HL Deb 27 November 1991 vol 532 cc1319-46

3.24 p.m.

Lord Campbell of Croyrose to call attention to the case for modifying practices which cause pollution and for increasing efficiency in the use of energy in order to avoid predictable damage to the environment; and to move for Papers.

The noble Lord said: My Lords, earlier this month the noble Lord, Lord Ezra, initiated a debate on the report of the Select Committee on the European Communities on a similar subject—energy and the environment. The noble Lord, Lord Ezra, had chaired a sub-committee considering four documents emanating from the EC Commission. It was a most informative discussion and a number of options and suggestions were aired. My intention today is to proceed from there on a world-wide basis. My aim is not to be repetitive but to complement that debate.

For example, the scope of that debate did not include transport, which has a significant impact on the environment while inevitably depending on sources of energy. The subject of transport, and the motor vehicle in particular, is definitely within today's agenda.

Before going further I declare again an interest. For the past 16 years I have worked with an international oil company, which is the operator for one of the largest fields in the North Sea. An important conference on the environment is to take place in Rio de Janeiro in June attended by virtually all the nations of the world. It has already been called the earth summit Through a series of conferences we must hope that policies will be agreed and acted upon. The poorer and less developed countries will need help from others. Unless most of the world works together towards the same objectives, the will to improve wasteful or polluting practices will be weakened. An individual country or group of countries may feel that their efforts can account for only a small percentage of the changes desired. They will ask themselves: is it worth the effort?

One of the principal subjects of anxiety at Rio will be global warming. There have been several debates in your Lordships' House on the greenhouse effect and the gases that cause it. Indeed, the subject was being raised in the House well before public interest was aroused outside Parliament. Scientists are still not agreed upon the precise effects in 30 to 40 years' time of emissions of greenhouse gases at present rates. I accept entirely that it may be some time before evidence can be evaluated conclusively. In the meantime, warnings about sea levels rising and other hazards are useful indications of very serious changes which may occur, if nothing is done, with devastating effects on some areas.

What we must register with alarm, I submit, is that the natural cycle, especially of carbon dioxide, is being distorted by the activities of human beings, by mankind. That is likely to be a dangerous process whether or not our experts can see the exact consequences. The rate of combustion of fossil fuels releasing carbon dioxide into the atmosphere together with the massive reduction of forests which absorb carbon dioxide is causing that distortion. The normal balance of gases is being upset.

The British Government and some other governments accept that corrective action is needed. At the Rio conference and elsewhere, I hope that they will convince others and come to agreements on where action and further expenditure are necessary and on the burdens that need to be shared.

The demand for energy continues to grow in this country and in others despite the recession. In the United Kingdom fossil fuels play the main part in meeting that demand. I understand that in this country 45 per cent. of the carbon dioxide emissions come from power stations. As the industrialisation of developing countries proceeds, it is likely that even larger amounts will be released. India and China will be using mainly coal-fired power stations. That is their intention. Therefore, we must continue to develop alternatives to fossil fuels where practicable. The world's accessible oil and gas reserves may, in any case, have been used up within about 100 years.

Of the alternatives, the nuclear sector can make the largest contribution. Renewable sources can help; for example, tides, waves, wind power and solar energy. At present only modest amounts of energy come from such sources or are in sight. One must not overlook the fact that there are difficulties in respect of all of them. I shall return to that subject later.

Energy efficiency, which includes avoiding wasted energy, must play an important part. The aim should be to extend for as long as possible the period of use of oil and gas reserves. As regards nuclear energy, the long-term aspiration of the human race must be fusion. Already life on earth depends on the benefits of fusion from the sun. The experiments at Culham in Oxfordshire at the Joint European Torus are designed to find ways of producing the fusion process at will on earth. The recent good news that an early stage has been reached successfully is encouraging. However, the process is still 50 or more years away from practical application. We and the next few generations must keep the planet clean and keep its ecosystems in balance until fusion becomes possible. No doubt fusion will have its own problems of waste and pollution, as recent correspondence in The Times has suggested. However, it should not upset the balance of the ingredients of the atmosphere.

Without the prospect of energy from nuclear sources—and from fusion in particular—the environment for our great-grandchildren and their descendants would look discouraging. Twenty years ago fusion was for the layman a panacea, providing efficiently for mankind's needs but likely to be unattainable. It was no more than a dream. If man could master the process, energy could be produced in plentiful supply from ordinary substances, such as seawater. One felt rather like the alchemists of centuries past who strived vainly to turn base metals into gold. However, we can now be optimistic about the long-term future.

Our immediate task is to change and to modify present practices and to persuade other countries, especially those in developing parts of the world, to take similar action. I was glad to read a speech made by my right honourable friend the Secretary of State for Energy on 5th November. He stressed that energy efficiency was the quickest and most cost-effective way of reducing emissions of carbon dioxide. After pointing out that as much as 80 per cent. of the world's present energy needs come from burning fossil fuels, Mr. Wakeham advocated substantial improvements in efficiency and the development of alternative sources.

In Britain the Energy Efficiency Office has been promoting programmes to increase efficiency. And earlier this month the Government launched a three-year campaign entitled "Helping the Earth Begins at Home". I hope that those initiatives reach the majority of domestic consumers and exert influence upon their habits and plans.

The United Kingdom should play a part in improving clean coal technology. Coal will continue to be a source of energy for many years. The developing countries are likely to increase massively their use of it. The need to reduce the carbon dioxide and other pollutants from coal will become more urgent. If we in this country can, with our present knowledge and experience, achieve advances, there should be requirements in this technology in other parts of the world besides application in our own power stations. I am glad that the noble Lord, Lord Ezra, is to speak in today's debate. He must know a great deal about the subject and I shall be interested to hear his comments.

Transport is responsible for much of the pollution of the atmosphere, motor vehicles in particular. It is probably the most difficult sector to curb or control. The petrol engine emits carbon monoxide and unburnt hydrocarbons. As from the end of next year all new cars in Britain must he fitted with catalytic converters which will reduce those emissions. I am told that petrol and diesel engines will then be roughly equal in their pollution effect. Work has been carried out on electric road vehicles which will avoid such pollution. However, as in the case of electrically-powered trains, the original source of the energy must be traced. If, as is mostly the case with railways, the electricity is generated from coal-fired power stations, the emissions of greenhouse gases have not been avoided. The battery in an electric road vehicle must be recharged. Again, one must enquire how the electricity supply was generated.

