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Energy Efficiency (S&T Report)

My Lords, like other Members, I am most grateful to my noble friend Lady Perry of Southwark for her introduction to this interesting, detailed and, if I may be forgiven for saying so, now somewhat dated report. One starts an examination, the examination takes a considerable amount of time and, when one comes to the end of it, one has to await a government response. That is one of the tragedies of our procedures. Here we are, after 21 months, debating something that began as a very topical and relevant issue in 2004; today, the issue is even hotter and more topical. The committee has—the noble Baroness will understand the euphemism, but if the Minister does not like it, that is too bad—been shooting at a moving target. There has been some progress over time. One change that I welcome is that the Government have now appointed Mr Malcolm Wicks as Minister of State for Energy, with responsibility for energy issues, sustainability and the environment. This is not strictly relevant to the report, but none the less it is progress and a clear sign that the Government are at last beginning to take the issue seriously. But could the Minister explain exactly what his honourable friend’s job is? Is he going to be able to control and manage energy matters and policy, or is he simply a co-ordinator between departments? He is in the DTI, so what is his relationship with Defra and, equally important, with the ODPM? If he is simply there to co-ordinate ideas, to keep a record of what is going on and to refer the whole lot up to somewhere else in government, I am not entirely sure that I would regard that as real progress, although it is a beginning. I am immensely glad that it is the noble Lord, Lord Bach, who has to respond to this report in all its detail, and indeed to this debate, because I am happy to confess that if I had to do it, it would take me more minutes than noble Lords present would think was reasonable. I do not intend to take too long to respond to this debate, because I know that the Minister will respond to many of the points that have been made and it seems superfluous that I should do the same. To me, one of the most important diagrams or graphs in the report occurs on page 27, in figure 6, which shows the energy intensity of the economy from 1970 to 2003. The graph is in one sense very encouraging, because it shows that the economy has more or less doubled in that time and that energy use per unit of output has more or less halved. There are a great many reasons why one should be very pleased that that has happened, but the report also shows that energy usage across the country has continued to rise over that time. The implications of that are really quite fundamental because, despite a very serious and gratifying increase in energy efficiency, we have not actually controlled energy consumption, a matter raised by a number of speakers this evening. The other point that needs to be made is that energy efficiency does not necessarily have anything to do with carbon emissions. Of course, if one is using a mineral or hydrocarbon-based fuel, one will still have carbon emissions even if one is using less energy. Under the diagram on page 27 is an explanation of the wonderfully titled Khazzoom-Brookes postulate, which I took to mean very roughly that energy economy is all too often matched by greater energy use. Although the Government in their response to this part of the report—it is on page 24—are rather dismissive of the Khazzoom-Brookes postulate, if we stop and think about it, the postulate needs to be taken very seriously. We only have to look around our own homes to see that it is almost certainly a reality. Look in our kitchens and living rooms at the gadgets that we have now compared with 30 years ago. Heaven help us, but look in our children’s bedrooms at the gadgets that they have, which were not dreamt of 30 years ago and are completely beyond my comprehension. As the noble Lord, Lord Redesdale, rightly said, most of these gadgets are on standby, busy consuming electricity all the time. However much we want energy economy, I do not think that society will wish to be deprived of all these gadgets. Indeed, we have a whole lot of very innovative and clever businesspeople who will be dreaming up yet further similar things for us to use in our homes. We have them in our offices: 30 years ago, the place would have been full of manual typewriters, whereas now it is full of computers on everyone’s desks, all electric and all on standby. To me, Khazzoom-Brookes is very real. We will not get global warming, and particularly carbon emissions, under control without having a fundamental look at our energy sources and changing the way in which we get our energy. That to me is the great lesson that comes out of this report. It is immensely detailed and helpful in so many other ways, but that is the issue that we need to take home and think about most seriously. The confusion between energy economy and the need to control carbon dioxide emissions has to be resolved. What matters is limiting those emissions. If society wants to use lots of energy in the future, as I am sure it will, we will have to provide that energy in ways that do not involve increasing carbon dioxide. Indeed, if the Government are to meet their long-term strategic objectives, energy sources in the future will have to be non-mineral hydrocarbons to a great degree. Although I accept that carbon capture and storage may provide some relief, I still regard that rather in the class of the alchemists’ dream in the Middle Ages to transmute base metals into gold. We might achieve it, but it is still very much a ““might””. I am not sure that we can afford to wait to find out whether or not we can achieve it. We also need to realise that, even if we get it, it will apply only to very limited sections of the community, because it can only really be applied to very major carbon dioxide-emitting establishments, and they are relatively limited in number. It will do nothing to help the domestic sector or transport, which probably account for 60 per cent of carbon dioxide emissions. A lot has been made of what goes on in the building industry, and I will touch only on one aspect of it, which seems to me to be vital. Much has been made of the need to improve the standards of new buildings, and of course that is right. The noble Lord, Lord Lewis of Newnham, mentioned the million new houses by 2010. We need to appreciate that that is only 4 per cent of our housing stock. We have 25 million homes that need to be brought up to the same standard as the new homes that we are demanding. In the end, property owners must face an economic decision. It has always been thus. The question is whether the cost of reducing energy use, moderated by any fiscal incentives that may be provided, produces a real financial return. If it does not, regrettably, property owners and even housing trusts will not make the investment to reduce their energy consumption. When we come to the 25 million existing homes, it is extremely difficult to see how to deal with that issue or whether the Government have any real plans to deal with it at all. The final depressing thought that I wish to throw at the Minister concerns a friend of mine who thought that it would be a good idea to put a condensing boiler in his house to reduce his energy consumption. Being a sensible chap, he thought that he would investigate it a little. He went to the Carbon Trust, but it could give him no helpful information at all about what it was likely to cost him or how he could do it. He then went to the boiler manufacturers and, surprisingly, got precisely the same answer. We have a long way to go. The Minister has a major task in answering this report. I was depressed by the Government’s response, because although it was full of information, that information struck me as being rather like the Government’s approach to this subject until now. I give them credit for beginning to get their act together, but until now there has been confusion, a piecemeal approach, a lack of co-ordination, a lack of focus and, inevitably, a lack of results. We must do better.