Draft Carbon Tax Budget

Anne-Marie Trevelyan Excerpts

Monday 21st June 2021 General Committees

[The Chair]

Before we begin, I remind Members to observe social distancing and that Mr Speaker has stated that masks should be worn in Committee when not speaking. Hansard colleagues would be most grateful if Members sent their speaking notes to hansardnotes@ parliament.uk.

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I beg to move,

That the Committee has considered the draft Carbon Budget Order 2021.

The draft order was laid before the House on 21 April 2021. It may be only one line long, but it is a world-leading line of legislation. It sets a sixth carbon budget of 965 million tonnes of carbon dioxide equivalent, which will reduce greenhouse gas emissions by 78% by the 2033-37 budgetary period, compared with 1990 levels. That level is recommended by our statutory expert advisory body, the Climate Change Committee, and endorsed by all four Governments of the UK nations. The UK was the first country to introduce a legally binding long-term emissions reduction target, through the Climate Change Act 2008. That was updated in 2019 to set our new target of net zero emissions by 2050. Carbon budgets are set on the way to 2050 to step down our emissions every five years. So far, five budgets have been set in law, setting our decarbonisation path through the last decade and the next.

The proposed sixth carbon budget is highly ambitious, seeking to achieve well over half the emissions reductions required from now to 2050 in the next 15 years. It builds on the momentum of our new nationally determined contribution under the Paris agreement to reduce emissions by 2030 by at least 68% compared with 1990 levels—the highest reduction target set by a major economy to date.

The sixth carbon budget will, for the first time, incorporate the UK’s share of international aviation and shipping emissions—an important part of the Government’s decarbonisation efforts that will allow for those emissions to be accounted for consistently. We aim to introduce the necessary legislation formally to include those emissions as soon as possible, and within the year.

The arguments for decisive action on global climate change are overwhelming, and the consequences of inaction are stark. Unchecked, it will lead to rising temperatures and rising sea levels, extreme weather, damage to ecosystems, and reduced crop productivity. Co-ordinated global action is critical if we are to mitigate the potentially catastrophic effects on the environment and economies across the world. The UK is leading the way in responding to the climate threat. This world-leading sixth carbon budget will reinforce that strong leadership, ensuring that the UK acts consistent with the Paris agreement temperature goal to limit global warming to well below 2°C and to pursue efforts towards 1.5°C. Importantly, it will allow us credibly to call on others to increase their own efforts, including at this year’s COP26 summit.

We know that we have a significant challenge ahead of us, with additional effort needed across every sector of the economy, but look at what we have already achieved: cutting emissions by more than 40% since 1990 while growing our economy by more than three quarters. Today, low-carbon electricity gives us more than half our generation, while we boast the world’s largest offshore wind capacity. Consider the benefits that net zero will bring: protecting the planet for future generations; economic growth and jobs in new green sectors; reducing air pollution; and enhancing biodiversity.

The net zero transition has huge potential to support jobs in low-carbon industries, building on the Prime Minister’s 10-point plan, which will mobilise £12 billion of Government investment and potentially three times as much from the private sector to create and support up to 250,000 more green jobs by 2030. We recognise that we can harness such benefits only if we back our targets with ambitious plans across all sectors of the economy. Over the coming months, we will bring forward further bold proposals, including a comprehensive net zero strategy showing how we intend to meet this ambitious new carbon budget and earlier targets. That will set out the Government’s vision for transitioning to a net zero economy, cutting emissions and creating new jobs and industries across the country, going further and faster towards building a stronger, more resilient future and protecting our planet for this generation and those to come.

I conclude by emphasising the utmost importance of the sixth carbon budget in our efforts to cut emissions and strengthen our climate leadership ahead of COP26. I hope very much that hon. Members will support this statutory instrument, and I commend the order to the Committee.

--- Later in debate ---

[Anne-Marie Trevelyan]

I thank the hon. Gentleman for his thoughtful words and for the depth of his commitment to the subject. We all appreciate that this is, in every sense, whole-of-Parliament legislation. None of us underestimates the challenges of decarbonising the economy, but this legislation will ensure that we give ourselves a marker to move towards.

I will answer a number of the hon. Gentleman’s questions. The shipping and aviation timeline will be within a year. It will be as soon as we can find some parliamentary time and pull together the relevant details, but it is very much at the front end of the queue, because it is important that industry in both sectors can get on and do the work that we want it to do.

Can we be more ambitious? Well, we are incredibly busy. I have published the industrial decarbonisation strategy already, and I will be imminently publishing the hydrogen strategy. The heat and building strategy, which is clearly within the remit of the Department for Business, Energy and Industrial Strategy, is doing the final stages of its tour around Whitehall before it can be published.

I cannot directly speak to the challenges that the hon. Gentleman raises about the Department for Transport’s strategies, but I would like to give him confidence that there really is whole-of-Government thinking on net zero in a way that has never really been visible before. The Climate Action Implementation Committee, on which I sit, meets regularly and is really driving incredibly hard and fast. It is drawing together, at both official level and ministerial level, that criticality of thinking through both the key policies and the most effective policies that can have the biggest impact as quickly as possible.

I cannot give the hon. Gentleman a precise time on the Treasury’s net zero review, but I know that it, too, is coming close to completion. Its focus will be on the exposure of household sectors and regions to these changes. The Treasury is providing important oversight by understanding the risks and making sure we make the journey safely and inclusively. This must be a just transition. If it is not, we will be leaving parts of our communities behind, which is not something any of us wants to do; quite the opposite. This affords us the opportunity to think in a forward-leaning, world-leading way to set technologies in place and drive forward private and public sector investment. That gives us the opportunity to give the world leadership and technology to help it decarbonise.

I hope I have provided the necessary assurances to allow the statutory instrument to be approved. It will keep the UK on a credible path to meet our 2050 net zero target and try to keep the temperature rise to 1.5°. It will build on the current momentum, and we will continue to drive new policies that enable us to capitalise on the opportunities that net zero brings and credibly urge other countries to do the same for the benefit of our planet.

I hope I have answered all the questions, and I commend the order to the Committee.

Question put and agreed to.