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Climate Change

My hon. Friend has articulated in a few sentences one of the key minority dissenting views. The majority view, to which I tentatively subscribe, is that the increase is primarily anthropogenic. A serious group of people, mainly astrophysicists—I have some of their material with me—are convinced that the increase is not primarily anthropogenic but that it is caused by variations in the activity of the sun, particularly its interaction with parts of our atmosphere, especially cloud cover and the ionosphere. However, I do not want to go into the detailed science. Incidentally, most scientists who speak on the subject are from other parts of the scientific community, and have scarcely more legitimacy in commenting on the subject than we have. We need to listen to that much smaller, select group—the world’s leading climate scientists, particularly those of a certain type. I shall now do my best to make progress with my speech. Given the uncertainties that I have flagged up and the controversies that are clearly raging on the subject, what should we do now? I shall list a few things. First, we need to get out of what I described a moment ago as the foothills of knowledge about the cost-benefit analysis. We should create a commission of our best economists to examine Professor Stern’s conclusions. The commission should include some of the leading critics of that review as well as some of its advocates. Secondly, the Treasury needs to take a lead by creating an internal group, which should publish an annual assessment of the full cost of decarbonising measures taken during the preceding 12 months. We must have transparency. The public need to know what is being spent on decarbonising the economy. Thirdly, the same Treasury group needs to examine critically whether the carbon trading emissions scheme, which is not a market-based scheme but a quota-based rationing scheme by another name, can be made to work. It should be borne in mind that all other attempts at quota-based controls have generated massive economic inefficiencies, and that many brought with them corruption and fraud. The European Union’s initial experiment has so far been a disaster, something that could easily have been predicted. Fourthly, we should seriously examine introducing a carbon tax, initially at a low level, with its proceeds being allocated to reductions in general taxation elsewhere in the economy. Fifthly, the Government should begin the process of removing all subsidies to carbon consumption still in the system. That raises some highly contentious political issues, and it can be done easily only with all-party agreement—and then only gradually. The sort of things that need to be considered include VAT on domestic fuel and power, red diesel and others. I do not advocate action now; I am saying that the Government should start examining such things. The reason is that most measures in this field distort economic activity and therefore, ceteris paribus, reduce economic growth. Removing the subsidies will increase efficiency and growth, provided that there are offsetting tax cuts elsewhere in the economy. Sixthly, the Government should give much greater prominence to removing carbon subsidies in other countries. It is a scandal and the height of absurdity that the Germans are still subsidising their coal industry. Seventhly, Nick Stern relied for much of his work on the political summaries of the IPCC panel. Another huge row about whether those summaries are accurate is now taking place in learned journals. Those who are interested might want to read World Economics, but there are many others. We need to find a way to include the Washington institutions and the OECD in the scrutiny of the IPCC process, to bolster the credibility of their conclusions, to ensure that their summaries are a fair reflection of the main text, and to review their methodology. Eighthly, we need to find a more intelligent and systematic way of allocating research into global warming. I am reliably informed that such research is threatening to crowd out other important work in our universities. It is difficult for applicants to get a grant unless they can find a way of describing their research as being related to global warming—usually on one side of the debate. We need to come to a clear view about how much we want to spend each year, and ring-fence it. We also need to ensure a balance between those challenging and supporting the orthodoxy. Ninthly, we should act only when the world can go forward together. The UK should not try to take the lead by cutting carbon emissions faster than other countries. It would be particularly absurd if we were to impose carbon-reducing measures that resulted in the closure of British industries, only to see those same industries reopening in China.