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Net Zero Test

Volume 814: debated on Thursday 22 July 2021


Asked by

To ask Her Majesty’s Government what assessment they have made of the recommendation of the Climate Change Committee that all government policies should be subject to a ‘Net Zero Test’; and what steps they intend to take in response.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interests as set out in the register.

My Lords, over the last three decades the UK has achieved record clean growth. Between 1990 and 2019, our economy has grown by 78%, while our emissions have reduced by 44%—the fastest reduction in the G7. The Government recently set out the UK’s sixth carbon budget, which would reduce 2035 emissions by 78% compared to 1990. We have strong governance around net zero; this includes two Cabinet Committees, one of which, the Climate Action Strategy Committee, is chaired by the Prime Minister. We will respond officially to the CCC report in due course.

My Lords, I am grateful to the Minister for that response and I declare my interests as set out in the register. I was privileged to be present to hear the speech of Special Presidential Envoy John Kerry, in London this week. He spoke passionately of the scale of the challenges the world faces and the urgency and breadth of the action needed to avert catastrophic climate change. Do the Government accept the need highlighted in the recent report of the Climate Change Committee to put a climate lens on all government legislation and all policy choices? Will they show global leadership on this issue, in the run-up to COP 26 in Glasgow, by committing to a net zero test in their imminent, I hope, net zero strategy?

Well, as I told the noble Baroness in my Answer, we have really strong governance around climate change. There are two Cabinet committees, one established and chaired by the Prime Minister and the second chaired by the COP 26 president designate. Of course, we look at all policies and their impact on climate change.

I call the noble Lord, Lord McColl of Dulwich. No? I think we will go on to the next supplementary question. I call the noble Lord, Lord Curry of Kirkharle.

Can the Minister confirm that, as stated in their response to the Climate Change Committee recommendations, government policy that flows from the Agriculture Act and the Environment Bill that impacts on agriculture will take a holistic approach and take into account the significant benefits that agriculture does and will deliver, such as carbon sequestration in soils, crops and plants?

I agree with the noble Lord on the important contribution that agriculture makes and will need to make in the fight against climate change. Defra is looking at ways to reduce agricultural emissions and is progressing its environmental and land management schemes. It is also looking at other options to reduce agricultural emissions, including some very innovative solutions on the use of, for instance, methane-inhibiting food additives.

In Monday’s debate on transport decarbonisation the Minister said:

“The more we can set out … what our expectations are, the more we expect that development to increase.”—[Official Report, 19/7/21; col. 26.]

The Government’s wish list is unsupported by effective plans for action. A yet to be published report of the Science and Technology Committee that deals with the means of transport decarbonisation has stated that the Government’s actions do not align with their ambitions to achieve net-zero emissions. What is required is an independent office for climate responsibility, which can assess the extent to which the Government’s actions correspond with their stated objectives. Do the Government recognise this need?

I understand the point the noble Lord is making, but I would refer him to the independent Committee on Climate Change, which does many of the things he is suggesting. It was established by the Climate Change Act 2008 and provides expert advice to the Government on climate change mitigation and adaptation. As he will have seen in its written reports, it is not afraid to point out what it sees as any deficiencies.

My Lords, could the Minister explain how the Government’s proposed planning Bill will help lead towards his department’s goal of net zero?

Planning of course is extremely important, particularly in terms of delivering net-zero buildings. The noble Lord will be aware of the proposals we have to modify building regulations to reduce the impact of new buildings.

This is the decisive decade for action and achievements, yet behind the Government’s scatter-gun rhetoric there is only dither and delay to key strategic coherency: the net-zero strategy, the hydrogen strategy, the Treasury’s finance road map, and others. Can the Minister confirm reports that another key strategy document, the heat and buildings strategy, is further delayed? According to Sky,

“Whitehall negotiations are stuck over how best to incentivise the public to change to low-carbon alternatives”.

