Carbon Dioxide Emissions

HC Deb 17 February 1995 vol 254 cc1307-16

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]

2.32 pm

Mr. Robert Ainsworth (Coventry, North-East)

rose—

Lady Olga Maitland (Sutton and Cheam)

On a point of order, Mr. Deputy Speaker. Can it possibly be right for Opposition Members, and in particular the hon. Member for St. Helens, South (Mr. Bermingham), to object to the Second Reading of my Bill which is designed to bring safety and—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. The hon. Lady knows that that is not a point of order for the Chair.

Mr. Ainsworth

I welcome the opportunity to raise this issue in the House. I want to explore with the Minister policies to reduce carbon dioxide emissions and to review at some length programmes that are supposed to deliver those reductions. I want to elicit clear answers from the Minister about his current targets and his exact up-to-date plans to put his programmes back on track. I want to raise some of the social consequences of the Government's method of implementing their programme and to question their sincerity and real priorities.

I shall first deal with some facts. The Government signed the Rio convention and committed themselves to reducing CO₂ emissions to 1990 levels by the year 2000. They accepted the need to address that important environmental issue, but there are criticisms of the Government's record on reducing CO₂ to which I shall refer.

The targets that the Government have set for themselves are very modest. The 6 per cent. cut in emissions compares very poorly with other European countries, some of which have pledged cuts of up to 20 per cent. The President of the Board of Trade, when he was Secretary of State for the Environment, said that he believed that 20 per cent. cuts could easily be achieved. The targets were not ambitious.

My final complaint on targets is that there are still no long-term targets. In his previous life as Chairman of the Environment Select Committee, the Under-Secretary of State for the Environment, the hon. Member for Hertfordshire, West (Mr. Jones), wrote a report a principal recommendation of which was that by the end of 1995 a rolling programme of targets should be developed and strategies outlined for achieving longer term goals for the years up to 2010. I was disappointed that the hon. Gentleman will not reply today, as he obviously has much sympathy with my point of view. Perhaps that is why he has been kept away. However, as he is in the Department, I hope that he can persuade the Government and his hon. Friend the Minister, the hon. Member for Croydon, Central (Sir P. Beresford), to act on that recommendation. I hope that the Minister will tell us if and when that will happen.

On policy and policy failures, "Climate Change: the UK Programme" said: "the centrepiece of the programme is the set of measures designed to limit emissions of CO₂. The centrepiece of the centrepiece, therefore, was the Energy Saving Trust. It was set up in 1992, with the task of delivering 25 per cent. of the Rio target. Lord Moore was put in charge of it and sent away to devise a plan. He came back claiming that, to achieve its target, the trust would need £1.5 billion to spend by 2000. That money was to be supplied predominantly by the electricity and gas industries in equal parts. When Lord Moore was reminded by the then Chairman of the Environment Select Committee that the electricity companies anticipated putting in only £100 million, he said: "My job is to try to be objective on this. I am saying that … to achieve the 2.5 million tons of carbon emission reductions, that [£1.5 billion] is what I believe we will need. He continued that, if the view of the regulators was that the money would not be forthcoming, he would fail to reach the target that had been set.

Let us remember that we are not talking about a loony green-fringe activist. Lord Moore is an ex-Tory Minister, and he should not be the type to cause too much trouble.

On Lord Moore's prediction, we will not reach the target set. After a number of run-ins with the electricity and gas regulators, the Energy Saving Trust is woefully underfunded. Recent questions suggest that, if current funding is sustained until 2000, the total spend will be £158 million, a mere 10 per cent. of Lord Moore's requirements. Lord Moore, when he met the Environment Select Committee on Wednesday, confirmed that because of that he will achieve only 10 per cent. of his target savings.

On Thursday 9 February, Clare Spottiswoode's rejection of the vast majority of the Energy Saving Trust's latest proposals confirmed the continuing funding crisis. That came, by the way, after a delay of seven months in assessing the proposals, which has led to a formal complaint being lodged with the citizens charter unit by Andrew Warren of the Association for the Conservation of Energy. However, the Government appear to be totally incapable of preventing that unelected appointee from continuing to frustrate their policy, and unable to do anything about the social problems that arise from the decisions that she takes.

