Fossil Fuels and Cost of Living Increases

Debate between Caroline Lucas and Philip Dunne

Wednesday 11th January 2023 Westminster Hall

[Caroline Lucas]

I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.

[Philip Dunne (Ludlow) (Con)]

I, too, congratulate the hon. Lady on securing this debate, and on her important contributions to our deliberations on the Environmental Audit Committee. Just before getting diverted on to nuclear, she mentioned the importance of the energy efficiency taskforce, on which I completely agree with her. Does she agree that when the Government choose to respond to the report we published as a Committee earlier this week, which she mentioned, it would be most helpful if they took this opportunity to clarify what the taskforce’s terms of reference and primary objectives will be, so that it can be used as a Government-inspired device to accelerate this national mobilisation of energy efficiency, which we all agree needs to be undertaken?

[Caroline Lucas]

I thank the right hon. Gentleman for his intervention and his kind words. I absolutely agree: the taskforce has a real potential to make a difference, but we are still in the dark about many of the details. If the Government gave us more information, it would give a lot of comfort to a lot of people to know that there is a guiding mind that will ensure we accelerate these urgent installations of energy efficiency.

I turn to oil, gas and fossil fuels. Just as it was political choices that led to families being unable to heat their homes, so was it a political choice by the Government to protect the oil and gas companies, whose profits have grown fat from the spoils of war. As households struggle to make ends meet and our planet burns, the Government have chosen to double down on the very thing that is at the heart of these multiple crises. The UK is set to grant more than 100 licences to explore for more oil and gas in the North sea. Although the windfall tax has been increased to 35%, bringing the total tax on oil and gas to about 75%—I note, in parentheses, that that is still lower than Norway’s, at 78%—it is genuinely incomprehensible that the Government have failed to remove what is being called the gas giveaway, which means that oil and gas companies will still be able to claim £91.40 in tax relief for every £100 invested. What is more, from 1 January, a company spending £100 on so-called upstream decarbonisation—essentially reducing emissions from the process of extracting oil and gas, which of course then goes on to be burned—is now eligible for £109 relief on every £100 invested. In other words, we are paying the oil and gas companies to do the decarbonisation that they should be paying for. They are not broke; they are literally saying that they have more money than they know what to do with. I suggest that they start actually paying their own way.

New oil and gas extracted from the North sea will neither deliver energy security nor bring down bills, but will inevitably come at huge cost to the taxpayer. The hon. Member for Bath (Wera Hobhouse) mentioned Rosebank, the UK’s largest undeveloped oilfield. The costs to the taxpayer if it goes ahead are enormous. At triple the size of the neighbouring Cambo oilfield, if Rosebank is developed it would produce more emissions than 28 low-income countries combined, or the carbon dioxide equivalent of running 58 coal-fired power stations for a year. It is estimated that if it is developed, its owners would receive more than £500 million of taxpayer subsidies, as the hon. Lady said, thanks to the investment allowance—the gas and oil giveaway—in the energy profits levy. If that £500 million were not used for those subsidies—subsidies to burn our planet more—it could be used to extend free school meals to every child whose family receives universal credit. It could be used to pay the annual salaries of more than 14,000 nurses or build one new medium-sized hospital. It is genuinely baffling that the Government think that that is the best use of £500 million at any time, let alone now.

The Minister may try to argue that the development is required because the UK will continue to need gas in the future, but he knows as well as I do that 90% of Rosebank’s reserves are oil, not gas, and that it is likely to be exported, given that that is the fate of 80% of the oil that is currently produced in the UK. There are currently more than 200 oil and gas fields already operating in the North sea whose production would be entirely unaffected if Rosebank were not to go ahead, so this is not about immediately turning off the taps, as Ministers like to suggest. It is not legitimate for the Government to justify new oil and gas licences by saying they are needed. That does not reflect the reality of the situation. I know that, and I think the Minister does too.

It is patently clear that a crisis caused by gas cannot be solved by more gas. As the International Energy Agency clearly states in its “World Energy Outlook 2022”:

“No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”

As a first step, the Government must scrap the so-called gas giveaway—the huge subsidy to the climate criminals who have benefited from Putin’s illegal war. Next, they must urgently work to end the age of fossil fuels for good, because time is not on our side. The Environmental Audit Committee report, which has been referred to, recommended that the Government consult on setting a clear date for ending new oil and gas licensing rounds in the North sea. Given that we are, in the words of the United Nations Secretary-General, António Guterres,

“on the highway to climate hell with our foot still on the accelerator”,

personally I think the time for consultation has gone. Will the Government explain exactly how new oil and gas licences are compatible with limiting global temperatures to 1.5°, when there is overwhelming evidence to the contrary?