Incentives to economise within the area of transport on the burning of fossil fuels are being widely discussed: for example, EC Ministers have been considering taxation. It will not be easy to co-ordinate worldwide action. In the United States tax on gasoline—the American name for petrol—is small compared with ours. A British motor industry report published this month states that £20.7 billion of tax in the United Kingdom is collected from the motor industry and its customers. It further states that nearly half, £9.6 billion of that, is the duty on fuel. Americans, for whom the family automobile is a household god, are not ready to increase their taxes to the levels of Britain or other industrialised countries.

I return to the alternative sources of energy. While renewable sources should be given every encouragement, it must be recognised that environmental problems arise. For a comparatively small amount of electricity generated from solar and wind sources, considerable areas of land are needed for panels and wind vanes. Where suitable places can be found those sources can add useful contributions. Barrages and other tidal works are likely to alter riparian water levels, thereby upsetting bird sanctuaries and causing similar disturbances. Many noble Lords are aware of the objections that arise when such proposals are put forward. The problems are not insoluble but they must be identified at the earliest possible stage.

On Monday I asked a Question about landfill gas, a biomass source of energy. The Answer was encouraging and stated that good progress was being made in this country. I know that progress is also being made in other countries, in particular Germany. Methane, which would otherwise escape into the atmosphere, is one of the worst greenhouse gases.

In Britain, we have already exploited the principal opportunities that exist for hydro-electric power. Not a great deal more can be done in Scotland or in Wales. Will my noble friend Lord Astor comment upon the apparent anomaly in the recent legislation on the electricity industry? In England and Wales there is an obligation to use a certain percentage of electricity from non-fossil sources. I understand that that has already acted as an encouragement for the use for wind power and other sources. The equivalent requirement does not apply in Scotland where there are likely to be more suitable conditions; for example, for wind farms in sparsely populated areas or for wave power in lochs or the sea.

The incentive is lacking in Scotland. Is that intentional? What are the reasons? One reason may be that so much electricity is generated in Scotland from nuclear lower stations, compared with England and Wales, that the nuclear sector in Scotland does not need support. If that is the reason, could not some change be made to encourage use of other non-fossil sources in Scotland?

At the Rio conference no doubt an important subject will be further control of chlorofluorocarbons—CFCs—which deplete the ozone layer. I make only a passing mention of them because they are mainly used as refrigerating agents and are not an energy source. Insuring against leaks and proper disposal after use, which can be expensive, must be the continuing objective there.

I have ranged widely from looking at prospects for the whole planet several decades ahead to improving efficiency now in domestic households in Britain. I hope that the House will understand why I do that. We and other nations need to strengthen a firm determination to use the fuels and sources of energy now available in the most economical and least damaging way in order to protect our surroundings. Some of those fuels will in due course dry up and disappear To obtain full co-operation, it will be helpful to have before us the reassuring prospect, although many years ahead, that science and technology are on the way to unlocking new sources of nuclear energy which will be much cleaner and more parsimonious in fuel consumption. When that time eventually arrives, let us hope that the world's natural assets will have been preserved by willing and informed co-operation. I beg to move my Motion for Papers.

3.42 p.m.

Lord Dean of Beswick

My Lords, I thank the noble Lord, Lord Campbell of Croy, for introducing this debate. It allows us to speak on what is probably the most important subject facing the international community and the future of our planet as we know it. I must apologise in that I must leave the Chamber at 4.45 p.m. for a meeting, but I shall try to be back in time for the Minister's reply to the debate.

The noble Lord touched upon an extremely important point in his wide-ranging speech. It was almost a case of deja vu. Similar points were made when we debated energy in a global sense. The noble Lord referred to the forthcoming conference in Rio. The most important question to which it must address itself is how we are to provide enough energy for the world to survive in its present form. I quoted figures in our previous debate on this subject. I do not have them with me, but I believe that I said that the prediction was that the population of China will double in the foreseeable future and that the population of India would continue to explode upwards, as is the case in most of the developing but poor countries. We cannot deny them the right to energy while we have a proliferation of it.

Much has been said about the greenhouse effect. That was dealt with today at Question Time when the House discussed the new fuel which is to he used. It would be disastrous if we were seen to be burning a fuel which has such a damaging discharge while at the same time, as the noble Lord quite rightly said, trying to persuade the countries in South America not to demolish their many rain forests. They do so for economic reasons, which they are able to justify. If we do not find an alternative to offer them, we are wasting our time.

In an obviously well-researched speech the noble Lord said that fusion will be available in 50 years' time. Can we wait 50 years? I do not believe that we can because we shall then be almost halfway through the next century. In my opinion the demand and pressures by that time will be appalling. The noble Lord said that the scientists are not sure what will happen if global warming continues to rise. However, we know that whatever the results are, they will not in any sense be beneficial.

One of the matters to which we must look more urgently than at present is our own performance. This country is now known as the dirty man of Europe. It was quite clearly illustrated and proved that our burning of fossil fuels—and the noble Lord mentioned the present figure of 45 per cent. although I believe it used to be higher than that—was the prime factor responsible for the acid rain which has devastated areas of Europe. I have a question for the Minister, which I do not put in a carping sense. The Government had a programme for the desulphurisation of our larger power stations such as Drax B and the other major power stations which still burn coal. Can the Minister tell the House what has happened to that programme and whether it is progressing as fast as was first envisaged? If he cannot give me an answer in his reply, perhaps he will place some information in the Library. I believe that if we do not prove by example that we mean what we say, we shall not be entitled to state at Rio what other people should be doing.

I have spoken about India and China but the noble Lord produced a figure on which we should concentrate our thinking. I believe I used a similar figure in a debate some time ago. The total known fossil fuels on the earth at present are expected to last another 100 years at present usage rates. If the population doubles in some of the densely populated countries, it will not last 100 years. What will take its place?

I know that there is a strong and powerful anti-nuclear lobby. My noble friend Lord Hatch is part of that. However, as yet nobody has found an alternative. There is no point in saying to people in China, Africa, India and the vast tracts of South America that there is power but that certain lobbies believe it should not be made available. People who are dying from hypothermia will not wish to be told that they are dying a pure death because they are unaffected by nuclear energy. In terms of contamination fossil fuels have probably killed more people than nuclear fuel ever could. There must be a review of the position of nuclear energy and its safe use; otherwise, we have nothing to offer those people.

