Ed Davey is the Liberal Democrat MP for Kingston and Surbiton.
We have identified 22 Parliamentary Votes Related to Climate since 2010 in which Ed Davey could have voted.
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We've found 106 Parliamentary debates in which Ed Davey has spoken about climate-related matters.
Here are the relevant sections of their speeches.
Next month’s summit in Baku is a chance for the UK to regain world leadership on climate change—a role disastrously lost under the Conservatives. As this is the final summit before countries must ratchet up their new Paris agreement targets for 2035, will the Prime Minister take this opportunity to seize back world leadership on climate change by committing today to support the targets set out this week by the independent Climate Change Committee and publishing a programme to deliver on them?
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15:54
The Liberal Democrats have a proud record of investing in renewable power, almost quadrupling it when we ran energy policy. Our policy drove the cost of renewable electricity below the cost of fossil fuel-generated power. I hope the Government will act with the same level of ambition to tackle not only the cost of living crisis but climate change too, because urgent action is needed to prevent catastrophic climate change. We have shown how it can be done, and how doing it well will benefit consumers, the economy and the environment. We welcome the Government’s focus on this challenge, and we will push them to meet it.
Health and care, the cost of living, climate change and sewage, these big crises just got worse and worse over the last years of the previous Government, whose failure to address them is a big part of why people’s trust in politics is so low. This year’s British social attitudes survey found that 45% of people—a record high—almost never trust the Government to put the national interest first. I am sure I speak for everyone in the House when I hope that this Government will prove that wrong. But restoring public trust and confidence in our politics is a major task for us all, right across this House, no matter our party.
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16:09
Let us look just at energy, where today the Government could have brought forward plans to ensure Britain’s energy security and to bring down energy prices, with sustainable energy price cuts, for the long term. The Government could have announced plans to insulate homes to cut people’s energy bills and to invest properly in cheap, clean, renewable energy for the future. Instead, the Conservatives are choosing, once again, to shackle us to the expensive, dirty fossil fuels of the past.
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On a point of order, Madam Deputy Speaker, I would like to apologise to the House for not declaring my interest when tabling two parliamentary questions last year: one on 13 May and one on 4 June. I tabled the questions because of my long-standing interest in climate change, and as a result of constituency casework. An administrative oversight resulted in a breach of the rules, and for that I am sorry. I have put in place measures to ensure a similar mistake cannot be made again. I wish to put on record my thanks to the Parliamentary Commissioner for Standards for her time and care in rectifying this matter.
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17:27
The Budget proved one thing about this Conservative Government: they are totally out of touch. They are out of touch with the cost-of-living crisis: despite people struggling with rising heating, food and mortgage bills, the Conservatives’ response is to raise their taxes. They are out of touch with the crisis facing our children: despite the dramatic loss of learning, thanks to covid, the Conservatives plan to spend less than a third of what their own catch-up expert recommended. They are totally out of touch when it comes to climate change: despite the Budget taking place on the eve of the most important set of climate talks ever, the Chancellor had literally nothing to offer on positive action for the climate. Instead, he offered tax cuts for people using fossil fuels, not least on short-haul flights.
It was such a missed opportunity and such an own goal. Does my right hon. Friend agree that there were other things that the Government could have done, such as the electrification of east-west rail, which would have affected my constituency? That would have shown that the Government were serious about decarbonisation, but what they did was encourage people to fly when they should not be flying.
My hon. Friend is a real campaigner when it comes to the environment and climate change, and she is absolutely right. I make a prediction to her: this continuing concerted love-in with fossil fuels will be seen by our children as criminally negligent.
Let me be crystal clear about the Glasgow COP. Having led the UK delegation to three past COPs—in Doha, Warsaw and Lima—when I was Secretary of State for Energy and Climate Change, and having prepared the UK’s negotiating position ahead of Paris, I desperately hope that Glasgow succeeds. But when I see the Government’s gross diplomatic mistakes ahead of COP26, and when I hear a Budget speech that does not even mention climate change, I fear for the outcome of Glasgow, and I am angry with this Government.
I regret to say that, as I watched the Prime Minister pose in Rome’s Colosseum, he reminded me less of Emperor Augustus than of Emperor Nero. He talks about ending coal use across the globe, while refusing to stop a new coal mine being opened in Cumbria. He asks world leaders for the political will to act on climate change, while allowing new drilling—new drilling!—for oil on land in Surrey and offshore in Scotland. With the Secretary of State for Levelling Up refusing to use the planning power that he has for climate action, I fear that the only levels that will go up under his leadership are the sea levels.
I have to say to the Secretary of State that I am proud to be the Minister who passed the regulation that did more to stop fracking under this Government and I am proud that I passed it under his own nose in the Cabinet. He was one of the people urging me to go on to fracking but, because I fooled him, I managed to make renewable energy the watchword of the Liberal Democrats in power. We nearly quadrupled renewable energy. We made Britain the world leader in offshore wind power, despite opposition from the Conservatives. I am so proud that it is the Liberal Democrats who were responsible for cutting coal use in this country more than any other party.
The Secretary of State is known very well for his debating skills, but he is also known for his political skills. My political skills were shown in my ensuring that his Ministers, and he, believed that we were taking real action on fracking when I was passing the regulation that did more to stop fracking—let him hear this. We did more to stop fracking than any other group of politicians. I am really proud that the Liberal Democrats did more on renewable energy—
As we debate the need to level up, anyone would have thought that the Government would want to save jobs in our energy-intensive industries, most of which are big employers outside London and the south-east. But no; there was no help at all in the Budget for the energy-intensive industries. The Government could have used money from a windfall tax on gas producers, as we would have done, to help those industries to decarbonise and to invest in the technologies of the future. This is yet another missed opportunity on climate change from the Conservatives. We can have a greener and fairer society, investing in climate action and helping the fuel poor, but we will not get it with this Conservative Chancellor and this Conservative Government.
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16:46
Liberal Democrats want us to emerge from covid as a more caring country. The Liberal Democrat vision of a fairer, greener, more caring country is the programme that our country needs now. Fairer, with an economic recovery that leaves no one behind. Backing small businesses to create jobs of the future, so that people have genuine opportunities, wherever they live. Supporting the self-employed, instead of cruelly excluding 3 million people from Government help during the pandemic. Greener, with investment in secure, well-paid green jobs of the future in every part of the UK, and a climate change action programme far more ambitious than the rhetoric of a Prime Minister who once wrote that a wind turbine
I could not agree more. Having overseen the carbon budgets as Secretary of State for Energy and Climate Change, and having had to work with some colleagues on the Benches opposite, I know we have to hold them to account, as they will wriggle out of the law.
Liberal Democrats are proud to have the best record on climate change action of any party in this country, and we will keep campaigning for more action on climate.
Does the right hon. Gentleman recall that it was his party that authorised the changing of Drax B power station to wood pellets, which are now harvested from virgin forests in America and brought across to the United Kingdom, and now require a subsidy of £1 billion a year? Is that the kind of green energy that he talks about?
Another reason why I find this programme for government so dreadfully disappointing is that it further entrenches the Government’s isolationist tendencies. It is not just the recovery-threatening EU trade deal that is bad for Britain and bad for business, but the shockingly poor diplomacy ahead of hosting COP26—the crucial international climate change talks. Having led the UK delegation at three UN climate change talks and helped the UK and the EU to create their position ahead of the most successful climate change talks ever, in Paris in 2015, I am deeply alarmed by what I see and hear about the preparations for Glasgow.
Let me give some examples. Diplomatic relations with the EU ahead of COP26: throw some insults, send a warship. Relations with the US now that, thankfully, we now have a President who gets climate change: reduce the size of our Army and ignore President Biden’s warning over Northern Ireland. Relations with the developing world: slash our aid budget in the middle of a global pandemic. To cut foreign aid—to hurt the world’s poorest—is disgraceful in and of itself, but it is shocking during a pandemic. To undermine Britain’s global leadership just when the world’s future depends on it the most is nothing short of a catastrophe.
The Liberal Democrats want a plan for recovery that is fair, green and more caring, with no one left behind. Anyone who has seen their business fail or who has lost their job must be supported to get back on their feet. Any young person who has been robbed of months of their education must be supported with educational and emotional recovery. We want to see investment in reliable, well-paid green jobs, not only to tackle the climate emergency, but to power our recovery. We want a well-resourced NHS and social care system ready to meet the challenges of the future, and we want proper recognition of and support for the 11 million carers in our country to help heal our nation, not least for bereaved families and children.
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14:49
This Budget fails millions of people across the UK. It fails tens of thousands of small businesses and millions of self-employed people. It fails millions of NHS staff and carers, and it fails future generations with its lack of ambition for action on climate change. The Liberal Democrats argued for a Budget for small businesses, which would protect shops, restaurants, pubs, cafés, beauticians and barbers, all of which make up our local high streets, and create jobs in our communities. The Liberal Democrats wanted a Budget to make our country fairer, greener and more caring. We got the reverse.
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16:59
I give almost two cheers for the short-term measures announced today, but less than one for the medium and long-term measures. The Chancellor will have to produce a much more coherent economic strategy if we are to deal with unemployment in the medium term and with inequality and climate change, which are still massive challenges for our country.
When it comes to the medium term, this package is just not up to the moment. We have a serious economic crisis, the like of which we have never seen, and it comes on the back of the threats that will be posed to parts of our economy from Brexit. We also have the climate change challenge and the global issues caused by the tensions in trade between China and the US. All these things will dampen the global economy and our economy, and I just do not think that the package we have heard about today really amounts to anywhere near enough if we are serious about protecting jobs and getting that green transition.
If we really want a fiscal stimulus, we should be talking about the longer term and about the new industries. I was very proud when I was Secretary of State for Energy and Climate Change that we really boosted renewables. We nearly quadrupled renewable power. We became the world leader in offshore wind. We saw jobs created in declining economies such as those in Hull, Grimsby and Lowestoft, thanks to the policies we put in place on the basis of green jobs. Where is that ambition here? I do not see it. There is nothing on hydrogen, as has been said, and no real push for renewables, no real push to make sure that we bring in investment in nature and environmental improvements as part of the climate change challenge, and very little more on green transport.
The right hon. Gentleman is making a powerful case. As well as insulation, does he agree that we need to make sure we have zero-carbon homes going forward? Some 2 million homes have been built since the Climate Change Act 2008 came into being that now need to be retrofitted. Does he agree that the Government must bring forward the future homes standard, and that they were wrong to scrap the zero-carbon homes standard?
The hon. Lady, whom I call my hon. Friend, is absolutely right. I was part of the team that brought in the zero-carbon homes regulation, and two months after we left office the Conservative party got rid of it. It was an outrageous act of climate change vandalism, and nothing has happened on that, so the hon. Lady is absolutely right.
The idea that the Conservatives have a good record on climate change is for the birds. All the advantages actually came from things that the Labour Government did before 2010 and things that the Liberal Democrats did when we were in charge of the Department of Energy and Climate Change, and they tried to undo almost everything when they had the chance. I saw them trying to undo all the great things—not just zero-carbon homes; they cancelled the carbon capture and storage plans, which they are now trying to put back with the timidity of a mouse. They do not understand how big the challenge is. This is an historic challenge: we have to move our economy from a fossil-fuel based economy to a net zero carbon economy, and we cannot wait for 2050. We now have an opportunity to retrain our young people, and our whole workforce, so that we can deliver this, creating a green industrial base and a regional strategy that brings everybody up. However, I fear that this Prime Minister, this Chancellor and this Government are just not up to the job.
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18:54
Alongside greater fairness, we must move our economy much faster towards net zero so that we address the climate emergency in the recovery. I am pleased that the Government are talking about this, but we need urgently to debate specific policy proposals to make sure that the new economy that we must build is genuinely low carbon. We are seeing how fast the Government can move in a crisis; well, there is a climate crisis and we need to move just as fast to tackle that, too.
When it comes to planning the recovery, may I ask Treasury Ministers to consider three key issues? The first is how the furlough scheme is wound down to make sure that we protect jobs. We must prevent staff who are furloughed today from becoming staff who are laid off tomorrow. The second is that in the recovery we must achieve a historic and dramatic rise in both private and public investment in green technology and climate-friendly infrastructure. After solving the current international crisis, let us solve the next global crisis—the climate crisis—that we all know is facing us.
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16:57
The other issue I find disappointing is climate change. The Government have been trying to pretend that this Budget is going to take action on climate change. Let us look at it. With a fuel duty freeze again and £27 billion on 4,000 miles of road, that does not sound like a green transport policy to me. Then they announce, as though it is going to make any difference, £1 billion on green transport measures. This is completely absurd. The transport sector is the biggest sector for our emissions, and we need a completely different green transport strategy if we are to be serious about the climate. We need to make sure that we are not expanding airports, but that we are really investing in the electric vehicle infrastructure and giving incentives for electric vehicles, and this Budget does nothing for that.
If there is a real area on which we need to see significant Government expenditure, it is refurbishing the housing stock. We all know that that is where a huge amount of the emissions come from, and we all know that that is where there are easy wins that will reduce our constituents’ fuel bills, tackle fuel poverty and create jobs in every community. Why are the Government not doing that? They should of course bring back the zero- carbon homes laws that we passed and the Conservatives abolished, but, no, they are not keen on real action on climate change.
Then there is the Government’s announcement on carbon capture and storage. I was the Secretary of State for Energy and Climate Change when we were pushing this, and there was a £1 billion set-up fund, with a competition with two projects, with several billions of pounds running forward. We were the world leaders because we have a comparative advantage with our amazing engineers, with the North sea in which to store a lot of the emissions, and with our oil and gas industry and the skills from it.
Instead of exploiting that, what happened in 2015, when the former Chancellor, George Osborne, had his way? He cut that project overnight, not even telling Shell, which had shelled out £30 million. It was a disgraceful act against climate action. We need CCS, not just to green our power sector, but to green our heat sector and our industry. We could be world leaders, but that was a disastrous policy. The idea that these projects, which the Red Book claims will take the next 10 years, are a replacement for the level of ambition that we once had, is frankly shocking. The Government have failed very badly on the green agenda.
I thank the right hon. Gentleman for his strong points about the economic forecast and the serious challenges ahead. Does he agree that the challenges that he has outlined—coronavirus, the climate crisis, and workforce planning—mean that this is not the time to start looking in on ourselves or cut ourselves off from our nearest neighbours? Does he also agree that requesting an extension to the transition period would be the logical next step for the Government?
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13:21
On a point of order, Madam Deputy Speaker. Earlier today, the Court of Appeal handed down an historic and fantastic ruling, judging that the Government’s Heathrow expansion decision was unlawful because it did not take account of the Government’s legally binding commitments on climate change. The Secretary of State for Transport has tweeted that the Government “won’t appeal” against the ruling, but the Government’s transport policy is now in confusion and chaos, along with their climate change policy. Could you, Madam Deputy Speaker, through the Chair, use your good offices to ask the Government to make a statement to this House as soon as possible on how they take this decision forward? We hope that the Government will confirm that the expansion of Heathrow has now been consigned to the dustbin of history.
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Q6. Before the previous successful climate change talks in 2015 in Paris, I led the British preparations, including the delegations, for the three preceding UN climate talks. Global action on climate change only happens when the host nation engages with the world’s largest nations in advance at the highest political level. As the host of the 2020 climate talks, will the Prime Minister today publicly commit himself to meeting President Xi of China, Prime Minister Modi of India and US President Trump to secure for the Glasgow talks global action on the climate emergency? ( 900851 )
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Happy new year, Mr Speaker. May I associate myself and my colleagues with your remarks of support for the people of Australia? In that regard, may I ask the Treasury Front-Bench team whether this March’s Budget will be a Budget for the climate emergency? If it is, will Ministers look at the ideas of the outgoing Governor of the Bank of England to decarbonise finance and green the City and come forward with the rules and regulations that will catalyse private investment to beat climate change?
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16:42
We needed a Queen’s Speech that would truly keep our country together, heal the divides and tackle the challenges of inequality, lack of opportunity and climate change. However, I fear the Prime Minister’s Queen’s Speech will only undermine our united country’s great traditions. I fear that, with this Government’s programme, we will become a more inward-looking, more illiberal and less compassionate country. The one nation rhetoric of the Prime Minister is not matched by his actions. Let me start with Brexit.
Some of us have led successful negotiations, pan-Europe, in Brussels—difficult negotiations that I won for Britain—on everything from economic reform of the single market to climate change. I did not succeed by adopting this Prime Minister’s tactics of bulldog bluster combined with the record of a turncoat. I do not believe that that is the right approach, and I do not believe that he will succeed without reneging on all, or most, of his previous promises to leave voters. My parliamentary interest in this is whether or not, in the dark Conservative forests of the Brexit Spartans, his erstwhile friends have yet smelt betrayal. We shall see, but as we oppose Brexit and continue to point out the extra costs, economic damage and loss of influence, we will also remind Government colleagues of the previously unthinkable concessions that now need to be made for any chance of a deal next year.
There was another huge omission from the Queen’s Speech: the climate emergency. Sure, we heard the unambitious 2050 net zero target mentioned again, but just like in the Conservative manifesto, there was a lack of a sense of urgency and of a set of practical but radical measures. I find that truly alarming. It is particularly alarming because this Prime Minister has previously written so scathingly about the need to tackle climate change.
The right hon. Gentleman will know, as a former Secretary of State for Energy and Climate Change, how long it takes to get these major projects that will deliver big change up and running. In my speech, I outlined three failures that happened because of this Government and their predecessor. Does he agree that we need to get action going now?
I absolutely do. In her speech, the hon. Lady mentioned carbon capture and storage; I had pushed that competition forward, and it was going very well but, directly after the 2015 election, the then Chancellor cancelled it overnight and put Britain’s global leadership on this key climate change technology back years. It was a disgraceful measure.
I was talking about the opinions of the Prime Minister on climate change. Just seven years ago, in his infamous Telegraph column, he sought to cast doubt on mainstream climate science, dismissing it as complete tosh. You can hear him saying that, can you not, Mr Deputy Speaker? Instead, he warned about the
Then we see the Conservative record on climate change since 2015, voted for at every stage by the Prime Minister: scrapping the zero carbon homes regulations, banning onshore wind power and stopping tidal lagoon power.
Does my right hon. Friend agree that this Conservative Government’s commitment to expanding Heathrow, and the economic benefits claimed for it, do not justify the impact on climate change, the impact on air quality and the impact on noise, in south-west London in particular but also over a very wide area?