The Climate Change Committee noted:

“An end to UK exploration would send a clear signal to investors and consumers that the UK is committed to…1.5°C.”

Furthermore, now that the Government have resurrected the Energy Bill, will the Minister use this opportunity to legislate for an end to the maximising economic recovery duty—a woefully outdated obligation to maximise the economic recovery of petroleum, which can have no place on the statute books of a country that has any real climate ambition? Instead of that duty to maximise the economic recovery of petroleum, will he look at the need to effect a real, just transition for workers and an orderly managed decline of the oil and gas industry? Will the Government also fully harness the potential of renewables, which at the latest contracts for difference auction were at least nine times cheaper than gas?

I welcome the concessions on onshore wind made in the Levelling-up and Regeneration Bill, but the Minister will know that a number of barriers still remain, not least the lack of targets and the strategy for this cheap and popular form of energy. Will he now also address those issues?

[Philip Dunne]

The hon. Lady is being generous with her time. I may pre-empt what she was about to come on to. In concluding her remarks on alternative renewable energy sources, will she commend to the Minister the work the Government have already done in allowing contracts for difference to be available to tidal energy systems, to provide renewable baseload electricity supply, which at the moment is a critical shortcoming in the plans?

[Caroline Lucas]

I certainly welcome that intervention and agree entirely on welcoming the use of the contracts for difference mechanism. Tidal has huge potential and that is one way to maximise that. As the right hon. Gentleman knows, we will be looking this afternoon in the Environmental Audit Committee at ways in which we can unblock more solar power, for example, by enabling the batteries, alongside household solar, to be installed retrospectively at lower VAT rates. It is odd that, at the moment, there are reductions on VAT for solar panels but not for the batteries for households that want to store energy.

Action on Climate Change and Decarbonisation

Debate between Caroline Lucas and Philip Dunne

Tuesday 5th July 2022 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

The right hon. Member is talking about the recalibration that is needed in the Department. Does he agree with me that one area where that is extremely true is the need for a proper home insulation programme? We have never seen this Government get that right, in spite of the £11.7 billion allocated to the energy bills support scheme, which is of course welcome. What we need is a proper home insulation programme—street by street, local authority-led—and we still do not have it.

[Philip Dunne]

The hon. Lady makes a very important point, and she made a strong contribution to our Committee’s report on the inquiry into the energy efficiency of existing homes. I will comment on that in my remarks, but I broadly agree with her.

It is right that the Government do what they can to align their spending priorities to support all those who are being squeezed, but as the CCC reminded us last week, we are also in a future of living crisis. Large-scale changes in climactic conditions are undeniable, and they have the potential to make parts of the globe uninhabitable, provoking a crisis of barely imaginable severity. So it is entirely appropriate, in Net Zero Week, that the House consider in a little more detail the spending that the lead Department on net zero is proposing in the current financial year to tackle climate change and to address decarbonisation of the economy.

In October 2021, just before the COP26 conference in Glasgow, the Government produced their net zero strategy. This is an ambitious document, ranging widely across all areas of Government. It presents the first wide-ranging plan across Government to build on the initial 10-point plan for the green industrial revolution, which the Prime Minister presented in November 2020. It demonstrates that the Government are in the business of climate mitigation and climate adaptation for the long term. I would argue that there is broad consensus across the parties in the House that this has to be the direction of travel. It also reflects the broad scientific consensus that the planet is under threat from climate change as never before in recorded history, and that our behaviour must change in certain ways if we are to be able to avoid the worst effects. However, my concern is that the Government’s strategy seems, in too many areas, to defer substantive action and to leave real expenditure to a future date—and, dare I say it, possibly to a future electoral cycle. The warning from the Committee on Climate Change last week surely demands that more immediate action is taken to achieve the Government’s priorities and net-zero ambition.

My Committee had an interesting exchange last week with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. He disagreed with the thrust of the CCC’s conclusions, which he thought did not make sufficient allowance for the potential contribution of technology to mitigation of the climate crisis. That is a perfectly reasonable debating point. Indeed, our Committee has looked at a number of technologies that can play their part in achieving our net-zero ambition. However, I say gently to those on the Treasury Bench, that waiting for the right technology to turn up is not a strategy.