The greatest user of energy in the world today is the largest and most powerful true democracy—the United States. Its wastage of energy is absolutely appalling. The Americans do not conserve any energy. They just pay through the nose for it. Their use of energy per capita of the population is disgraceful. They must look at that issue and start setting an example. I believe that the United States is the only major country in the world which heavily subsidises petrol at the pump. That is no incentive for people to stop or limit their consumption of petrol. They are known as gas guzzlers. Nobody aspiring to become the president of America would dare to attempt to deal with that situation because if he did so he would never be elected.

Those are some of the matters to which we must address our minds. The noble Lord referred to the transport industry. It has made substantial progress. He gave some figures which indicate that in the foreseeable future most of the pollution coming from exhausts will probably be eliminated. I believe he also mentioned the diesel engine. On the information I have received from people in the motor industry, the diesel engine can be geared to make a far better contribution than can the petrol engine to the exercise in which we are all so involved.

I want to talk briefly about transport in general. Basically, I am a big city man. I spent most of my life in the centre of Manchester and lived in Leeds for a while. A programme has been introduced for big cities to return to using tram cars, in which I travelled as a boy—quite a while ago! However, I find difficulty in understanding why we are bringing back that type of transport and at the same time allowing the cities to be absolutely choked by the motor car.

Either the Government or local authorities will have to look seriously at banning motor cars in city centres and conurbations such as London. Cars cause the biggest pollutant problem that affects people. I know that from living on a main road just outside Manchester. There is a continual passage of vehicles of all kinds, bumper to bumper—heavy goods lorries as well as saloon cars—passing my door in both directions. Sometimes I can taste the pollution. We must ask ourselves whether in a free society we should continue to allow that to take place with the toll it takes on people's lives, or whether we should grasp the nettle and do something about it.

I own a car. I use it as little as possible when I am in Manchester because I have reasonable bus access. It is not perfect but I can catch a bus into Stockport or Manchester almost door to door. When I want to travel to the main line station I can do the same. However, I notice that when I am doing that there is an endless line of cars collecting people and dropping them off. It all contributes to that which we are trying to eliminate.

I understand that a strong lobby is suggesting that we put goods back onto the railways to release the pressure on the roads and help the situation. My information is that it would be a difficult exercise at this point in time unless the Government were prepared to underwrite the billions of pounds of expenditure necessary to develop the railways to that extent.

We are left with the situation in this country whereby the two biggest culprits, as the noble Lord said, are the fossil fuel power stations and the motor car. I believe local authorities will find themselves in difficulty if they suddenly decide to bar the motor car from the city centres. Although I use buses—I do not want to be too political—enormous cuts have been made in the amount of money available for the provision of local transport services. I am convinced that many people are using motor cars to travel around the cities and into the centres because no alternative transport is available.

Some time ago I was in conversation with the present leader of Manchester City Council. We do not meet often because we hold different opinions on some major political issues. However, I asked him what is to happen with the new rapid light transit railway in Manchester. It is no good to me; it comes nowhere near my home. It travels from the north to the south of Manchester. Huge areas in the north-east, east and south-east, where most people live, are hardly touched by it. I wish it every success and I hope that it is a success. I also hope that it is only the start to a network of rapid light transit railway in that city. Other cities are introducing similar systems.

I do not believe local authorities and poll tax payers—they will be something else next year—should be asked to bear the burden of providing the funds to bring that system into being on an extended scale. The Government, whatever their colour, have a responsibility to do that. Unless they are prepared to provide the funds and diminish the use of the motor car, even with all the action the motor car industry is taking—and it is doing a lot to deal with the situation in this country—pollution will continue to rise with all the appalling consequences to people's health.

One of my finest memories is when we suddenly had no smog. I can remember a few years ago that whenever we had smog in London and other big cities the papers were full of reports of deaths from bronchial and heart-related complaints. In my opinion many people are still being affected in that way due to living 24 hours a day in the pollution arising from petrol stations.

Turning to power stations emissions, I could not believe it when I was told of the amount of pollution, in tonnage, being blasted out of our big coal-fired power stations. They were not talking of hundreds of tonnes but thousands of tonnes of pollution being blasted into the atmosphere in one place and falling to earth elsewhere on to some unlucky persons.

Once again I thank the noble Lord, Lord Campbell of Croy, for introducing the debate. What I have said is perhaps said in a rather pepper-potted way. But I believe serious problems exist to which we should turn our minds. In my opinion the conference in Rio should not look at the situation with the jaundiced eye of those of us who have energy and, whether we like to admit it or not, are the polluters of the world. We must formulate an approach which will give encouragement to the emerging countries whose youth population will soon double, and convince them that we are on their side. We must offer them something quickly. It may be nuclear energy; there is nothing else on the table at present of a similar dimension.

Once again I thank the noble Lord for giving me the opportunity to make a contribution to the debate. I only wish it had a wider viewing and speaking audience in your Lordships' House. Nevertheless, he did a first class job in bringing the matter to our attention.

Lord Marlesford

My Lords, before the noble Lord sits down perhaps I could say something. Following his desirable objective of reducing the number of motor cars in cities, with which we all agree, perhaps he will accept that one thing that could be done, and done cheaply, is to make it easier to use a bicycle in cities. I declare an interest as a long-term cyclist in this capital city. There are virtually no facilities for cyclists and a small expenditure by central or local government could greatly increase the use of bicycles. It is one of the greenest and healthiest forms of transport available.

Lord Dean of Beswick

My Lords, the noble Lord is obviously fitter than I. Obviously cycling could be a successful and contributory factor based on the fact that the necessary parking or other facilities are made available. I should not have thought that would cost much money and the suggestion should be seriously considered by local authorities.

3.59 p.m.

Lord Hatch of Lusby

My Lords, I am very pleased that the noble Lord, Lord Campbell of Croy, has introduced this debate this afternoon. We cannot have too many of them. I hope that we shall have a succession of discussions of this kind between now and Rio, and afterwards.

I have spoken before about transport and the question of vehicles and their emissions. I do not propose to go over that ground again. I shall leave that to other Members of your Lordships' House who are taking part in the debate. All I shall say about the subject is that it should be noted that the catalytic converter is not going to remove carbon dioxide emissions.