When we on these Benches say that we do not trust this Prime Minister and this Government on climate change. The evidence is with us, so we will raise the need for radical action on climate change time and again in this Parliament. We will work to force the Government to make the next global climate change talks in Glasgow in November a success, even though they come, ironically, just when the UK will be losing its influence on climate change at the European table. We will champion the need to decarbonise capitalism, and to build on the fantastic work done by the Governor of the Bank of England, Mark Carney. Today, in the Financial Times , we read that Mr Carney is taking action, introducing world-leading climate stress tests in major financial institutions. If only this Government would back the Bank of England in the City, there would be a historic opportunity for this country to lead the world with a gold standard for green finance, but I fear that there is no ambition on the Conservative Benches for that.
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15:10
You will appreciate, Mr Speaker-Elect, that the past few days have been difficult for my colleagues and I, having seen our friend Jo Swinson lose her seat. Jo consistently said during the election that there is an issue even bigger than Brexit—namely, the climate emergency. On these Benches, we will be seeking your help as we raise this issue and argue for the radical climate change policies that Jo advocated. Thank you, Mr Speaker-Elect.
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14:27
Take energy, for example. With the climate emergency, we must accelerate the pace of decarbonising energy, but instead Labour wants to spend years legislating for energy renationalisation—what a climate catastrophe! Liberal Democrats showed in government that if we intervene intelligently, we can harness the market to tackle climate change. Thanks to our decisions, Britain is now the global leader in offshore wind. Offshore wind farms now have much greater UK content than people ever imagined possible, and future offshore wind farms will no longer need a subsidy to be built. So if you want to go green, don’t go red, go yellow—and don’t destroy capitalism; decarbonise it.
On the likely eve of a general election, the voters are faced with a choice between two visions of the past and one vision of the future. In the blue corner, we have a return to the 1870s, in a colonial-style global Britain so well personified by the laid-back Leader of the House. In the red corner, we have a return to the 1970s, stoking up old class divisions when our country so desperately needs to come together. Fortunately, there is a yellow corner, from where we can go forward to the 2070s, full of hope and optimism that our country can survive this current nightmare, invest in our children and tackle climate change. As we vote against this damaging Queen’s Speech tonight and prepare to face the electorate—preferably in a referendum but, if not, in a general election —the voters can be in no doubt: the Liberal Democrats are the party for Britain’s future.
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Does the Secretary of State agree that the climate emergency demands that we reform the whole financial system, to decarbonise capitalism and green the City? If so, why are the Government taking three years to implement the mandatory disclosure of climate-related financial risks, when it could be brought in within one year?
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14:30
I refer Members to my entry in the Register of Members’ Financial Interests, in which I disclose my interest in renewable energy, particularly solar.
Parliament has declared a climate emergency. I welcome that tremendously, but it prompts the question: how do we solve that emergency? The good news is that many of the technologies we need are already here, and they are developing fast. From solar to wind to storage, their price is coming down fast—far faster than many people expected—and their reliability is increasing dramatically. On top of that, massive innovation will propel those technologies further forward, and we will enter a cheap green energy age.
The barriers to dealing with the climate emergency are no longer technological; they are more about policy, leadership and cash. We need politicians to show leadership, but we also need to ensure that investment funds get behind the new technologies at a speed and with an urgency that currently we are not seeing. That is why we, as a country and as the world, need to disinvest from fossil fuels and dirty technologies, and reinvest in clean green technologies. The question is how we propel that as fast as possible.
I believe we need a system-wide approach. We have to decarbonise capitalism at a fundamental level across the whole of the City—the debt markets, the stock exchange, the banks, the Bank of England’s own balance sheet and the pension funds. The Committee on Climate Change has asked for Britain to become carbon net zero by 2050, but we produce only 1% to 1.5% of global greenhouse gas emissions. However, 15% of the world’s greenhouse gas emissions are funded in London, so not only do we have the power to get our own country’s greenhouse gas emissions down to zero, but we can help spread that around the world and be a real leader. We could be the green finance capital of the world and say, “We will no longer finance the climate crisis in our country.” If we did that, we would show dramatic leadership in the world on this emergency. We should start with pensions.
I believe that is not the case. We need to ensure that the parliamentary pension fund becomes zero-carbon. We as Parliament need to say, “Divest Parliament.” That would show leadership both to public schemes, particularly in local authorities, and to the wider sector. Let us remember that we have already discovered four to five times the fossil fuels the world would need to exceed a climate change budget. We already have too many fossil fuels. We should not invest in more. We should disinvest now.
The previous Government target to cut carbon emissions by 80% by 2050 is no longer relevant because we have to cut our emissions to net zero, so fracking, which is a source of carbon fuel, is no longer an option for this country. Should not the Government reflect that new reality and issue new planning guidance for local authorities or give them new powers? Such leadership would have an immediate consequence: investment in fracking as a source of fossil fuel would no longer be an option or attractive to investors.
I congratulate the right hon. Gentleman on securing this important debate. I agree entirely that Parliament should take the lead in not investing in fossil fuels. Yesterday, BP’s investors decided that it should adopt a totally different strategy on carbon fuels so it fits in with the Paris agreement on climate change. Does he agree that other companies should take that way forward?
That brings me to my argument. Not only is there a moral imperative for us to divest, given the threat climate change poses to our planet; there is also a financial risk for pension funds and their beneficiaries. We need to explore that. We need to make it clear to pension fund managers and trustees that pulling out of fossil fuels is the right thing to do in financial terms. The real issue is often called the carbon bubble. We are investing in more fossil fuels than we could possibly need if we were going to stay climate change compliant. At some stage, that bubble of investment in carbon that we do not need will burst, leaving pension funds and the wider economy in a serious mess. Those assets would be worthless; they would be stranded assets, which would cause huge disruption in our financial sector.
Another approach is to say, “Let’s reduce, and ultimately stop, exploration for further fossil fuels. Let’s not inflate that bubble any more. Let’s gradually deflate it, so we can have an orderly transition for our economy, our energy sector and all the communities, towns, cities and people who depend on it.” That is the solution, and that is why I have concluded that we must disinvest and reinvest in a thoughtful, careful way. If we do that, we can tackle the climate emergency and avoid a financial and economic catastrophe.
We need to make capitalism our servant, not our master, and that comes from laws and regulations in this House. I propose a five-point plan systematically to decarbonise capitalism and tackle the disinvestment and investment challenge of the pension funds. First, there should be mandatory disclosure from all fossil fuel companies on how much carbon their business plans would see emitted and how much carbon is in their reserves. That should be coupled with a legal requirement to show how they will become compliant with the Paris treaty, with timed targets, so that fossil fuels can unwind the pollution they cause.
The right hon. Gentleman seems to be advocating a reduction of investment in energy companies. Does he recognise—I am sure he does from his time as Energy Minister—that many such companies, and particularly the larger international oil companies, are investing in new technologies, cleaner technologies and research and development in renewable energy?
We have a climate emergency, and it is great that we are seeing people—young people in particular—coming out and protesting. I celebrate what they have done. There is a thirst for Governments to take action. The question is: are our actions up to it? The only response to what people are arguing for and what the science says is a quite dramatic systemic change. In the disinvest and reinvest approach and the policies I have outlined, I want to argue for something very radical but practical.
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15:58
I thank everyone who has contributed to this debate, which has been really good. There is some degree of consensus emerging. I agree with what the Minister said on carbon capture and storage. I was disappointed that the former Conservative Chancellor, George Osborne, got rid of the CCS projects that I had been developing as Secretary of State for Energy and Climate Change, particularly the gas CCS which was a world-leader. I regret that, because I think it was an extraordinarily bad decision for the gas industry.
In the context of the role of the UK and the City of London internationally, we need to go further. If we can lead from the City of London, we can decarbonise capitalism not only here, but globally. That will be the biggest contribution that Britain can make to tackling global climate change.
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18:01
I refer the House to my entry in the register, especially in relation to solar power and community renewable energy.
I have three small ideas for the House today: reform of capitalism, engagement in Europe and beyond, and the future of technology. On capitalism, when people say that we need a system change, they tend to be referring to a change in the energy system, but I think we need to be bolder and go wider. We need to reform our whole economic system, and that requires reform of capitalism. Nothing else will be a sufficient response to the young people protesting; nothing else will be radical enough. Decarbonising capitalism means reforming the rules for our banks, stock exchanges and pension funds to force them to take account of climate risk. If people think that is radical, well, the Governor of the Bank of England, Mark Carney, agrees with it. Many people agree with it. We, and this Government, are getting behind the curve on the financial reforms we need. If we made them, we would radically transform the situation.
On European engagement, when I intervened on the Secretary of State earlier, I pointed out that Britain had led climate action at EU level. By winning stronger EU action, Britain influenced the United States and China, and through that we influenced the United Nations, and that led to the Paris climate treaty. Action at European level was critical for global action on climate change. As a Minister, I spent two and half years of very solid climate diplomacy across the EU, but a lot of it in Warsaw, because Poland was the issue. We worked with the Poles, we got a compromise, and we moved them over. Because of that, the whole of the EU adopted a greenhouse gas reduction target that the EU’s Climate Change Commissioner had told me was impossible. We got right to the far end of our ambition, and it was Britain leading that ambition, not going down to the bottom, as is sometimes said about us in Europe. If we are at the table, we can make that difference. Brexit is a climate disaster in itself, because it is reducing this country’s soft power and influence.
Finally, when I became Secretary of State, I was told by the Daily Mail and various other people that renewables were too expensive, and did I not know that the sun does not always shine and the wind does not always blow? Because of the policies we introduced, renewables are now the cheapest option, and that is fantastic for this country and the world. Intermittency, which is the other problem, is fast being solved through storage, interconnectors, the smart grid and demand-side response. If we add in tidal power and CCS, we can have the base load to sort out the problem relatively quickly. The solutions are there. We need the political will and determination to drive them through and meet this climate emergency.
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16:03
On that point, does my right hon. Friend agree that it is interesting to compare the Government’s planning approach to fracking with their planning approach to renewable energy?
I bring that to the House’s attention because those are completely the wrong priorities, not least because of the climate change crisis. If anything, I have got more sceptical about fracking over the years, because the evidence—particularly after Paris—is that we need to be even more rigorous in reducing our fossil fuel usage. Now that we have gone from a 2° target to a 1.5° target, we have to push the renewable agenda further forward.
I would say to the Minister that when we were thinking about shale gas, we were thinking about making sure it was linked to technologies such as carbon capture and storage, which are now in abeyance. Without CCS, there is much less of an argument for fracked gas. Moreover, renewables technology has increased and improved dramatically. Prices have come down much further. We have seen storage technology come on. We are not going to need the gas that people thought we would need just a few years ago.
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16:24
I refer the House to my entry in the Register of Members’ Financial Interests and particularly to my involvement with community renewable energy and solar energy.
Many colleagues have talked about the huge challenge that is climate change, and they were absolutely right to do so. We must act much more quickly. If we are to do that, however, we must ask what is the real barrier. Of course there are political barriers, whether they are represented by President Trump in America, President Bolsonaro in Brazil or Brexit, and we need to break them down. There are also some technological barriers, such as the need to improve the efficiency of storage, although that is coming along much faster. But the biggest barrier now, in my view, is finance. We must change the way in which our financial system works.
In my experience—both my experience as Secretary of State for Energy and Climate Change and my experience of working in the renewables sector—too many of our financial institutions do not really get the fact that investments in renewable energy can be fantastic; nor do they get the fact of climate risk, which will cause investments in fossil fuels to fail. The so-called carbon bubble will burst and people who thought they would get returns from fossil fuels investment will have their fingers burnt, and that could affect the pensioners of the future.
The real issue that I am trying to bring to the House’s attention is the huge number of vested interests in the fossil fuels sector that seep throughout economies and finance. If we are to be really radical, we need to decarbonise capitalism. We need new regulations and new laws to change the incentives completely, so that any investor will need to factor in climate risk. Let me give some practical examples.
I want a new treaty to back up the Paris treaty. I would call it a fossil fuels non-proliferation treaty. It would be a global treaty, and it would say, “We have enough fossil fuels. We do not need any more. In fact, we will not be able to use those that we have.” That is the sort of radical change that we need if we are to tackle climate change. This is not just about the policies in this country, although we have made some real progress.
The climate change agenda is also significant globally. If we get this right, we can take a major step forward in tackling human poverty, because we will bring electricity to rural Africa and rural India, and the children and families there will have the light and be able to keep their food and medicines cool, to educate themselves better and to be part of the global economy. So this is one of the biggest ways, particularly through solar energy, that we can tackle poverty. But it is even better than that: this is a way of promoting peace and reducing conflict and tensions throughout the world. Fossil fuel control is held by a small number of men in our world: Vladimir Putin, the dictator in Venezuela and so on. If we can get renewable energy, we can take the power away from those people and give it to all people—to all humanity.
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15:28
I was Secretary of State for Energy and Climate Change when Putin invaded Crimea and the Bolsheviks went into eastern Ukraine. There were crisis summits. The European Energy Council got together to work out how to deal with the matter, and one way of undermining Putin was to reduce Russia’s oil, coal and gas exports by ensuring that the EU became more secure by going green and by trading within itself, making it less dependent on Russia. That meant less money into Putin’s pockets and therefore fewer soldiers and rockets. That was how the UK could exercise soft power through the EU. Europe’s energy security strategy was written in my office in Whitehall, because we were able to use soft power to try to promote security and peace. That is what the EU is about, and that is why Paddy supported it.
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16:07
I refer the House to my entry in the Register of Members’ Financial Interests, especially with respect to renewable energy.
Not only did the Government get the short-term spending decisions wrong but they got the long-term spending decisions and strategy wrong. Where was the investment to tackle climate change? What about the opportunity in green growth—in our renewable energy? There are huge opportunities there, but there was nothing on that in the Budget. As for social justice, it was good to see some recognition that universal credit is causing pain out there, but the Budget did not go anywhere near enough. We are going to have to revisit this as a House if we are going to make sure that the poorest people in our country share in any future prosperity.
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16:18
As a Minister in the coalition Government, I attended five European Councils, first as a junior Business Minister and then as Secretary of State for Energy and Climate Change. Over five years, I was involved in a whole set of negotiations in Europe: on the economy delivering a growth package, which was very much written here in London; and on an energy and climate change package, which was very much written here in London. My experience was that we could always win for Britain, completely contrary to the nonsense we hear from so many Brexiteers. Moreover, people listened to us. When we engaged in proper negotiations and proper politics, we could always win the day. I have been disappointed, angered and distressed by the appalling inability of the Government to negotiate—with themselves, frankly, let alone the European Union. Their attempt to try to build those relationships, which are critical in a successful negotiation, has failed lamentably.
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It is good news that the Prime Minister is attending President Macron’s summit on climate change in Paris today, but may I warn the Secretary of State that President Macron is positioning Paris as the world’s leader in green finance? To tackle that threat and to protect London, Ministers must back the Bank of England’s taskforce on climate-related financial disclosures and bring in new mandatory corporate requirements on fossil fuel assets.
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GIB has been very successful in mobilising private sector investment into the UK’s green infrastructure and economy—since its official launch in autumn 2012, GIB has invested in 42 projects and committed £1.8 billion of capital, which will deliver £6.6 billion of new infrastructure investment. The projects supported by GIB will, when complete, save 3.7 million tonnes of CO 2 per year. At the same time, the Government have ambitious targets for providing support to projects in developing countries that will mitigate climate change or enable communities to adapt to its effects. Developed countries have committed to jointly mobilising US$100 billion of climate finance a year by 2020 for developing countries, from both public and private sources. The UK is playing its part; we have already allocated £3.87 billion to the UK’s ICF to finance such projects. This also contributes to the Government’s 0.7% of GNI aid commitment. Unmitigated climate change will hit the poorest first and hardest.
It is vital that we use public climate finance to catalyse private investment into developing countries. By working with the Green Investment Bank, DECC will be able to draw on its unique mix of investment expertise, commercial discipline and close alignment of green policy objectives to maximise the impact and effectiveness of UK climate finance.
We intend to commit £200 million of UK climate finance in the pilot over three years, to invest in renewable energy and energy efficiency projects in developing countries; supporting economic growth, job creation, and development of reliable energy infrastructure. In doing so the pilot aims to demonstrate the commercial viability of low carbon investment and crowding-in of private investment in addition to delivering significant emissions reductions. This will complement the existing portfolio of ICF investments, which work through multilateral development partners, such as the World Bank, as well as direct support to programmes developed and delivered in countries.
This new venture will have no impact on the resources or capital of £3.8 billion which we have allocated to GIB for investment in the UK. GIB remains fully committed to helping the UK meet its domestic climate change goals. Indeed, this additional activity should benefit GIB’s core UK operations as GIB further builds its global reputation both as an expert in green finance and as a fund manager.
The UK’s financial services industry is world renowned, as is our leadership in tackling climate change, and this vehicle brings together these two strengths in a partnership that will enhance the UK’s reputation globally.
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On 24 March, we will be publishing a detailed report on the progress this coalition is making on investment in low-carbon energy, but let me now share two findings from that report ahead of next week’s publication. First, for the second year running the UK has invested more in clean energy than any other country in Europe, Secondly, Bloomberg new energy finance data show that last year was the UK’s best ever year for new-build renewable energy finance, placing the UK in the global top five. I promise, Mr Speaker, to give each Member in turn a new statistic showing how the UK is doing so well on low-carbon energy investment.
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Let me give a statistic to the hon. Lady: the annual rate of renewable energy investment in this Parliament is more than double the rate that it was in the previous Parliament. From 2010 to 2014, low-carbon investment has amounted to more than £40 billion. That is a record of which we are very proud.
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The hon. Lady has scored a massive own goal. She trailed us going down the attractiveness index for future investment, but she should realise that the closer we get to the election, the more worried investors are. Members do not have to believe me about the potential threat of a Labour Government to investment; they can believe the Secretary-General of the OECD, Angel Gurria, who said that Labour’s energy price freeze could bankrupt investors. That is why the index is going in the wrong direction. The hon. Lady might also want to know that that index was prepared as a snapshot before the recent successful contracts for difference auction, which saw 27 new renewable energy plant contracts issued. This Government are seeing huge investment. The only thing that can stop that investment is the election of a Labour Government.
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I am delighted that we are back on tidal power. My considered view is that tidal energy has many merits: it is clean, renewable, predictable, home-grown and secure. Tidal lagoons can be built in numerous places in the UK and have the potential to meet up to 8% of our electricity needs. Tidal lagoon costs could fall significantly in the next decade, as larger, more cost-effective projects are deployed. With tidal lagoons having the potential to last 120 years, this is a future green energy technology that I hope all parties will strongly support.— [ Interruption. ]
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Since the last oral questions to the Department of Energy and Climate Change, the first auction of low-carbon contracts for difference was completed. I was able to offer contracts for 27 new renewable power plants, including 15 onshore wind farms, two offshore wind farms, and five solar farms. The auction saw onshore wind prices fall by 17%, and offshore wind farm prices by 18%. Today I will publish the first annual update to our country’s first ever community energy strategy. That shows real progress in everything from district heating policy to grid connections, and from state aid clearance for the Green Investment Bank to lend to that sector, to our new water source heat map.