The Committee has been looking at potential solutions to help decarbonise the economy, from tidal power to offshore wind—there is significant emphasis on that in the Government’s strategy—and heat pumps, where there is ambition, but currently a significant gap in delivery. As the Secretary of State for Business, Energy and Industrial Strategy, and the Minister for Energy, Clean Growth and Climate Change will know—we wrote to them about this—the current state of development of negative emissions technologies does not promise a “silver bullet” from carbon capture and storage plants, which by 2050 will snatch carbon from the air and allow us all to go on as before. It is simply not there yet.

The Chancellor’s spending review last autumn gave a breakdown of the Government’s expected expenditure on net-zero measures in each year to 2024-25. In total, the Government plan to spend £25.6 billion on net-zero measures over that period, with £5.5 billion to be spent in the current financial year—subject, of course, to the House’s approval of these spending plans tomorrow. There are concerns about how effective that spending will be, and the Public Accounts Committee has recently been critical about the overall funding of the net-zero transition. The House is right to be concerned about the value for money of such approaches, and I commend the National Audit Office for its detailed and expert analysis of the Government’s plans.

The excellent briefing on the Department’s estimate, produced by the House of Commons Library for this debate, indicates that £21.8 billion—20% of the Department’s budget for this year—is dedicated to reducing UK greenhouse gas emissions to net zero. I do not include in that figure the £11.6 billion for the reduction in energy bills announced as part of the Government’s measures to address the cost of living crisis. Although the Government list that as a measure contributing to the net-zero target, I do not think that short-term energy bill reductions should be treated as a net-zero measure, unless somehow they are linked to fossil fuel reduction measures more directly.

I will focus the remainder of my brief remarks on the points that my Committee made last session in its report on the energy efficiency of existing homes, to which the hon. Member for Brighton, Pavilion (Caroline Lucas) referred. It seems that this is the area where greatest progress can be made towards the net-zero target, and in the shortest time. It was also the area that many witnesses before the Committee identified as a missing component from the recent energy security strategy.

I was pleased that late last month Ministers laid before Parliament the draft legislation needed to implement the fourth energy company obligation scheme. That hugely successful scheme has driven energy efficiency improvements in a great many domestic properties. Such improvements will reduce consumer bills. They will also reduce energy consumption, and thereby emissions from power generation. In the nine years of the scheme’s operation to date, it has supported cavity wall insulation in over 1 million properties. That is impressive, but there are still some 19 million homes that need upgrading to energy performance certificate band C. The cost estimate on which our Committee received evidence averaged £18,000 per property. Our Committee, I am afraid, found that the Government estimate for decarbonising Britain’s housing stock by 2050, at some £65 billion overall, was highly likely to be a significant underestimate. Welcome though the ECO is—last month, the chair of E.ON told the Committee about industry support for the scheme—it represents only a small fraction of what is genuinely necessary to achieve domestic energy efficiency. Will the Minister be in a position to elaborate further on the Department’s plans to drive energy efficiency in existing homes? It is not immediately apparent in the spending plans that the House is examining.

It is unlikely that the average householder will be able to afford a one-off payment of about £20,000 to upgrade their property without some incentive from the centre. I do not want to hark back to the green homes grant voucher scheme, but I hope that the Government have learned the lessons from its introduction. It was a well-meaning scheme that could have kick-started energy efficiency improvement, but it was strangled by red tape and ultimately abandoned in less than a year, having reached only a fraction of the homes that it was expected to improve.

COP26: Limiting Global Temperature Rises

Debate between Caroline Lucas and Philip Dunne

Thursday 21st October 2021 Commons Chamber

[Caroline Lucas]

I thank the right hon. Gentleman for his intervention, with which I wholeheartedly agree. I particularly agree that if we look at the covid pandemic as an example of international co-operation, it does not augur well. If we cannot properly share technology and vaccines even when our own wellbeing depends so directly on that, it does not augur well for the climate crisis. We absolutely need the kind of technology transfer to which he refers.

Let me say a few words about the Government’s own track record, because we are not on track to meet the fourth and fifth carbon budgets, let alone the sixth carbon budget, which is the first to be based on net zero by 2050, rather than the older 80% reduction. Just last month, Green Alliance calculated that the Government policies announced since 2020 will cut emissions by just 24% by 2032, and that the policies out for consultation, even if enacted, would still fall far short of the fifth carbon budget. This week’s publications of the net zero strategy and the heat and building strategy lack ambition. They lack urgency and—crucially—they lack the serious funding we need. As a result they still do not do enough to get us back on track. Time is running out in the race for our future, and the Government are barely over the starting line.