Spottiswoode has rejected every single proposal from the Energy Saving Trust aimed at helping poorer households with their fuel bills. That is an indication of the ideology that steers the Government and the individuals whom they appoint to their quangos.

The second major policy aimed at reducing emissions was VAT on fuel. The effectiveness of the measure was always questioned, with many analysts believing that low price elasticities would mean that rising costs would have only a small effect on consumption. Green groups said that the tax would work only if the barriers to energy efficiency were brought down. European research suggests that energy prices would have to be trebled to have a lasting effect on fuel use.

The Association for the Conservation of Energy claimed that a 10 per cent. rise in prices would lead to just a 1 per cent. drop in energy use. However, the Government claimed that they would deliver 15 per cent. of their targets. For the sake of argument, let us accept that figure. I simply want to know how the Government intend to fill the gap that has been left since they were prevented from introducing the second tranche of VAT on fuel. They were prevented from doing so because they showed no concern for the consequences that it would bring for ordinary people. People saw through the Government and realised that they were hiding their tax-raising priorities beneath a green veneer. The Association for the Conservation of Energy calculates that the lower VAT rate will produce savings of 0.6 million tonnes of carbon against a target of 1.5 million tonnes—close to my simple calculation that half the tax hike will deliver half the savings.

Other policies, including the policy to encourage combined heat and power generators, are not delivering planned savings. In 1990, there was 2,000 MW of capacity of combined heat and power. To reach the target of 5,000 MW, new CHP schemes must be built at a rate of 300 MW a year—but only half that rate has been achieved over the past five years. I suspect that the 1 million tonne savings target will not be reached. Matters are getting worse. Last year, only 94 MW were built—a mere one third of what is needed.

Between 1990 and 1993, we achieved 221 MW of new renewable capacity—an increase of 74 MW a year. At that rate, we shall achieve only half the target of 1,500 MW of new renewable capacity by the year 2000. That casts doubt on the 0.5 million tonnes of carbon saving that the Government said that they intended to deliver in that way.

Improved building regulations are to be introduced too late. The aim was for new building regulations to be published in early 1994 and introduced later that year. Those measures are now to be introduced in July 1995—a year late—but the Government have not altered their estimate of the CO₂ savings that were supposed to flow. Logically, the savings will be 20 per cent. under the 0.25 million tonne target that they announced, as houses built before the regulations are introduced will not conform to them.

To do their bit for the environment, Government Departments were to cut their energy use by 15 per cent. over the five years up to 1995–96, but some Departments are still not producing figures and the figures that are produced show that overall progress towards those targets is being made at only half the rate necessary to achieve them.

Health authorities were set targets for energy savings of 15 per cent. over the five years to 1995–96. With just one year to go, they have managed only 7.9 per cent. It was also announced that longer-term targets were to be set, but that has not happened. That part of the programme was due to provide 1 million tonnes of carbon savings, but it appears that only half that amount will be achieved.

The policy on domestic appliance standards appears to have been almost completely abandoned. In their original plans, the Government expressed support for EC standards to raise the efficiency of domestic appliances by 40 per cent. by the year 2000—to save 0.5 million tonnes of carbon emissions. They are now relying on joint voluntary initiatives in some sectors. They talk about continuing assessment of energy labelling and other policies, but make no reference to setting targets, and that represents a considerable retreat from policy. We can only assume that the target will not be met.

Research from the United States research agency, D.R.I. McGraw Hill, shows that the targets will be missed and UK CO₂ emissions will increase over the period by 4.1 per cent. Despite all that, I have little doubt that the Minister will say that he is still confident that CO₂ emissions in the year 2000 will be the same as those in 1990, as promised at Rio. That seems surprising, given that Government policies now lie in tatters. He must be keeping something from us if he can be so confident. It is rumoured that the secret is that the Department has calculated that none of these programmes is necessary as emissions will stay constant without any effort from the Minister.