I would draw the Government's attention to the question that I asked during the debate on the humble Address regarding the omission in the Government's report analysing what had happened since the White Paper was published last year. Whereas the White Paper talked about the need for reducing traffic in cities, the report had nothing whatever to say about that. I should like to know whether the Government have now abandoned any hope of putting into effect the important matter which they raised in their own White Paper.

This afternoon I shall concentrate on the importance of using renewable sources of energy to reduce the polluting forms of energy which have already been widely mentioned. We go back to the time of the privatisation of the electricity industry and the institution of the non-fossil fuel obligation. The Government established a protected market for nuclear power. How has that money been used? Between 1979 and 1990 nuclear power and fossil fuels received £3,000 million in R? renewable energy received £203 million. Ninety-eight per cent. of the £1.15 billion which is raised each year through the non-fossil fuel obligation supports nuclear power. That adds £17 to the average household annual electricity bill. The amount spend on R&D for renewables adds only 40p. in its support for new renewable energy projects. I suggest that here the Government have their priorities wrong.

I want to use the question of wave power as an illustration of the way in which the Government have been neglecting the opportunities which have been opened up for the use of renewable energy. I have given the Government notice that this was the main issue that I wanted to raise. We recall the 1982 scandal—and it was a scandal—when the nuclear energy lobby deliberately falsified figures in order to purport to show that renewable energy was so much more expensive than nuclear energy. That has now been exposed. But as a result of that scandal and of the deliberate activities of the nuclear lobby, we have lost the research work that was being done particularly in Edinburgh by Professor Salter concerning what is known as "Salter's Duck".

Research money for the promotion of wave power ceased in that year because it had been shown, as a result of the activities of the nuclear lobby, that the cost of wave power was prohibitive. We now know that it was not. In fact, quoting from the evidence given to the Energy Committee of another place, a member of the department had this to say: if it is true that wave energy looks as though it can be produced at a cost as low as 5–5.5 pence per kilowatt hour … that would be very good grounds for investing more money in that particular area of technology". I was shocked to find that in 1990–91 only£200,000 was set aside for research into wave energy. I believe that that figure has been raised in the current financial year to£300,000. That is a drop in the ocean compared to the millions of pounds that are being poured into research on nuclear energy.

The noble Baroness, Lady Blatch, very kindly sent me a copy of the Minister for Energy's Statement of 5th November when he announced the new amounts to be allocated to renewable energy. I welcome that Statement as a small increase in the provision for research into renewables, but there is not one mention in it of wave power. I ask the noble Viscount who is to wind up why wave power was omitted from that Statement. I believe that I know the answer. I believe it is because we are still suffering from the scandal of 1982. Because the wave power technocrats have been unable to get research money during the past nine years, so companies have been unable to develop because the technology has never been developed. However, it has been and it is being used in other countries where research provision is much higher than here.

What is needed if we are to use that project in this country and also, one hopes, export the technology abroad, bearing in mind what my noble friend Lord Dean was saying and particularly as regards the developing countries? What is needed in order to provide an alternative source of energy to those forms of energy which are produced with massive pollution? In this country the Government need to extend the contracts which are offered to those companies employed in renewable energy development. At the moment the contracts last only until 1998. No company can develop a programme of research that is going to have a cut-off date of 1998.

The non-fossil fuel obligation is restricting the number of renewable energy projects which could be used by this country. In 1990, only 11 per cent. of the 1,500 megawatts of renewable energy projects that were submitted to the Department of Energy were accepted. We need a policy of objective pricing. The way in which projected prices and the estimated prices of renewable energy have been distorted is a scandal. The Government must accept their responsibility. We need an objective pricing policy to enable the country to know what is on offer, at what price and what contribution renewable energy can make to the provision of our energy needs. We need a dramatic increase in research into and development of renewables, especially of wave power. We need planning controls so that local authorities are encouraged to use and provide for the various forms of renewable energy—wind power, solar power, wave power, landfill and so on.

We should not be so modest. The Government's target is for 2 per cent. of our energy needs to be provided by renewable energy. The Government have already found that in the commercial market there are companies offering much more than that 2 per cent. The 2 per cent. target should be increased to 10 per cent. by the end of this century, with a rapid increase afterwards. By the year 2000 we should be aiming to produce 10 per cent. of our electricity from renewables. If we achieved that target we should be preventing 23 million tonnes of carbon dioxide, 160,000 tonnes of sulphur oxide and a 100,000 tonnes of nitrogen oxide being emitted into the atmosphere.

Surely the whole story of energy provision and the Government's policy on energy over the past 12 years shows that this issue cannot be left to market forces. Government support is required for research and development and in many cases legislation is required to enable local authorities to promote renewable energy and to avert the disasters which loom over us in terms of pollution.

I have given this example before in the House but it is worth repeating. Two or three years ago a group of companies came to see me. The companies had developed a technique for the disposal of refrigerators which would not allow any CFCs into the atmosphere. But they pointed out that the technique cost money. They said that they could not take it further until legislation was provided to enable local authorities to pay the cost of the disposal of the refrigerators. That may seem a small matter, but it could be extended to refrigerators all over the world. We should consider the opportunities in this country for the development and export of this kind of technology. We should realise the tremendous difference it could make to the fate of the world and the great difference it could make to raising the standard of living of third world peoples just to the point at which they can sustain life.

Surely the Government should take up this challenge. They could make Britain the leading exponent of the abolition of pollution and at the same time marry essential development among the poor of the world with environmentally benign technology. That could give a great boost to manufacturing industry and exports and simultaneously make a major contribution to saving our planet.

4.15 p.m.

Lord Ezra

My Lords, I too would like to express appreciation to the noble Lord, Lord Campbell of Croy, for introducing this debate. It is, as he rightly said, complementary to the debate which I had the honour to introduce on the 11th November on the report on Energy and the Environment which was produced by Sub-Committee B of the European Communities Committee.

The case for dealing with the whole problem of energy and the environment is so vast and global that we cannot really pay sufficient attention to it in our various debates in this House. The noble Lord, Lord Campbell, was absolutely right to say that there were gaps in our report. We could not cover everything. There were two gaps. First, we did not cover the transport sector. We deliberately did not cover it because we would not have been able to produce our report in time if we had. Secondly, we confined the report to what was happening in the European Community as that was our remit, whereas of course this is essentially a global issue. The noble Lords, Lord Campbell of Croy, Lord Dean of Beswick and Lord Hatch of Lusby, have covered these wider areas in their contributions to the debate.