As this is the final DECC oral questions of this Parliament, I thank you, Mr Speaker, my Ministers and officials, Her Majesty’s loyal Opposition, and all right hon. and hon. Members for their help and advice—most of the time. The UK is now achieving on all our energy and climate change objectives, and I believe it is leading Europe on the path to a climate change treaty in Paris this December.
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I am grateful to the right hon. Lady, who makes a serious point about the impact of climate change on some of the most vulnerable people on our planet. We need to lead in the world, as indeed we are doing. She will also know that not only the Liberal Democrats but the Prime Minister, on behalf of the Conservative party, and the Leader of the Opposition recently signed a letter to confirm their support for the Climate Change Act 2008. That had huge consensus across the House— [ Interruption. ] As the right hon. Member for Hitchin and Harpenden (Mr Lilley) notes, five people voted against it, and nine Members also voted against the Energy Act 2013, which I put through the House and is the practical way of delivering on the Climate Change Act 2008. It is important that the world should understand that across the parties there is a lot of agreement on this issue.
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The Government, whether the lead has been taken by a different Department, such as DEFRA, or another Department, have done their best to deal with flooding issues. I speak as one of the Ministers with responsibility for flooding. We have done a lot of work in the south of London to assist with this matter, including on aspects of the Thames flood alleviation, but the real issue for me, as Secretary of State for Energy and Climate Change, is that if we do not tackle climate change, this country will be badly hit by more flooding. We can build the flood defences we need, but in the long term if we are to reduce the cost of climate change to this country we need to tackle climate change itself.
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The hon. Gentleman has clearly not read the report, and he has clearly not read what the Chair of the Energy and Climate Change Committee, and indeed Greenpeace, has said about it. Not only are we more than meeting our carbon emission reduction targets, but as the hon. Gentleman will see if he reads the report, there are different ways of accounting—we have made that point a number of times—and we are accounting in the way that is internationally recognised. If the hon. Gentleman wants to change that system on the eve of climate change talks, he must be completely barmy.
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Talking of taste, Mr Speaker, I thought that the question from my right hon. Friend for Bexhill and Battle (Gregory Barker) was very tasteful, and that he made a very sensible point. I am grateful to him. I think it is clear that, although there are some differences between us on some aspects of energy policy such as onshore wind, the two parties have been able to work together in the country’s interest to achieve our objective of providing affordable, secure, green energy. I am grateful to the Minister of State for what he said earlier, although he did make me laugh when he claimed that the Chancellor was the force behind the tidal lagoon.
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I have met a range of climate change negotiators, particularly the Chinese negotiator Minister Xie, and interestingly they have never raised that issue. They have raised many other issues, but they have never raised that specific one, so it would be a first for the negotiations. There are other issues that we need to focus on, however, and we set out our position in a publication last September.
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My hon. Friend is right that network costs account for about a fifth of the average household bill. Of course, the Energy and Climate Change Committee, which he chairs, is looking into this issue and has taken evidence on it. We look forward to receiving his report. If one looks at an historical analysis of network costs as a proportion of energy bills, they have been coming down steeply since privatisation. We obviously want Ofgem to continue to bear down on them, and our regulatory regime is one of the strongest in the world.
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Since our last Department of Energy and Climate Change orals, we have seen significant progress for consumers on switching, energy prices and energy efficiency. Energy firms have responded to my challenge and halved the time it takes to switch, from five weeks last year to 17 days now. That is helping people to switch to get big savings on their energy bills, as the extra competition we have backed is now seeing bills being not just frozen, but cut. Figures to the end of November show that the energy companies obligation and the green deal have delivered new boilers, windows and insulation to more than 1 million homes, four months ahead of our March 2015 target. In introducing to the House today tough new regulations to require landlords to ensure that their properties meet minimum energy-efficiency standards, we aim over the next three years to help about 1 million private sector tenants enjoy lower energy bills and warmer homes.
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I think that is a little harsh. My Department published the calculator, so far from ignoring this, we are putting into the public domain not just a UK 2050 calculator but, having helped 20 other countries with their calculators, now a global calculator. It shows that people’s lifestyles—not just their meat-eating habits, but their transport and so on—all have an impact on climate change. The calculator enables people to look at the types of choices we may need to make in the future.
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I expect any figures from the Committee on Climate Change to be correct, but of course the ones my hon. Friend quotes do not tell the full story of our policies, which was told by my response to him. My hon. Friend just does not get the green energy opportunity, but in the spirit of Christmas let me cheer him up by telling him that the green energy savings I mentioned come partly from regulations—the type of Government intervention he dislikes so much. Worse still for my hon. Friend, his constituents are saving money, thanks to green regulations from the European Union.
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The most significant development for my Department since the last DECC oral questions has been the climate change agreement secured in this year’s talks in Lima last week. British leadership on the European Union’s position on climate change helps to secure an ambitious 2030 target for EU cuts in greenhouse gases. This European leadership has been significant in accelerating political momentum into the Lima talks and beyond, through to the crucial Paris summit on climate change next year.
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The right hon. Lady asked a very important question about energy efficiency. She will know that our approach has been to go after measures not only on loft insulation and cavity wall insulation—which are very important but declining in terms of availability and options because so much has been done—but on solid wall insulation, which is more expensive but vital for tackling fuel poverty and climate change.
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I am grateful to my hon. Friend for that question. In our community energy strategy and our work with both the solar and the onshore wind industries, we have stressed the importance of community benefits, and that is having a marked effect. We have enabled that through voluntary protocols, community benefit registers and the like. We have accepted and are taking forward the report of the shared ownership stakeholder group, which has also shown that people can be directly involved and have a stake in local renewable energy projects.
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I think that my last answer to the hon. Gentleman, in which I recommended EU product regulations as very effective in reducing his constituents’ bills, must have annoyed him a tad. The UK’s leadership on climate change is acknowledged not just in this country or in Europe but around the world. We are taking forward the climate change negotiations successfully and I look forward to a successful agreement in Paris. The one thing that we have to achieve next year is to ensure that the deal is ambitious enough.
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The annual conference of the parties (COP) to the United Nations framework convention on climate change took place in Lima, Peru, from 1-14 December. The United Kingdom was represented by the Secretary of State for Energy and Climate Change.
All countries in the United Nations framework convention on climate change committed at the COP in Durban in 2011 to negotiate, by 2015, a new global, legally binding agreement, applicable to all nations, to come into force by 2020. In Warsaw, last year, all agreed to bring forward their intended nationally determined contributions (INDCs) to that agreement well in advance of Paris, and by the first quarter of 2015 for those that are ready to do so.
We also reached a balanced decision on finance, which I brokered alongside the South African Environment Minister. The decision sees countries welcome the capitalisation of the green climate fund—more than $10 billion committed in the initial capitalisation round—as well as other initiatives, and calls for increased transparency and predictability of climate finance.
Overall, the Lima outcome was broadly positive. We secured the basis for everything the Government want to see in the final agreement, which was outlined in Government’s vision for the new agreement—“Paris 2015: Securing our prosperity through a global climate change agreement”—that I published on 9 September 2015. We achieved a good result on climate finance by demonstrating again the UK’s leadership in this area, which helps enhance our reputation and credibility internationally. The UK continued its strong record of leading on climate change action: demonstrating our ambition at home, our support to developing countries and our leading influence in the EU and with international partners.
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As Secretary of State for Energy and Climate Change I am the Justifying Authority and it is my responsibility to take these decisions.
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Smart meters give consumers greater control over their electricity and gas use, changing the way we think about energy and helping to transform the retail energy market. By providing real-time information and bringing an end to estimated billing, the roll-out will enable consumers to save money on bills, make switching energy suppliers easier and faster, and help to restore trust in the energy market. Smart metering will also help reduce energy waste, with suppliers and networks having access to better information to support a sustainable energy supply.
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I am delighted to tell the House that European leaders recently signed an historic deal agreeing to cut greenhouse gas emissions by at least 40% by 2030, and that the UK played a crucial leadership role over two years to deliver that deal. It establishes EU leadership and influence ahead of negotiations for a global climate deal next year, and it provides business with additional certainty to help unlock billions for low-carbon investment. It reforms EU energy policy to give member states more flexibility so that they can go green at the lowest cost, and it helps to improve Europe’s energy security, sending a strong signal to Russia at a moment of heightened tension. I commend the EU deal on energy and climate change to the House.
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I am surprised that the hon. Gentleman asks that question because, having been an assiduous member of the Committee that considered the Energy Bill, which became the Energy Act 2013, he will know that we cannot lay down that order until the fifth carbon budget, which is due in 2015-16. He will also know that this Government have met the first carbon budget and are on track to meet the second and third carbon budgets, and that in the summer I confirmed the fourth carbon budget at the ambitious levels we have set. We are meeting our Climate Change Act 2008 obligations.
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I am grateful to the hon. Lady for asking me about CCS. This Government are actually leading Europe on CCS; we have the only two commercial-scale CCS projects, one of which was the only such project to get funding from Europe. It was because of the UK Government’s actions that the conclusions of the recent energy and climate change deal included CCS. Like the hon. Lady, we are a strong supporter of CCS.
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It is interesting that not a single Labour Member has got up to congratulate the Government on leading in Europe and securing an historic deal to cut greenhouse gas emissions in the EU, which is Europeanising Britain’s Climate Change Act 2008. It is absolutely pathetic that they are not prepared to show that they support the Government on this historic deal. As Secretary of State, I introduced into the Energy Bill—now the Energy Act 2013—the power to bring in power sector decarbonisation, and we will do it. The Liberal Democrats will support that policy at the election, and I hope that Labour will too.
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Since the previous Energy and Climate Change oral questions, we have made significant progress for consumers, with all the large energy firms confirming they will have met my target to cut switching times in half at the end of the year, and with the good news this week that some independent energy retailers such as First Utility have committed to halving switching times this year.
I can confirm to the House that the EU has agreed ambitious greenhouse gas reduction targets following two years of negotiations in which the UK played a leading role. Thanks to the Government’s long-term, medium-term and short-term plans, our energy security remains rated the best in the European Union and among the best in the world.
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11:21
In 2010 it was not just the country’s finances that needed immediate action. It would be fair to say that back in 2010 the UK faced an energy crisis, too. There was an historic record of underinvestment in energy infrastructure that threatened our energy security. There had been a decade of rises in energy costs, with consumers getting a raw deal from the big six energy suppliers in a market that had too little competition. Even on climate change, there were plenty of legal obligations to cut emissions, but little practical policy to achieve them cost-effectively.
Before I leave the subject of energy security, there is one international aspect I should raise with the House that has domestic implications, namely the response by the G7 and the EU to Russian aggression against Ukraine, and the increasing threats by Russia to use energy supplies as a weapon. It is vital that we co-operate internationally to help our allies, especially in eastern and central Europe and the Baltic, many of which are highly dependent on energy imports from Russia, but it is also vital that we remember how fortunate the UK is to have such diversity in its oil and gas supplies. We should therefore not turn our backs on the shale gas opportunity, for as we decarbonise our economy, we will still need large amounts of oil and gas in the next three decades for heating and transport.
Finally, we have achieved that turnaround in energy security and energy investment while continuing to reduce the UK’s greenhouse gas emissions. I was delighted to announce in February 2014 that the UK had met its first carbon budget, covering the period 2008 to 2012. We are also on track to meet the even more demanding reductions required to meet the second and third carbon budgets. I was particularly pleased, after a cross-Government review, to confirm that our ambitious fourth carbon budget would not be changed.
The Government have delivered on our commitments under the Climate Change Act 2008, but to deliver on climate change more broadly, we also need international action, so in September, I published the Government’s strategy for achieving a legally binding global climate change deal in 2015. With the successful agreement last month on the EU’s 2030 energy and climate change framework, which was based on the UK’s proposed blueprint, Europe is now well placed to lead on the world stage and secure the global deal that is so crucial for future generations.
Despite political differences, energy policy has enjoyed a high degree of cross-party consensus over the past decade or so. I am pleased that that remains the case today on the vast majority of our policies. The Energy Act 2013 enjoyed the same level of cross-party consensus that the Climate Change Act 2008 enjoyed. That is crucial for the long-term investment decisions that energy infrastructure needs.
Of course, differences between the parties remain. There is an anti-competitive approach towards the energy market in parts of the Labour party; an anti-renewables, anti-wind tendency in parts of the Conservative party; and all parties have members with a history of opposition to nuclear power. However, it is imperative that those tendencies are resisted, particularly in the run-up to the general election. Short-term populism is the most dangerous enemy that energy and climate change policy has.
After the hard-won gains for the UK’s energy and climate change policy of these past four years, I urge right hon. and hon. Members on both sides of the House to cleave to the consensus we have achieved. That is the best way to keep energy bills down, to keep the lights on and to keep our pledges to our children to tackle climate change.
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The Council then considered the completion of the internal energy market. The European Commission opened the session by outlining the main challenges to completing the internal energy market, focusing on the need for completion of the network code process, and the cross-border interconnections covered by the projects of common interest process. The importance of regional co-operation was also focused on as a key priority by the discussion. The importance of the internal market for climate change action and energy security policy was made clear in the discussion.
In the afternoon there was a round-table discussion on the EU 2030 framework for climate and energy policies I urged member states to agree a package by the October European Council. I stated that the UK wants to see a package that is ambitious and has a target for EU domestic greenhouse gas emission reductions of at least 40%; that addresses the challenges of energy security and investment that Europe faces today; and that reflects the principles of fairness, solidarity and cost effectiveness. I reiterated the importance the UK places on the need for member states to have flexibility in the way they implement the package.
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Climate change is almost universally recognised as a serious threat to global prosperity, security and well-being. We are already experiencing the impacts of climate change within the UK. Extreme weather events at home and abroad already cause significant costs and disruption to UK businesses, and we are predicted to experience increasingly frequent and severe flooding and are vulnerable to a predicted rise in heat waves, storms and gales, as well as rising sea levels which will cause increased encroachment on our coastal areas.
The world is not asking if we need to tackle climate change, but how. Over 90 countries, covering 80% of global emissions, have already pledged to cut their emissions by 2020 under the Copenhagen accord. But this is not nearly enough to prevent global temperatures exceeding the globally agreed target of 2° C and, as a consequence, the world is increasingly experiencing the worst impacts of climate change. Action is needed on a co-ordinated global scale from every country in the world.
All countries of the UNFCCC agreed in 2011 to negotiate a global legally binding agreement by 2015, to come into force by 2020. These negotiations are progressing, and will conclude at the 21st UNFCCC conference of parties in Paris in December 2015. The UK is at the forefront of helping to shape and deliver this agreement. Paris will not be the end of the road in terms of tackling climate change, but an ambitious agreement would be a huge step forward which we can then build on in the future.
That is why today I am publishing the UK Government’s view on why we need a global deal on climate change, why one is good for the UK and what such a deal needs to look like. “Paris 2015: Securing our prosperity through a Global Climate Change Agreement” sets out:
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The hon. Lady knows that we legislated to introduce a decarbonisation target for 2030 in the Energy Act 2013. She also knows that my party strongly supported that.
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As my hon. Friend is a huge expert in this area, he will know that the electricity market reforms in this country have been deliberately technology neutral. That will be the case as the market evolves over the next decade and more. This country has therefore not had targets for particular technologies. We want the market to decide on the mix. That is the approach that we have taken in the European negotiations. We have argued for the most ambitious greenhouse gas emissions target of any member state and for it to be technology neutral. I am delighted to report to the House that we are winning that argument.
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If we are to meet the objective of the convention and avoid dangerous climate change, it is imperative that we secure an international, legally binding agreement, with mitigation commitments for all, in Paris in 2015. To facilitate that, I have pressed our case at a number of international ministerial climate change meetings this year, as well as bilaterally with my counterparts in Governments and with other key actors across the globe, including in China, the US and India. I will, as usual, attend the United Nations framework convention on climate change ministerial conference of parties in December this year, and I will also attend the UN Secretary-General’s climate summit in September, which will be the first meeting of leaders focused solely on climate change since 2009. Closer to home, I am continuing to push for EU agreement to an ambitious 2030 emissions reduction target of at least 40%, including by convening the green growth group of Ministers.
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I can certainly confirm that we work across Government—not just my Department and DFID but other Departments as well—to ensure that the international climate finance fund that we announced at the beginning of our time in office is wisely spent, particularly to help the poorest, most vulnerable and most exposed.
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No, I do not. In my visits to Beijing and Delhi I see the reverse. I see the Chinese taking climate change more seriously than they have ever done, not just in what they say at the international table but in the actions they take—massive investment in renewable energy and low-carbon energy such as nuclear—not least because of the impact of air pollution in some of their cities on the eastern border. Equally for India, I think that Prime Minister Modi will be a global leader on this issue.
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I start by paying tribute to my two ministerial colleagues who have moved on. I am delighted that my right hon. Friend the Member for Sevenoaks (Michael Fallon) will serve in the Cabinet after his excellent work at the Department of Energy and Climate Change, and I particularly thank my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) for his astonishing contribution, especially in arguing the case for action on climate change. He will be missed in the House, given that he is not seeking re-election.
I welcome my new colleagues, the Under-Secretary of State for Energy and Climate Change, my hon. Friend the Member for Hastings and Rye (Amber Rudd), and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for West Suffolk (Matthew Hancock), who have already made an impressive start.
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The combination of a long-term target and a strategy setting out our plans for achieving it will help ensure that the fuel-poor are not left behind as we meet our wider climate change obligations. At the same time, taking action to tackle fuel poverty will bring wider benefits, supporting jobs, saving carbon and improving health.
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The decision I have taken is consistent with the advice of the Committee on Climate Change. It also reflects the views of the vast majority of businesses, investors and environmental groups.
The review was conducted in line with the commitment made by the Government when the fourth carbon budget was set in 2011, specifically that we would review progress in 2014 in order to determine whether the UK’s domestic commitments placed us on a different trajectory from the one agreed by our partners in the EU under the EU emissions trading system. In considering the evidence, I have paid particular attention to the requirements of the Climate Change Act and the process that this sets out.
Having conducted a detailed review, it is clear that the evidence does not support amending the budget. Any revision now would be premature, especially in light of the ongoing negotiations in the EU to agree a domestic 40% GHG reduction target for 2030 by October this year based on the Commission proposals published in January 2014.
