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International Renewable Energy Agency (Legal Capacities) Order 2011

My Lords, on behalf of the Opposition, I offer our support for this order, which is quite a significant positive step for mankind. It is a multilateral agreement in an area where multilateral agreement has been extremely difficult to achieve. Until relatively recently, the United States did not accept that climate change was a problem of any kind, yet it is signing up to this international agency to spread best practice in renewables. That is extremely welcome. We hope that Britain will try to play a leading role in IRENA. It has a clear purpose, which is set out in paragraph 7.2 of the Explanatory Memorandum. Technology in this area is changing rapidly. There is a need for knowledge dissemination and not only competition but co-operation to make sure that technological advances spread at the most rapid rate throughout the year. There are well known market failures in applying renewable technologies, which means that there is a role for public intervention. As we know, the carbon price today does not reflect what it will be in the future as a result of the growing problem of climate change. Therefore, there is a problem about market incentives. In the developing world, where this type of organisation can play an important role, there are problems of governing capacity, project management capacity and access to finance. An organisation such as this, working in co-operation with bodies such as the World Bank and the world’s regional development agencies, can play an important role. Therefore, the UK should look at this positively as an opportunity for leadership. I should like to probe the Minister on what kind of agenda Britain intends to pursue in this agency. If I may, I should like to indulge in a flight of fancy of my own about the kind of agenda that I would like to see explored. This is in line with the economic thinking of the Opposition. One of the risks that we face, and one of the reasons why it is important to have these multilateral institutions, is that climate change is falling down the political agenda as economic problems climb up it. That is a real problem; we saw it in the European Parliament vote on the 30 per cent target, and it is a worrying theme. This is precisely the moment, at a time when interest rates are very low and according to many experts a great depression is looming—we are facing a kind of Japanese decade in the West—when we ought to be thinking about the long-term investments that will pay off richly regarding renewable energy. I should like to repeat an idea that I heard an eminent and far more distinguished person who is far more knowledgeable on these subjects, the noble Lord, Lord Rees, talking about at a conference on this subject. He thought that the kind of visionary project that we ought to be thinking about in Europe now is the use of solar renewables in the Sahara and wind renewables in the Aegean to power the industries of northern Europe, building grids from Africa, helping the Arab spring to have some kind of economic future and building networks to bring renewable energy to northern Europe. This is more important when countries such as Germany have announced that they are gong to abandon nuclear power. Not only could this be a way of tackling the development problems of those countries that we so much want to help, particularly in north Africa, it could also help to revive the European economy in a major way at a time of crisis in the eurozone. However, it needs a mix of public and private finance. We must not be myopic about public deficits if we are going to be able to finance these types of very long-term projects, which could really pay off. That is just an example, but there is huge potential for renewables, not just to solve the problems of climate change several decades hence but to help solve our economic problems in the coming decade. I would like to think that Her Majesty’s Government shared that view and would be using organisations such as this excellent IRENA to explore how such radical possibilities could be developed.