I am glad that there is now an increasingly common acceptance of the importance of this issue. The Government have recognised that by their comprehensive document This Common Inheritance, the most comprehensive document on the environmental issue so far produced in this country, which was issued in September 1989. It has been promptly followed up by the first year report, produced exactly one year later, which points out what progress had been made and what jobs still need to be done. I should like to express the hope that, whatever may be the outcome of the next election, whatever government there may be, they will continue this tradition. There is no point in continually having to start again. We now have a comprehensive document with annual reviews. I hope that those annual reviews will be continued and that action will be initiated to achieve the objectives set out in the original document.

In looking at the question of energy and the environment I believe that the developed countries, of which we are one, have a double duty. They have a duty within their own countries to achieve the best standards of using energy with minimal harmful effects to the environment. They have an even greater duty to set an example and provide facilities for the developing countries. If there is an environmental risk in the future, it does not so much lie in what happens here; it lies in what will happen elsewhere if something is not done. In the vast areas of China and India, in the eastern European countries and in the Latin American and African countries there will be a surge forward in economic development and growth. Many of those countries, particularly China and India, have access to substantial coal reserves. They will use those reserves because nothing else is to hand. It largely depends on us as to how environmentally acceptably they use those reserves.

If we can develop systems to enable coal to be used efficiently and cleanly, we shall probably be making the greatest contribution we can to limiting the impact of global warming. That point was referred to by the noble Lord, Lord Campbell of Croy, and I fully support him on it. Britain has a big role to play. We have an enviable tradition over centuries of mining coal and using coal. We are now, with government support. launching into a study and development programme for clean coal technology. That should be expanded rapidly in conjunction with other countries which have made progress in this area. It is an important issue and needs to be tackled effectively.

There are two ways in which we can best ensure that energy is used with least damage to the environment in spite of the increased need for energy in future. First, we should look at alternative sources of energy which pollute less and modify existing sources so that they, too, pollute less. Secondly, we should use energy more efficiently. The noble Lord, Lord Hatch, has referred to alternative sources. I agree with him; more effort needs to be put in that direction. There are many alternative sources of energy which can be developed. My own company—and here I declare an interest—has recently invested in a substantial refuse-burning plant in South London where the alternatives of landfill no longer exist. We are going to burn this refuse in ways which are totally acceptable according to Community rules. We are going to generate electricity and produce heat. Therefore, out of this refuse we are going to be diminishing the need for putting more CO2 into the environment.

The problem we have had, and the big decision we have had to make, as have others who are interested in a project of this sort, is that, as the noble Lord, Lord Hatch, pointed out, the NFFO—that is, the non-fossil fuel obligation procedure—will come to an end in 1998, and yet the sort of project I am talking about requires at least 15 to 20 years before you can fully recover your costs and get into a satisfactory financial situation. I hope that the noble Viscount, Lord Astor, when he replies will be able to tell us something about that because we need to have some assurance that this incentive to produce energy from non-polluting sources is going to be continued for many years ahead.

When we turn to energy efficiency it is generally recognised that this is one of the most effective and immediate ways in which we can safeguard the environment in using energy. In the report of Sub-Committee B recently debated we referred to the energy efficiency gap. There is undoubtedly such a gap of at least 20 per cent., and probably a good deal more. What is becoming evident as one studies this question is that there are some fairly obvious ways in which this gap can be closed; in which we can, if we set about it with determination, make much better use of the energy we consume, and therefore obviate the need for ever-increasing amounts of energy consumption and pollution of the atmosphere.

The power stations happen to be the biggest users of primary energy. They convert primary energy into secondary energy, which of course has been one of the dramatic technological revolutions of the age in which we live. But they do not do so efficiently because of the nature of power generation. The most efficient current power station, if it converts primary energy into secondary energy achieving a 38 per cent. conversion rate, is doing very well. With combined cycle processes using gas, that can probably be increased to about 42 per cent. Combined cycle coal, using clean coal technologies, could get at least that far if not further.

However, that is not good enough. Much more needs to be done, and the solution to that is at hand. If the waste heat is harnessed through combined heat and power processes the conversion rate is doubled. You not only get the benefit of the generation of the electricity but you make use of the waste heat. I am associated with such a project in the city of Sheffield, where the heat comes from another waste incineration plant, and instead of being burnt to atmosphere it is piped through the city of Sheffield and is now providing a totally environmentally acceptable form of energy. There is no possible pollution whatsoever. Here too we need to make a much more determined effort. There is nothing abstruse or difficult about it. It just requires determination, concentration and the necessary capital involvement on the part of both the public authorities and the private sector.

Buildings are obviously another place where energy is consumed. We have to use energy in our buildings in order to keep ourselves warm. We have to have energy in buildings to produce things, and so on. Here we are lagging way behind the Continent in our insulation standards. We need to try to stimulate those. In our recent debate I referred to what they are doing in Denmark, and I should like to repeat it because it is a simple way forward. They have introduced an energy rating system for buildings which is obligatory. A certified energy rating document has to be produced every time a building changes hands. It is one of the documents one has to produce.

There is a system in this country that can be adopted which rates buildings from 0 to 10. I felt that I should not only talk about it but have it done, so I had it done to my home. I happen to live in a fairly old house. I thought that I had done a great deal to insulate it. I regret to say that on the Richter scale of energy efficiency I rated at 4.6. I was told that it was not bad for the sort of house I had, but I immediately put in hand further measures. I recommend your Lordships to do the same. It can easily be arranged. If you have any difficulty let me know and I will put you in touch with the organisation that does this.

Then we come to transport. There is quite a lot going on in the transport sector. If we are talking about CO2 emissions we know that something like 20 per cent. of the emissions of CO2 in this country come from transport, and mainly from motor transport. That was made clear in the Government's report, to which I have referred.