Not only are the Government not doing enough of the right things, but they are actively doing too many wrong things. Consider some of the most egregious examples on the charge sheet: a £27 billion road building scheme; the expansion of airports; scrapping the green homes grant just six months after it was introduced; stripping climate change clauses out of trade deals; and an obligation still in statute to maximise the economic recovery of UK petroleum. Perhaps most egregious of all, we are pressing ahead with Cambo, a new oilfield off Shetland. No wonder the Climate Change Committee has concluded that the Government continue to

“blunder into high carbon choices”.

Leading by example on climate and nature matters, not just here at home, but because globally the first rule of diplomacy is to walk your talk. Perhaps it is not surprising that, despite what I am sure have been the best efforts of the COP26 President-designate, the Government have so far failed to persuade many other countries to come forward with climate targets aligned to 1.5°C. Indeed, Gambia is currently the only country whose climate pledge is compatible with 1.5°C. Based on the UN’s assessment of the nationally determined contributions submitted so far, the world is on track for warming of around 2.7°C. That cannot be allowed to happen. Shamefully, almost 90 countries responsible for more than 40% of global emissions, including China and India, failed to meet the UN deadline at the end of July to submit new pledges ahead of the Glasgow meeting. What more will the Government do to galvanise more ambitious action to keep 1.5°C alive? What is the President’s plan post-COP26 if the world’s collective pledges are not compatible with 1.5°C?

The Government’s second goal for COP26 is to adapt to protect communities and natural habitats. Globally, Ministers need to lead efforts for a new post-2025 public finance goal, specifically for adaptation, and ensure that other countries and the multilateral development banks follow the UK’s commitment to ringfence 50% of climate finance for adaptation. We need a scaling up of locally led adaptation and support that is accessible and responsive to the needs of marginalised groups. We also need ambitious and rigorous ecosystem protection and restoration incorporated into the enhanced nationally determined contributions and adaptation plans of all countries. Nature, with its vast ability to store carbon and cushion us from shocks such as flooding, is our biggest ally in the fight against climate breakdown. It is therefore shocking that just weeks before the start of COP26, more than 100 fires have been reported on England’s peatlands. They are a vital carbon store, and it is environmental vandalism to set fire to them right now. The climate and nature emergencies are two sides of the same coin, and they need to be addressed together with far greater co-ordination.

Let me move to the third goal of mobilising finance. The COP26 President has stated that delivering the 10-year finance pledge is a matter of trust. Yes it is, but when that pledge has not been delivered anything like in full, trust is at breaking point. Any leverage that the UK might have had in persuading others to step up has been carelessly thrown away by its becoming the only G7 country to cut overseas aid in the midst of a pandemic. That unforgiveable decision means that climate programmes are being slashed, leaving some of the world’s most climate-vulnerable countries bearing the brunt. For example, aid to Bangladesh has been cut by more than £100 million. It is not too late to change direction, restore the official development assistance budget, ensure that climate finance is genuinely new and additional, and increase our commitment so that we are providing our fair share.

We must also act on loss and damage—a subject far too long consigned to the margins of negotiations. I welcome the UK presidency’s more constructive approach to that issue, including making progress on operationalising the so-called Santiago Network, but we need to do more. We must facilitate a process to scale up dedicated finance specifically for loss and damage, and we must acknowledge that as the third pillar of climate action, on a par with mitigation and adaptation. We must ensure that it has its own dedicated space on every COP agenda, and take forward calls for a specific loss and damage champion. It is long past time for the more wealthy countries to put aside their concerns about liability and compensation, and instead to come from a place of solidarity and human rights, in order to make meaningful progress on loss and damage and delivering new finance. As the young Ugandan climate activist Vanessa Nakate has said:

“Our leaders are lost and our planet is damaged…You cannot adapt to lost cultures, you cannot adapt to lost traditions, you cannot adapt to lost history, you cannot adapt to starvation. You cannot adapt to extinction.”

The climate crisis is pushing many communities beyond their ability to adapt.

The fourth goal of the COP26 presidency is to work together to deliver. No one would argue with that, but I go back to the context in which these talks are being held. The summit is taking place while the pandemic continues to rage in many of the poorest countries, as a direct result of vaccine apartheid. Only around 2% of the populations of low-income countries have received even one dose of the vaccine, and of the 554 million doses promised by the richest nations, just 16% have so far reached their destination. That failure is morally obscene, as well as running entirely counter to our own self-interest. If COP26 is to succeed, the concerns and justified anger of countries in the global south urgently need to be addressed. That means providing enough finance and vaccines to match the need, waiving intellectual property rights, and transferring technical capacity and expertise.

