friend the Member for Bromley and Chislehurst has suggested, the Government are past masters at producing reports, documents, working parties and all sorts of other groups. When difficult decisions need to be taken in local government, we know that they set up a report under an eminent person. When the report is produced and a tricky decision is needed—I am sure that decisions on climate change will be the same—yet another report under the same eminent person is commissioned and the issue is kicked into the long grass. Just asking the Prime Minister to produce a report without imposing any further duties on him is an excuse to lay before the House lots of documents and hot air, with not much progress being made towards the targets.

My hon. Friend will not be surprised to hear that that part of the Bill had caught my eye. I wonder what would happen if the report said that no progress had been made. If we were lucky, we might be given a debate in the House, although we certainly would not have a vote because the Government do not like debates with votes any more. Has my hon. Friend speculated about what might happen if these rather tediously frequent reports ended up saying that very little had happened at all?

The Prime Minister makes an important point—[Laughter.] I am sure that that Freudian slip has filled some hon. Members with great joy and others with great horror—[Interruption.] I see that it would be joy on the other side of the House.

Given the comments of my hon. Friend the Member for Kettering about the fact that the Government are failing to stay on track to hit their targets, the Prime Minister might face the choice of either bringing a full and frank report before the House that made it clear that the Government had made little progress on reaching their targets—and, in fact, had hit fewer targets on the reduction of greenhouse gases than the Government led by Sir John Major—or producing a long and verbose report that skirted around the issues and made the steps that the Government had taken unclear.

As my right hon. Friend the Member for Bromley and Chislehurst said, the Bill provides for a debate on the report. I welcome that, because it is always good to give the House the opportunity to debate such important issues. As he said, however, a vote after the debate would be unlikely because the Government would not want to put their policy on climate change to a challenge. Little concrete progress towards meeting targets would be made merely by bringing a report before the House.

Has my hon. Friend thought about what would happen if the motions in the two Houses of Parliament to which the Bill refers were put to a vote and the votes went in different ways? For example, the House of Commons might vote in favour of the report, but following the excellent House of Lords report to which he and I referred, their lordships might vote against the Government's report. Where would that leave us?

We would be in a confused and unclear position.

Perhaps the hon. Member for Edinburgh, North and Leith will explain what would happen if the Prime Minister laid a report before the House that made it clear that the Government had made little progress? The Bill does not seem to give the Government any specific duty to make progress—they must merely lay reports before the House. We would prefer the Government to take action, instead of merely generating more paperwork and red tape.

The Bill would give the Chancellor of the Exchequer the duty of preparing and publishing

"a report on such fiscal measures he considers appropriate".

That relates to a point that I made in an intervention on my hon. Friend the Member for Braintree (Mr. Newmark). It would be helpful to set out in detail the guidance that we would want to give the Chancellor. Given the Chancellor's record so far, if he gets anywhere near this, people who produce their own power in a micro-generation plant and sell it back to an electricity company will almost certainly be pursued by the Inland Revenue for tax. Hon. Members have pointed out that people who already partake in micro-generation are pursued for national non-domestic rates. Given that the Bill invites the Chancellor of the Exchequer to consider fiscal measures, I cannot believe that he would come up with any such measures that would reduce tax. He would not pass up the chance to increase the amount of tax that people pay. If the hon. Member for Edinburgh, North and Leith gets his right hon. Friend the Chancellor involved, he might set back the course of micro-generation and energy efficiency, rather than enhance it.

Does my hon. Friend share my worry that if we took that provision literally and the Secretary of State felt so obliged, it could represent an open-ended commitment to public expenditure? If progress was not forthcoming in any other way, might not a Secretary of State, in adhering to the aims and provisions of the Bill, feel obliged to spend large sums of public money to reach the targets that had been set?

I invite the Minister to comment on the good point that my right hon. Friend makes. Although I listened to the hon. Member for Edinburgh, North and Leith with great care, I do not think that he spoke at any length about the possible cost of some of his proposals. We must be cognisant of that, especially in the light of their lordships' guidance on properly taking account of costs and being upfront and frank with the public about the options and difficult choices that must be made.

Several hon. Members, including my hon. Friend the Member for Braintree and the hon. Member for Bury, North (Mr. Chaytor), who is no longer in the Chamber, mentioned the policies of their local authorities. The Bill would put a duty on such authorities to set a local target regime. The Bill's long title refers to the "alleviation of fuel poverty", but I wonder whether an unintended consequence of the Bill might be to worsen fuel poverty.

I think I am right in saying that the hon. Member for Edinburgh, North and Leith confirmed that the Bill would put several duties on local authorities that would result in some cost. I am sure that my right hon. Friend the Member for Bromley and Chislehurst will agree that we receive many letters from our constituents about the burden of council tax, which falls especially heavily on pensioners, who obviously make up one of the groups of people most affected by fuel poverty.

I briefly remind my hon. Friend that the beauty of Braintree district council's proposal is that it is inexpensive and simple and has an immediate pay-back. One pays £170 for the insulation and the energy savings are approximately £100 per annum, so there is pay-back in less than two and a half years. The amount that is paid is not so expensive. We need a general broad set of targets, perhaps set by Government, and a light regulatory touch coupled with strong fiscal incentives. That is the combination that I propose to my hon. Friend.

My hon. Friend makes a good point but he slightly misunderstands my point. I was not talking about his scheme but considering the burden on local authorities. Braintree council's scheme gives a council tax rebate. The problem is that, if a local authority gives, without support from the centre, a rebate to one citizen, it is a burden on all the other citizens in the local authority area. If we burden local authorities and do not support them through central Government grant, thus driving up council tax, that will be detrimental to those in the poorest communities. They may find that they have even less spare funds available to purchase necessary fuel. Perhaps the Minister for Energy would like to comment on that later.

I want to consider the sale of electricity. I freely admit that I am not an expert or an engineer. Perhaps hon. Members with such backgrounds can advise me. The hon. Member for Lewes referred to losses in energy transmission. If we made a success of the approach that we are discussing, and millions of people throughout the country had their own micro-generation capacity and produced electricity that they wished to sell back to electricity companies, the Bill obliges the energy companies to purchase the energy at market rate. Hon. Members of all parties have welcomed that. I have a concern, which the hon. Member for Angus (Mr. Weir) also mentioned, about transmission charges.