Apart from the CO2, emissions there are the other emissions from transport that need to be dealt with. There are the gases such as carbon monoxide, unburnt hydrocarbons and oxides of nitrogen, all of which can be dealt with by the progressive introduction of catalytic converters. This is a desirable move. But, as the noble Lord, Lord Hatch, rightly said, that does not deal with the CO2 problem. The only way to deal with the CO2 problem is to make much more efficient use of our transport. The prize to be aimed for is to have more efficient cars in the first place and to drive them more carefully. If we had a combination of those two things we could be increasing our usage of motor vehicles but reducing our consumption of energy to drive them. This is a prize well worth going for. After all, the challenge we have is not to deprive ourselves of the benefits that energy brings but to make better use of it, and a more environmentally acceptable use.

I should like to conclude my remarks by repeating my thanks to the noble Lord, Lord Campbell of Croy, for introducing this debate and by repeating my firm conviction that we as a country have this double duty not only within our own territory but, even more importantly, to the third world to show how growth can be sustained and the use of energy developed in such a way that it will bring benefits not only in economic terms but also in environmental terms.

4.28 p.m.

Lord Donoughue

My Lords, I should like to join others in congratulating the noble Lord, Lord Campbell of Croy, on opening this important debate in such an interestingly wide-ranging manner. I agreed with most of what he said. Some of it has been explored in the earlier debate opened by the noble Lord, Lord Ezra, and he added significantly to what was said in that debate in his excellent speech today. This matter is so important that there is no harm at all in restating and reaffirming some of our conclusions in the field of energy conservation. As was said, certain areas were not discussed, such as transport and renewables, and this is an opportunity to touch upon them because they are critical to today's debate.

May I say in opening, and I am sure that the Minister will have some sympathy with this, that we have in the United Kingdom a governmental problem of organisation. I am the energy spokesman, the Minister is the environmental spokesman and we are talking about transport. In fact, departmentally speaking, Whitehall is simply not organised to cope adequately with a problem on this scale which cuts across so many departments. I have some sympathy with the Minister in attempting to answer us all.

Thousands of facts are put out to us but the basic fact we have to sit with is that the energy consumption of primary fuels is still rising this year, even in a recession, and it will get worse as the economy picks up. The two biggest energy consumers are electricity generation and transport. Probably the largest single area of energy wastage is in buildings, as the noble Lord, Lord Ezra, mentioned. Therefore anybody who is concerned to secure an improvement in this field must target those areas and make significant changes there. But it is not possible to make such changes without significant government intervention.

Electricity generation has been mentioned as a major factor and coal is still the dominant fuel for electricity generation. I believe that 70 per cent. of United Kingdom electricity is still produced from coal. It is much less in the OECD as a whole, with an average of around 40 per cent.; and it is declining here because of the decline in new commissions. However, 80 per cent. of our power stations' sulphur emissions comes from coal, and so there is a pollution problem. Coal is the dirtiest and least efficient of our fuels, although it is of course much cleaner than that nasty Orimulsion mixture that we discussed earlier.

So what do we do about coal? We should reduce coal dependency, and that is happening, as I say. In that context one might conclude that financial subsidies for coal are environmentally dangerous, but it would be a pity to eliminate coal because the United Kingdom has such large resources of high quality coal. Do we therefore switch to natural gas? That is happening on a major scale in electricity generation. There are targets to double gas firing in the United Kingdom by the year 2000. It is obviously much cleaner, but the problem is not as simple as that. Gas is, as has been said, in limited supply; so why exhaust it? Because it is limited, the price will certainly rise if there is a switch of demand to gas and in any case it is a premium energy. So why waste a premium energy on crude generation?

I agree entirely with what the noble Lord, Lord Ezra, said from his much greater experience. Much more promising is the development of clean-burn technologies. The technologies are well developed, as he said. Apparently we can now remove up to 95 per cent. of sulphur dioxide from flue gases, even in coal-fired stations, and we can remove over 90 per cent. of nitrogen oxides from flue gases in coal-fired stations.

The technology is expensive, yet surely this must be one of the most important answers to the problem. In it lies more immediate scope, though not necessarily long term, than in renewable energies. We must invest more in developing even better clean-burn technology, and it must be applied to coal. It is worrying that some of the electricity generating companies are contemplating spending on clean-burning Orimulsion rather than on coal. I would think that is quite wrong and I strongly support what my noble friend Lord Dean said.

It is not appropriate just to make a mass switch to gas. If we put our major investment into this clean-burn technology we can develop a proper industry and export technology, especially to India and China, where the potential for pollution disaster has already been mentioned. I believe that by the year 2020 those two countries alone will be responsible for 30 per cent. of the world's emissions of CO2.

In that context I am bound to say—and I think perhaps the Government might privately be bound to agree on this point —that electricity privatisation has not helped. Whatever the commercial and economic arguments, that privatisation has definitely set back the cause of energy conservation and pollution control because it has meant a priority for maximising power sales and consumption. Too little investment is going into clean-burn technology because the companies have already downgraded their commitments to invest in coping with the problem of acid rain and because of their hostility to renewable energy. For all those reasons privatisation has not been helpful. I must ask the Minister why the Government still decline to regulate the utilities more firmly in this area of pollution. We should insist that they give a higher priority to environmental consequences in their generation. They should also give higher priority to conservation rather than consumption and they should be encouraged to give more long-term contracts for renewables, as has been mentioned. They must be made to resist the pollution nightmare of substances such as Orimulsion.

Transport is the other major problem area. It is directly responsible for approximately 30 per cent. of the primary energy consumption in the United Kingdom; indeed, the figure is probably 40 per cent. if one includes related consumption for car manufacture and road maintenance, and the consumption is rising. So we cannot deal with the pollution problem without dealing with the transport problem, and that is getting worse. In the Government's own figures the number of cars on the road is forecast to increase by some 100 per cent. by the year 2025 on current trends.

In pollution terms, the petrol engine is a very inefficient consumer of energy. It can be a dirty pollutant. It is responsible for over 50 per cent. of the nitrogen oxide emissions into our atmosphere. The noble Lord, Lord Campbell of Croy, if I may say so, seemed a little optimistic about the future. I hope he is right but I am sceptical, especially in the light of the great expansion of car use in the third world. It is estimated that the full environmental cost of transport equals roughly 5 per cent. of GDP.

So what are the solutions? Theoretically one solution is quite simple. If you are not talking about practical politics you use fewer cars. That must come to some extent, certainly in towns, and it requires a switch to public transport, as has often been said, with greater use of light rail. One wonders when a government—any government, because I am not blaming the present Government alone—will fully grasp the scale of the problem and the expenditure involved.