As business groups have made clear, retaining the budget at its existing level provides certainty for businesses and investors by demonstrating Government’s commitment to our long-term decarbonisation goals. Our support for the UK’s energy intensive industries in the 2014 Budget underlined the Government’s continued commitment to protect the competitiveness of UK business. And, although I am clearly mindful of the risk that a misalignment between the EU and the UK’s trajectories in the traded sector might result in a disproportionate strain being placed on sectors not covered by the EU emissions trading system, the evidence does not indicate that action is required at the present time. Our current estimate is that UK and EU levels of ambition for the sector are likely to be extremely close over the period.
Above all, maintaining the fourth carbon budget at its current level demonstrates the UK’s commitment to its climate change target of an 80% reduction in emissions by 2050. The UK has the world’s most transparent system of binding emission reduction targets, which are used as a model throughout the world. Today’s decision cements the UK’s place as a global leader in combating climate change, which will allow us to play a central role in delivering a global deal to combat climate change at the end of 2015.
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The UK should be proud of its world-class oil and gas industry. It makes a substantial contribution to the economy, supporting around 450,000 jobs and supplying the UK with around half of the oil and gas we use, reducing our reliance on imports. It is vital therefore both for Britain’s energy security and long-term economic outlook that we take positive steps to maximise the economic recovery of our indigenous hydrocarbon reserves. As our carbon plan has shown, Britain will still need significant oil and gas supplies over the next decades, while we decarbonise our economy and transition to a low-carbon economy.
The establishment of the additional powers the OGA will need to perform its MER UK obligations will require primary legislation which cannot be delivered in the remainder of the current Parliament. The Department of Energy and Climate Change (DECC) will, therefore, in the first instance, and in order to demonstrate pace and its strong commitment to implementing Sir Ian’s recommendations, establish the authority in shadow form as an Executive agency. Our intention is for this to be operational in autumn 2014.
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Under the first item on the agenda the Council reached political agreement on the Greek presidency’s compromise text on the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land.
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I do not think there is a dichotomy of policy. One of the key issues in the 2030 package that we are negotiating is reform of the EU emissions trading system to send a carbon signal that everyone had expected under the 2008 deal, which has failed to come through. It is right to proceed with this reform. I am proud that Britain is leading in Europe on the ambitious climate change package that is vital to tackle climate change.
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The renewables target for 2020 was a very sensible one; it was needed to bring an immature industry forward, but I do not think it is needed for 2030. What is most important for 2030 is having an ambitious greenhouse gas reduction target. That is what we need to tackle climate change, and we need to do it in a technology-neutral way, which enables carbon capture and storage, energy efficiency and all low-carbon technologies to come through. I think that is the greenest approach.
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My hon. Friend is absolutely right. An energy price freeze would hit investors, hit investment, hit energy security and hit our efforts to decarbonise. Worst of all, it would hit consumers, because energy companies would put up their prices directly after the freeze. Everybody knows that, and it is one of the reasons why we have been pushing competition. Competition means not merely freezing bills—five of the big six have announced that they will freeze their bills this year—but, because of independent suppliers, enabling people to cut their bills. Our policy is to cut bills; the Opposition’s is simply to freeze them. We are the ones who are ambitious and on the side of the consumer.
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In April, we announced £12 billion of investment in renewable energy projects, supporting 8,500 jobs under the final investment decisions enabling process, which is resulting in the development of offshore wind, coal-to-biomass, and dedicated biomass for combined heat and power projects.
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That is a very important question. We are one of the world leaders in promoting international climate finance, and we very much support this fund. It has taken a while to get together to finalise the arrangements. Some real progress has been made in recent weeks, at long last. We hope that countries will start pledging to the fund at United Nations Secretary-General Ban Ki-moon’s summit in November or at the UN framework convention on climate change talks in Lima in December. It is also important that we have private climate finance. Only last week, the Minister of State, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), brought together many people to ensure that there is private money to help to get to the $100 billion target.
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16:48
The right hon. Member for Don Valley began by wanting to reach consensus and, to be fair, it is not the first time that she has done so. Right hon. and hon. Members might be surprised to learn that she talked warmly in a speech last week about the consensus on energy policy in the UK. They might be even more surprised to learn that I agree that there is consensus on some aspects of energy and climate change policy. The Labour party has accepted the coalition’s major reforms of Britain’s electricity market. Labour voted for the Energy Act 2013 and backed its centrepiece—contracts for difference—which will be crucial in creating the world’s first ever low-carbon electricity market. Labour appeared to be backing our measures that are driving the massive increase in energy investment from which the UK is benefiting, including the more than doubling of renewable electricity. Labour seemed to be backing the measures that we are introducing to keep Britain’s lights on, such as the plans for a capacity market and National Grid’s supplemental balancing reserve.
I am fairly confident that there has been a consensus on energy security and climate change for some time, because the right hon. Member for Don Valley never questions me about our climate change or energy security policies. I am grateful for her support, however tacit. It would be nice to have more opportunities to explain by how much renewable investment has risen in the UK. According to Bloomberg New Energy Finance, the UK had the highest level in Europe in 2013. It would be nice to have a chance to tell the House in detail how we have turned around the legacy of under-investment that we inherited, which was threatening Britain’s energy security.
It is very important that the Minister is not allowed to get away with an empty boast. The Energy and Climate Change Committee report states that
Pursuing the Opposition’s policies would be nothing short of a disaster, not just for consumers but for investment, for decarbonisation and for energy security. If any Government were so misguided as to intervene with the two prices regulations proposed by the right hon. Member for Don Valley (Caroline Flint) it would lead to chaos in our energy system.
In fact, it was one of a number of reasons and findings that led Ofgem to propose a market investigation reference. That is exactly what I think we should support when faced with such a worrying finding for consumers. There should be a no-holds barred inquiry by independent experts, whom we have given real teeth to act for consumers. That is the action that the right hon. Lady should be proposing and that I am backing as Secretary of State for Energy and Climate Change.
I am not the first Secretary of State for Energy and Climate Change to be confronted with the problem of wholesale and retail energy prices—the possibility of a rocket and feather consumer energy price rip-off. As Secretary of State for Energy and Climate Change, the right hon. Member for Doncaster North (Edward Miliband), the Leader of the Opposition, presided over a period in which wholesale prices crashed and retail prices did not. When he did my job, between September 2008 and January 2010, wholesale prices actually fell faster than the figures set out in the Opposition’s motion. Wholesale electricity prices on the day-ahead market fell not by the 23% mentioned in the motion but by 62.5%. Under the Leader of the Opposition, wholesale gas prices to businesses fell not by 38% but by 43%. A big driver of those falls was, of course, the massive recession, and they went on so long that, eventually, retail prices for consumers fell—but only by a bit: electricity by 7.5%, not the 62.5% fall in wholesale prices enjoyed by the energy firms, and gas by 5.6%, not the wholesale fall of 43%.
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My noble Friend the Under-Secretary of State for natural environment and science, Lord de Mauley and I will attend EU Environment Council in Luxemburg on 12 June. Paul Wheelhouse, Minister for Environment and Climate Change in the Scottish Government, will also attend.
Proposal for a regulation of the European Parliament and of the Council on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport.
Proposal for a Council decision on the conclusion of the Doha amendment to the Kyoto protocol to the UN framework convention on climate change and the joint fulfilment of commitments.
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Under the first item on the agenda, the Greek presidency will seek political agreement to the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land.
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The principles that were agreed to guide the G7’s work on energy security were transparent competitive energy markets, diversification of energy sources, an accelerated transition to a low-carbon economy and reduced greenhouse gas emissions, energy efficiency, investment in clean energy technologies, improved infrastructure and robust emergency response systems.
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My hon. Friend and I may disagree about onshore wind, as I have visited many popular sites from which local communities see real benefits, but I agree that tidal and wave power has a big future. The Government, and especially the Minister for climate change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), have been active by allocating £20 million for tidal arrays and ensuring that the EU provides funding for other projects. Generous support has also been given through the renewables obligation certificate and contract for difference systems.
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Since the last Question Time we have continued to see strong investment and growth in Britain’s low-carbon electricity sector. Last year, for example, renewables accounted for a record 14.8% of all electricity generated in the UK, a 28% year-on-year increase. The news that Siemens and Associated British Ports are to invest £310 million in their wind turbine factories in Hull underlines the fact that the UK is the best place in the world to invest in offshore wind. On bills, we received the competition report from Ofgem and the competition authorities and strongly support the proposed market investigation reference. On climate change, we received the second of three reports from the Intergovernmental Panel on Climate Change, which confirmed that climate change impacts are already occurring on all continents and across the oceans. It should now be clear to everyone that unless we take strong action on climate change, the dangers to human health, food security and the global economy will become intolerable.
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My hon. Friend is right that commissioning the Stern review was one of the better things that the previous Government did. It very much feeds into our policy. He will be interested to know that as we go ahead to the September summit of the UN Secretary-General, Ban Ki-moon, for Heads of State to discuss climate change, the Government have commissioned a new report, working with a number of other countries across the world. It will look at the benefits and opportunities in tackling climate change and is called, “The New Climate Economy”. It will be presented to Heads of State by the former President of Mexico, President Calderon. We believe it will be very influential in getting political momentum at the highest level behind action on climate change.
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I think that the most important thing we are doing at the moment on this issue is trying to get EU-wide agreement on the energy and climate change package for 2030, including a very ambitious binding target on greenhouse gas reductions, which will be binding on the UK as well as other member states. We have been leading that, and last year I set up the green growth group to get all the ambitious states together. Following the March Council, I am very optimistic that we will get agreement on an ambitious package for Europe and the UK at least by October.
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The majority of member states accepted that renewable energy subsidies should be rationalised as part of the state aid modernisation process but were concerned that there was a risk of contradiction between European energy policy and the state aid guidelines.
The Council then debated the 2030 climate and energy framework. The presidency asked member states for their views on three issues: how the Commission’s proposals would contribute to the EU’s energy objectives of sustainability, competitiveness and security of supply; the new governance system; and the proposed set of indicators. The Commissioner argued that the 40% greenhouse gas target was very ambitious. The majority of member states endorsed a greenhouse gas target of 40%. I called for a 50% target in the event of an ambitious international agreement.
A number of member states called for more ambitious binding EU targets for renewable energy—of 30 to 40%—and binding energy efficiency targets. Others called for a technology neutral approach with no EU and national-level targets for renewables and energy efficiency. I and others supported an EU renewables target of 27%, on the condition that they would not become binding national targets.
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There will be two policy debates at the Council. The first will be on the Commission’s communication on energy prices and costs in Europe, which analyses the impact of the decarbonisation of the energy sector on energy prices for households and industry. The communication charts rises in electricity and gas prices and costs and the price differential between the EU and its competitors. It also examines the potential risks to energy intensive industries. The communication argues for actions to reduce energy costs including completion of the internal market, action to improve competition in the retail markets, and improving energy efficiency. The importance of cost-effective climate and energy policies is reinforced.
The second debate will be on the Commission’s communication setting out a climate and energy policy framework for 2030. The proposed framework is based on an overarching binding domestic greenhouse gas emissions reduction target for 2030 of 40% and an EU-level renewable energy target of 27%. The renewable energy target would not include binding national targets, in contrast to the 2020 framework.
The communication also proposes a new governance process, based on national plans. The plans would set out how each member state intends to meet its 2030 greenhouse gas reduction target, including, in particular, planned levels of renewables and energy efficiency.
The UK will emphasise the need for early political agreement on the 2030 framework. The UK considers the 40% GHG target proposed by the Commission a good start, but will argue that the EU needs to go further—up to 50%—in the event of an ambitious global climate deal.
The UK particularly welcomes the Commission’s recognition of our argument that countries must be allowed to decarbonise in the cheapest way possible. However, the UK remains concerned to ensure that a renewables target binding at an individual member state is fully ruled out and is seeking greater clarity on this.
The UK also has questions about how an EU-wide renewables target and the proposed governance process would work in practice. We will work closely with European partners to discuss the details, but will continue to argue that member states should retain full flexibility over their choice of energy mix to deliver their GHG targets.
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We have been working extremely hard and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon) in particular has been leading the work to promote the “buy early” campaign so that consumers can buy oil when it is available at a lower price. Moreover, we have a six-monthly round-table with the industry to make sure we are doing everything we can.
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The science is clear: we are already seeing some effects of man-made climate change and the future threat from climate change is great, as my right hon. Friend the Prime Minister confirmed in the House yesterday.
The Intergovernmental Panel on Climate Change published its fifth assessment last September, which covered the relationship between climate change and extreme weather events. It stated:
“all the evidence suggests there is a link to climate change”.
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I do agree with that. My hon. Friend and Eastleigh borough council are leaders in the bottom-up approach. He will know that there are two areas that we need to tackle. First, local communities and individuals must reduce their carbon emissions to stop climate change getting worse. Secondly, communities must work together to make people’s homes and communities much more resilient to the climate change that has already happened.
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The fourth carbon budget review is under way. I will not prejudge that, and the hon. Lady should not expect me to do so. I will say that this Government are leading the international climate change debate in Europe. The 2030 energy and climate change targets, which will be discussed at the European Council in March, are critical in tackling climate change. She will know that we have to work internationally to do that. This Government and the UK have been leading that debate.
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When I made those comments, I was not talking about my ministerial colleagues; I was talking about some voices on the Conservative Benches, particularly in the other place, who question the science of climate change, and I think that is very unhelpful. The right hon. Lady talks about a decarbonisation target, but it was this Government who brought forward legislation on a decarbonisation target. The Labour party did not have one in its manifesto and neither did the Green party. We took the policy forward and it is in the Energy Act 2013.
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Since Energy questions in January we have published Britain’s first ever community energy strategy, which is widely welcomed by the sector. This week we published a review by Sir Ian Wood into our oil industry. I have accepted Sir Ian’s recommendations, and we intend to fast-track his proposals. I am grateful to Sir Ian and his team for their work, which we believe is a game-changer in the management of our offshore oil and gas assets. Finally, we announced a second carbon capture and storage project this week—the world’s first ever commercial-scale gas CCS project—and CCS will play a key part in our decarbonisation strategy.
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I do welcome the publication of the climate legislation study. The United Kingdom, including many parliamentarians throughout the House, has played a leading role in encouraging other countries to enact climate change legislation, and it is encouraging to see how many have responded. I pay tribute to the Members involved, particularly the hon. Member for Brent North (Barry Gardiner).
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I am pleased to inform Parliament that today, my right hon. Friend the Prime Minister and I are signing a contract with Shell to take their world leading gas carbon capture and storage (CCS) project into the next stage of development.
The Government have agreed a multi-million pound contract for engineering, design and financial work on the Peterhead CCS project in Aberdeenshire. The world’s first-planned gas CCS project, Peterhead involves installing carbon capture technology on to Scottish and Southern Energy’s (SSE’s) existing Peterhead gas power plant, and transporting the CO 2 100 km offshore for safe, permanent storage 2 km under the North sea in the old Goldeneye gas field. If built, the project could save 1 million tonnes CO 2 each year and provide clean electricity to over 500,000 homes.
Today’s announcement follows the award in December of a front end engineering design (FEED) contract to the White Rose project in Yorkshire, and marks a key milestone in the Government’s CCS competition. We are investing around £100 million from our £1 billion budget to take the Peterhead and White Rose CCS projects to the next stage of development—which together could support over 2,000 jobs during construction and provide clean electricity for over 1 million homes. In late 2015, the projects will take final investment decisions, with the Government taking decisions shortly after.
By bringing forward CCS, we could save more than £30 billion a year by 2050. Without it, achieving an affordable, low-carbon energy mix with renewable and nuclear energy alone will be much more difficult and more expensive.
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This is the first ever Community Energy Strategy published by a UK Government. It sets out the role that communities can play in helping to meet the UK’s energy and climate change challenges, including supporting a sustainable and secure energy system; reducing UK greenhouse gas emissions; and lowering consumer bills. Publication of the strategy will meet a commitment in the programme for government to
“encourage community-owned renewable energy schemes where local people benefit from the power produced”.
Community energy has real potential to help keep energy costs down for consumers and tackle the rising cost of living. The package of support announced in this strategy will help realise this potential: supporting communities to take control of the energy they use, get a better deal on the energy they buy and cut bills by generating their own renewable energy.
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I do not think the hon. Gentleman is curmudgeonly at all, and I welcome his question. I think it is important to think about whether events are connected to climate change. As he will know, climate change scientists are reluctant on this because the evidence does not suggest that particular weather events are connected with climate change, but the Intergovernmental Panel on Climate Change fifth annual report last year showed that there is increasing concern because both the theory and practice of climate change analysis suggests there are likely to be more severe weather events if we do not tackle it.
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I think my hon. Friend is referring to the one issue over which the Prime Minister said to the Liaison Committee there is a difference between the two coalition parties. The £125 figure that he quotes is from the Conservative party’s website. The figure from the Committee on Climate Change on the cost of the decarbonisation target is six times less. What that shows is that we need a debate on the decarbonisation target and what the actual costs will be.
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The Council discussed the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels with the aim of reaching political agreement. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land. The Council was unable to reach agreement on the proposal as Ministers could not find a compromise between those who wanted high ambition on ILUC—including the UK—and those who wanted to protect the interests of their biofuels industries. It is hoped that this dossier will be taken forward under the Greek presidency.
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The European Commission’s decision represents another important step forward in progression of the state aid case for Hinkley. Alongside Royal Assent, today, of the Energy Bill and my Department’s publication tomorrow of the electricity market reform (EMR) delivery plan and revised version of the contracts for difference (CfDs) terms, this opening decision for Hinkley demonstrates excellent progress in delivering the Government’s EMR programme. Investment contracts, such as those proposed for Hinkley, are in effect early CfDs and, like CfDs, they are a market-oriented instrument designed to incentivise investment in new low-carbon generation while ensuring an appropriate allocation of risks between generators and consumers. This investment is needed at scale if the UK is to play its part in meeting the EU’s common security and diversity of supply and decarbonisation objectives, all at least cost to the consumer. EMR, taken together with our other energy interventions, for example in relation to energy efficiency and the pursuit of interconnectors with other member states, will help ensure that the UK is able to make its fullest contribution to achieving a single EU energy market.
The UK’s electricity market reforms are groundbreaking, with much of Europe following our progress with close interest. This is particularly so in the case of CfDs. CfDs are necessary given the current market failures and are an innovative intervention, with impacts on competition and trade limited to the very minimum required to ensure that security of supply and decarbonisation objectives can be achieved. For example, as set out in the commercial agreement on key terms for the proposed Hinkley Point C investment contract that I announced on 21 October this year, any contract awarded to EDF for Hinkley would include in-built mechanisms to prevent overcompensation. These include construction and refinancing gain shares and operating cost reviews taking place at 15 and 25 years into the contract term. Indeed, CfDs are less distortive and less generous to generators than some other interventions, which have previously been approved by the Commission.
