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Climate Change Bill [Lords]

I beg to move,"That this House agrees with Lords amendments 17A and 17B in lieu of the words left out of the Bill by its amendment No. 17." These amendments deal with domestic effort and use of overseas credits. This has been a key theme in our debates on this Bill. The Government absolutely agree with the importance of driving emissions reductions in the UK, and we have designed the Bill to provide a clear framework for action. It will ensure greater clarity for industry and households about our path towards a low-carbon economy, at the same time as sending a clear signal to our international partners about our commitment to tackling climate change. The amendments on this issue, which I bring before the House today, further strengthen the Bill in this key area. Amendment No. 17A would require the Secretary of State to set in secondary legislation a binding limit on the use of carbon units for each budgetary period, taking into account the views of the Committee on Climate Change on the appropriate balance between domestic and overseas effort. This limit would also have to be set in the context of the requirement, which we introduced in Committee in the Commons, for the Secretary of State to have regard to the need for UK domestic action on climate change in considering how to meet the 2050 target or any carbon budget. In proposing a limit, the Secretary of State would also have to consider each of the matters in clause 11, which must be taken into account in coming to"““any decision…relating to carbon budgets””." With the exception of the first budgetary period, where the limit is to be set at the same time as the level of the budget, amendment No. 17A would require that the limit be set 18 months before the start of the budgetary period in question. This would ensure an appropriate limit could be set once the level of the budget was known, and the wider policy context, including the international situation, was clear. Amendment No. 17A would also provide the important flexibility that particular units may be excluded from counting towards the limit. This would allow, for example, the exclusion of carbon units arising as a result of UK companies' participation in the EU emissions trading scheme from counting towards the limit. A limit on credits that affected the EU ETS sector by including emissions allowances sourced from participants in the scheme elsewhere in the EU would conflict with the UK's commitment to this key policy measure. This approach could also undermine the economic efficiency of the trading scheme by placing further requirements on UK-based participants that were not imposed elsewhere in the EU. Such a limit would also cause a real likelihood that we will find ourselves with inconsistencies or a lack of transparency, which would go against everything we are trying to do in this Bill. We need the flexibility to apply a limit that supports the certainty and transparency that we have tried to provide to businesses. We propose that regulations under the new clause would be subject to the affirmative resolution procedure. That would mean that the Government's approach on the limit proposed, and the reasons for the exclusion of any types of carbon unit, would be fully debated in both Houses of Parliament at least once every five years. Amendment No. 17B would supplement amendment No. 17A by specifying in clause 27 that any carbon units in excess of the set limit may not be counted towards the net UK carbon account. The amendment effectively puts in place the binding nature of the limit for the purposes of carbon accounting under the Bill.