If we lay on electricity suppliers a requirement to purchase electricity, what physical infrastructure would be required to enable the transmission of those relatively small quantities of electricity into the local distribution network? How efficiently would that happen, and at what cost? If the obligation to purchase the power causes electricity companies to spend a great deal of money, the cost must be borne either by the person selling the electricity back to the transmission network—that would probably offset the amount of revenue they get—or electricity companies. In the latter case, the cost would be passed on to many consumers.

Although I am not an engineer, I believe that we currently have primarily a pull strategy. We pull energy through the national grid into our local communities. As we pull it over long distances, the longer the distance, the more energy we lose in the pipeline or channel. A micro-generation strategy, which is based in a local community, becomes more of a push strategy. Any surplus energy is pushed away from the core. It is therefore likely that any surplus will be held in a relatively small area. I appreciate my hon. Friend's point about cost, but micro-generation is a far more efficient form of energy production.

I am grateful for that point. The hon. Member for Lewes also dealt with energy efficiency in his remarks. I know the difference between the national transmission network, which my hon. Friend the Member for Kettering mentioned, and the local distribution network. I am simply considering the physical infrastructure and the mechanics of dealing with a large number of people who are trying to sell their electricity back to the grid. I wonder about the practicalities.

My hon. Friend is conscious of the cost and accounting aspect of the measure. Has he considered whether the complex system and network that is being envisaged will be able to take account of depreciation and maintenance of all the micro-generating plants and how that might be factored into the realistic cost of producing energy? Does he share my suspicion that, up to now, everybody has somehow assumed that it is a free good?

My right hon. Friend makes a good point. One of the key points about the Bill is that, for it to work, consumers must be able to offset some of their energy costs with the revenue that they get from producing surplus electricity and selling it back to electricity companies. That works only if some of the costs involved are not borne by those consumers. If, consequently, we load lots of costs on to electricity companies, which they have to pass on to other consumers, some consumers might be a little more entrepreneurial than others, participate in the excellent local schemes and thus benefit—the hon. Member for Edinburgh, North and Leith said that six to 10 million homes might benefit from the measure. However, those who do not participate may find that the cost of their electricity increases. That would not help to alleviate fuel poverty, which is one of the Bill's aims.

Notwithstanding the excellent point that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) made, I remind my hon. Friend that maintenance is a cash item whereas depreciation is a non-cash item. We must take that into account when we consider helping to alleviate pensioner poverty and so on.

I thank my hon. Friend for that point.

Is the assumption being made that the individual home owner would own the capital micro-generating equipment? If people had ownership and responsibility for maintaining it, the depreciation point is relevant and would kick in.

That is a valuable point.

Is the hon. Gentleman conscious of the contribution that unnecessary hot air may make to climate change?

I am not entirely sure that that was a serious point. I have probably spent more time reading some of the stuff than some hon. Members.

I want to consider growing the market for the sort of technology that we are considering. Several hon. Members received an excellent document, which included photographs of the hon. Members for Edinburgh, North and Leith and for Southampton, Test (Dr. Whitehead). The document, which is entitled, "Micro Power Nov 2005" from the Micropower Council, includes a joint statement by several companies that manufacture such technology. I am always a little suspicious when a group of business people gets together to make joint statements. I believe that Adam Smith said that we should beware when a group of business people gets together because it is probably not for the benefit of the public as a whole.

The group states:

"But our bankers and investors will need a certain future market place to put up the substantial sums this involves."

It is a little unusual for Labour Members to be willing to give protected markets and guaranteed returns to business people who can then invest substantial sums at no risk. If the technologies are so promising, it is surprising that an entrepreneurial business sector has not already taken a risk, made some investments, perhaps in marketing, and persuaded people of the promise of the technology. I am surprised that the market has not already taken off in that way.

I am a little concerned about the requirement on heating fuel suppliers to demonstrate that a proportion of the fuel that they supply is from a renewable source. In rural areas, such as the one in which I live, fuel can be purchased from a very small supplier. It is unreasonable that that requirement impacts on all suppliers, however small, and forces them to diversify into the supply of renewable energy. I counsel caution in applying that provision too widely.

I am grateful for the opportunity to speak in favour of the Bill and to make a brief contribution to the debate.

Since I was elected to Parliament, I have heard a number of Members speak about their postbags and the amount of correspondence that they have received on various issues. Some of those claims, particularly over the past few days, have worried me somewhat, as their postbags have clearly not borne any relation to mine. It is therefore with some relief that I can speak on an issue that really has captured the imagination of residents in Cheadle, and I certainly have a postbag to prove it.

I want to praise all those who have been involved in the various campaigns to promote this and the accompanying Bill. As a local councillor in Stockport, I have already been able to support both Bills at a local level, with the backing of all parties there. Similarly effective information and publicity campaigns have been conducted up and down the country in the run-up to this debate.

The technology involved in micro-generation offers a wide range of opportunities to contribute to what is arguably the most important of all global challenges. On thermal heating, household wind turbines, and fuel cells—to name just some of the technologies available—the Bill can make a real impact through the encouragement that its measures offer householders.

It is not just the technology that appeals to me. There is plenty of evidence in my constituency that the public take their responsibilities to the environment very seriously. That is why the local authority that covers my constituency has the highest levels of household recycling of any metropolitan authority, and it is why the constituents to whom I speak are eager to do even more to conserve energy and protect the environment. The measures in the Bill would tap into the enthusiasm and commitment of the public in a positive way, and in a way that simply does not exist at present. The Bill offers carrots to the public and sticks to the Government, because it is clear that this Government and Governments across the world need to move more quickly on this most important matter.

Even those who believe that climate change is an enormous conspiracy theory—which I most certainly do not—and that global warming is neither a serious issue nor a major threat to us all, should think of all those utility bills dropping on the doormat. At a time of rising fuel prices, it would not be overstating the case to say that we have never needed such a Bill so much.

There are compelling reasons to support this Bill on so many counts that it should satisfy those of all political persuasions and of none. The Bill combines the economic, scientific and moral case for environmentalism in a way that I believe really can reverse those negative trends that pose such a threat to us. The Bill is truly worthy of support from all sides.

I am keen to see this and the other Bill to be presented today progress. As we have had some long speeches today, I merely want to record my support for the Bill. I hope that we can move to the Front-Bench speeches and make some progress.