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We expect the Council to reach political agreement on the proposal to amend the renewable energy directive and the directive relating to the quality of petrol and diesel fuels. The proposal is intended to address indirect land use change (ILUC), which occurs when production of biofuels from crops grown on existing agricultural land results in the displacement of production on to previously uncultivated land.
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The strike prices and updated contract terms being published today have been set to meet the Government’s objectives on renewable energy, decarbonisation, security of supply and minimising cost to consumers, and are informed by the feedback and evidence received through the delivery plan consultation, conducted during the summer of 2013. The consultation included draft strike prices for renewable technologies, and was followed in August by the publication of further detail on CFD contract terms.
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15:34
But it is also right that the Government are open about their social and environmental policies, which make up just under a 10th of the average bill. Our policies provide for immediate help for the most vulnerable with direct cuts to bills, as well as long-term savings on bills through energy-efficiency programmes and support for low-carbon energy that boosts energy security and tackles climate change. For example, the warm home discount cuts the bills of 2 million vulnerable households by £135. The energy company obligation provides permanent long-term savings on bills, including to the most vulnerable, by helping people to upgrade their homes and making them easier and cheaper to keep warm.
Support for cleaner energy increases our energy security and boosts investment in our thriving renewable energy industry, with tens of thousands of green jobs being created, but unlike the winter fuel payment, which provides around 12.5 million pensioners with help with their bills, and cold weather payments, which last year provided over £146 million to cut bills for the most vulnerable, policies such as the renewables obligation, ECO and the warm home discount are paid for directly by consumers through their bills, rather than through general taxation. So it is right that Government keep these social and environmental obligations paid for by energy bill payers under continuous review, and where we can act to reduce their impact on bills, while maintaining the integrity of our policy, we will, but as we do this, we must act responsibly. We must ensure— [Interruption.] We must ensure that the changes we make maintain the support provided to the most vulnerable, maintain the investment in clean energy and do not have a negative impact on our carbon reduction ambitions.
I have been clear from the start that support for low-carbon energy should not change, and it will not. The Government recognise that green energy investment incentives such as the renewables obligation, contracts for difference and feed-in tariffs are essential for investment in future home-grown clean energy generation. Without this low-carbon investment, energy security would be jeopardised as Britain would become ever more dependent on imported oil and gas, and energy bills in the future would be increasingly subject to high and volatile fossil fuel prices. The Government will also ensure that their overall approach will cut just as much carbon as planned. New measures, worth more than £540 million over three years, will boost energy efficiency even further by introducing new schemes for home-movers, landlords and public sector buildings.
Today’s announcement of cuts to energy bills is just part of the concerted action the Government are taking to help hard-working families, including through income tax cuts, the council tax freeze and the fuel duty freeze. This help for people with energy bills is being achieved while we maintain and extend support for the fuel-poor and continue to back green energy, and by boosting energy efficiency. I commend this statement to the House.
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The annual conference of the parties (COP) to the United Nations framework convention on climate change took place in Warsaw, Poland, from 11-23 November. The United Kingdom was represented by the Secretary of State for Energy and Climate Change and the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker).
All countries in the United Nations framework convention on climate change committed at Durban in 2011 to negotiate, by 2015, a new global, legally binding agreement, applicable to all nations, to come into force by 2020.
The UK’s key objective for the Warsaw conference was to make progress in agreeing the means by which this 2015 deal will be reached. We achieved this objective: all nations have agreed to start their homework to prepare for a global climate change deal in 2015.
In addition, we made some progress on increasing mitigation ambition before 2020: the conference set out a process to focus on specific sectors of high mitigation potential and increase technical analysis. It agreed that Ministers from all countries, not just parties to the Kyoto protocol, will convene in June 2014 to review ambition.
Climate finance and loss and damage
Climate finance and loss and damage associated with climate change were the other key issues in Warsaw.
On finance, this year’s conference agreed a timetable towards initial capitalisation of the green climate fund (GCF) in late 2014, subject to the GCF board taking the final decisions to operationalise the fund, and a new process for assessing progress in scaling up climate finance to $100 billion per year by 2020 from public, private and alternative sources.
The conference established a new institutional arrangement for loss and damage— the “Warsaw Mechanism”, with a remit to enhance and promote knowledge of and approaches to addressing loss and damage. It does not have decision-making powers or a remit to seek new funding. It will report to the annual climate conference and comprise finance, adaptation and technology experts. It will be reviewed in 2016.
We achieved a good result in Warsaw by demonstrating again the UK’s credentials on climate. The UK continued its strong record of leading on climate change action: demonstrating our ambition at home, our support to developing countries and our leading influence in the EU and with international partners.
We joined the United States in their policy of ending support for public financing of new coal-fired power plants overseas, we announced extra help for some of the world’s poorest to adapt to the impacts of climate change and we unveiled a major new package of support for tackling deforestation in partnership with the US, Germany and Norway.
Importantly, the UN Secretary-General will host a leaders’ summit in 2014. This will be the first time that world leaders meet to discuss climate change specifically since Copenhagen. This will be an important opportunity to make further concrete progress towards the global deal in 2015 and in raising mitigation ambition.
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I agree that there should be a power sector decarbonisation target for 2030. That is why the Government are legislating so that a decarbonisation target range can be set in 2016, once the fifth carbon budget has been set. When that target has been set, we believe it will be the world’s first such legally binding decarbonisation target.
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I should like to pay tribute to the hon. Lady, now that she has told people that she will not be standing at the next election. She has been a doughty champion of green issues in the House. However, I do not believe that this short delay of two years will have the impact that she describes. She should remember that we have the EU 2020 targets for energy efficiency, renewables and emissions; the Climate Change Act, with the carbon budgets running up to 2027; and the Energy Bill which provides the most secure framework, the levy control framework going up to 2020, and industrial strategies. This country is arguing for the most ambitious 2030 greenhouse gas emissions target of any EU member state. It is just not true that investors think that this Government are not committed to this issue.
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I am grateful to my hon. Friend for his question. We are working with all our EU partners to raise ambition in the EU. This Government have proposed that we should have an EU target of a 40% reduction in domestic greenhouse gas emissions by 2030, and be prepared to go up to 50% if we can get a global deal in 2015. We are leading the way in Europe on ambition.
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My colleagues and I will stand together. On the green levy review, we need to do all we can to help consumers with energy bills and I should have thought that the Opposition supported that, but I have made it clear that we will not do that on the backs of the fuel poor—we will keep our support for them in the levy—and that we will ensure that there is investment in renewable energy.
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There has been huge progress in this area. In the Energy Bill, we are building the world’s first ever low-carbon electricity market and have already seen renewable electricity generation double. To date, the UK Green Investment Bank has committed £740 million of public money to projects in a range of green sectors, including waste, offshore wind and energy efficiency, helping to mobilise an additional £1.9 billion of finance from the private sector. From the largest investment in the railways since Victorian times to our leadership on climate change in Europe and the world, our record in this area is a vast improvement on the past.
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I recently published the annual energy statement, which focuses on security of supply and on competition in energy markets. Since then, I have focused on driving forward our ambitious agenda for more competition. For example, I held a recent round table with industry leaders and consumer groups to consider the practical steps that we need to take to deliver faster and easier switching for consumers. There have been significant new investments in renewable energy and I expect to make further announcements on that shortly.
Finally, the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) and I recently attended the global climate change talks in Warsaw, where a good agreement was reached that put in place the foundations for the critical talks in Paris in 2015 and established a work programme to prepare for them.
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I met the NGOs before they walked out. I explained the progress we were making in the talks, and after they walked out, we made further progress. No one expected the Warsaw climate change talks to be a breakthrough. They were an important building block— a foundation—for Lima next year and for Paris and the critical talks in 2015. I have laid a written statement on the Warsaw talks.
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I do not recognise the hon. Gentleman’s figures. A recent Ernst and Young survey had the UK as the fourth most attractive place in the world to invest in renewable energy.
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The UK Government recognise that energy infrastructure investment is critical to economic growth and poverty reduction in many developing countries, and that MDBs have an important role in financing energy investment. However, investments in new coal-fired energy production risk locking countries in to higher levels of carbon emissions over the coming decades. In order to avoid dangerous climate change, it is estimated that global coal demand will need to fall by 45% from 2009 levels by 2050 1 . Globally we need to rapidly move away from unabated coal power generation. That is why we are calling for an end to supporting public financing of new coal-fired power plants overseas, except in rare circumstances.
An assessment has been carried out of the technical, economic and financial feasibility of building the coal-fired power plant as CCS ready.
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I am today designating the Secretary of State for Energy and Climate Change as the national competent authority for the United Kingdom for permitting processes for projects of common interest under article 8(1) of regulation (EU) no 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure.
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The Department of Energy and Climate Change requires a cash advance of \xA34,069,000 from the Contingencies Fund to support urgent preparatory work to fund external advisers in relation to transitional arrangements for early investors and to fund an interim panel of technical experts before parliamentary approval of both the specific enabling legislation and the necessary estimate.
Contracts for difference (CfDs) are designed to ensure sufficient investment comes forward in time to replace old generating plant due to close from 2016 onwards with new low-carbon plant, thus ensuring continued security of supply for the UK and contributing significantly towards achievement of our legally binding EU renewable energy target.
The Energy Bill will, subject to Royal Assent, make provision for transitional arrangements to enable developers to take investment decisions, where required, ahead of full implementation of electricity market reform. The Department needs to engage external advisers before the Bill receives Royal Assent to support the negotiation of any such arrangements to ensure they represent value for money for consumers. Accordingly, parliamentary approval for additional resources of \xA34,069,000 for this new service will be sought in a supplementary estimate for the Department of Energy and Climate Change. Pending that approval, urgent expenditure estimated at \xA34,069,000 will be met by repayable cash advances from the Contingencies Fund.
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Since the last Energy and Climate Change questions we have been busy. The Energy Bill is continuing its progress through Parliament and we hope that it will achieve Royal Assent by the end of the year. That will help deliver the modernised infrastructure and cleaner energy that the country needs to meet our energy security requirements and climate change obligations. The House might be interested to know the latest figures we have on investment: we have seen at least \xA335 billion invested in increased electricity infrastructure alone since 2010, a 56% year-on-year increase in renewable energy investment and a doubling of renewable electricity generation under this Government. Also, our policies to help the fuel poor are in place for the winter.
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Since the last Energy and Climate Change questions we have been busy. The Energy Bill is continuing its progress through Parliament and we hope that it will achieve Royal Assent by the end of the year. That will help deliver the modernised infrastructure and cleaner energy that the country needs to meet our energy security requirements and climate change obligations. The House might be interested to know the latest figures we have on investment: we have seen at least \xA335 billion invested in increased electricity infrastructure alone since 2010, a 56% year-on-year increase in renewable electricity generation between quarter 2 2012 and quarter 2 2013 and a doubling of renewable electricity generation under this Government. Also, our policies to help the fuel poor are in place for the winter.
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11:26
Today, I am laying before the House the annual energy statement, alongside the statutory security of supply report. This coalition Government are putting in place the most coherent, sustainable energy policy the United Kingdom has ever had. We are creating one of the most competitive and attractive electricity investment markets in the world; improving our energy security and affordability; and boosting home-grown clean energy, and providing jobs and economic growth in the process.
This ambitious energy and climate change policy is vital so that Britain can meet our significant challenges. The coalition Government inherited from the previous Administration an energy future with a huge, multi-billion pound black hole at its heart, which was the result of years of underinvestment, dithering and delay. So this Government are having to take the tough decisions others ducked to make sure that Britain’s lights do stay on. Everything we are doing has to ensure that we drive investment into the system, not scare it off or freeze it out. But, as I will make clear in this statement, energy security must go hand in hand with affordability.
The fruits of bringing this greater predictability and certainty to investment are already showing. Latest estimates suggest that at least £35 billion has been invested in new electricity infrastructure since 2010, and much more is in the pipeline. In the past 12 months alone, we have provided consent for seven major energy infrastructure applications worth about £20 billion, with the capacity to generate electricity for more than 6 million homes. That, of course, included last week’s announcement that we have reached key commercial terms with EDF for the first new nuclear power station in a generation at Hinkley Point C. And there is more: through the Energy Bill’s final investment decision enabling programme, 23 applications for 26 investment contracts are currently being evaluated by the Department of Energy and Climate Change for a broad range of renewable technologies, including onshore wind, offshore wind and biomass projects.
We have also brought together in one place all the advice from across Government—from the Department of Energy and Climate Change and the Department for Work and Pensions—and from charities such as Age UK and Citizens Advice. Today, I am writing to all Members of this House with information about this new guide so that they can share it with their constituents, to make sure they are getting all the help to which they are entitled.
I have also written to energy companies about direct debits. I share concerns that they might be holding on to significant credit balances when customers have overpaid through direct debits. I expect all suppliers to make every effort to return money to customers with closed accounts. I accept that that sometimes will not be possible, but, when it is not, my view is that credits should be applied directly to help the fuel poor and other vulnerable customers. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), will meet energy suppliers next week to discuss that question and that of the level of credit balances that energy companies are holding on to.
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I wish to inform the House that, further to the Foreign Secretary’s oral statement launching the review of the balance of competences in July 2012 and the written statements on the progress of the review in October 2012, and May 2013, the Department of Energy and Climate Change has today published its call for evidence for the energy report.
The report will not include climate change aspects of the Department’s work, international climate change negotiations, the reduction of collective EU member state greenhouse gas emissions via burden-sharing arrangements and the EU emissions trading system. These issues will be covered in the Environment and Climate Change report due to be published this winter.
The resulting report is intended to be a comprehensive, thorough and detailed analysis of EU competence for environment and climate change and what this means for the UK. It will aid our understanding of the nature of our EU membership and will provide a constructive and serious contribution to the wider European debate about modernising, reforming and improving the EU. The report will not produce specific policy recommendations.
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15:32
Hinkley Point C would supply a stable source of low-carbon, climate-friendly power to nearly 6 million homes—nearly twice the number of homes in London—and would supply 7% of the United Kingdom’s electricity by 2025. It would reduce emissions by the equivalent of about 5% of the UK’s annual carbon dioxide emissions from energy supply compared with unabated gas-fired generation. It would increase energy security and resilience from a safe, reliable, home-grown source of electricity, reducing electricity bills by about 10% compared with a non-nuclear future. With clean-up costs included from the outset, we would be avoiding the mistakes of the past. This is good news for jobs, good news for the economy, good news for bill-payers, good news for energy security, and good news for the environment.
We have a huge challenge ahead of us. With many old and dirty power stations closing down over the next decade, the capital investment required to replace that electricity generating capacity is around £110 billion between now and 2020, the largest infrastructure programme in Government. This agreement is a vote of confidence in the measures this Government are putting in place to attract investment into the system, to make the market work, and to ensure we keep the lights on. We need to decarbonise our electricity sector to meet our emissions targets and our responsibilities to the next generation, and we need a revolution in home-grown energy generation to protect bill-payers from price rises caused by volatile world gas markets.
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My hon. Friend is absolutely right. The Energy Bill and electricity market reform do just that. He may be interested to know that we have today asked the Leader of the Opposition 10 questions about Labour’s policy. If we look at it, we not only find that it is a con that will reduce competition and hurt the small suppliers, but that it will hurt investment, too, which is needed to keep energy security and to decarbonise. Labour’s policy is economically illiterate.
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Since the last Energy and Climate Change questions we have been busy. The Energy Bill is continuing its progress through Parliament and we hope that it will achieve Royal Assent by the end of the year. That will help deliver the modernised infrastructure and cleaner energy that the country needs to meet our energy security requirements and climate change obligations. The House might be interested to know the latest figures we have on investment: we have seen at least £35 billion invested in increased electricity infrastructure alone since 2010, a 56% year-on-year increase in renewable energy investment and a doubling of renewable electricity generation under this Government. Also, our policies to help the fuel poor are in place for the winter. [Official Report, 1 November 2013, Vol. 569, c. 7MC.]
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My hon. Friend knows that we are a champion of low-carbon energy investment. I strongly welcome ShareAction’s campaign to promote responsible investment by pension funds and fund managers. People who operate these pension funds should think long term, and there is no longer-term problem and challenge for the people they are investing for than climate change.
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The Department of Energy and Climate Change has been leading and co-ordinating the work of a wide range of parties to develop the policy, regulatory and commercial platform to roll out smart meters, through the smart meters implementation programme.
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1 GB Gas Security and Options for Improvement: A report to the Department for Energy and Climate Change”, Poyry, March 2010, “Gas Security of Supply Report: Ofgem report to Government”, Ofgem, November 2012
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I am grateful for my hon. Friend’s comments. He will know that the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), wearing both his DECC hat and his Department for Business, Innovation and Skills hat, is very much at the centre of those discussions. We are talking to both the Dutch and the German Governments, who are key to this sale.
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I pay tribute to my hon. Friend and his colleagues from Cornwall, who have been true champions for green energy and the impact that will have on jobs and the economy in Cornwall. He will know that I have already visited Cornwall, but I am very keen to visit again because it is such a powerhouse behind our low-carbon economy.
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My right hon. Friend will know that our policies are playing a big role in that. Three years ago, the Renewable Energy Association calculated that more than 18,000 people were employed in renewable energy in the Greater London area alone. That represented 19% of the share and was a bigger share than any other region had, and we expect that to grow. Across the UK we expect green jobs to be a very important part of the boost that our energy investment restructure will give. The House may wish to know that earlier today we granted planning consent to what will be the world’s largest offshore wind farm off the Lincolnshire-Norfolk coast, with £3.6 billion of investment and 1,130 new jobs created.
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The review, conducted by Professor Sir John Hills, provided us with a new understanding of the problem of fuel poverty. Professor Hills’s work demonstrates that fuel poverty is a long-term and structural problem requiring an ongoing effort to mitigate it. We believe it is right to reflect this by adopting the new measurement approach proposed by Professor Hills, which will support a renewed focus on those with the lowest incomes living in the worst homes. This new approach aligns fully with the Government’s wider objectives of saving energy, promoting growth and decarbonising the housing sector.
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A key part of the challenge our market faces is in ensuring secure electricity supplies. In addition to the closure of ageing plant and increasing demand, the UK is seeking to decarbonise its electricity supply in order to meet our carbon reduction targets. These changes create an investment challenge, for some forms of capacity such as gas generation. The Government are taking clear action to address this by legislating to introduce the capacity market. The capacity market will give investors the certainty they need to put adequate reliable capacity in place and by protecting consumers against the risk of supply shortages. It does this by providing a predictable revenue stream to providers of reliable capacity, including both generation and non-generation measures such as demand-side-response and storage. In return, they must commit to provide capacity when needed or face financial penalties.
