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Climate Change

My Lords, this seems a convenient moment to repeat the Statement made in the other place by the Secretary of State. The Statement is as follows: ““With your permission, Mr Speaker, I would like to make a Statement on the independent report on the economics of climate change by Sir Nicholas Stern, commissioned by the Chancellor and the Prime Minister in July 2005. This morning Sir Nicholas published his comprehensive and compelling report. I believe it is a landmark in the debate about climate change. ““The Prime Minister, the Chancellor and the Foreign Secretary have repeatedly stressed that climate change is an economic, energy, security and political issue, not just an environmental issue. The Stern report shows why this is true. The conclusions of the report are clear. ““Climate change is the greatest long-term threat faced by humanity. It would cause more human and financial suffering than the two world wars and the Great Depression put together. All countries will be affected but the poorest nations will be hit hardest. ““The costs of inaction far outweigh the costs of action. At a minimum, a failure to tackle climate change will cost 5 per cent of global GDP. Costs could run to 20 per cent of global GDP. ““The window of opportunity to reverse the rise in global emissions is narrowing. The science and the economics suggest that to avoid catastrophic climate change, global carbon emissions must peak in the next 10 to 15 years. ““The Stern report shows how the stock of CO2 or equivalent has risen over the past 150 years to 430 parts per million. It continues to rise at about two parts per million per year. Stabilisation at between 450 and 550 parts per million would mean at least a 25 per cent cut in global emissions. For richer countries with high emissions, this would mean a cut of 60 per cent or more. ““Finally, climate change is not an insoluble challenge. The technologies to reduce energy demand, increase efficiency and develop low-carbon electricity, heat and transport are within grasp. The costs are manageable at around 1 per cent of global GDP. The earlier we act, across all countries and all sectors, the more we will keep costs down. ““Stern argues for both global co-operation and domestic action. Let me set out our initial response. ““First, on emissions trading, Stern argues that we must create a price signal for carbon, in particular, through the development of emissions trading schemes around the world. Emissions trading can not only ensure cost-effective reductions in emissions but could also drive tens of billions of dollars each year to put developing countries on a path to low-carbon economies. ““In this area, the European Union is a world leader and it is a European solution that is key to our goals in this area. Today we are proposing that the EU commits to new targets to reduce greenhouse gas emissions by 30 per cent by 2020 and at least 60 per cent by 2050. And we are setting out our commitment to strengthen the European Union emissions trading scheme as the nucleus of a global carbon market. I will be discussing with business and environmental groups on Wednesday how we can develop a unified UK position for phase 3 of the scheme from 2012. I am sure we need to secure the long-term certainty of the scheme, extend it to cover new sectors—especially aviation—and link it to other emerging emissions trading schemes. ““Secondly, Stern argues for a stronger focus on technological company-operation, including the doubling of energy research and development support and a five-fold increase in the deployment of low-carbon technologies. ““In March, the Chancellor announced the creation of the Energy Technologies Institute, a new public/private partnership designed to co-ordinate £1 billion worth of research and development funding into low carbon energy technologies over the next 10 years. Today, we can announce two new companies will be joining the partnership, Scottish and Southern and Rolls Royce, taking total contributions so far to£550 million of funding—half Government, half private sector. ““Stern also identifies a specific need to develop low carbon transport fuels. That is why the UK has initiated a joint task force with Brazil, South Africa and Mozambique to promote the development of a regional sustainable biofuels industry in southern Africa. The Renewable Energy and Energy Efficiency Partnership (REEEP), which the UK launched in 2003, is now working in over 40 countries to develop policies and financing frameworks for investment in sustainable energy. ““At the Gleneagles G8 summit last year the UK was instrumental in establishing the Energy Investment Framework, led by the World Bank and the Regional Development Banks, to catalyse increased investment in energy efficiency and alternative energy sources, as well as adaptation. The UK Government are therefore pleased to announce today with President Wolfowitz of the World Bank, together with the four leading regional development banks, a partnership with the World Economic Forum and the World Business Council for Sustainable Development to stimulate private sector investment through the Energy Investment Framework. President Wolfowitz and the Chancellor will co-host a conference early in February 2007 to kick off the partnership. ““Third is the action to reduce deforestation, which makes up 18 per cent of global greenhouse gas emissions each year—equivalent to more than the whole of the transport sector. Forests are of great global importance for climate change and biodiversity. But they are also sovereign territory of the countries whose forests they are, and only those nations can decide what happens to them. With the governments of Brazil, Papua New Guinea, Costa Rica and the Coalition for Rainforest Nations, with Germany holding the presidency of the G8 and the EU, and with the World Bank and other interested parties, we will be exploring over the coming months how to mobilise global resources for sustainable forestry. ““Fourth is the need for adaptation. The review suggests that richer countries must provide financial support to developing countries to adapt to the changes in climate already in train. The UK Government are strongly committed to making climate risk reduction key to development activities. Contributions to the special climate change fund (SCCF), the least developed countries fund for climate change (LDCF), and the Canadian International Development Research Centre, are additional to development finance and policy as part of this drive. ““In all these four areas, the UK is determined to continue to show international leadership; that drive is strengthened by our domestic leadership. To be the most convincing persuaders, we must also be effective contributors. ““Between 1997 and 2005, the economy has grown by 25 per cent and greenhouse gas emissions have been cut by 7 per cent. We are exceeding our Kyoto targets and are the only country on track to double them. The ambitious commitments inthe energy review to take a further 19 million to25 million tonnes of carbon out of the economy will add further impetus to the drive to reduce emissions. ““We have now also decided to put in place a legislative timetable to become a leading low carbon economy. Our climate change legislation will provide a clear, credible, long-term framework for the UK to achieve its long-term goals of reducing carbon dioxide emissions. ““The Bill will be based on four pillars. For each, we will come forward with details at the time of publication of the Bill. We are in addition determined to promote the widest possible debate in this House and across the country about the contents of the Bill. ““The legislation will, first, put into statute the Government’s long-term goal to reduce carbon dioxide emissions by 60 per cent by 2050 from 1990 levels. We will also consider appropriate interim targets. We are determined to enhance Britain’s competitive position and believe that business in particular will benefit from the long-term framework that it says is so important for effective investment decisions. ““The new legislation will, secondly, establish an independent body—a carbon committee—which will work with Government to reduce emissions over time and across the economy. We will ensure that the committee’s advice is transparent, equitable and mindful of sectoral and competitiveness impacts, including the need to secure energy supplies at competitive prices. ““Thirdly, we believe that targets need to be accompanied by substantive measures if they are to have credibility. This legislation will, therefore, create enabling powers to put in place new emissions reduction measures to achieve our goals. ““The final pillar of the legislation will be to assess what additional reporting and monitoring arrangements are necessary to support our aims of a transparent framework for emissions reductions, including reports to this House. ““I believe that the House and the country owe a huge debt to Sir Nicholas Stern and his staff for their outstanding work. I believe his report should be a cause for alarm but also a cause for action. It is action that the whole Government are determined to deliver—at home and abroad””. My Lords, that concludes the Statement.