We have had some supportive and positive interventions from the hon. Members for South-West Bedfordshire (Andrew Selous) and for Salisbury (Robert Key), and an important point was made by the hon. Member for Ruislip-Northwood (Mr. Hurd) about the cost of setting up micro-generation. My hon. Friend the Member for East Surrey (Mr. Ainsworth) also made an important point about the Government framework. What a joy it has been for the second time this week to have so much consensus on both sides in the House. I hope that the Minister will refer at some stage to the gap in funding for the Clear Skies project, to which I shall return later.

We heard a good speech from my hon. Friend the Member for Kettering (Mr. Hollobone), who emphasised the importance of the issue and the fact that the Bill enables people to go out and help themselves, which is an important principle. My hon. Friend the Member for Braintree (Mr. Newmark) was very supportive, and spoke about young people and the success generated by local initiative.

My hon. Friend the Member for Forest of Dean (Mr. Harper), who was also supportive of the Bill, made a considerable contribution. He spoke about economics and his concerns about the potential total energy capacity from micro-generation, which was most helpful, and the Government's favouritism for wind energy, which is a concern across the country. He also asked whether the Prime Minister would announce his failures, about which we must be sceptical. As for bringing him to the House to explain one of his party's policies, that is something that he does not currently have to do.

All in all, there were some extremely helpful and positive contributions from Conservative Members, and some questions which I hope that the Minister will answer. Conservatives have always supported promoting the environment, since Rio in 1992. We welcome proposals designed to improve the environment, and we welcome much of this private Member's Bill. I am grateful that these matters are being discussed on the Floor of the House.

The Bill contains some beneficial measures to help combat climate change. Clause 2 makes provision for the Prime Minister to make an annual report. That will help with transparency and Government accountability. Back in 2000, the Prime Minister announced,

"the greatest threat to our environment today is climate change."

In 2004, he remarked:

"Our effect on the environment, and in particular on climate change, is large and growing."

This year, he used his presidency of the G8 to place climate change at the forefront of the agenda. At the Labour party conference in September, we heard the Prime Minister again pledging to formulate an energy policy some time next year.

There has been lots of talk, but not much effective action. Despite the Sustainable Energy Act 2003, the Waste and Emissions Trading Act 2003 and the energy White Paper of February 2003, carbon dioxide, pre-eminent among greenhouse gases, has increased since 1997 by 4.7 per cent. Since the introduction in 2001of the climate change levy, which was designed to reduce greenhouse gas emissions, we have seen greenhouse gas emissions increase. The Kyoto protocol requires us to ensure that our greenhouse gas emissions are 12.5 per cent. below 1990 levels. Considering that the Prime Minister is the Head of Government, his high profile and the importance that he attaches to climate change, it is only right and proper that he should present to the House the annual report on greenhouse gas emissions and his Government's policy.

Clause 2 will make it easier for Parliament to scrutinise the Government, and serve to make the Government more transparent and the Prime Minister more accountable to Parliament. As I said a few moments ago, the Prime Minister currently has no obligation to explain policies to the House. The hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) has sensibly included provisions for micro-generation, which is a technology that Conservative Members would like to see advanced. Section 82(1)(a) of the Energy Act 2004 states:

"The Secretary of State must prepare a strategy for the promotion of microgeneration in Great Britain",

and we need to wait 18 months for this strategy to appear. The Government have already had eight years—[Interruption.]

Order. The House takes a strong line on mobile phones going off while we are debating in the Chamber. I do not know whose mobile phone that was—[Hon. Members: "He's gone."] The Member responsible has obviously beaten a hasty retreat.

We have had to wait eight years for the Government to develop such an energy strategy—perhaps that was what the phone call was about—and we are still waiting.

This Bill reiterates the need for the Secretary of State to produce a strategy, and requires that the Secretary of State make an annual report to the House about the progress of the micro-generation strategy produced. Like the Prime Minister's report that the Bill advocates, the Secretary of State's report will serve to make the Government more accountable to Parliament for both their successes and their failures. This Bill goes further than section 82 of the Energy Act 2004, as it makes statutory provisions for the Secretary of State to set targets for the take-up of micro-generation in Great Britain. The stability for the industry that such a target would offer could reduce prices by as much as 50 per cent.—those statistics come from the hon. Member for Edinburgh, North and Leith. Microgeneration has huge advantages. The Sustainable Development Commission argues:

"Microgeneration technologies, in particular micro-renewables, have the potential to make a significant and prolonged contribution to efforts to reduce emissions of carbon dioxide . . . it is hard to envisage a scenario whereby on-site generation of both electricity and heat will not play a major part in future energy supply."

The locality and individual input of micro-generation demonstrates further advantages for its use. The fact that it sources energy locally means that on-site electricity generation substantially reduces the transmission losses that can account for 7 per cent. of total output. That information comes from the Sustainable Development Commission and answers some of the questions from Members who spoke of the loss through the National Grid.

Microgeneration plainly has economic and environmental advantages. It empowers individuals to make a visible impact on climate change. Research has confirmed that when individuals are using micro-generation, their awareness of the environment and energy use increases.

In October 2005, the Sustainable Consumption Roundtable reported:

"It seems that microgeneration provides a tangible hook to engage householders emotionally with the issue of energy use . . . Householders describe the sheer pleasure of creation and of self-sufficiency: 'It's like growing your own vegetables.'"

It went on:

"The installation of microgeneration had a profound effect on many individuals across the samples, in homes and schools. Instead of being invisible and unengaging, they could now see the creative process of energy being made and powering their buildings. The emotional benefits from the energy, such as warmth, comfort, light, entertainment, cooking and cleanliness, were now strongly associated with the energy source and made people feel good about their own technology."

Evidence demonstrates that the more the Government promote micro-generation, the more uptake there will be.

Clause 7 will enable consumers to sell the surplus energy that they produce back to the grid. That economic incentive should prompt more people to install micro-generation. I believe that there are already plans to use hydropower energy production on the River Thames to meet about a third of the energy demands of Windsor castle, and there are individual projects such as those on the River Stour in Dorset. There is, however, a massive lack of Government support for those measures.

In response to provisions in the Energy Act 2004, the Sustainable Development Commission commented:

"Since 2003, we have seen two primary initiatives aimed at encouraging the installation of microgeneration technology—Clear Skies2, and the Major PV Demonstration Programme—but the extent of these programmes has been limited, with total funding over four years of around £42.5m. This has helped to create a domestic solar PV installation industry (and the UK's first manufacturing plant in Wales), and has dramatically increased the growth of other microrenewables. But it has not led to the creation of mass-market status, and in most cases microgeneration companies are small, and operate in a niche market."