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Appropriately sited onshore wind, as one of the most cost effective and proven renewable energy technologies, has an important part to play in a responsible and balanced UK energy policy. It is low-carbon and brings new growth, investment and jobs to the UK economy. It reduces our reliance on imported fossil fuels and helps keep the lights on and our energy bills down. The UK has some of the best wind resources in Europe, and the Government are determined that the UK will retain its reputation as one of the best places to invest in wind energy and renewables more generally. We have also legally committed to ensure that 15% of our energy will come from renewable sources by 2020.
Communities hosting renewable energy installations play a key role in meeting the national need for secure, clean energy. It is only right that local people should be recognised and rewarded for that contribution. This new package of measures on community benefits will ensure that communities receive a fairer share of benefits associated with onshore wind and are properly empowered to negotiate with developers the type of benefit package that best suits their local needs.
We will also be exploring ways to make it more attractive for communities to invest in wind projects themselves, through the recently issued call for evidence on community energy. A joint DECC/DEFRA £15 million rural community renewable energy fund will also provide loans and grants to rural communities for initial development and planning work.
This decision ensures ongoing value for money for the consumer and provides more certainty for developers, ensuring continuity of support as contracts for difference are introduced as part of our electricity market reforms. DECC will of course continue to monitor the costs of renewable energy technologies, in accordance with the provisions in article 33 of the Renewables Obligation Order 2009.
The measures that make up our response to the call for evidence will allow the deployment of onshore wind to the level necessary for our energy security and renewable energy goals, but will also ensure that communities will have a greater say over proposed onshore wind development and will receive more reward for hosting those developments that are taken forward. This is an important sector that is driving economic growth and I am determined that local communities should share in these benefits.
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Let me reassure my hon. Friend. We work very closely with our European colleagues, and I formed the green growth group, currently working with about nine other member states, including our German and Dutch colleagues. We need to reform the ETS to make sure we have a functioning and effective carbon market in Europe, and we also need an ambitious 2030 target for greenhouse gas emissions. The UK Government have agreed that we will seek a 50% target in the context of winning a global climate change treaty.
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My hon. Friend is right. We do not want to see carbon leakage; that would not help the climate, and it would not help our economy. That is why I agreed with my right hon. Friend the Secretary of State for Business, Innovation and Skills a very generous package, working with the Chancellor, to compensate energy-intensive industries for the indirect costs of the ETS and the carbon price floor, and it is also why we have exempted energy-intensive industries from the costs of contracts for difference. We want to ensure we make progress on climate change, but we also want to ensure we keep successful businesses in the United Kingdom.
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The Government have listened to a wide range of views on the issue of setting a decarbonisation target and have legislated to set one. We fully recognise that investor certainty is essential to delivering our energy and climate goals at the least cost and have already provided very clear signals to industry about the long-term trajectory of the electricity sector; for example, through our commitment to the levy control framework, through the Energy Bill, through carbon budgets and through our commitment to ambitious long-run targets on renewables, power sector decarbonisation and carbon emission reductions.
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The hon. Lady needs to look at what has happened. We have drafted the legislation so that we can set a target and that has been welcomed. She should remember that when the draft Energy Bill was published and we first started to discuss electricity market reform, there were no proposals to set a power sector decarbonisation target—not from the Opposition or from any other party in this House—but I, as Secretary of State, argued in the Government to set such a target, and that is what we have done.
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I am afraid it is the Opposition who are refusing to listen. They should look at the Energy Bill, in which we have legislated for the power to set a decarbonisation target—the first country in the world to do so.
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I worry about all the Kingstons in the United Kingdom and as Secretary of State for Energy and Climate Change, I represent all of them. I am working extremely hard to make sure we get investment in the energy sector in this country and we are working with Siemens. The hon. Lady may be interested to know that, in fact, Siemens did not sign the most recent letter from a number of companies about this issue. In our discussions with Siemens, the issues that have come up are contracts for difference, strike prices, ports and infrastructure, and we are working with the company. The hon. Lady ought to get behind us and support us.
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No, the plan will be in line with our legally binding obligations. As I have explained to the House, before we set the decarbonisation target in 2016 we will give National Grid guidance on setting the EMR delivery plan to ensure that it is on path to meet our decarbonisation targets in the least-cost way.
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In 2016, we will be the first country to set a decarbonisation target, so the idea that we are being slow on that is preposterous. On shale gas, we are behind other countries—she may have noticed that the US has already gone into it. We are determined to see whether this country can benefit from shale gas, but we will ensure that we protect the environment and take the public with us. That is the right way to get the benefits for the country that shale gas might well offer.
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We strongly support EU action to tackle climate change and to help deliver the EU’s goal of limiting global temperature rise to 2 degrees. We remain committed to an increase in the EU climate target for 2020 to 30% and are pushing strongly for urgent structural reform of the EU emissions trading system (ETS) to ensure it continues to incentivise investment in low carbon.
But we should also learn the lessons from 2008 package—the EU climate deal for 2020 was not sufficiently ambitious, and the renewables target was the product of a time when renewables badly needed a catalyst. The EU has moved on since then; we need to see a new deal on greenhouse gas targets that is ambitious, but which has flexibility to let countries follow their most cost-effective decarbonisation approach.
We believe that the best way to deliver our low-carbon goal is through a binding GHG target and a strong EU emissions trading system, with flexibility for member states to pursue a wide range of options to decarbonise in the least cost way. While we strongly support renewables to 2020 and beyond, we do not believe a binding EU renewables target would be cost-effective, fit well with our electricity market reforms which incentivise low-carbon generation in a technology-neutral way, or be in line with the Government’s commitment to sector-neutral and least-cost emissions reduction. We support EU action where appropriate to enable increased levels of renewables, such as a renewed focus on research and development under the strategic energy technologies plan and ongoing work to complete the single energy market.
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18:07
Let me begin by thanking those from all parts of this House and outside who have helped to strengthen this crucial Bill and bring it to this point. I thank the Energy and Climate Change Committee and its Chair, my hon. Friend the Member for South Suffolk (Mr Yeo), and the informal scrutiny group in the other place for conducting invaluable pre-legislative scrutiny of the draft Bill. I also thank the individuals who gave oral evidence to the Committee, as well as the organisations that took the time to provide expert written evidence and recommendations.
I also want to thank the Ministers of State, Department of Energy and Climate Change for their hard work. It would be remiss of me if I did not also mention my hon. Friend the Member for Wealden (Charles Hendry).
The hon. Lady might not have noticed that the Government have responded to a lot of the debates and tabled a lot of amendments on everything from electricity demand reduction to decarbonisation. I will come to those amendments shortly.
The Climate Change Act 2008 commits the United Kingdom to an 80% reduction in greenhouse gas emissions by 2050, so we need specifically to encourage investment in low-carbon energy generation: renewables, carbon capture and storage, and nuclear. The Energy Bill will do that. With global demand driving wholesale prices higher, and with that in turn driving domestic energy bills higher, we need to create a more diverse and competitive energy market to help to cushion consumers from volatile fossil fuel prices. We also need to ensure that they are getting the best deal from suppliers. The Energy Bill will do that.
I want to reflect on some of the ways in which the Bill has been further strengthened in this House. Let me start by dealing with the decarbonisation target head on. No party in this House—not the Liberal Democrats, not the Conservatives, not Labour, not the nationalists, not even the Greens—had a commitment in its 2010 manifesto to set a 2030 decarbonisation target during this Parliament. Nor has any other country yet set a power sector decarbonisation target for 2030.
I can understand the argument that an early decarbonisation target could provide extra certainty for large, long-term projects in the UK power sector, particularly in the supply chain. However, there is also logic in the consistency of setting the decarbonisation target for 2030 at the same time as the fifth carbon budget, which is scheduled for 2016—still 14 years ahead of the target date. By comparison, the 2020 renewables target was set in 2008, just 12 years from its target date.
If anyone still doubts my commitment, or that of this Government, to decarbonisation, they should consider the decision that we have just made on the UK’s position for the EU’s 2030 greenhouse gas target. In the context of winning an ambitious global climate change treaty, we will be arguing for a 50% reduction target in the EU. That is the most ambitious position of any member state, and I am proud that this Government are leading the way on climate change action.
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13:13
I wish to make progress and to talk about energy and climate change policy. My Department has three major objectives. The Department wants to ensure that energy is as affordable as possible for consumers and business; that we keep the lights on with energy security; and that we decarbonise the power sector. With the Energy Bill, the green deal and many other policies, we have the most coherent energy and climate change policy of any Government in Europe—and indeed of any Government in this country for many, many years. Our approach also tries to maximise the jobs and growth potential from our energy and climate change policies. We also try to ensure that the impact on the bills of consumers and businesses is as low as possible, and we have policies to try to meet the climate change challenge.
I am disappointed that my hon. Friend seeks to deny the science of climate change. He may have heard Sir John Beddington, the Government’s recently retired chief scientist and a very distinguished scientist, say that the science showing climate change was human-made was “unequivocal”. When it comes to science, I like to listen to the experts.
On prices, we have to drive a wedge between the rising global prices and the bills that people have to pay. We also have to rise to the climate change challenge. We need to recognise that the challenge is serious and that—contrary to what my hon. Friend suggests—the science tells us that we have to act.
Around 1 million people work in the green economy, and the support that we are giving to clean energy will fuel the rise in the area. Between now and 2020, the support we give to renewables will increase year on year to £7.6 billion—a tripling of the support for renewable energy and a record the Government can be proud of. We already have 110,00 jobs in the renewable energy sector directly, and 160,000 jobs in the supply chain. By 2020, we believe the sector will have more than 400,000 jobs.
We also have the prospect of a new generation of nuclear power stations. I am engaged in discussions with EDF for a proposed nuclear reactor at Hinkley Point C. If we reach agreement, it will result in more than 5,500 jobs during construction, more than 1,000 ongoing jobs at Hinkley Point C and more in the supply chain. Our proposals on carbon capture and storage—we have two preferred bidders, Peterhead in Aberdeenshire and White Rose in Yorkshire—will also result in lots of jobs and deliver a pathway to commercial CCS in the next decade, which will be very important in meeting our climate change targets.
We sometimes forget the oil and gas sector, perhaps because it is not as green as renewables, nuclear and CCS, but it will be essential as we make the transition from a fossil-fuel economy to a low-carbon economy. We will still need an awful lot of gas and oil during that process and in the next few decades. I am delighted to report to the House that investment in the North sea is booming. We are seeing record levels of investment in the North sea, which is good for our energy security as we do not have to import so much gas from other parts of the world. I hope that right hon. and hon. Members will welcome that.
I have made it clear that we will also support the development of shale gas. If it has potential—and we do not know that yet—it could be beneficial, especially to our energy security. We are going to need gas for many decades. It replaces coal, so it can help us to meet our climate change targets. At the moment, we have to import increasing amounts as the amount coming from the North sea is declining. If we can exploit shale gas commercially, that will make sense, and I hope that we can reach agreement on that. We are going about this in a way that is designed to keep the public with us. In other countries that have rushed headlong into it, the public have reacted very badly, leading to moratoriums and bans. We want to ensure that we think things through carefully, which will help us do it properly.
All our policies, whether on energy efficiency, renewables, new nuclear, CCS or oil and gas, add up to the proposition that my Department is about growth. We are seeing a lot of jobs created and we will see more in the future. However, I am also concerned about the bills and the cost of energy, and how those affect our constituents and industry. We have seen global gas prices increase dramatically. UK wholesale gas prices were 50% higher in the five years to 2011 than in the previous five, and they have continued to rise since then. That is the global context. People talk about the reduced price of gas in north America, but they forget to look at the price of gas in other markets, which has gone up significantly.
The impact of our climate change and energy policies has been to reduce household bills by 5%. By 2020, bills will be 11% less than they otherwise would have been. We know, of course, that energy prices are going up globally, but we have the policies to try to cushion people. As a result, people will pay lower bills than they otherwise would have done.
We must ensure that business energy costs are, through climate change policies, similar across the EU and the globe. One measure that the UK and the EU have pushed is the European carbon market, which is often known as the EU ETS. It is important that the EU ETS carbon price provides incentives and signals to the markets for investment in low carbon, and that it creates a level playing field for industries across the EU. I regret that the vote in the European Parliament on the back-loading proposals was lost by 19 votes. The proposals were part of the reform of the EU ETS. We need to do a lot better. I hope that the ENVI Committee in the European Parliament can come forward with another package so that we can reform the carbon market. That is in everyone’s interest, not just on climate change, but to ensure that we have competitive industries on a level playing field across the European Union.
I want to end by talking briefly about climate change. Some will say that we should put off action on climate change until we get to better financial times, and some will say that we should not be looking at this issue at the moment given our financial and economic problems. I reject those arguments completely. The science of climate change is unequivocal: we have to act now and we should have acted before. That is why we need to reform the EU ETS. It is about not just the back-loading proposals, but structural reform. I am working with fellow EU Ministers and have set up a like-minded group—the Green Growth group—to try to build a coalition at the European Council, so that we can achieve these vital reforms on climate change.
There has been a big debate during the passage of the Energy Bill—a carry-over Bill in the Queen’s Speech—on the proposal for a decarbonisation target, which has a role to play in tackling climate change. Of the general election manifestos from the Liberal Democrats, the Conservatives, the Labour party and even the Green party, guess how many mentioned a decarbonisation target for the power sector? Not a single one. When we published the draft Energy Bill in May 2012, it did not contain a decarbonisation target, and there was no decarbonisation target promised in the coalition agreement. Now we have one in the Bill. The Government have looked at the issue and put the target in the Bill. We are the first Government ever to do that, and it is a very strong move. We are an early mover. The Opposition want to carp at one or two details, but I am afraid that they fail to acknowledge what we have done and what we have delivered.
Does my right hon. Friend agree that, whether or not people are sceptical about climate change, reducing our reliance on fossil fuels and carbon is equally as important to energy security as it is to climate change? This policy is very important in making sure that we have energy security in this country.
My hon. Friend is absolutely spot on. I believe that the climate change science is unambiguous and that we have to act on that basis, but he is absolutely right: there are other reasons to invest in low carbon and energy efficiency. It is important that this country takes a lead on climate change by working with EU colleagues to reform the EU ETS and the European carbon market, by including the decarbonisation target in the Energy Bill, which we have done, and by taking various other measures. Other countries are looking at our measures on electricity market reform and our green deal because they believe that we are leading the way.
All those measures are critical in the run-up to 2015, which is when the climate change talks will take place in France, probably in Paris. During the climate change talks in Durban in 2011 the world agreed to sign a legally binding global treaty at the climate change talks in 2015. This will be a critical moment in the global battle against climate change. We need to ensure that our international legal obligations apply to everyone in the world, not just to Europe or the Kyoto protocol nations. Having agreed in Durban to do that in 2015, we now have to prepare the way to make it a success. Our work here and with the EU is critical because it will enable us to sign a treaty in 2015.
I am grateful to the Opposition for how they have debated energy policy over recent months, particularly on the Energy Bill. I have seen a desire to build a consensus, which is really important, because investment to tackle our energy challenges and climate change are, by their very nature, long term, and the investment framework that one builds needs to span not just one Parliament or one Government, but several Parliaments and Governments into the foreseeable future. Building a consensus is critical for successful policies that are as cheap and effective as possible. I look forward to hearing what the right hon. Member for Don Valley (Caroline Flint) has to say. I am sure that she wants to add to that consensus.
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The Department of Energy and Climate Change (DECC) will publish today the conclusions of its consultation on the proposed justification process for the reuse of plutonium.
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The Department for Energy and Climate Change requires a cash advance of \xA36,580,000 from the Contingencies Fund for financial year 2013-14, to support urgent preparatory work to set up a contracts for difference (CFD) counterparty; to fund a panel of technical experts; and to fund external advisers in relation to transitional arrangements for early investors before parliamentary approval of both the specific enabling legislation and the necessary estimate.
Contracts for difference (CFDS) are designed to ensure sufficient investment comes forward in time to replace old generating plant due to close from 2016 onwards with new low-carbon plant, thus ensuring continued security of supply for the UK and contributing significantly towards achievement of our legally binding EU renewable energy target.
Accordingly, parliamentary approval for additional resources of \xA36,580,000 for this new service will be sought in an estimate for the Department of Energy and Climate Change. Pending that approval, urgent expenditure estimated at \xA36,580,000 will be met by repayable cash advances from the Contingencies Fund.
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Heating is an integral and critical part of our lives and our economy, worth billions of pounds to industry and an essential element of all of our lives. The vast majority of heating is currently supplied by fossil fuels, comprising around a third of the UK’s total greenhouse gas emissions, and more than half of the UK’s natural gas usage.
Today’s publication deals systematically with all the different heating requirements in the UK; and commits us to clear steps forward. To meet our long-term climate change target, we are going to have to change the way we generate, distribute and use heat in buildings and industry. This needs to be delivered in a way that is fair and affordable, and maximises benefits to the economy in terms of jobs, growth and investment. My Department has been engaging with a range of organisations in the public and private sectors, from business to consumer organisations, from local authorities to research establishments to develop these new proposals.
So with the Department for Business, Innovation and Skills, my Department will work with industry over the next two years to develop a low-carbon “road map” for each industrial sector for the long term, focusing on the sectors that use the greatest amount of heat and represent the greatest carbon emissions. Through closer working with the companies themselves, we aim to understand more about how energy is used in each of these sectors and how it can be decarbonised.
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My noble Friend Lord de Mauley, Parliamentary Under-Secretary for Resource Management, the Local Environment and Environmental Science, and I will attend the EU Environment Council in Brussels on 21 March. Paul Wheelhouse, Minister for Environment and Climate Change in the Scottish Government, will also attend.
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13:11
My decision to grant consent comes after a long process of consultation and analysis, first on the policy that underpins the decision. As set out in the national policy statements that were approved by this House in July 2011, a new generation of nuclear power stations are a key part of our future low-carbon energy mix, tackling climate change and helping to diversify our supply, contributing to the UK’s energy security. Low-carbon energy projects will also bring major investment, supporting jobs and driving growth.
I expect the wide range of mitigations and controls provided for in the order and elsewhere to be effective in reducing the impact of the construction work on local people, but I also recognise that as these works are carried out, those who live in the area may well have their daily lives disrupted in one way or another. This disruption is, in my view, outweighed in the final analysis by the benefits that the project would bring. Chief among these is the very significant contribution it would make to the achievement of energy and climate change policy objectives. The energy national policy statements make it clear that the construction of new low-carbon electricity generation infrastructure is of crucial national importance. There is also significant potential for local benefits including new jobs, with a work force of up to 5,600 during construction, and contract opportunities for the supply chain including local businesses.
Affordable new nuclear will play a critical role in a secure, diverse electricity supply for Britain and make a significant contribution to the transition to the low-carbon economy needed to tackle climate change. Therefore this decision on planning aspects of the first new nuclear power station in a generation represents an important milestone in that process to decarbonise our electricity supply and economy. I commend the statement to the House.