I should like to support what the noble Lord, Lord Marlesford, said about facilitating cycling. It is cheap, it is clean, it is healthy and, sadly, very dangerous in present road conditions. Another solution would be more energy-efficient consumption by cars: slower speeds and smaller engines, for which more tax incentives would be justified. We must resist the trend towards larger lorries. I notice that the Austrians have legislated for smaller loads on lorries. Finally, there is the development of alternative car fuels. A great deal has been written on the subject, but, being practical, the technology of alternative car fuel is mixed and the environmental impact is often unmeasured.

The general area of energy conservation—the area which was discussed most in the debate initiated previously by the noble Lord, Lord Ezra—was well covered by the noble Lord, Lord Campbell. I shall not discuss the details of what was said in the previous debate. To summarise for the record: it is in buildings where savings of up to 20 per cent. are possible and economic. We need grants and incentives for better insulation; we need tougher building regulations. The noble Lord, Lord Ezra, rightly referred to the UK failings and the Danish example. I have noted recent European reports that calculate that if all housing in Britain had basic insulation, that would reduce pollution over the next 50 years by 2,000 million tonnes of CO2 and 3,000 million tonnes of SO2 and save £2.5 billion a year. We need better and compulsory labelling of heating equipment. We need more financial incentives to invest broadly in energy conservation.

Turning to renewables, my noble friend Lord Hatch dealt with them at some length. The basic fact is that today only 0.5 per cent. of our energy supply is renewables derived. That is mainly hydro, much of which was started by the 1945–1951 Labour Government. So we have not made much progress there.

On wind, investment is rising but from a very low base. We need much more. In the solar area, particularly the passive solar area, there appears to be great scope for its use in individual dwellings. On biofuels—refuse, straw and wood —there is considerable scope for local, community energy generation; but again long-term contracts are needed. In the tidal area there is potential; and in the wave area, as has been said, research has been virtually terminated and one wonders why. The total research into that is still derisory.

In conclusion, the need for energy conservation, and for greater stress on energy conservation by the Government, on economic and environmental grounds is overwhelming. The Rio conference will be important, but it will achieve little unless individual governments act. Our recent experience is that market forces are not working well enough to achieve a switch to the environmentally friendly energy combustion which is necessary.

I am not opposed to market forces, but the Government must recognise that that is not a sufficient answer. The Government have, I confess, in the past two years shown much greater activity in that field, with numerous publications and announcements, but we still do not have enough action. We need a massive programme of energy conservation to match the scale of the environmental threat. I am afraid to say that I see no sign yet of action on that scale from the Government. I am always optimistic, and I hope that the Minister has more than words to give us.

4.44 p.m.

Viscount Astor

My Lords, we have had a wide-ranging and useful debate this afternoon on some of the most difficult and most pressing environmental problems. We in government do not underestimate the scale of the problems that face us. On the contrary, we have responded vigorously to the challenge both at home and abroad.

Earlier this month, in the course of the debate on the gracious Speech, my noble friend the Minister of State for Agriculture noted the publication of the Anniversary Report on the Environment White Paper, which was published in September.

One could hardly ask for clearer evidence of the Government's continuing commitment to the protection, and improvement, of the environment. The White Paper anniversary report set out specific policy proposals on the whole range of environmental issues. We intend to continue that rigorous practice of review. That is equal to the performance of any state and a great deal better than the majority.

The anniversary report was the first time that a British Government have subjected their policies to such open accountability. Line by line, paragraph by paragraph, we have set out the record. Where progress has not been as rapid as we might have hoped we have not shirked giving an explanation. But in most areas significant progress has been achieved: 250 of the 350 commitments have been met and over 400 environmental initiatives were taken in the first year of action; in addition, another 400 commitments have been made.

Those new initiatives cover the areas we are considering today: a £60 million energy efficiency scheme for public housing; a further £600 million for sewage treatment; and £42 million for recycling. Those are but a handful of the measures that we are taking this year to improve our environmental performance.

My noble friend Lord Campbell of Croy addressed the question of global warming. The relationship between energy and the environment is a complicated one. Energy generation has a series of harmful effects on the environment: from smoke pollution to acid rain; from carbon dioxide emissions to slag heaps and water pollution. Each poses a different problem but there is a common solution: energy efficiency.

Nowhere is that more true than in remedying the problem of increasing CO2 emissions. Increasing use of fossil fuels by man has upset the natural balance of CO2 emission and absorption. We know that that is enhancing the natural greenhouse effect and will cause global warming. We now have a broad scientific consensus that, if we continue as we are, global warming will occur faster than the world has seen over the past 10,000 years. That will lead to rises in global average sea levels and to climate change.

The Government recognise the seriousness of that threat. It calls for a response on a number of fronts. Global action is essential: we are playing a full and active part in the negotiations for a climate change convention. Discussion in the Inter-governmental Negotiating Committee is now based on a possible convention text. I expect good progress to be made at the fourth meeting next month in Geneva.

The environment White Paper and the anniversary report set out a strategy to meet our target of returning carbon dioxide emissions to the 1990 levels by 2005, providing other countries take similar action. We are already taking many practical steps which make sense in their own right as well as contributing to controlling UK emissions of greenhouse gases. We are improving energy efficiency, promoting renewable energy sources and reducing transport emissions. We are planting trees to absorb the carbon dioxide.

Let us look at renewables. Over £24 million of support is available in 1991/92, and about 80 new projects are being initiated annually. We are working towards a figure of 1,000 megawatts of new renewable energy electricity generating capacity in 2000, a ten-fold increase. That is in addition to the long-standing use of more than 1,000 megawatts of hydroelectric plant in Scotland.

The non-fossil fuel obligation has given the renewable energy industry a great boost. It has helped it overcome the gap between demonstration and commercial development. The second order for 122 projects was announced on 5th November. The two orders have quadrupled renewable-sourced capacity contracted to regional electricity companies since 1990.

The targets for renewables and the extent to which they can help to restrain greenhouse gas emissions is under review. Both Scotland and Northern Ireland are being considered in the review. We are also preparing guidance on new energy technologies for local planning authorities. A new draft will be issued shortly for consultation.

