16:00 Ellie Chowns (Green)

That this House has considered COP29 and international climate finance.

Thank you, Sir Roger—I am still learning the ropes. I thank the Minister for coming to respond to the debate. It is my pleasure to introduce this debate on international climate finance, and I particularly appreciate the presence of so many colleagues, given that it is an extraordinarily busy day when, with the Budget, we are discussing domestic finance. I may have one or two words to say on that in a moment.

This debate is particularly important, because we are in the run-up to COP29—the conference of the parties—in Baku. It is supposed to be the finance COP, because it is crucial that we mobilise the necessary finance to tackle the global climate crisis. My purpose in securing this debate is to encourage the Government to put a bit more flesh on the warm words that we have heard so far. I recognise those warm words: for example, the Foreign Secretary saying that he wanted to put climate change “at the centre” of foreign policy—that is welcome—and the commitments from the Secretary of State for Energy Security and Net Zero on domestic investment. However, there is still much more to do.

I will give the Minister advance notice of the topics on which I would love her response. At COP29, we are looking for the international community to agree a new collective quantified goal for climate finance in the trillions of dollars, not the billions. That is the scale of the challenge that we face. Do the Government recognise that, and are they prepared to play their part in leading from the front to ensure that there is collective commitment to the goal?

International climate finance needs to tackle mitigation, as well as the urgent need to invest to reduce emissions of greenhouse gases. It needs to tackle adaptation, because an enormous amount of global warming is already built into the climate system through historical emissions. It also needs to tackle loss and damage: the costs that are already being borne particularly by the most vulnerable in the poorest countries, and are due to the historical debt that early industrialising countries built up through our burning of fossil fuels.

For some low-income countries, one of the biggest factors is debt through private creditors, which I think is greater than the other debt that a lot of those countries owe. Does the hon. Lady agree that the matter of debt owed to private creditors must also be addressed to tackle the need for more funding for climate emergencies?

My third point is that it is essential that international climate finance comes largely in the form of grants, not loans. The UK Government generally have a good record: roughly 85% of the climate finance we have committed has been through the form of grants, and I believe that commitment is in place until 2026. Will the Minister commit to that figure remaining a floor? Will she seek to increase it, so that the vast majority of climate finance is provided in such a way that it does not build up debt repayment problems for the future?

I welcome the point the hon. Lady is making. Thirty-four countries in Africa are spending more on debt interest than on health and education. If we are to talk about a just transition, it is simply not right that the poorest people in the world should be paying for it. That gives force to what she is saying. Will she comment more on ensuring that this is a just transition?

Absolutely. The hon. Member makes a very important point, which relates to the one I made at the beginning: we cannot avoid the fact that we in the UK have an historical responsibility to take action on climate finance. We need to ensure that we are not storing up further problems for the future by providing climate finance in the form of loans, which make things harder for the poorest people in the poorest countries. Frankly, it is a scandal that, as he says, so many people in the poorest countries find that their Governments are spending more on debt repayments than they are on investment in crucial health and education, which build what we sometimes call the human capital that is so essential to sustainable development in such countries. I very much hope that the Government will lead on this issue and ensure that climate finance is in the form of grants—all of it, if possible, but at least the very largest proportion of it.

I congratulate the hon. Lady on securing this debate. I spoke to her beforehand, and the subject is incredibly important. According to international climate finance reports, 14 programmes have been initiated to support farmers across the globe to improve their access to clean energy. As she rightly said, that is an objective not only internationally, but at home. Does she agree that the Government must do more to assist farmers domestically across the United Kingdom of Great Britain and Northern Ireland with incentives for greener and cleaner farming?

I thank the hon. Member for making that point. This debate is on international climate finance, but I am happy to address his question about the interaction between domestic policy and the climate crisis that we face. I was disappointed not to hear in the Budget statement any commitment on climate or nature. Indeed, reading the detail on page 37 of the Budget, we will have a real-terms 2% decrease in the Department for Environment, Food and Rural Affairs budget over the next two years. Investment, however, is vital. Nature-friendly farming in the UK is one of the crucial ways to reduce our own emissions and get a little closer to doing our fair share of mitigating climate change. Another issue close to my heart is the role of DEFRA in tackling water pollution, and again we are not seeing that. I agree that investment domestically in nature-friendly farming and environmental policies is crucial. We have to put our money where our mouth is, and we have to ensure that we ourselves are on track to meet our climate goals.

At COP28 last year, the stocktake found that the world is off track to meet the 1.5° target. In itself, that commits us to serious effects already. In real life, we see increasing drought and wildfires, and the increasing frequency and severity of flooding in our own country. We know that climate change is happening. We have to do everything possible domestically to tackle it.

My fourth point is that international climate finance must be additional to aid. In recent years, we have seen not only a shameful, in my view, reduction in the overseas development assistance budget—I strongly urge the Government to bring that back up to 0.7% as soon as possible—but the wrapping of all sorts of other costs into the ODA budget. A real risk, if we put international climate finance into the ODA budget, is less money to spend on health, education and all those policies that are so essential to tackling international poverty and inequality. International climate finance must be treated separately from ODA.

My fifth point is about where the money should come from. Again, that is an important topic on Budget day, and indeed I will digress slightly to comment on the Budget. One policy we have seen today is a retention of the fuel duty freeze, which is effectively a subsidy for fossil fuels. That is clearly incompatible with the Government’s rhetoric on climate change. We should lead the way as a country in pushing for “polluter pays” taxes to generate the finance necessary to meet what I hope will be strong and ambitious international climate finance goals, because—to recap—this is urgent. 2024 is on track to be the hottest year ever on record. This change is going only one way. I do not know how many economists and scientists we need to tell us that the investment must come early—as soon as possible—because the transition will get more and more expensive. The longer we leave it, the costlier it will be, not just financially, but in terms of the effect on human lives. COP29 is a crucial moment in the international climate negotiations.