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I strongly agree that a lot of analysis suggests that if we move to a decarbonised sector, this country and our consumers, people and firms will be less exposed to volatile international gas prices.
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I have to remind the right hon. Lady and the House that no single party—not the Labour party, the Conservative party, the Liberal Democrats or even the Green party—argued in its 2010 manifesto for a decarbonisation target for the power sector. It was this Government and me as Secretary of State who argued for such a target and got the power to set one in the Energy Bill. When it comes to targets and having the policies to meet them, this Government have done far more than the previous one. The previous Government were right to set targets in the Climate Change Act 2008, but they did not produce the policies to meet them. This Government are doing that.
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The core purpose of the Department of Energy and Climate Change is to power the country and protect the planet, and to avoid catastrophic climate change while providing secure, affordable energy supplies to the UK.
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I am grateful for the hon. Gentleman’s question. I have seen that letter. He will know that there is a case, which I have supported, for bringing this forward and setting a target in 2014, but we have reached an agreement across the coalition. I think it is a very sensible agreement, because we are the first Government ever to propose setting a decarbonisation target. I think we should be proud of that. Rather than talking it down, the Opposition should realise that we have moved further and faster than they did.
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The hon. Gentleman is right: green growth enables our economy to perform. We are seeing green growth, and I welcome that. I have been working closely with the Chancellor. The deal that we agreed before Christmas will mean a tripling of support for renewable energy, and, for the first time, the power to set a decarbonisation target will be put into law. That provides a framework that the last Government did not provide.
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The presidency then held an orientation debate on the Commission’s proposal on Indirect Land Use Change (ILUC), which attempts to reduce the greenhouse gas-associated impacts of first generation land-based biofuels. The Commission noted that it could be flexible with respect to the cap of 5% on the contribution of first generation biofuels towards the 10% renewable energy target for transport and in relation to the recognition of the different greenhouse gas impacts of biodiesel and bioethanol. I agreed that a single approach was not helpful as the evidence indicated that bioethanol and biodiesel have very different ILUC implications and suggested that basing the proposal instead on the “ILUC factors” of biofuels would be a more appropriate way of tackling the problem and would allow investment to continue in more sustainable bioethanol. A number of member states supported this position. Most member states considered that the 5% cap on industry was too restrictive and damaging to investor confidence.
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13:47
Notwithstanding some of the sentiments expressed today against nuclear power, the coalition Government policy on nuclear power enjoys wide agreement in this House, as we heard from the right hon. Member for Don Valley (Caroline Flint) just now. The national policy statement for energy infrastructure on nuclear power generation, which was debated in the House on 18 July 2011, detailed the case and the need for new nuclear power stations in the UK. It set out how a new generation of nuclear power stations are a key part of our future low-carbon energy mix, tackling climate change and helping to diversify our supply, contributing to the UK’s energy security. That policy statement passed with only 14 votes against. Both the Conservative party and the Labour party are in favour of new nuclear power. That makes for a majority in this House of 450-plus.
I urge the hon. Lady and, indeed, all colleagues to consider that the environmental case for new nuclear has got stronger in the past decade or more. I am one of those from the green movement who have been prepared to recognise the low carbon benefits of nuclear generation, which remain even when life-cycle analysis of carbon for a new nuclear station is taken into account. I believe that nuclear, alongside ambitious energy efficiency, renewables and carbon abatement, can play an important role in reducing greenhouse gas emissions.
Nuclear’s cost-effectiveness has to be seen in the context of climate change and decarbonising our power sector. It is right that this House asks the tough questions on the affordability, value for money and cost-effectiveness of nuclear power, for those questions are at the heart of this Government’s policy on nuclear power.
This far-reaching reform of the UK electricity market will encourage investment in low-carbon electricity generation, which is critical to tackling climate change and meeting our legally binding carbon targets. Electricity market reform is the most transparent and most market-based means of bringing forward the transition to a low-carbon economy. Under EMR, as set out to Parliament in October 2010, new nuclear will receive no levy, direct payment or market support for electricity supplied or capacity provided, unless similar support is also made available more widely to other types of generation.
Nuclear power remains a key part of the Government’s strategy for transition to a low carbon future. I recognise the strong concerns that have been expressed about affordability; I share them. That is why this is not a deal at any price. Nuclear power must be affordable and must offer value for money. We have a huge challenge ahead of us. We need to replace a fifth of our power generation in this country in this decade. We need to decarbonise our electricity sector to meet our emissions targets and our responsibilities to the next generation. We are embarked on the largest infrastructure programme in Government, with £110 billion of investment over 10 years. Are there risks? Of course, but the risks to the country and to the planet if we do not meet this challenge are infinitely worse. Affordable, low carbon new nuclear is just one part of the answer, but let the House be in no doubt that it is part of the answer.
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The Department of Energy and Climate Change requires a cash advance of \xA34,851,000 for financial year 2012-13 from the Contingencies Fund to support urgent preparatory work by National Grid Plc, to initiate recruitment for a panel of technical experts, and to fund external advisers in relation to transitional arrangements for early investors. This work needs to begin before parliamentary approval can be obtained of both the specific enabling legislation and the necessary estimate.
These measures are designed to ensure sufficient investment comes forward in time to replace old generating plant due to close from 2016 onwards with new low carbon plant. This will ensure continued security of supply for the UK and will significantly contribute towards achievement of our legally binding EU 15% renewable energy target, and the decarbonisation targets established by virtue of the Climate Change Act 2008.
Accordingly, parliamentary approval for additional resources of \xA34,851,000 for this new service will be sought in a supply estimate for the Department of Energy and Climate Change. Pending that approval, urgent expenditure estimated at \xA34,851,000 will be met by repayable cash advances from the Contingencies Fund.
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The UK strongly supports the single energy market, which will bring benefits to the EU economy by increasing competitiveness and energy security. Last week, I met my Irish counterpart to sign a memorandum of understanding on exploring the scope for trading renewable energy. In November, I attended the first meeting of the North European energy dialogue to discuss the growth potential of energy infrastructure investment with ministerial colleagues from across northern Europe. I hope to host a follow-up meeting in London this year.
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My hon. Friend is absolutely right. While the carbon emissions reduction target had its successes, more than 300 million light bulbs were provided in the early years of the scheme and we estimate that approximately a third of them are still lying unused in cupboards. There was no doubt that we needed to reform the CERT. She is absolutely right to say that the ECO is a much better scheme. As the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) said, it is already under way and having a real effect in bringing help to people.
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First, let us be clear. Although, as the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) said earlier, taxpayers are often consumers, the subsidies are paid for by consumers when and only when a wind farm produces electricity. There is good value for money for consumers, so I think onshore wind and offshore wind play a really important part in our energy mix. As the hon. Lady knows and as I said in my initial answer, we have reviewed the subsidies going to onshore wind and to all other renewables. In addition, because concerns were expressed around the House, we issued a call for evidence to check that the figures we used in our most recent analysis are up to date, particularly with respect to onshore wind. We will report back to the House on that call for evidence to see whether there have been changes to the cost structure that we did not find in our previous analysis.
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The core purpose of the Department of Energy and Climate Change is to power the country and protect the planet, avoiding catastrophic climate change while providing secure and affordable energy supplies to the UK. Since the last DECC questions, the Energy Bill received its Second Reading, and it is now in Committee. We have launched the green deal to help all households save energy and to lower bills and we continue to work towards a legally binding global international treaty, engaging with our partners to formulate a road map through to 2015.
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The parliamentary report clarifies that the first four carbon budgets, covering the period 2008-27, have been set to leave headroom for international aviation and shipping emissions, putting us on a trajectory which could be consistent with a 2050 target that aligns with the UK’s share of the international goal of limiting global temperature rises due to climate change to 2°C.
Government reaffirm their overall commitment to the 2050 target and recognise that emissions from international aviation and shipping should be treated the same as emissions from all other sectors, in order to reach our long-term climate goals.
In taking this decision. Government have taken full account of advice provided by the Committee on Climate Change, and will revisit this issue when setting the fifth carbon budget.
Publication of this report fulfils the Government’s statutory obligations as laid out in section 30 of the Climate Change Act. Copies of the parliamentary report have been laid in the House and can be obtained electronically from the DECC website at:
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The development of shale gas in the US has been accompanied by an increasing level of debate on its environmental impacts. Many of the incidents reported have, on investigation, not been shown to be connected with oil and gas activity. However, they have given rise to concerns which in themselves are entirely reasonable. Residents in those areas want to be assured that their water will not be contaminated with gas or toxic chemicals, and the air will not be contaminated with noxious gases; that there will be no threat of damage from earthquakes; and that other kinds of disturbance such as traffic, lights and noise will be kept under control. In considering these concerns, I have had the benefit of the earlier report on shale gas by the Energy and Climate Change Committee, and many authoritative reports from the US, including two from the Secretary of Energy’s Advisory Board.
As regards the implications of any future move to large-scale production, the concerns are principally of two kinds: on the one hand, concerns about the local or regional impacts on questions such as traffic movements, noise, night-time lighting etc., or on the health of people living in the vicinity, or on regional water resources, or on tourism and other aspects of the local economy; on the other, concerns about wider issues including the implications of large scale shale gas production for climate change, for the UK’s climate change policies or for renewables investment.
As regards the wider concerns about the implications of large scale shale gas production for the UK’s climate change policies etc., it is in general too early as yet to make any meaningful estimate of what these might be in the absence of any convincing estimate of what future production might be. But as there has been particular concern about the carbon footprint of shale gas operations, and in particular the possible impacts of fugitive emissions of methane, I should note that all shale gas operations will be subject to my Department’s long-standing policy on flaring and venting of methane. Venting of methane, which has been widely unregulated in the US prior to the recent proposals from the Environmental Protection Agency (EPA) for a new controls, is already required in the UK to be reduced to the minimum technically possible. Flaring of methane will also be required to be reduced to the economic minimum, so that where cost-effective routes for economic use of the gas are available, these must be used. These controls mean that UK oil and gas operations already meet the standards which the EPA is introducing, but the new office will ensure that these work consistently with new controls which may be introduced by the Environment Agency in applying their legislation, and that methane emissions will continue to be minimised.
At the present time, methane emissions from oil and gas operations onshore are a very small part of our GHG emissions. The current estimate is that they contribute less than 1% to the total. And the relatively small number of wells which might be drilled in the current exploration phase will not in any case substantially increase that contribution. I therefore intend to commission a study into the possible impacts of shale gas extraction on greenhouse gas emissions. This will consider the available evidence on the lifecycle greenhouse gas emissions from shale gas exploitation, and the need for further research. I have invited Professor David Mackay, my Department’s chief scientific adviser and Dr Tim Stone, the expert chair of the Office of Nuclear Development to undertake this work.
Also, we will be acting on the academies’ recommendations that the regulatory bodies should assess the requirements for effective regulation of a significant future production phase, and that existing co-ordination should be maintained and strengthened. The new Office of Unconventional Gas and Oil will be taking this forward in collaboration with the other departments and agencies concerned. And the Environment Agency is already conducting a review of the implications of shale gas for its regulatory responsibilities, including the question of whether further controls and monitoring requirements are appropriate in respect of methane emissions. To facilitate future development, further consideration is being given to ensuring a streamlined and transparent regulatory process for environmental permitting.
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I do not think that anyone has described me as a frackhead. My job is to make certain that the environmental and safety controls are there, and I believe that the work that we have done, particularly on the seismicity aspect but also on other aspects, can reassure the public in that regard. I am determined to ensure that the environment is properly protected, and as Members will see if they read my statement, I have also commissioned a study of the potential impact of shale gas exploration on greenhouse gas emissions. I hope that that will reassure people on the environmental side as well.
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The whole House listens to the hon. Gentleman closely on these issues because he is an expert on drilling and all aspects of the coal industry. I do not know the case to which he refers, but if he wishes to write to me, I am sure my officials can look into it. He makes an important contribution to this debate, because he highlights the fact that this country has had to tackle methane emissions in the coal and the oil and gas industries, so we have a lot of knowledge, experience and expertise to draw on to make sure we can control emissions from shale gas.
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Shale gas exploration is at a very early stage in the UK, and its possible scale is as yet unknown. We have legally binding carbon budgets, and that should reassure the hon. Lady. In addition, I hope that she will be reassured to know that I have announced today that I am commissioning a study of the possible impacts of shale gas development on greenhouse gas emissions.
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We have legally binding commitments under the Climate Change Act 2008, and our carbon budgets have been set out for people to look at. When we announce strategies it is not unusual for there to be a whole set of analyses, including sensitivity analysis. Yes, one analysis showed higher carbon intensities, but there was also an analysis that showed lower carbon intensities, and I think that people have missed that.
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Since our last Question Time, we have published Britain’s first comprehensive energy efficiency strategy and a consultation on electricity demand reduction; we have announced a landmark agreement across the coalition Government on energy policy, including a tripling of support for low-carbon generation by 2020; and I have attended the UN climate change talks in Doha, where we were able to make steady progress on the Durban platform towards a legally binding global deal on greenhouse gas emissions in 2015. We have also introduced the Energy Bill, which will have its Second Reading next week. It will reform the electricity market, provide long-term certainty to investors and ensure that British households and businesses enjoy affordable, secure and clean electricity supplies.
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I thank my hon. Friend for that question. He is right that we need to take this issue seriously. We intend to lay a parliamentary report announcing our decision before the end of the year, as is required by the Climate Change Act 2008. In making that decision, we are considering carefully the advice provided by the Committee on Climate Change. We are taking careful note of developments in the international policy framework for aviation, in particular in relation to the EU emissions trading scheme and discussions with the International Civil Aviation Organisation. It is important to clarify that the Government have set the first four carbon budgets, which take account of international aviation and emissions.
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The welcome that industry gave to the publication of the Energy Bill was extremely heartening. The British Chambers of Commerce, the CBI, the Engineering Employers Federation and the Federation of Small Businesses, which represent thousands of businesses, welcomed the Energy Bill. The fact that we are taking powers in the Bill to set a decarbonisation target shows real leadership and many companies have welcomed that.
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The annual conference of the parties (COP) to the United Nations framework convention on climate change took place in Doha, Qatar, from 26 November to 8 December. The United Kingdom was represented by the Secretary of State for Energy and Climate Change, the right hon. Member for Kingston and Surbiton (Mr Davey), and the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker).
After the success of last year’s Durban conference in agreeing to negotiate by 2015 a new global legally binding agreement to come into force from 2020, while focusing renewed efforts before 2020 on raising ambition in reducing greenhouse gas emissions, this year’s conference needed to make progress on both. It was never going to be a major breakthrough meeting, but I am pleased to say that, following two weeks of intense negotiations, the UK’s objectives this year were largely achieved. We agreed a high-level work plan for negotiating the new agreement by 2015 and for enhancing the political space for and breadth of recognition of efforts to raise ambition. In doing so, it was important to ensure the current regime would not fragment and that the rules and mechanisms within it can be developed further ahead of the new regime from 2020. To this end, we, with our European partners, Australia and some others agreed to bind our existing actions on reducing greenhouse gas emissions into international law by entering a second commitment period of the Kyoto protocol (KP2). We also secured agreement to further work on developing the rules base around accounting, measurement, reporting and verification of effort by countries not in the KP2, while also streamlining the three negotiating tracks working in parallel at Doha into one negotiation focused on the new agreement and the need to raise ambition. This was a step forward on the way towards getting back on track towards addressing the growing gap between current greenhouse gas emissions and a cost-effective trajectory of reducing such emissions that would be consistent with limiting average global temperature increases to below 2°C above pre-industrial levels.
Climate finance
The EU is the world’s leading provider of official development assistance and climate finance to developing countries. In Doha the EU demonstrated that it is on track to provide the full €7.2 billion it has pledged in “fast start” finance for the period 2010-12 and assured its developing country partners that climate finance will continue after this year. A package of decisions on finance encourages developed countries to keep climate finance in 2013-15 to at least the average level of their fast start finance. The decisions also extend a work programme on long-term finance for a year, with the aim of helping developed countries identify pathways for scaling up climate finance to $100 billion per year by 2020 from public, private and alternative sources in return for continued meaningful action by developing countries. I used the UK’s commitments on climate finance, agreed and first announced in 2010 as part of the current spending period, to add momentum to the negotiations at a key point during the second week. This helpfully also secured public announcements by many other donors of the climate finance they were also delivering, demonstrating that showing leadership draws others.
Loss and damage associated with climate change
A key concern of many developing countries was the issue of “loss and damage”. By agreeing to establish an institutional process under the regime to address more structurally loss and damage associated with the impacts of climate change in particularly vulnerable developing countries we headed off calls for an unbounded process towards compensation. The arrangements will be established at the UN climate conference to be held at the end of next year in Warsaw.
What does the second commitment period of the Kyoto protocol mean ?
The second commitment period of the Kyoto protocol will start on 1 January 2013. It is a ratifiable amendment to the Kyoto protocol setting out the rules governing the second period. It will run for eight years, thus ensuring no gap occurs between its end and the entry into force of the new global agreement in 2020. The EU will apply the amendment from 1 January 2013 even though formal ratification by the European institutions and member states is likely to take over a year. I shall bring forward the process of ratification to the House in 2013.
Overall, the Doha conference represents a useful step forward. It has reaffirmed the commitment to a 2015 global agreement, given space and a process for focus on raising shorter-term ambition, and preserved the Kyoto protocol and a wider rules-based system that will help form the foundations of the new agreement.
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I am laying today before Parliament the Government’s gas generation strategy. Last week I set out in the annual energy statement the objectives of our overarching energy policy—to keep the lights on, to keep energy bills affordable and to cut greenhouse gas emissions. This needs to be delivered in a way that maximises benefits to the economy in terms of jobs, growth and investment. I also published details of our approach for reforming the electricity market which will be implemented through the Energy Bill.
The strategy reaffirms the Government’s expectation that gas will continue to play a major role in our electricity mix over the coming decades, alongside low-carbon technologies as we decarbonise our electricity system.
However, the need to decarbonise the UK’s electricity system will significantly impact the role of gas and we need to provide clarity to investors about the future role of gas to enable the new plant we need to get built.
The objective of the gas generation strategy published today is to reduce the uncertainty around gas generation for investors. Government recognise that support for other forms of generation could undermine certainty for investors in both low-carbon energy sources and gas. To this end, the Government are setting a sustainable and affordable cap on the levy control framework out to 2020. We are also reiterating that our approach to decarbonisation trajectories will continue to stay in step with other EU countries throughout the 2020s and consistent with a least-cost approach to our legally-binding 2050 decarbonisation objective and the fourth carbon budget.