The Government have reached that conclusion for two reasons. First, they have changed their estimate of the proportion of electricity generated using gas and nuclear power, which lowers their prediction of CO₂ emissions for the year 2000 without needing to reduce the total amount of electricity used. Energy paper 59—this was after consultation with the national grid—stated that 12 GW of gas-fired capacity was predicted for the year 2000. Energy paper 65 will predict, it appears, that 18 GW of gas-fired capacity will be reached. To reach that figure, 6.9 GW of capacity—it is only just past the first planning stage—has been included. Much of that will probably never be built, and still less is likely to be part of the national grid base load.

Similarly, it appears that problems with the nuclear generating capacity are being ignored. Dungeness and Heysham I have both been closed down since the end of last year and could be offstream for a long time yet. These two huge reactors represent about 30 per cent. of Britain's nuclear capacity. Yet Government figures rely on all this capacity being up and running in the year 2000. This great reliance on some broken-down reactors and a load of rather old Magnox stations staggering on into the next century is certainly cause for concern.

Secondly, it has been rumoured that the assumption of medium growth, which was used in deciding a target of 10 million tonnes, is to be altered to a low-growth assumption, meaning that CO₂ emissions will not rise as high as first thought.

It is refreshing that the Government are being slightly more candid about the lack of success with their economic policies, but having to lower a target which would have reduced CO₂ output by 6 per cent. shows a serious lack of commitment to the environment. Surely the Minister should be continuing to pursue policies aimed at reducing emissions by at least 6 per cent., which the programmes were supposed to deliver, and treating any additional savings from continuing slow growth as an environmental bonus. After all, he is not relying on better weather than usual in the year 2000. He should not rely on fickle energy markets and poor economic performance. We should remember that many experts always considered that the 10 million tonne target was very conservative. Halving the target would make it laughable.

I shall make three allegations. I hope that the Minister will respond to them by telling us what his future plans now are: First, the programmes for the environment targets have never been allowed to affect the Government's policy of privatisation. The privatisation of the gas and electricity industries has systematically taken priority over the environment. The sale of the generating companies and grids and the introduction of competition into the gas market continue to worsen the shambles. The Government are more concerned to sell energy producers than to conserve energy.

Secondly, the Government's ideology has led them to attempt to meet their targets without offering any assistance to people on low incomes. They have not invested money sensibly in energy conservation. They have done the reverse in trying to bolster their own revenues by. dressing up their taxes in green clothes. That is what led to the value added tax fiasco.

Thirdly, the Government have been happy to set targets without the means of achieving them. They have sought to kick the political football up the field to a time, as it were, when they feel that they will not be in office and, therefore, not responsible to answer for their failures.

Having made three allegations as a humble seeker of the truth, I shall pose some questions. How does the Minister intend to break the funding deadlock of the EST? Will he introduce legislation? Will he use gas legislation to force the regulator to fund environmental projects? Will he act on the recommendations of his colleague in the Department, the Under-Secretary of State, and issue regular bulletins setting out the performance of individual programmes and setting rolling targets for CO₂ emissions beyond the year 2000? If so, when will that happen? Can he confirm that the Government continue to be dedicated to reducing CO₂ emissions by 10 million tonnes by promoting energy efficiency? What does he intend to do to make up the shortfall—I estimate that it will be about 40 per cent.—caused by the failure of his present programmes?

Finally, and most interestingly, how can Ministers continue to be so brazenly confident about achieving 1990 levels of CO₂ by the year 2000, as they sit surrounded by their failed policies? What is the secret?

2.49 pm

The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford)

Some people manage to read out Christmas carols and make them sound like a funereal dirge. To use a similar analogy of a football, I am afraid that when the hon. Member for Coventry, North-East (Mr. Ainsworth) kicked it, it went flat. The reality is that the Government are firmly committed to meeting the challenge of sustainable development. I shall try to answer as many of his questions as possible, but I will have to write to him on any that I fail to answer and I am sure that he will understand as the minutes available have been eaten into severely.

We are committed to meeting the challenge of sustainable development, including the threat of global climate change. A great deal of progress has been made since the publication last January of the sustainable development strategy, the climate change programme and other associated documents.

The United Kingdom has played a leading role in the international negotiations, under the United Nations climate change convention. While the scientific evidence of human-induced global warming is not yet conclusive, it is clearly right for us to take precautions now to safeguard our future.