I very much look forward to hearing from the Minister how she will ensure that the UK plays a leading role, putting our money where our mouth is and doing everything possible to influence international partners to ensure that climate finance is sufficient to address the challenge that we face.

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16:11 Anneliese Dodds (Labour)

This Government are getting on with reconnecting Britain to the world and modernising our approach to international development in a spirit of genuine partnership and respect, as I set out in a speech at Chatham House a couple of weeks ago. That speech built on the Foreign Secretary’s lecture at Kew Gardens, in which he reiterated our view that action on the climate and nature crisis must be at the heart of everything that we do. I am grateful to the hon. Member for North Herefordshire for making reference to that; it is a genuine and important commitment. We believe that action on the climate crisis is critical to grow our economy and bring opportunities to people across our country and globally, and we know that our partners around the world share that ambition. When I was in Indonesia, for example, I was pleased to sign an agreement on critical minerals with the Government there, working on the climate crisis and green growth with them. We have a strong shared agenda, and we need to solidify that partnership globally.

I congratulate the hon. Member for North Herefordshire (Ellie Chowns) on securing this important debate. We have already heard that the UN has identified a need for £600 billion of additional private finance if we are to tackle climate change. Does my right hon. Friend the Minister agree that in the UK, due to the expertise of the City, we are uniquely placed to lead on that? Does she also agree that the UK delegation to COP in Baku must make an ambitious new goal for private investment in the climate a major priority?

We are clear that situations of extreme humanitarian need globally are so often driven by conflict and climate crisis—in fact, they are often driven by the two intertwined. I unfortunately saw that for myself in South Sudan, at the Bentiu camp for internally displaced people. People escaping the horrific civil war in Sudan are managing to make it to the IDP camp, but they are surrounded by floodwater. It is now a permanently flooded area, making an already horrendous situation worse. We need to recognise the fundamental impact that the climate crisis is having right now, as the hon. Member for North Herefordshire rightly underlined.

I am very pleased to be heading to Baku for the climate COP alongside the Prime Minister and the Foreign Secretary, who attended previously when in opposition. As well as coming forward with our own ambitious, nationally determined contribution for the UK at COP29, we are determined to support others to scale up their ambition and action. That includes initiatives such as the global clean power alliance, which the hon. Member for North Herefordshire may have heard mention of. That is a strong commitment from the new UK Government. We are determined to deliver greater political momentum.

When speaking with our friends based on small islands and in fragile and vulnerable states, such as many of those the UK Government met with at the Commonwealth Heads of Government meeting in Samoa, we hear very loudly and clearly how difficult it is for them to access the finance that they need, especially climate finance. Very little of it is getting to those who need it, particularly fragile and conflict-affected states. The UK is determined to work with our partners to change that. I have prioritised, including at the World Bank annuals last week, trying to push hard for sources of climate finance and adaptation finance to be available. I am grateful to the hon. Member for Strangford (Jim Shannon) for mentioning the role of farmers. The proportion of climate finance that reaches farmers in the most fragile and conflict-affected states is minuscule, particularly for adaptation. That must change urgently.

I agree with the hon. Member for North Herefordshire that we must increase the level of dedicated climate finance from all sources across the causes and impacts of the climate crisis. We are determined to agree an ambitious new collective quantified goal; that is absolutely pivotal to our negotiations and vital to maintaining the global consensus of the Paris agreement and keeping 1.5° of warming within our reach. The UK is working extremely hard on this. The Department I am based in and the Department for Energy Security and Net Zero are working closely together and with our new climate and nature representatives. We have been carrying that forward at every opportunity.

Of course, that collective quantified goal needs to be agreed. From the UK’s point of view, we are determined to exercise leadership. I am delighted that the Secretary of State for Energy Security and Net Zero, who was engaged in this 16 years ago and managed to achieve great things then, is working with my Department, our representatives and so many contacts from all across the world to say, “How can we put forward the overall figure that is needed?” It has to be jointly agreed, as the hon. Member knows. The most important thing is that we get a figure out at the end because if those negotiations do not succeed, we will be taking a step backwards when we are in a situation of such urgent need.

As the hon. Member rightly mentioned previously, the UK has traditionally been a funder in this area, focusing particularly on the quality of climate finance and ensuring that there is sufficient grant and concessional finance. That is something we are determined to continue to do.

For our part, as well as co-chairing the global green climate fund, we are working towards making good on the UK’s pledge to get help to those who need it. We want robust roles to be agreed for article 6 on how countries co-operate to reduce emissions. We need real follow-through from the global stocktake on commitments such as tripling renewable power and doubling energy efficiency globally by 2030, and we need implementation of the national adaptation plans as we scale up finance in support. We have committed £100 million to the taskforce on access to climate finance that the UK co-chairs with Rwanda, and we are working with the World Bank and the board of the new fund for those facing devastating loss and damage; the hon. Member was right to mention that as being important.

I refer back to the figure that the hon. Member for Chesterfield (Mr Perkins) mentioned—the UN’s finding that we need £600 billion of international climate finance per year to address the challenge that we face. That is actually the same amount that is invested in oil and gas every year. Does the Minister agree that we must put a complete end to all public subsidy or support for fossil fuel industries right now? Can she comment on the role that the UK could and should play in ending all such subsidies?

I am grateful to the hon. Lady for making that point. She may have heard the Chancellor state today that this new Government will ensure that what was described as a windfall tax on oil and gas companies, but did not operate as one because of the numerous loopholes, will be tightened up. We will ensure that support for decarbonisation is incentivised, rather than disincentivised, as it was under the previous approach to taxation, so big changes are taking place.

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