I hope that the Minister will talk more about the Clear Skies 2 programme. He shook his head following an intervention about the time lag and the continuity of the programmes. If he has some good things to say I shall be grateful, because he needs to explain why the micro-generation industry is not happy and has been complaining.

Our economy is the second largest in Europe, yet the United Kingdom accounts for only 2 per cent. of Europe's installed thermal capacity. Germany managed to account for 47 per cent., more than 20 times as much. At the end of 2004, our installed capacity of photovoltaic energy production represented a mere 8.2 MWe out of an EU total of 410.5 MWe. Seven EU countries are installing more photovoltaic technology than we are, and even a country as small as Luxembourg can boast almost six times more photovoltaic capacity than us.

The Minister has himself spoken of the need for micro-generation. In July, at the renewable power annual conference, he said:

"Our vision for the future is of an energy system that includes much more diverse, local energy generation. Small-scale renewable generation has an important part to play in helping the individual to make a contribution to our renewables targets and our wider energy policy goals."

He went on to say that the Government

"must create the right competitive environment for these technologies to fulfil their potential."

The Government are making over £800 million a year through the climate change levy. They should be able to fund some micro-generation projects, especially given that the costs of water turbines, for example, can be as low as £3,000. Earlier this month, during talks about climate change in London, the Prime Minister remarked:

"The solutions will come in the end, in part at least, through the private sector in developing technology and science."

The Government have set themselves a target of reducing Britain's carbon dioxide emissions to 20 per cent. below 1990 levels by 2010. In 1997 we were on target to achieve that; now that looks far less likely. The Government have been slow to respond to the changes, and it is the practical effects of many aspects of the Bill that will equip them to make a more positive response to climate change.

Given the amount of Government rhetoric about climate change and sustainable energy production, why should not the Government support a Bill that would oblige them to do what they claim they want to do, but have not done yet?

I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on presenting an important Bill and a well researched and considered case on climate change and sustainable energy. In the interests of time, which I know we all take seriously, I will not comment in detail on all that has been said—I hope Members will forgive me—but I will say that, at times, the talk here this morning has been as green as the House of Commons Benches. I find that significant.

The private Member's Bill procedure is important. Some 10 years ago I had the opportunity through the ballot and the privilege through the House of introducing what became known as the Carers (Recognition and Services) Act 1995, with much support from the then Conservative health Ministers. I have told my hon. Friend the Member for Edinburgh, North and Leith privately that if I, a mere Labour Back Bencher in those days, could present a Bill under a Conservative Government, surely it may be possible for a Labour Member to do so now.

My hon. Friend is himself a renewable source of energy, as he moves around the Chamber simply to confuse me! [Laughter.]

rose—

The right hon. Gentleman has not had much of an opportunity to intervene today, so I shall give way to him.

Is the Minister aware that during the last three Fridays when we have discussed private Members' Bills, it has been his ministerial colleagues who have systematically talked out three of his Labour colleagues' Bills?

I was not aware of that, because, unlike some, I like to spend some time in my constituency on Fridays. I always feel that that is part of my duty. I am sometimes teased at meetings when I am reminded that I am the seventh Minister for Energy in eight years. I do not want to comment on that, but it shows the Government's dedication to renewables.

Tackling climate change is a priority for the Government and, I detect, a key priority for all of us, or certainly most of us, in the House. The Prime Minister and others, too, have said that it is the greatest challenge facing the world today. While politicians often wax lyrical that their chosen subject is the biggest challenge, in terms of the evidence climate change claims the dubious crown of being the biggest challenge facing the world today.

Our record on addressing the levels of harmful emissions that contribute to climate change is good. We are on track to meet our Kyoto protocol commitments, with emissions of all greenhouse gases projected to be approaching 20 per cent. below 1990 levels by 2010. However, we recognise that there is much more to do to meet our more ambitious target of a 20 per cent. reduction in carbon dioxide emissions by 2010. That is a challenge. Through the current review of the climate change programme, we are evaluating existing measures to reduce emissions and assessing new options for getting back on track to meet our ambitious target.

If, as the Minister and the Government's chief scientific adviser have said, climate change is the most important challenge facing the world, will the Minister explain why these measures, which he has just said are valuable and well thought out, have had to be introduced by a Back-Bench Member rather than by Her Majesty's Government?

This House has a great tradition—I cited my own modest contribution to it—of making societal progress through the contribution of Back Benchers, and that has to be good for Parliament. However, I believe that the Government have a good record on micro-power, not least the work to meet our target of 10 per cent. of electricity coming from renewables overall by 2010.

rose—

Obviously, I need to give way once or twice but most of us are anxious to make some progress on moving towards a judgment on this important Bill.

I know that the Minister wants to get on, but he acknowledged the challenge of the 2010 CO ₂ reduction target. Will he take the opportunity to confirm that the Government will neither drop nor seek to adjust that target in the climate change review?

Our Kyoto obligations are absolutely clear. Indeed, our own targets are absolutely clear and we are committed to them.

Micro-generation, as we have discovered, is a generic term for a suite of technologies that allow for the production of heat and electricity in close proximity to communities and to the consumer.

Will the Minister give way?

Yes, because I was able to get out a whole sentence of my speech and it would be extremely churlish of me, given that I have a reached a full stop, not to stop momentarily.

I welcome the opportunity to put on record my support for the Bill, particularly its provisions on micro-generation. Does the Minister agree that, by generating their own electricity at home, people will understand how much energy they use and that that will motivate them to reduce their energy use, which is key to reducing emissions overall?

That is an important point. I shall touch on that briefly in a few moments.

When we talk about micro-generation, we are talking about a range of technologies: solar power to heat water and produce electricity; harnessing the wind through individual micro-wind turbines; and using the earth's heat to heat our homes through ground source heat pumps. Energy efficiency involves a closely related family of measures, including, as was confirmed today, the thatched cottage, and it was useful to be reminded of that important example by the hon. Member for Lichfield (Michael Fabricant). We have an array of technologies that can make a significant contribution to our long-term targets for reducing carbon emissions. By exploiting our own natural resources, increased levels of micro-generation would reduce our reliance on imported fuel and contribute towards our objective of secure energy supplies. That issue requires more debate in the months to come, and I think that we shall achieve more debate.

