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Climate Change Bill [Lords]

It is a great pleasure to follow the right hon. Member for Scunthorpe (Mr. Morley), who has given one of the most practical and realistic speeches in the debate so far. Having studied physics at Cambridge before going on to study economics, I approach the science and, to a greater extent, the economics of global-warming alarmism with a degree of scepticism. None the less, I am predisposed to curb hydrocarbon use and CO2 emissions because my scepticism may prove unwarranted; it is sensible to seek more secure and plentiful sources of energy, and we have a duty of stewardship to the planet. Above all, because I spent last year and the year before studying global poverty, it is clear to me that, if climate change is significantly man-made, the men and women who did not make it are the poor people of this world. Yet they will suffer most from it, and they more than anyone need to increase their energy consumption if they are to grow and prosper. So I accept that developed countries, including the UK, should bear a major share of the burden of prevention or adaptation to climate change. However, any measure that we introduce must pass two tests—the same two tests that we apply to any Bill. First, the benefits, even if they accrue to other people, must be greater than the costs, even if they are all incurred by us. Secondly, the measures must be effective, rather than just demonstrative. The Minister did not mention the final impact assessment, except in response to my intervention, yet it shows that both the costs and the benefits of the measures that he proposes are immense—so immense that it is astonishing that the House has got this far in the debate without considering them. According to the Government, the potential benefits lie in the range of £82 billion to £110 billion, but the potential costs lie in an even larger range, from £30 billion up to £205 billion. The net benefit, they say, could be £52 billion positive, but it could be as much as £95 billion negative. The Government admit that the method that they employ in their final impact assessment"““cannot capture trade and competitiveness impacts…unable to capture transition costs…limited in its ability to capture the obstacles which make it more expensive (such as information and policy costs)… It may therefore be expected to produce lower-bound estimates of the costs of carbon abatement in 2050.””" In other words, their estimates are the lowest possible and ignore quite significant costs. Those costs are not trivial. The Government's own figures say that"““transition costs””," which are not included in their figure of up to £205 billion,"““could be 1.3 per cent. to 2 per cent. of GDP in 2020.””" On the trade and competitiveness impact, which, again, is not taken into account in their costs, they say:"““Both short and long run costs could be unevenly distributed, with a small number of energy intensive industries affected more significantly, particularly those facing international competition.””" They go on to quote the IPCC, whose research found"““relatively high risks of the transfer of productive capital to countries without carbon policies””" if they are pursued asymmetrically—that is, unilaterally by us, without others doing the same. We could end up bearing the cost of driving UK business abroad, which is not included in the Government's figures, without reducing carbon emissions—because, of course, those industries abroad would still be spewing forth carbon.