How will the different strategies combine to support the UK’s climate change goals on both net zero and adaptation, along with wider environment-related goals?

The heat and buildings strategy will be published in due course. I do not agree with the noble Lord that we are not doing anything. I refer him to action we have taken recently: the energy White Paper, the revised emissions trading system, all of the announcements and investment to do with offshore wind, the pledge to phase out new petrol and diesel vehicles, the transport decarbonisation plan, and so on. Of course, there is always more to do, but I do not accept the noble Lord’s premise.

My Lords, I would like to congratulate the Government on their achievements so far, with the fastest reduction in the G7. We have two Ministers—one in the Lords and one in the Commons, my noble and honourable friends—who are determined to help reduce our emissions and achieve success for the environment. I agree with the noble Viscount, Lord Hanworth, that an independent assessment of the net-zero impact of policy is important and I commend the work of the Climate Change Committee. However, I hope the Government will continue to focus, for example, on direct action, by encouraging institutional and pension fund investors to invest in climate change mitigation, and promoting a net-zero approach to investment portfolios rather than asking officials to continue with a net-zero test in a way that the family test has been more of a tick-box exercise.

I thank my noble friend for her comments and certainly agree with her. As she is well aware, the trustees of occupational pension schemes are independent of government; they are not bound by the commitments we have signed up to. However, given the significance of the financial risks posed by climate change, we expect all investment decisions made by pension scheme trustees to take climate change into account. As of 2019, trustees of pension schemes with 100 or more members have been required to set out in their statement of investment principles policies on stewardship on an ESG, including climate change.

My Lords, if this test was brought in, would it not help government departments by giving them a very clear direction of travel? It would cover the sorts of decisions we are still wrestling with—Cambo in the North Sea and the Cumbrian mine—which have somehow slipped through despite government ambitions to reach carbon neutrality. This test could save future Ministers’ blushes. Can the Minister say what discussions have been had about this proposal and whether he will advocate it to his ministerial colleagues?

We have not had any discussions about implementing this proposal yet. We will respond to the Climate Change Committee’s recommendations in due course. But we are looking at the impact of climate change across all our policies. As I said, we have a couple of senior Cabinet-level committees, one chaired by the Prime Minister, which take all of these things into account.

My Lords, the Climate Change Committee sees local authorities as having a critical part to play in achieving net zero. On 16 July, the NAO revealed

“serious weaknesses in central government’s approach to working with local authorities on decarbonisation, stemming from a lack of clarity over local authorities’ overall roles, piecemeal funding, and diffuse accountabilities”.

Does the Minister agree with its assessment that there is

“great urgency to the development of a more coherent approach”

and can he explain how the MHCLG, BEIS and other departments are responding to this challenge?

I do not agree with the noble Lord. Of course, local authorities are critical in terms of delivering this agenda and I have many meetings with them to discuss a number of the grand schemes for which I am responsible. We have spent something like £1.2 billion in dedicated funds given to local authorities through the local authority delivery scheme and the public sector decarbonisation scheme to help them in this job.

My Lords, the Government’s remit to the Oil and Gas Authority is MER, maximising economic recovery—also known as “drill every last drop”. The Government’s continued support for this policy leaves them open to applications such as the Cambo oilfield, which one trusts they will turn down. May I ask the Minister how the MER policy is compatible with our net-zero targets, given that existing oilfields already in production will take us over our agreed NDC?

The independent Committee on Climate Change recognises that there is an ongoing role for oil and gas, and we are working hard to drive down demand and emissions. The updated Oil and Gas Authority strategy includes a requirement for industry to “take appropriate steps” to support the delivery of the net-zero target—and, of course, we have put forward the ambitious decarbonisation plan for the North Sea. With regard to the Cambo field, Shell and Siccar Point have put forward a development proposal seeking consent, with an intention to commence production in 2025. This is not a new project; it was licensed in 2001 and 2004 and is going through the normal regulatory approval process.