The Government have long recognised the potential of micro-generation, which is why I announced only last week a £30 million low-carbon buildings programme to support these technologies. In announcing the details, I was anxious to bridge any gap in funding that was of concern to the industry. That brings total Government funding for micro-generation installations to £83 million since 2002. Creating a sustainable market for those technologies will not be done solely through capital grant programmes, which is why we are developing a strategy for the promotion of micro-generation technologies to remove some of the wider barriers preventing widespread take-up.

Will the Minister touch on the point that I raised with the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) about the concern among people who use micro-generation water turbines that they could be brought within the compass of the non-domestic rate? Can he allay their fears?

My understanding is that business rate valuations do include renewable energy installations, but that business can benefit from the financial gains associated with renewable obligation certificates and levy exemption certificates. [Interruption.] On the domestic side—no, householders' own micro-generation would not make those individuals or households eligible for business rate. That is an important clarification.

One important theme has been raised by one or two colleagues, such as the hon. Member for East Dunbartonshire (Jo Swinson) and my right hon. Friend the Member for Oxford, East (Mr. Smith). Many people watching their television screens and hearing about global warming could be forgiven—although I am saying that they should not be—for thinking that the future of the planet is by definition an issue for big people, such as presidents and prime ministers, and big institutions, such as the UN, the G8 and the rest. Of course it is an issue for those big players, but what my right hon. Friend the Member for Oxford, East said is also important. He was once my Secretary of State, and I am rather in the habit of agreeing with him, so I am happy to agree with him on this important point. To use his phrase, this is about thinking globally and acting locally.

When an individual or a community organisation—a school, a church or a community centre—starts to invest in photovoltaics, say, or a micro wind turbine, they are not only making a contribution to their own energy supply but sending out a signal that they are taking responsibility. All of us as individuals—that would certainly be the case for us in the House—are more part of the problem of the misuse of carbon than the solution, but micro-generation enables us, locally and as individuals, to start becoming part of the solution.

Now I shall turn to some of the details of the Bill.

rose—

I shall give way one more time, and then make some progress.

I would like to add my support for the Bill. Does the Minister agree that one of the barriers to popular participation in the technology is the cost, and that one of the valuable aspects of the Bill, as with the biofuels initiative this week, is that it will give a boost to the market, which will bring down the cost of these technologies and make them more affordable for more people?

That is right. The technologies are at the stage where television was, perhaps, in the first few months of production. Clearly, with growing popularity, there are economies of scale and cost reductions. If the Bill is passed by both Houses, that will show the will of Parliament, which in itself will make an important impact.

Before I turn to specifics, let me make it clear that the Government support the key principles that underpin the Bill, but that we have concerns about some of the detail. However, if my hon. Friend the Member for Edinburgh, North and Leith accepts the changes that I propose, I will be happy to work with him—although I do not know where he is at the moment. [Interruption.] Oh, there he is. I wish to be his friend; I do not know why he is hiding from me. I shall be happy to work with him to get the Bill on to the statute book. [Hon. Members: "Hear, hear!"] Before we have too many "Hear, hears", let me go into the detail.

Clause 2 gives the Prime Minister a duty to table an annual report on progress towards meeting targets for reducing greenhouse gas emissions. The UK already has an existing requirement to submit data to the EU on greenhouse gas emissions annually, so ensuring that the report is laid before Parliament would not be problematic. Indeed, we welcome the idea.

Although the Government see no problem with the general thrust of the clause, however, we would not support a final version that required the Prime Minister, rather than a Secretary of State, to table the report—and we do not believe that there is a need for a resolution approving the report.

The fact that the Prime Minister makes the report is one of the most important aspects of the Bill. The Minister will be aware that the Secretary of State for the Environment, Food and Rural Affairs has stated:

"We will not, on the basis of current policies alone, achieve our ambitious domestic goal of a 20 per cent. cut in carbon dioxide emissions."

A few moments ago, the Minister said that the Government would. That is why it is so important for the Prime Minister to make the report.

The Prime Minister has led from the front both domestically and internationally on climate change. A report on micro-generation should, in our judgment, come from my Secretary of State rather than the Prime Minister.

Clause 3 requires that Her Majesty's Treasury produce a fiscal and economic strategy for micro-generation and energy efficiency. As hon. Members will be aware, all consideration of fiscal measures is undertaken as part of the normal budgetary process, so a separate fiscal and economic strategy for micro-generation and energy efficiency is unnecessary and would risk prejudicing the outcome of the overall budgetary process. I should add that the Chancellor has asked the Government's chief economist, Nick Stern, to review climate change and economic instruments.

I do not wish to take up too much time, but I want to return to the point about the Prime Minister. The reason why the Bill suggests that the report should be done by the Prime Minister, at least in name, is that responsibilities are set out in clause 2 for greenhouse gas emissions—not just micro-generation—which involve the Department of Trade and Industry, the Department for Transport, the Department for Environment, Food and Rural Affairs, among others. It is important to aim for cohesion and accountability across government. That is why the Prime Minister's involvement is an important aspect of the clause.

The Government could not be more joined up, Mr. Deputy Speaker, on issues surrounding climate change, energy efficiency and the rest. I do not believe that we should get into too much of a lather about who presents the report. I have explained why I think that it should be my Secretary of State. The hon. Gentleman should beware of casting himself in the role of talking the Bill out by making too many interventions.

Clauses 4 and 5 relate to the setting of national and local targets for micro-generation. Let me remind the House that the Government already have two targets to which micro-generation contributes: 10 per cent. of electricity generated from renewable sources by 2010 and 10 GW of combined heat and power capacity installed by 2010. A formal requirement to set targets for micro-generation would be premature at this stage.

We recently held a consultation exercise on the development of our strategy to promote micro-generation and we are analysing the responses before putting together a package of measures in the final strategy. There are also difficulties associated with setting a realistic target for an industry that is still in its very early stages. However, I understand the importance of targets in providing long-term signals to the industry, particularly for those looking to make significant investments. Although we could not support the clause as drafted, the Government would accept an enabling power in relation to the setting of micro-generation targets.

It goes without saying that we would report on the progress made in implementing our micro-generation strategy on a regular basis, so clause 6 poses no problems—[Interruption.]

I notice that the Minister has accepted the importance of finding ways and means of alleviating fuel poverty, to which clauses 1 and 6 relate. What specific extra measures do the Government propose, particularly for constituencies such as my own of Na h-Eileanan an Iar, which has some of the highest fuel poverty in the whole of the United Kingdom?