The challenge is global, but the onus must initially be on those countries that have the scientific and industrial base to take effective action, which includes us. We must make changes and demonstrate what can be done, so that others in developing countries can follow. That is why the United Kingdom has been at the forefront of international action under the United Nations climate change convention.

The convention's ultimate objective is to achieve stabilisation of greenhouse gas concentrations at levels that would prevent dangerous human interference with the climate system. As a first step, the convention commits developed countries to take measures aimed at returning emissions of CO₂ and other greenhouse gases to their 1990 levels by the year 2000.

We were the first country to present our national programme under the convention and the first to publish a detailed programme demonstrating how we were aiming to meet those commitments, and we are fully committed to fulfilling our obligations under that convention.

The United Kingdom climate change programme was published in January 1994. The centrepiece is the set of measures to limit CO₂ emissions. It was based on. the Government's energy projections, published in 1992, which suggested that—on the basis of a central scenario without any new measures—CO₂ emissions would be about 10 million tonnes of carbon above the 1990 level by the year 2000.

The CO₂ programme is based on a partnership approach, and was drawn up following extensive consultation, which included representatives of all sectors of the economy. The programme was developed on the basis of that detailed discussion and debate of the most cost-effective options. During the consultation process, many organisations expressed a willingness to play their part by taking action to improve their own energy efficiency and helping others to do so—a genuine partnership approach.

The CO₂ programme contains a balanced package of measures covering all sectors of the economy. We want to achieve energy savings as cost-effectively as possible. Our priority is to exploit the potential that exists for improving energy efficiency. That can bring social and environmental benefits, as well as reducing CO₂. The programme is aimed, therefore, at ensuring that both individuals and organisations exploit the considerable scope for taking action that is cost-effective in its own right.

We are encouraging action through the climate change programme. The Government have provided the framework for change, but it is the decision makers in households and businesses, including the energy suppliers, who will take the action that will lead to lower emissions. Thus, a key element in the programme, the dissemination of advice and information on action that we can all take to achieve savings, is vital.

The domestic energy campaign, "Helping the Earth Begins at Home", which we have run for the past few years, has successfully increased awareness of global warming. We have now introduced a new phase, called "Wasting Energy Costs the Earth", which will encourage domestic consumers to turn that awareness into cost-effective action in their homes.

We seek the maximum co-operation from the private sector in the campaign, and it was recently launched with an initial promotion on low-energy light bulbs. That was very successful and met its target of increasing sales of those light bulbs by a million units, which alone is expected to save 98,000 tonnes of CO₂.

Implementation of the programme is still in its early stages but there is already evidence of the success of a number of the measures that it contains.

First, the "Making a Corporate Commitment" campaign encourages top management in organisations in the private and public sectors to make a commitment to energy efficiency. Some 1,800 organisations have signed up, and a recent survey showed that their energy management performance is significantly better than that for businesses generally. The campaign is succeeding by changing board-level attitudes.

Secondly, as part of our programme to stimulate the development of new and renewable energy technologies, the third renewable non-fossil fuel obligation order was announced last December. It is expected to double the capacity of electricity from renewable sources already operational under the first two rounds. It keeps the Government on course as we work towards 1,500 MW of new and renewable generating capacity in the United Kingdom by the year 2000.

Thirdly, new building regulations to come into effect in July are expected to improve the energy performance of space and water heating in new homes by 25 to 35 per cent. compared with current standards. We expect similar improvements in the non-domestic sector.

Fourthly, as part of the long-term strategy of increasing fuel duties in the transport sector by at least 5 per cent. a year above the rate of inflation, duties were increased recently by 8.6 per cent. in real terms. That also provides an incentive to improve the fuel efficiency of vehicles and of driving patterns.

There are additional measures which, although primarily aimed at achieving other benefits, have been effective in contributing to reductions in CO₂ emissions. For example, the home energy efficiency scheme has already provided grants and free advice to improve the energy efficiency of a million homes since it began in its present form three years ago. The budget for the scheme in the current financial year has been increased by a further £8.6 million, bringing the total available for grant to £77 million. In each of the next three years, the sum available for grants will be increased again to around £100 million—enabling about 600,000 homes a year to be insulated. Those improvements to the housing stock are long lasting and will benefit future occupiers of the homes and contribute to long-term CO₂ reductions.

