Draft Climate Change Act 2008 (Credit Limit) Order 2016 - 18th July 2016

18:00 Jesse Norman (Conservative)

That the Committee has considered the draft Climate Change Act 2008 (Credit Limit) Order 2016.

It is a great pleasure to serve under your chairmanship, Sir Roger. This order—I speak as someone who has gone from being a complete innocent on these topics to being a raddled veteran in the course of three hours—fulfils the requirement under the UK’s Climate Change Act 2008 to set a limit on the number of international carbon credits that the Government could count towards the third carbon budget, which runs from 2018 to 2022. The Act, which was passed with near-unanimous support, allows for the flexibility of using carbon credits to meet a carbon budget. That ensures that even if unforeseen circumstances cause our planned emission reduction measures to come off track, the UK can continue to ensure that we meet our emissions targets under the Act.

The order will set the credit limit for the third carbon budget at 55 million tonnes of carbon dioxide equivalent, which is only about 2% of the total carbon budget. That is the same amount of flexibility as the House agreed for the second carbon budget credit limit. In determining the appropriate third carbon budget credit limit—the subject of the present discussion—the Government have taken into account the advice of the independent advisers, the Committee on Climate Change, as well as the views of the devolved Administrations. We have also considered the range of factors required by the Act, including the economic, fiscal, social, scientific and international circumstances. Although the Committee on Climate Change recommended a zero credit limit, the Government have concluded that it is best to maintain a small amount of flexibility over the third carbon budget period. Although the Government’s policies are ensuring that we are on track for the third carbon budget, it is still prudent to allow ourselves flexibility in the future to manage the uncertainty in emissions projections. I therefore commend the order to the Committee.

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18:03 Barry Gardiner (Labour)

There is really only one question that the Minister must answer, and he attempted to do so in his remarks. Why is this Committee being asked by the Government to go against the independent advice of the Committee on Climate Change on this matter? The Minister stated—I do not know whether this was justification or explanation—that the Government were following the precedent from last time. Indeed they were, but again on that occasion the Committee on Climate Change had recommended that they should not use the flexibility of these credits, and the committee was proven right because the credits were not needed—as indeed on this occasion the Minister believes, I think, and I believe that they will not be. They should not be required. We are already below the level that has been set, and unless the Minister knows of any reason why our energy policy should start to increase emissions dramatically, it is almost inconceivable that we will need the flexibility that the order allows.

The chief executive of the Committee on Climate Change said to the Environmental Audit Committee earlier this month:

The Minister needs to challenge his officials a little bit more strongly on the issue of domestic action. According to the Committee on Climate Change’s 2016 progress report to Parliament, our average annual emissions are already below the level needed to meet the second and third carbon budgets up to 2022. The Department of Energy and Climate Change’s impact assessment of this legislation notes that using credits

The Opposition would prefer to go with the recommendation of the Committee on Climate Change. We will therefore oppose the order.

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18:07 Jesse Norman (Conservative)

I am very grateful to the shadow Minister for his comments. He and I are rapidly turning into the Mutt and Jeff of the climate change world, but it is a pleasure to address the concerns he raises.

Let me remind the Committee that this is not a matter of buying credits; it is a matter of setting a credit limit. The Government have never bought credits and do not contemplate doing so as part of either the second or third carbon budgets. It is also true to say that the Government have not ignored the Committee on Climate Change. On the contrary, we have engaged closely with it and adopted its main recommendations consistently. Here, however, there is some licence to deviate. The Government have done so in this case for the reasons I set out in my opening remarks. The first is following the precedent set by the previous budget. The Government understood that that was potentially problematic from the Committee on Climate Change’s standpoint, but we did that because we sought a degree of flexibility, and that degree of flexibility is again sought today.

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18:11 Jesse Norman (Conservative)

I thank the hon. Gentleman for his contribution and reiterate that the Government remain committed to combating climate change. Climate change has not been downgraded as a threat, and is widely recognised across Government as one of the most serious long-term risks to our economic and national security. At the heart of the Government’s commitment is the Climate Change Act 2008 and its target to reduce emissions by 80% by 2050, as against 1990 levels. The interim carbon budgets have been set against that framework, and under the Act, we need to set a limit on the number of international carbon credits that the Government can count towards that budget.

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