Fuel poverty is a crucial issue. In the context of the Bill, one of the issues that I wish to explore in detail over the coming months is how best to use micro-power to help to address the fuel poverty agenda. They are often seen as different subjects, but I do not think that they should be. We have heard about areas that may be off the gas mains and having to pay higher costs. We need to explore further how micro-generation and energy efficiency can play a part. I am rather with the thrust of the hon. Gentleman's comments.

Clause 7 gives the Secretary of State a duty to establish a scheme enabling the sale of electricity by domestic micro-generators. Such a scheme could then require electricity suppliers to buy at the market rate the electricity produced by their domestic customers by micro-generation. Micro-generators can already sell their electricity, so legislation is not required to achieve this. To require suppliers to buy that electricity at the market price risks distorting the electricity supply market and would be incompatible with our liberalised arrangements. This Government would like more suppliers to engage in the market for this exported electricity, perhaps through an obligation on them to offer terms, in a manner similar to their obligation to offer terms for supplying electricity to householders. So we are looking at this issue and I am anxious to make some progress on it, but I am unable to accept the clause as drafted.

Clause 8 appears to put a duty on any public authority, including Ofgem, to have regard to the needs of micro-generators when carrying out any function relating to various green energy certificates. I have some concerns about imposing a specific duty on Ofgem in respect of micro-generation. It already has a clear set of duties that govern its work, including a duty to contribute to sustainable development. A requirement to have specific regard to the needs of micro-generators would inappropriately skew its focus toward this still relatively small section of the energy market. But the Government support the general thrust of this clause, in so far as it would encourage actions that help micro-generators to gain access to the benefits associated with green certificates, such as renewable obligation and levy exemption certificates.

On Ofgem's remit and possible changes to the Bill, the Minister and I have discussed informally the possibility of varying the cap arrangements in the Energy Act 2004 to allow Ofgem's transmission charging regime to work more favourably for projects in island communities. Can the Minister offer any prospect of using this Bill as a means to achieving that end?

Our policy is this area is still under review, but I hope to announce a conclusion in two pages' time. [Laughter.]

Clause 9 gives the Secretary of State a duty to promote community energy. I am happy to say that this Government already do much to promote community energy schemes. The clear skies initiative provides funds for renewable installations in the community, and the new low carbon buildings programme will continue to fund such schemes.

I am pleased to be able to put on the record my support for this Bill. Does the Minister accept that the enormous advances taking place in photovoltaics and solar energy research, particularly in respect of materials and efficiency, could bring costs down and support the development of community energy?

Yes, which is why we have supported photovoltaics and hope to do so in future. It is still a relatively expensive renewable technology, but we hope to see the developments that my hon. Friend describes.

The Secretary of State for Environment, Food and Rural Affairs has provided £60 million for the community energy programme, which aims to increase the development and installation of community heating schemes throughout the UK, so our record on supporting community energy is clear. The imposition of a duty to promote community energy would not have any significant impact on our activities in this area, so we do not see the immediate need to include clause 9 in the Bill.

Clause 10 enables the Secretary of State to introduce a renewable heat obligation. I am aware that the House has debated this subject at length, particularly during the passage of the Energy Act 2004. There is no doubt that we need to take action to support renewable heat, but it is important that that action be appropriate and effective. We have the evidence base provided by a recently published study on biomass, and by the recommendations of Sir Ben Gill's taskforce, to help us to provide suitable measures to promote renewable heat. At the moment, there is nothing to suggest that a renewable heat obligation is the definitive way forward, so to commit to such an obligation at this stage would be premature. We will of course look carefully at the possibility of introducing such an obligation alongside other policy options suggested in Sir Ben Gill's report, and we will be happy to discuss the matter with colleagues in Committee.

Is the Minister prepared to accept that the Bill does not commit him to the renewable fuel obligation, but merely gives him the opportunity to bring it in? If the Bill is passed and he decides in his wisdom—as he should—that the renewable fuel obligation is necessary, he will have the power to bring it in without further legislation. Will he not reconsider on that point?

We can discuss that in Committee, as much of the Bill needs to be discussed.

It has been brought to my attention that when we were discussing whether the Prime Minister himself or the Secretary of State should table the report, I referred to my own Secretary of State, the Secretary of State for Trade and Industry. It is evidence of the fact that we are so joined at the hip on these issues that I should, of course, have referred to the Secretary of State for Environment, Food and Rural Affairs. Frankly, we DTI Ministers are so often in and out of DEFRA that I sometimes forget which Department I am a member of—such is the extraordinary joined-up-ness of this Administration.

Hon. Members will be aware that my Department has been in the process of reviewing the renewables obligation. Some measures included in the preliminary consultation, and now the statutory consultation, require primary legislation to be tabled. They are aimed at making it easier for micro-generators to benefit from the obligation. They will make it easier for agents to handle much of the administrative process on behalf of householders who wish to claim renewable obligation certificates for the electricity that they generate. They will also remove the need for micro-generators to have a sale-and-buyback agreement in place with their electricity supplier before they can claim their obligation certificates, which are known, in the jargon, as ROCs. That will help to make the whole process a lot smoother. The Bill seems an appropriate piece of legislation in which the Government can make those changes at the earliest opportunity.

I fully support this excellent Bill, but will my hon. Friend undertake to hold close discussions with the Welsh Assembly Government about its progress and any developments?

Yes, indeed. My hon. Friend the Member for Edinburgh, North and Leith will also hold such discussions.

Will the Minister give way?

No!

Well, very briefly.

I am a little confused about whether the hon. Member for Conwy (Mrs. Williams) supported the Bill in the form promoted by the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) or as filleted by the Minister.

Yes. There is a difference between effective parliamentary scrutiny and speaking for the sake of it.

Another issue subject to recent consultation is the adjustment of transmission charges for renewable generators in the north of Scotland. In March, we announced our intention to use the power in the Energy Act 2004 to make such adjustments with respect to renewable generators in Shetland, Orkney and the Western Isles. Since then, I have had an opportunity to consider these matters with many hon. Members and a welcome chance to visit delegations from those islands. As things stand, the power in the Energy Act enables us only to adjust charges until 2014, but the long lead time for developing projects on the islands mean that they will not be in operation until early in the next decade and would derive only minimal benefit from a scheme ending in 2014. Extending the scheme to 2024 would provide additional support to island projects and bring environmental and economic benefits to those important island communities. The Bill once again provides an opening to make the required legislative change at the earliest opportunity, and I know that my hon. Friend the Member for Edinburgh, North and Leith is in accord with that.

