Tackling Climate Change

Nick Hurd focusses on the limitations of the Kyoto treaty and suggests it could be improved with incentives for new low-carbon technology

Mr. Nick Hurd (Ruislip-Northwood) (Con): It is a pleasure to follow the hon. Member for Nottingham, South (Alan Simpson), who showed where we can go with a bit of energy, imagination and political leadership in terms of driving forward the sustainable energy agenda. I enjoyed his speech.

I want to focus my remarks on the international effort and strategy on this global issue. The question seems to be: where do we invest the finite source of political energy available to tackle this most complex issue, riddled as it is with uncertainties? I detect a change in the wind. I detect it in the remarks of the Prime Minister, and in the initiatives taken by countries in Asia Pacific, Australia and America after the Gleneagles summit. This change reflects a growing realisation that we are on the wrong course-a course to failure.

The fruit of the past 15 years of political endeavour has been the Kyoto treaty. My hon. Friend the Member for East Surrey (Mr. Ainsworth) has said that it is an important milestone, but the closer we look at it, the more limited it appears. It will make a marginal impact on carbon concentration, and its value lies only in demonstrating international co-operation. It was holed below the waterline by the absence of the United States and the emerging giants. It creates no serious incentives for new technology. In the process of negotiation and implementation, the political machine has failed to carry the public with it. Under those circumstances, in the short term, focusing the political machine on trying to follow up that agreement with a new universal agreement on a bigger scale but on the same premise for a greener set of absolute CO₂ reductions seems highly questionable. It looks very hard to achieve-I do not know what other colleagues felt, but the remarks of the Secretary of State left me with no confidence that an international agreement would be in place by 2012. Were we to pursue that course for another agreement to negotiate absolute CO₂ reductions, it would be of limited value. Those targets will necessarily be arbitrary, as there is still too much scientific uncertainty as to what a safe level of carbon concentration is, and if they are negotiated on the same basis as Kyoto 1, the targets would be effectively unenforceable.

Those who push for this course argue in the cause of taking out an insurance policy against catastrophic risk. It is an attractive theory, but ultimately, who buys an insurance policy that will not give certainty of covering the risk? That uncertainty is undermining the effectiveness of the political process. In terms of international strategy, I would prefer the political machine to focus on creating the conditions that will make universal agreement much more plausible. The priority must be to generate the momentum that has been lacking over the past 15 years in making a difference to the scenario of emissions, which are growing. The requirement to reduce the uncertainty of the science and economics of climate change has been absent from this debate. A huge amount has been done in the past 15 years, but ultimately what comes through to the layman is how little we know. Greater certainty is therefore an absolute priority.

The second priority must be to accelerate the deployment and development of low-carbon technology. The good news is that the technology exists that can make a difference, but it is too expensive today. Not only is it right to focus political energy on making this technology cheaper, but it is clearly in the interests of many countries, particularly Britain. As we become an energy importer, energy security becomes increasingly important to this country. A superb and massive commercial opportunity also exists for those countries, and companies in those countries, who can see the potential in renewable technology. President Clinton's comments in the much-discussed summit in New York were bang-on the money: we will only make a difference when people smell a buck. Those conditions are not sufficiently in place at the moment. The acceleration of low-carbon technology is clearly a win-win for Britain and must be at the heart of any new international initiative.

Talking of win-wins, surely it is time for Governments across the world to start picking the low-hanging fruit of energy efficiency. It has been sitting on the branches for 20 years and every Government during that period have talked about it, yet none have delivered on it. The hon. Member for Nottingham, South mentioned the example of Woking's Conservative-led council becoming self-sufficient in energy. I encourage the Government to look at what is happening in Braintree, where another Conservative-led council has negotiated an agreement with British Gas, whereby it will offer council tax payers real money for taking on board an energy efficiency package. The early data suggest that the public are responding, and there are signs of a real breakthrough. Consumer apathy towards such a proposition is breaking down, and I hope that the Government will look closely at that example.

As my hon. Friend the Member for East Surrey pointed out, the short-term priority is the industrialisation of China, Brazil and India. The carbon intensity of that process must be minimised. Doing so is in our interests not least because of the need to deal with carbon concentrations and to reduce CO₂ emissions. However, there is also a superb commercial opportunity for those companies that can seize that initiative in all our interests.

European Governments in particular should seize the opportunity to develop the emissions trading mechanism by giving it serious teeth. In looking at the first round of negotiations, most commentators see all the mechanism's failings. It is diluted and weak, has no teeth, does not deal with aviation and operates within very restricted sectors. There is an opportunity in Europe to develop an emissions trading scheme with teeth that can be pointed to as a global template. That is where political energy should be focused.

Mark Lazarowicz: I am grateful to the hon. Gentleman for giving way during what is a very interesting and constructive speech. Does he agree that the European Union has a good record, in that it is among the leaders in trying to address climate change through specific, Europe-wide policies? Does he further agree that there is a lot of merit in the proposed mandatory Europe-wide renewable energy targets, which would encourage the Europe-wide growth of renewable energy?

Mr. Hurd: I thank the hon. Gentleman for that intervention and it is undoubtedly true that Europe's achievements in progressing environmental regulation are impressive. In fact, the linchpin for Europe in terms the challenge and the opportunity that it faces in redefining its relevance to the new generation-the generation who must pay for such things-is greater co-operation on environmental policy. I also agree with the hon. Gentleman's comment about the need for greater co-operation in developing renewable energy policy across Europe. I have mentioned the need to accelerate technology, and Governments can help in that regard by increasing the size of the markets available to those developing such technology.

On the question of where political energy should be focused in the short term, there is an urgent need for one country to stand up, to promote itself as a role model and to show that emissions can be significantly reduced at an acceptable cost. Britain had that opportunity, and I say "had" because I believe that it is in danger of losing it. We can argue in an utterly useless way about the motivation behind the "dash for gas", but the reality is that it created the platform for a developed economy that is capable of reducing emissions at a very low economic cost. My charge against the Government is that they are in danger of failing that test. That is why I support the proposition of my right hon. Friend the Member for West Dorset (Mr. Letwin) that at the heart of such failure is a lack of accountability and the distant nature of the targets. I therefore wholly endorse the introduction of an independent voice into this process, so that teeth can be given to such accountability.

Finally, I am conscious in focusing the political machine away from Kyoto 2 that it would be better if all such activity took place within the framework of a set of targets. The imperative here is for Governments to send long-term signals to the market, but we have to face the fact that pushing this global meeting towards agreement on absolute CO₂ reductions will be extremely hard. As an alternative to "contract and converge" and the various other scenarios that, in essence, still push the debate down that channel, I suggest that we investigate the feasibility and attractiveness of viewing carbon intensity as a proportion of GDP. That might be a more acceptable benchmark for the United States and the emerging giants. Many who are pressing for absolute CO₂ reductions will view that as a cop-out, but I would argue that the priority is to get some momentum behind the process of lowering the carbon intensity of economic development. In that context, focusing all our energy on pressing for absolute CO₂ reductions and for replications of Kyoto seem to me to carry huge opportunity costs.

6.20pm