Glasgow is not only crucial for delivering climate ambition and finance in line with the Paris agreement; it is also a litmus test for safer, fairer, more inclusive forms of economic restructuring and global governance. It is a chance urgently to shift to an economic system that values the long-term wellbeing of people and planet above the endless growth that, in the words of the OECD, has generated “significant harms” over recent decades. When the climate crisis is caused by our extractive, exploitative economic model, we cannot expect to win the chance for a better future by re-running a race that we see we will ultimately lose, and that everyone else will lose as well.

[Philip Dunne (Ludlow) (Con)]

I am grateful to the hon. Lady for allowing me to intervene before she winds up her speech, and I am pleased that she secured the support of the Backbench Business Committee to hold this important debate ahead of COP26, which starts in under two weeks. She has spoken powerfully, and in the light of what she has said, does she agree that the UK is showing leadership in, for example, including international aviation and maritime emissions in our sixth carbon budget—we are the first and, so far, only country prepared to do that? She has called on this country to do that for some time, so will she at least welcome it?

[Caroline Lucas]

I thank the Chair of the Environmental Audit Committee for his intervention. I welcome the fact that aviation and shipping will be brought into our climate budgets but, as always, the devil will be in the detail. I have great concern that some will try to find ways of assuming that technology can get us out of this hole as well. I suggest that it cannot, and that we need proposals such as those made by the citizens Climate Assembly on a frequent flier levy. I think we need to change behaviour, rather than think that technology will get us out of the hole, but I look forward to seeing the Government’s plans. [Interruption.] I am winding up, Madam Deputy Speaker—I have less than four minutes. You will be pleased to know I have a page to go, and I am rattling through it.

To conclude, if the UK Government are to rise to the challenge of being president of the most important global summit in a generation, and if we are to keep 1.5° alive, we need a justice reset to be at the heart of all four of the Government’s objectives. Will the Minister therefore say what more will be done to ensure that countries such as China, Russia and Brazil step up, and to demonstrate more ambitious leadership at home? Will she urge her colleagues in the Government to reverse the aid cut and step up with new funds for loss and damage, and will she propose a revision to our own domestic emissions reduction target based on that new understanding of what constitutes our fair share of the global climate budget?

I am championing in Parliament the new climate and ecological emergency Bill, which sets out a legal framework to do just that. It is backed by more than 115 MPs and many councils, businesses and organisations, and I commend it to the Minister. This is our last chance—our best chance. The young people who are striking for the climate and for a safer world know that. The workers who are demanding a just transition know that. The businesses that are, frankly, far outstripping Governments when it comes to climate targets and actions know that. It is time for the Government to recognise that we can all win, and that to successfully rise to the challenges facing us all—to seize this chance—is perfectly possible with the political will. If we do not do it, we will never be forgiven by history.

Growing Back Better Report

Debate between Caroline Lucas and Philip Dunne

Thursday 25th February 2021 Commons Chamber

[Philip Dunne]

I applaud the ground-breaking work that my hon. Friend is bringing to the House in relation to hydrogen through his leadership of the all-party parliamentary group, which is doing great work in raising awareness and suggesting solutions. I rather bow to his superior knowledge on this issue. I think the key thing for industry is to understand what the Government’s hydrogen strategy is, so getting it published will provide industry with a structure around which it can invest. There have been some encouraging signals in the 10-point green industrial revolution plan, but at the moment these seem to be modest steps and we need a full strategy to be published as soon as possible.

[Caroline Lucas (Brighton, Pavilion) (Green) [V]]

I thank the Chair of our Committee and agree with all that he has said. Does he agree that there is real urgency for the carbon intensity of the Bank of England’s corporate bond portfolio to be cut and aligned with the Paris agreement? Analysis by the Bank itself shows that the portfolio is in step with a catastrophic 3.5° temperature rise, and this is clearly untenable, particularly if the UK aspires to be a credible host of COP26. He has spoken about the failure of the green homes grant. Does he agree that a failure to establish a revised scheme on a multi-year basis would do enormous damage both to businesses and consumers by destroying confidence and trust in any future home retrofit project? I have businesses in my constituency that face going bust because of the incompetence of this scheme.

[Philip Dunne]

I thank the hon. Lady for her contribution to our Committee and her characteristically robust portrayal of some of our recommendations. I touched on the Bank of England in my remarks. The pace at which it seeks to adjust its portfolio is a matter for the Bank, but it has agreed to look at this in the response from the Governor, and that is a very good start. The Bank of England has led the way internationally in many of its approaches towards climate change, and COP26 provides it with an opportunity to do more. In relation to the green homes grant scheme, I completely agree that it must be turned into a multi-year scheme to provide confidence to installers up and down the country.