The hon. Gentleman touched on one or two other points, which I shall try to pick up as I go along. For instance, he mentioned combined heat and power. Considerable progress has been made in the use of combined heat and power, which has been encouraged since the privatisation of the gas and electricity industries. We now have 3,000 MW installed CHP capacity in the United Kingdom on more than 1,100 sites. I opened such a site on a housing estate north of London, which is using redundant tank engines. That is an interesting turn-round, considering the international situation.

The scorn which the hon. Gentleman poured on the public sector was utterly unjust because we accept that the public sector, particularly central Government, has a special role to play—if for no other reason than to set an example. The Government are fully committed to an ambitious target of improving energy efficiency on their own estate by 15 per cent. over the five years ending in March 1996. The 1993 results are being analysed, but the 1992–93 CO₂ emissions per square metre and CO₂ total emissions had reduced by 6 per cent. and 3 per cent. respectively. After March 1996, further targets will be set to take Government estate energy use to well below 80 per cent. of 1990 levels by the year 2000.

On efficiency standards for appliances, the Government have always supported the European Commission in developing measures to bring about improvements in the energy efficiency of domestic appliances. A directive covering the mandatory energy labelling of refrigerators and freezers came into force in the UK on 1 January. Further directives are under way covering the mandatory labelling of washing machines and tumble dryers, and progress has clearly been made in that direction.

Clearly, with an innovative programme of that scale, it is crucial that we monitor the progress towards achieving our overall target. Our programmes have quantitative targets. We monitor and report on them, for example, in an annual White Paper. We are also questioned on them regularly in the House. The hon. Gentleman is vigorous in doing so.

It is inevitable that some elements of the programme will save more CO₂ than expected, and others will save less. Continuous monitoring is, and will continue to be, an essential part of the process of developing a response within the flexible programme that the Government have laid out. I have already mentioned some elements of the programme where we have carried out some adjustments.

Some items in the programme are more experimental than others and further adjustments must be made. I accept that the Energy Saving Trust had a difficult and uncertain year. I am abundantly aware of that because Lord Moore was my predecessor as Member of Parliament for my constituency and lives just down the road. On Monday, my hon. Friend the Minister for Energy and Industry announced that the Government will take powers to contribute to the trust's running costs. That will enable the trust to reconsider its plans, and it represents an important first step in establishing funding for the trust and the schemes that it brings forward.

The hon. Gentleman asked about the role of the regulators. Their independence is an important principle. They must balance their various duties, and the hon. Gentleman would not expect me to comment on legislation that is not yet before this House and that is not for my Department.

Our monitoring shows that we are currently on course. Provisional figures for 1993 show a reduction of 6 million tonnes of carbon compared with 1990 levels. With the economy beginning to grow again, we cannot afford to be complacent. and we are currently considering whether further measures will be needed in the light of recent developments. We will draw our conclusions from that review as soon as possible.

The convention represents an important first step in tackling the threat of climate change, but it is only a beginning. The adequacy of existing commitments will be reviewed at the first conference of parties to the convention that starts next month in Berlin. It is expected that the conference will set in place the machinery for agreeing further far-reaching commitments.

The Government will support the position of the European Union, agreed at the meeting of the Environment Council in December, which calls for the current commitments in the climate change convention to be strengthened and extended. The conference will begin to examine what more could or should be done under the next phase of the convention.

Our programme sets out possible options for further measures beyond the year 2000, and we will examine them carefully, taking into account the national conference to look beyond 2000 that was held last year. We will also take account of the new energy projections, to ensure that the UK is well placed to contribute towards achieving the convention's ultimate objective.

The Government emphatically remain fully committed to fulfilling their obligations under the climate change convention. The threat of climate change is a global problem and must be solved by global action. That is why we remain committed to active participation in the international process under the climate change convention and to fulfilling our own obligations. We will continue to monitor and review our programme, taking whatever steps are necessary to ensure that we remain on course to meet our commitments.

Question put and agreed to.

Adjourned accordingly at two minutes past Three o 'clock.