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Ahead of the important international negotiations in Doha, I wanted to update the House on the plans I have been developing with the Secretary of State for International Development, the right hon. Member for Putney (Justine Greening), and the Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for North Shropshire (Mr Paterson), on international forests and climate change. So today I am outlining new action to tackle deforestation as part of the UK’s international climate change commitments.
Tackling deforestation is a central part of how we address climate change, while reducing poverty and protecting biodiversity. Up to 17% of global greenhouse gas emissions come from deforestation, and around 13 million hectares of forest are lost every year. An estimated 1.2 billion poor people depend on forests for their livelihoods, and forests hold up to 80% of global terrestrial species.
Also today, I am pleased that we are joined by other donor countries in setting out priorities on forests for the UN climate conference in Doha and beyond, including on ensuring our respective efforts are co-ordinated and coherent.
Ambitious commitments and actions by forest nations are critical. In that context, I am announcing today that £15 million of the UK’s international climate fund will go towards developing silvo-pastoral systems for climate change mitigation and poverty alleviation in Colombia. This involves supporting smallholder farmers to plant trees on cattle grazing land, to increase biodiversity, improve the livelihood of farmers, reduce carbon emissions, and protect local forests.
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11:19
Those short-term benefits of our transition to a low-carbon future are followed by still greater ones in the longer term. First, of course, our transition will help us to meet our carbon budgets on the path to our 2050 emissions target, so that Britain will continue to play a leading role in tackling climate change. Secondly, it will diversify our energy mix, improving our energy security, and insulating households and business consumers from high and volatile fossil fuel prices on global markets. Thirdly, it will keep British companies at the forefront of the fast-growing global green sector.
We need to improve revenue certainty for investors in low-carbon generation, including renewables, nuclear power, and carbon capture and storage, so we will take powers in the Energy Bill to introduce feed-in tariffs with contracts for difference. That mechanism will give investors precisely the confidence they seek. We have also responded to Select Committee on Energy and Climate Change concerns and will create a single counter-party for the contracts for difference.
We will legislate to allow the Government in the next Parliament to set a 2030 decarbonisation target for the power sector, and in the shorter term we will introduce an emissions performance standard. That will ensure that new coal plant can be built only with carbon capture and storage technology. All those mechanisms will be supported by a robust, transparent institutional framework. The reforms will maintain Britain’s energy security while providing a huge opportunity for jobs and growth. Competition for long-term contracts will drive innovation, raise productivity and give UK industries a strong platform from which to compete internationally.
We continue to make progress in international talks on climate change. I will shortly be attending the C0P 18 talks in Doha, working towards the genuinely global deal to which Durban opened the door, to be agreed by 2015 and to come into force from 2020. We are now preparing a once in a generation transformation of the energy landscape to bring on massive private-sector investment, which will boost the economy, create jobs, and power Britain towards a prosperous low-carbon future.
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Following the morning session I attended a ministerial lunch hosted by the presidency. This lunch focused on climate change. Discussion included the outcome of the pre-COP 18/CMP 8 ministerial meeting on climate change held in Korea, which I also attended, and climate finance.
In the afternoon session Council conclusions were also adopted on the preparations for the 18th session of the conference of the parties to the United Nations framework convention on climate change. My ministerial colleagues and I focused our discussions on paragraphs 14 (on the EU QELRO—quantified emission limitation or reduction objectives); 16 (AAUs—assigned amount units); and 29 (climate finance).
There was a great deal of discussion on how AAUs should be treated as the first commitment period of the Kyoto protocol comes to an end and the EU prepares to move into the second commitment period from 1 January 2013. I emphasised the need to ensure environmental integrity and, therefore, was not willing to cede that strict limits need to be applied in some manner across the carry-over of AAUs to, and the domestic use and trading of these carried-over AAUs in, the second commitment period. The presidency repeatedly proposed compromise texts aimed at bridging differences but these were rejected. As there was no consensus on any new text on AAUs the presidency reverted to the text we agreed at the March Council, which emphasises the need for environmental integrity.
Several member states emphasised the importance of the EU having a strong position on climate finance before Doha. The UK supported inclusion of references to previous ECOFIN conclusions but clarified that we should not intrude on ECOFIN territory in these Doha conclusions. The presidency presented compromise text on this paragraph, which signalled our ongoing consideration of climate finance and the need for continuation of finance provision post-2012. The paragraph was adopted.
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The key purpose of electricity market reform is to allow the market to make decisions of that sort. As the hon. Gentleman will know, my Ministers and I are extremely supportive of demand reduction and energy efficiency measures, which have a critical role to play in our energy mix, but we also need to bring in new supply. We face rising electricity demand as we electrify the transport and heating sectors in the years ahead to meet our climate change targets, even if we have the most ambitious energy efficiency policies imaginable, so we need both a supply-side and a demand-side response.
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At the climate talks in Doha, as part of a balanced outcome, I want to see a collective commitment from developed countries to maintain climate finance at least at Fast Start levels from 2013. We also want work on mobilising sources of finance to continue to reach the goal of jointly mobilising $100 billion a year by 2020. Finally, we will need to endorse the host country for the green climate fund.
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I raised it at the pre-COP talks in Seoul. It is a really interesting source of new climate change finance and should be explored alongside other potential revenues. It is absolutely vital that developed countries raise their ambitions in this area. We must show developing countries that we want to support them in this change and that moving to ambitious targets for reducing carbon emissions globally is possible and will not stunt growth. Green growth can go together with economic growth, whether in the developed or developing worlds, and we must support those countries.
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Left-wing bourgeois academics are obviously welcome to contribute to any discussions in this House, because we want to hear from all sides. I must say that climate change scientists are not noted for their political beliefs; they do their work as scientists. They are providing the evidence that the Government, the country and, I hope, the rest of the world will act on. Their scientific results are extremely disturbing. Most recently we have seen what is happening in the Arctic, where the polar ice cap is melting faster than people had previously thought. That is what the scientists are telling us, and we should take it very seriously.
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If I may, Mr Speaker, I should like to pay tribute to the great work that my hon. Friend did at the Department in a whole range of sectors and thank him for the support he gave me. He is absolutely right that countries around the world, even those that are richer in oil and gas supplies than ours, are investing in renewable energy, and I think we should continue with that. We should make it clear that this is one of the best places in the world to invest in renewable energy.
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Since my Department’s previous Question Time, I have attended the pre-COP ministerial climate change talks in Korea. In addition, we have announced the winners of the record-breaking 27th North sea licensing round and the shortlist for our £1 billion carbon capture and storage competition. We have put in place the framework for our flagship green deal energy efficiency programme. We have welcomed the news of Hitachi’s major investment in new nuclear power stations in Britain. Energy UK has reported that energy investment in the UK is running at a 20-year high, including record investment in renewables. As you know, Mr Speaker, I intend this month to introduce the energy Bill, which will reform the electricity market, provide long-term certainty to investors, and ensure that British households and businesses enjoy affordable, secure and clean electricity supplies.
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I am grateful for my hon. Friend’s question. I think that there is a case for a decarbonisation target for the power sector, but that is still subject to ongoing discussion in Government. We are in a coalition and we need to get Cabinet approval for a decision such as this. However, it is worth noting for the benefit of the House that it is not just the Climate Change Committee and the Select Committee that have called for a carbon limit on the power sector by 2020. More than 50 companies, third sector bodies and trade bodies recently signalled their support in an open letter. There is huge support from industry for this measure and I hope that we can win that argument in this House.
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The hon. Gentleman seems to suggest that there is a lack of transparency in the way in which energy costs are delivered. I have to say that I disagree with him. There are huge amounts of information about the different costs of green energy. He will know that the cost of renewables for bills is tiny and that the cost of energy efficiency schemes, such as the carbon emissions reduction target and the energy company obligation, is significantly greater. The real costs involved in and the real reason energy bills are going up are the rising price of wholesale gas on global markets and the need to invest in our distribution networks that need to be replaced. Those are the real drivers behind higher gas and electricity bills, and people who suggest otherwise should look at the facts.
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I do agree that investment in onshore wind is a serious matter. We need to ensure that industry and investors know that the Government are committed to a long-term, stable and consistent framework. The hon. Gentleman will know that I lead on renewable energy strategy and I decide the policy, and the industry has heard that.
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I will write to the hon. Gentleman with the exact dates of when a Minister from our Department last visited China. I recently met the relevant Minister from China in London, and in Seoul at the international climate change talks. We are working closely with the Chinese, and they have taken up our 2050 road map calculator for how we can plan to reduce carbon emissions in an ambitious way. Our relationship with China in that area is solid.
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I am today providing an update on the UK’s carbon capture and storage (CCS) commercialisation competition. The UK is providing funding to support the development of CCS technology, which if developed at scale could allow the safe removal and storage of harmful carbon emissions from coal and gas plants.
The competition, which has £1 billion in capital funding available to support commercial scale CCS projects, was launched on 3 April 2012. Its objective is to identify and support projects which can contribute to reducing the costs of CCS technology so that it can compete with other low-carbon technologies in the 2020s. The competition closed for bids on 3 July 2012 and eight bids were received.
The NER300 is a European Commission competition for CCS and innovative renewable projects. The Commission is due to announce awards from its first round of funding at the end of this year. In order to do that member states need to state which projects they are prepared to support from the list that the Commission has published. The Commission has informed us that no more than two or three CCS projects (across Europe) will receive funding in this round. The maximum support available for CCS projects is around £250 million per project. Each member state is allowed to support three projects in total (i.e. CCS and renewables projects combined), although projects on the Commission’s reserve list are allowed to be supported without limitation at this stage.
With a maximum of two or three CCS projects able to be supported across Europe, the UK will not secure funding for three UK CCS projects. My officials have therefore confirmed support for the one UK renewable project on the Commission’s candidate list of projects and for the two CCS candidate projects that remain in the UK process. My officials have also confirmed our continued support for the one renewable and one CCS project the UK has on the NER reserve list. (The CCS reserve project also remains in the UK process.)
Teesside CCS, White Rose Oxyfuel CCS and Sound of Islay Tidal as our three candidate projects;
Peterhead CCS and Kyle Rhea Tidal Turbine Array as the reserve projects.
Significant UK Government funding is required for the CCS projects. Our support for the CCS projects is therefore subject to them ultimately being successful in the ongoing UK Government competitive process. My officials have written to DG Climate Action to explain the next steps in our process and to reconfirm the substantial financial offer we have committed to CCS. DG Climate Action will now consider our response and we understand they aim to make award decisions to successful projects by the end of this year.
[Source]
Following the morning session the presidency will host a ministerial lunch which will focus on climate change. The topic of this lunch is a
“presentation and discussion on the outcome of the pre-COP 18/CMP eight ministerial meeting on climate change held recently in Korea”,
In the afternoon session, Ministers will seek to adopt non-legislative Council conclusions on preparations for the 18th session of the conference of the parties (COP 18) to the United Nations framework convention on climate change (UNFCCC) and the eighth session of the meeting of the parties to the Kyoto protocol (CMP 8). COP18 will take place in Doha, Qatar from 26 November to 7 December 2012, and these conclusions will form the basic framework of the EU’s negotiating position at C0P18.
Information from the presidency and the Commission on the timing of auctions of greenhouse gas allowances (“Back loading”)—state of play.
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I pay tribute to my hon. Friend for his work on promoting renewable energy in his constituency and his county of Cornwall, particularly in respect of marine energy. I can reassure him that the Government will make decisions based on the evidence. We will crunch through the more than 4,000 responses we have had—an awful lot of evidence, including some substantial new evidence—and our decisions will reflect the evidence.
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I congratulate the hon. Lady on asking three questions, but I will not anticipate the announcement that we will make shortly. We support onshore wind—we believe it is a cost-competitive renewable technology, and it has an important place in decarbonisation and in a secure energy supply.
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I have to disappoint the right hon. Lady, because my Conservative colleagues and I are working very closely on this matter. Both Government parties support decarbonisation and understand the critical role that renewables can play, whereas under Labour renewable investment did not occur and we had one of the worst records in Europe. She will have to be patient, but we will make the announcement, and it will be a very good announcement.
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My hon. Friend is absolutely right, and has been a champion of the offshore wind industry. I congratulate him on that. The draft energy Bill has been widely welcomed by many people in the offshore wind industry because they see that it contains the instruments needed. We are pressing ahead with the timetable in the White Paper that we published last July. I am grateful to the Energy and Climate Change Committee for how it has gone about is rapid pre-legislative scrutiny. We will look carefully at its report, and we hope to publish the full Bill in the autumn.
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My hon. Friend is absolutely right: our energy infrastructure and climate change policies are very much part of our growth strategy, and are bringing forward serious investment. He is also right that SMEs play a critical role in this regard, particularly in respect of innovation and the supply chain that is developing in many of the new and existing markets that we are developing.
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As the hon. Lady will know, a Department for Business, Innovation and Skills and Department of Energy and Climate Change consultation that has now closed looked at policies to help such energy-intensive industries. My right hon. Friend the Business Secretary will introduce some of the proposals, and we hope they will cover a range of industries.
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I am afraid that the hon. Gentleman has got his facts wrong. The support for renewable energy costs 6p a day per household, and in this financial year the warm home discount will result in 1 million of the poorest pensioners getting a discount of £130—so I have to say the hon. Gentleman is wrong.
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Since my Department’s last Question Time we have published a draft Energy Bill for pre-legislative scrutiny, set out the next steps for the green deal, publishing the detailed plans and secondary legislation, and we have helped to broker an EU energy-efficiency directive. There is also decarbonising power generation, a new market for energy-efficiency and European leadership on international climate change—it is an ambitious agenda.
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At the heart of our Electricity Market Reform (EMR) measures are feed-in-tariffs with Contracts for Difference (CFDs), long-term instruments which will provide stable and predictable incentives for companies to invest in low-carbon generation. CFDs are more affordable than alternative incentives and will mean a better deal for consumers. Through the work on Final Investment Decisions (FID) Enabling we are committed to working with developers to enable some of this investment to come forward in advance of the CFD regime coming into force, and the Bill contains measures to support this process. This will be complemented by a capacity market that will, if required, provide security of electricity supply by ensuring sufficient reliable capacity is available. Measures relating to conflicts of interest and contingency arrangements will ensure that the system operator which will deliver these schemes is appropriate. Renewables transitional measures will ensure that existing investments under the renewables obligation remain stable. Finally, an Emissions Performance Standard (EPS) will limit carbon dioxide emissions from the most polluting fossil fuel power stations by setting appropriate standards for all new fossil fuel powered generation. Taken as a whole, EMR will enable large-scale investment in low-carbon generation capacity in the UK and deliver security of supply, in a cost-effective way.
I am confident that measures contained in this Energy Bill will enable us to keep the lights on, bills down and air clean. I am pleased to commend it to the House today for PLS and will look forward to the publication of the Energy and Climate Change Select Committee’s report.
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My Department considers many views on the causes of climate change, and I encourage my officials to take all available scientific evidence into account when developing policy. However, the fact that we are open to a range of views does not mean we ascribe equal value to each.
As with all scientific endeavour, climate science involves uncertainties, but it is considered very likely that human activities are the major cause of current climate change, and compelling evidence shows that climate change brings major risks for us all. It would be deeply irresponsible not to act decisively and urgently to deal with climate change in the United Kingdom and globally.
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I know that, as a former distinguished Chair of the Public Accounts Committee, the hon. Gentleman wants to take evidence and science into account, and that he understands risk and probability. The case for action is overwhelming, whether it is made by the Intergovernmental Panel on Climate Change or the Stern review.
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The uncertainty surrounding climate change, and surrounding all technologies, is such that it would be irresponsible not to pursue every possible low-carbon technology. The hon. Gentleman is right to suggest that renewables have a positive future, as does solar power. We propose to deliver an additional 620,000 installations at a cost of just £500 million by 2015—that is, to deliver nearly three times as many installations as were delivered under the old scheme, at a third of the price.
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Unlike the right hon. Lady, I have read the letter from the Foreign Secretary and I wrote the letter to the Prime Minister. They are very positive about what we want to do on low carbon technologies and climate change in this country and abroad. We are leading the way.
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I am writing to inform you that during recess I will launch the CCS commercialisation programme—the Government’s competition for CCS—and publish our CCS road map.
CCS has the potential to be one of the most cost-effective technologies for decarbonisation of the UK’s power and industrial sectors, as well as a significant green growth opportunity.
Launching the competition and publishing the CCS road map will be a major step forward on our CCS agenda. Our CCS commercialisation programme will, subject to state aid clearance, support commercial scale CCS with the £1 billion in capital funding that we have made available. The focus will be on reducing the cost of CCS to enable cost-competitive deployment in the 2020s. The road map will set out the strategic context and describe our approach to enabling commercialisation of CCS in the UK, including the wider programme of interventions which we are putting in place.
I believe that we now have one of the best CCS packages offered by any country in the world and that the launch of the programme and road map will ensure that the UK continues to be a global leader on CCS.
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I have to disagree with the hon. Gentleman. The carbon price floor is important if we want to move to a low-carbon future, to which I am completely committed. We understand the impact of the carbon price floor on energy-intensive industries. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) is talking with his colleagues in Northern Ireland to try to mitigate those issues.
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I agree with my hon. Friend. I am a liberal, but I strongly believe that collective action can help solve some of society’s ills. That is why I promoted collective purchase and switching as consumer affairs Minister and am continuing to do so as Secretary of State for Energy and Climate Change. It is a shame that the party of Keir Hardie and Aneurin Bevan forgot the power of collective action in its 13 years in government.
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We need to balance a range of priorities in energy policy, including energy security, affordable bills and tackling climate change. That is why this Government have a portfolio approach to energy generation. We are looking at low-carbon technologies, including wind power, carbon capture and storage, and new nuclear.
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First, we need to make sure that communities are listened to during the planning process, and the planning reforms will do that. We are committed to ensuring that local communities capture the full economic benefit from hosting renewable energy projects, particularly the retention of all the business rates that these installations pay.
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This is my first departmental Question Time as Secretary of State for Energy and Climate Change. Since my appointment in February, I have been rather busy, following on from the successes of my predecessor. I have opened the world’s largest offshore wind farm off the coast of Cumbria, launched the energy efficiency deployment office to help the Government deliver their energy efficiency policies, and published reforms to the feed-in tariffs scheme. In addition, the Department of Energy and Climate Change and Ofgem have published a report on cutting the costs of offshore wind connection.
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04:21
My hon. and learned Friend is absolutely right and I can certainly agree with that. It is also worth pointing out that the Duke of York not only helps UKTI and its related activities but assists in the objectives of other Departments, such as the Foreign and Commonwealth Office and the Department of Energy and Climate Change, when he is asked to do so.
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The Council agreed conclusions on tourism, simplifying rules governing the EU’s R and D funding programmes, and approved the launch of three joint programmes on agriculture, food security and climate change; cultural heritage; and healthy eating.
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