I welcome most warmly the announcement that the Minister has just made, which will make a significant difference to the development of renewable projects in the island communities. If we have a successful and happy conclusion to the Bill, which I certainly hope for, may I urge on him an early imposition of that power?

That will be subject to the will of the House and the other place, but I also hope that that will happen.

I wish to say a quick word about the application of the Bill to the devolved Administrations, which I know my hon. Friend has been considering. As it stands, aspects of the Bill legislate for Scotland in devolved policy areas or impact on functions exercised by Ministers of the Scottish Executive. My hon. Friend will have discussions on the issues, but if he does not secure agreement amendments will be required in Committee to exclude Scotland from the provisions of the Bill where necessary. I am sure that that will not happen. It would be curious if a Bill introduced by a Scottish MP would benefit Croydon but not his constituency, and I suspect that he will be able to reach agreement on the issues. That is a matter for him, but we will do our best to help.

In conclusion, the Government are pleased to offer overall support, subject to the caveats that I have outlined. We see an opportunity for the Bill to include further clauses that would help to tackle climate change and energy supply. We look forward to working with my hon. Friend and I hope that the House will give the Bill a Second Reading.

I confess that I was minded to seek to divide the House on this Bill because I have grave reservations about it, as I will explain. However, having heard what the Minister said, I do not think that that will be necessary at this stage. I would be content for the Bill to receive a Second Reading as it will be important for the Committee to give thought to what the Minister has said—it certainly attracted me—and we can spend productive time on Report and then decide whether to let the Bill make further progress.

However, the House would not expect me to allow this opportunity to pass without making a few remarks about aspects of climate change. I take as my texts today a letter from the Minister for Climate Change and the Environment, the report by the excellent Economic Affairs Committee of the House of Lords and the excellent work by Mr. Bjorn Lomborg, "The Sceptical Environmentalist", which I highly recommend to hon. Members. I shall first set the scenario—a much loved word by environmentalists—for the debate and then move on to some consideration of the Bill. I shall touch briefly on mitigation versus adaptation, multilateral versus unilateral action, developed versus developing countries, and the role of technology in the response to climate change.

I shall start with an excellent letter, which I received in reply to one that I had written on behalf of a constituent, from the Minister for Climate Change and the Environment, joined at the hip as he is to the Minister in his place today. They are undoubtedly inseparable. The letter mainly concentrates on the effects of climate change on sea levels. The first thing that caught my eye was the statement:

"Relative sea level in the Thames estuary will continue to rise by between 26 and 86 cm by the 2080s."

In many ways, that statement encapsulates the problem that we face as we discuss climate change and its possible impact. A range of possibility between 26 cm and 86 cm may not sound very much, but it is a crucial difference for all of us, especially those living in coastal and low-lying areas, to say nothing of those living in countries such as the Maldives, which I had the pleasure and privilege of visiting on behalf of the House just last year. That range of possibility should give us all pause for thought. I shall return to that theme later.

One of the great problems of rushing like Gadarene swine to support anything labelled global warming, climate change or emissions is that so much uncertainty surrounds the analysis. We should be extremely cautious about rushing towards solutions such as those proposed in the Bill. That is why I welcomed the Minister for Energy's rather more cautious approach. Although it is fashionable in such Bills—generated, as they usually are, by rather narrow single-interest groups—to try to solve many problems by legislation and to try to pin the Government of the day down to the certainties that many people want, the reality, as the Minister pointed out, is that life simply is not like that. It is certainly not like that when we start with such a wide range of possibilities in the analysis, before we can even consider the solutions.

The letter referred to Greenland ice sheet melt, stating that

"even if begun in this century, it would take up to 3000 years to melt and thus raise sea levels by 6 metres in total on a time scale of millennia".

That strikes me as an extraordinarily long perspective, even for this Government. Many boasts are made about long-term targets, but I should be extremely impressed if we were adopting targets with a 3,000-year perspective. The Minister continued, a little more percipiently, that

"a total loss of the western Antarctic ice sheet would raise global sea levels by an average of 6 metres"—

although he noted that it was unlikely to occur in the next 200 years. We must bear such time perspectives in mind as we talk about relatively ready solutions to what are deemed to be their causes.

I shall return to those arguments when I touch on the comparisons that we must take into account between the developed and the developing world. As I shall say later, it is one thing to make arguments about the solutions to such alleged problems as emissions and carbon dioxide in the context of our society, our relative wealth and the sort of sacrifice that we might have to make in our standard of living, or indeed in our economic growth; but it is quite another thing when we try to impose the same solutions on the developing world, where people have much less scope, in terms of either economic growth or standards of living, to deal with the problems.

My right hon. Friend may be aware of the discussions about the economic impact of changes in the UK compared with the effects of climate change on the development of the Chinese and Indian economies. Will he bear that in mind as he continues his remarks?

I am grateful to my hon. Friend. He will not be surprised to learn that I intend to touch on that point somewhat later in my remarks; it is an important element in what we should be considering. Rather than looking at the narrow perspective that Bills such as this inevitably force us to take, we must bear in mind—must we not?—how far it will be effective in the context of global warming and global climate change for us as a country to introduce such measures. They may disadvantageously prejudice our people's standard of living or affect our economic growth, but how far is that likely to affect global emissions and global warming, given the huge developmental prospects of, in particular, China, south-east Asia and India? I may return to that point later.

I want to quote further from the excellent letter from the Minister for Climate Change and the Environment. He said:

"The UK seeks to act and to persuade others to act"—

the persuasion of others to act is key to the point that my hon. Friend has just made—

"by cutting emissions and by developing sustainable adaptation strategies".

I shall refer to adaptation later. The Minister continues:

"Many other areas of policy in other Government departments now incorporate a climate change perspective, including water resources, building regulations"—

very much the subject of the Bill and, indeed, the next one, should we come to it, Mr. Deputy Speaker, which will require extremely close scrutiny given its implications—

"health, agriculture, forestry, conservation and international development."

"International development"—I give the Government all credit for acknowledging both the scope and scale of the problems that the Bill addresses and the international context in which it inevitably should be considered.

That is why I felt that this letter was very timely. Indeed, it is absolutely hot off the press; it is dated 7 November. It even says "Dear Eric" at the top, so although I cannot claim to be quite as close to the Minister of State as is the Minister with us today, I am obviously on pretty intimate terms with him. He has written to me very warmly, and he has even signed it "Yours, Elliot". So he and I are obviously very much at one in all of this, and I am most grateful to him for writing to me just in time for today's debate. It has been very timely and very useful.

Because I do not want to sound at all negative today, Mr. Deputy Speaker—you know that that would be completely uncharacteristic of me on a Friday—I want to continue to be warm and positive about the Government. The Minister is starting to look slightly uncomfortable, but I shall ladle on a bit more praise just to rub it in. The hon. Gentleman then goes on—this is the other Minister, my friend Elliot—to say:

"The Government set up the UK climate impacts programme in 1997 to encourage private and public sector organisations to assess their vulnerability to climate change so that they can plan their own adaptation strategies."

I could not have put it better myself. That is the sort of approach that we should be encouraging, not the heavy-handed approach that we get so often—bring in a Bill, pass a law, introduce targets, make regulations, introduce penalties—which is an approach apparently so much beloved of everybody, including, I am really sorry to say, my own friends on the Front Bench. I am sorry that they should reach so readily for this sort of approach to a problem so widely perceived, instead of the imaginative and positive approach that the Government adopted in 1997, which talks about encouraging the public and private sectors to plan their own strategies. That strikes me as reflecting much more of modern Conservatism than the heavy-handed legislative approach that we have before us today.

My next text, having skimmed lightly over the Minister's letter, is the House of Lords report. So that there is no doubt anywhere, it is the Select Committee on Economic Affairs second report of Session 2005–06, entitled "The Economics of Climate Change". I recommend it most highly to Members of the House and people beyond.

I should like to offer to the House a number of key passages in the report because they bear very much on the thrust of the Bill. The first is from paragraph 45, which says that

"nearly all of the public debate on global warming is about mitigation—reducing emissions—rather than about adapting to climate change and assisting the most vulnerable societies in the world to adapt to the risk they may face."

In today's debate we have heard the cosy unanimity of people no doubt wound up by single-interest groups and postcards from certain organisations—there is nothing wrong with that at all, provided we put them very much in context. But the debate we should be having today is about mitigation versus adaptation, particularly with regard to the developing world.

The excellent Professor Lomborg made a point on this very effectively. He has argued at great length—I am tempted, but I probably will not quote too much from him, you may be relieved to hear, Mr. Deputy Speaker—that attempts at mitigation, in other words controlled emissions and all that go with that, are at best a very long-term strategy and may or may not be effective, whereas adaptation can be done much more quickly and much more efficaciously, certainly in terms of, for example, flood protection. He says, as did the Minister for Climate Change and the Environment in his letter, although I did not quote that bit, that we are used to adaptation in this country. One only has to ask the good people of the Netherlands about adaptation; they have been doing it for centuries. That makes the point that it is often much more effective to seek to adapt to the effects, claimed or actual, of climate change over a long period than it is to mitigate through the sort of Kyoto approach that we are all supposed to have signed up to. So there is the first very important contribution that the House of Lords report makes.

Then, because most of what their lordships talk about is the link between economic activity and emissions, they point out at paragraph 51 that any analysis of that has to encompass all the following factors:

"population change, rates of economic growth, the stage of economic development"—

that is, whether heavy industry or service-based—

"the type of energy used to 'fuel' the economy, energy efficiency . . . and technology."

That is a formidable array of variables, which we should take into account when making our analysis. I have heard nothing of that today. All that we have heard today is the suggestion that we should make a glib assumption about the source of emissions and their alleged causal effect on global warming and nothing of the required analysis of the vital links that their lordships point out.

Their lordships go on to tell us something even more worrying. Paragraph 72 states:

"We received a significant amount of evidence on the realism of . . . emissions scenarios, and doubts were raised, particularly about the high emissions scenarios. The balance of this evidence suggests to us that the high emissions scenarios contained some questionable assumptions and outcomes."

Again, that takes us into the important area of considering which of the very sophisticated computer models and analyses we choose to believe or should believe. Those things are important because the range of variation is considerable. For example, estimates of the increase in sea level can range from 1.5 cm to 4.5 cm. That very wide range of possibilities can lead to all sorts of different conclusions, depending on which estimate one chooses to believe.

Their lordships return to that theme over and again. For example, I return to paragraph 13, where they say:

"No one disputes the fact of temperature rise in the last 100 years or so. No one disputes that carbon dioxide is a greenhouse gas and few dispute that it has an enhanced 'greenhouse effect'. What is disputed, albeit by a minority of scientists, is the scale of this effect."

They go on to say that some of the scientists suggest that the models on which the predictions are based "are biased upwards" and

"while warming will occur, it may well be at the lower end of the IPCC spectrum that is relevant, not the upper limits".

So there is an important difference of opinion among the scientific community about what is the reality of the predications of global warming that results from emissions.

In all those important ways, we have considerable work to do in establishing beyond doubt exactly what is the cause of global warming and what its extent will be, and, crucially, what our reaction to it should be. In that context, I have grave doubts about the Bill because I am not convinced that it necessarily addresses the right problem or that it does so in the right way. We are entitled to be somewhat sceptical about it. That deals with mitigation versus adaptation.

I want briefly to touch on the other very obvious fact that we must take into account: multilateral versus unilateral action. As has been said already, it is assumed that although we are a small country in the global context, if we do all sorts of sexy, interesting, exciting, good and heat-warming things about emissions, we will surely have either an effect on global warming itself or some sort of influence on other countries to do the same. Sadly, there is not much evidence to that effect so far.

I share the scepticism that has been expressed about the Kyoto arrangements in any case. However, the fact that countries as important as the United States and Australia have not signed up to those arrangements anyway and given that it is almost certain that the bulk of emissions in the foreseeable and distant future will be caused by economic growth and development in China, south-east Asia, India and, probably, Africa as well, it should give one pause for thought about how effective what we are doing in this country is likely to be.

My right hon. Friend might perhaps have been as concerned as I was recently during the informal European summit at Hampton Court a few weeks ago, when the Prime Minister referred to putting much more emphasis in our energy policy on working with European partners. The reason why I am concerned—particularly in this multilateral, international context—is that it is very clear that the European Union constitutes one of the brakes on having a successful trade negotiation because of its attitude to the lack of agricultural reform. I would be very concerned, given the importance of persuading countries such as China and India, if too much of our energy policy were dependent on getting the whole of Europe moving in the same direction, given the negative effects that we have seen in our trade negotiations.