In the foreseeable future, however, most of our energy will continue to be generated by burning fossil fuels. Energy efficiency is the fastest and cheapest way of curbing carbon dioxide emissions and conserving finite resources. The threat of global warming has provided a new spur to our efforts in the energy efficiency field. We can save money and save the planet at the same time. Since we are all energy users we all need to contribute. I believe that we all ought to follow the lead of the noble Lord, Lord Ezra, by having our own homes looked at to see how they rate on the energy efficiency scale.

The Energy Efficiency Office has been promoting energy efficiency with great success. Its programmes alone have generated recurrent savings now worth over £500 million per year. The Ministerial Group on Energy Efficiency is giving the message a further boost. The group works to raise the profile of energy efficiency and encourage an energy efficient lifestyle.

I should like to turn now to the first year report of the group and highlight the new initiatives it has overseen. The Energy Efficiency Office runs the following major programmes: the home energy efficiency scheme provides support for low income households; the best practice programme provides independent and authoritative information on energy efficiency; and the regional energy efficiency officers publicise our programmes to particular industrial sectors.

Last month my right honourable friend the Secretary of State for Energy launched a new energy management campaign—"Making A Corporate Commitment". This is encouraging senior management in UK industrial and commercial companies to make energy efficiency one of their top priorities. The financial and environmental advantages make this essential. Companies are asked to sign a declaration of their commitment to responsible energy management and the promotion of energy efficiency throughout their operations.

In the domestic sector, the Energy Efficiency Office and the Department of the Environment have launched a £10 million campaign "Helping the Earth begins at Home". The aim is to make householders appreciate that their own domestic energy use contributes to global warming and to persuade them to use energy efficiency measures. The campaign will last three years.

I hope that consumers will make use of another initiative: the new energy efficiency advice services provided by the regional electricity companies, British Gas and British Coal. These help people to use energy wisely and advise on energy efficient appliances.

The Energy Efficiency Office has developed with the regional electricity companies a voluntary scheme for the labelling of appliances, starting initially with refrigerators and freezers. Labels will show details of energy consumption and overall energy efficiency on a simple 1 to 10 scale, providing potential purchasers with valuable information. We have developed this scheme As an interim measure before the introduction of the EC-wide scheme in the next year or so.

The EC appliance labelling scheme is one of a number of specific proposals expected to be made under the EC SAVE programme for energy efficiency. We support the principle of this scheme and look forward to seeing practical proposals.

It may surprise noble Lords that public expenditure on energy efficiency this year exceeds £1 billion. Despite this, the level of the Energy Efficiency Office budget has been criticised. I shall respond to that specific criticism by referring to the Autumn Statement, which announced that the EEO budget for 1992–93 will be £59 million—a 40 per cent. increase in resources for Energy Efficiency Office programmes from the £42 million available this year. Further increases are planned.

There will be a 50 per cent. increase in resources next year for support for energy efficiency in low income households. Additional resources are being made available for the best practice programme and our regional and publicity activities. The budget also includes provision for expenditure on the first year of the new energy management assistance scheme. This fulfils a commitment to the scheme made in the White Paper on the environment last year.

This scheme will be targeted on enterprises with fewer than 500 employees. It offers financial support for project management assistance with the implementation of energy measures. From April it will subsidise the use of consultants for energy auditing, investment feasibility studies and project management of investments devoted to improving energy efficiency.

I said earlier that global warming is a global problem and, as such, it requires a global solution. Efforts made by individual countries would have relatively little impact on their own. Indeed, we risk exporting our emissions elsewhere if action in the UK results in importing more goods from other countries. Achieving a framework convention on climate change is therefore essential. But countries come to the negotiating table with very different national circumstances and a wide divergence in their capacity to take action. This is particularly true of the developing countries. We recognise that they will need additional financial help and the transfer of environmentally sound technology on a fair and favourable basis.

There has been a lot of discussion about this issue, both about possible financial measures and about ways of facilitating technology transfer to enable less developed countries' growth to be clean growth. The Government have responded to the call for additional financial resources by creating a new item of public expenditure for global environmental assistance, entirely separate from the aid budget. From this we are contributing £40 million to the global environment facility, which will provide grants for projects to limit greenhouse gas emissions.

In helping developing countries meet their growing energy needs the Overseas Development Administration supports projects designed to encourage energy conservation and efficient use. These include training, demonstration projects, institutional development and promoting awareness of the financial and economic benefits of energy efficiency. The Overseas Development Administration is also helping developing countries to conserve the tropical rain forests, whose role in absorbing carbon dioxide is so important. This country has financed studies to assess the likely impacts of climate change on developing countries; and we have offered to finance studies on greenhouse gas emissions and the cost of measures to limit them.

In the longer term, action to achieve the UK's conditional target for CO2 emissions will inevitably have to include increases, achieved by taxation or other means, in the relative prices of energy and fuel. Full market pricing of fuels to reflect their economic and environmental costs would have a fundamental impact in increasing energy efficiency. But it would also affect international competitiveness. Measures affecting the relative price of energy can only sensibly be taken when our competitors are ready to take similar action.

The EC Commission has proposed a combined carbon/energy tax, and the Government are participating in discussions on this issue. We will need to consider the proposals carefully, in particular their effects on this country and EC competitiveness. Much more analysis is needed before any decisions can be reached.

The UK target is the result of detailed work. We have assessed the feasibility and costs of possible measures to limit CO2 emissions in this country and the level of emissions we would otherwise have expected to reach in the future. A range of scenarios was considered for an array of assumptions about the economy, our use of energy, and the shape of our industry; these are all difficult to assess with precision. The target applies to the full range.

It is true that if GDP does not grow as quickly as the high growth scenario assumes, CO2 emissions will not rise as much. But that does not mean that it is easier to stabilise or reduce emissions. The less GDP grows, the less wealth we have to pay for the measures that will be needed to solve the problem. As for the timescale, new technologies can be developed given time, and investments made in the costly replacement of plants and products at the end of planned life times rather than prematurely. A sensible assessment of the speed at which innovations can be made suggests that a lot more potential change is possible within 15 years.

I have spoken at length about energy efficiency because this has been the main focus of the debate. But the Motion also refers to pollution control measures and I want to turn to these now.

Your Lordships will know that the Government have already introduced significant initiatives in the field of environmental legislation, designed specifically to reduce pollution and to minimise damage to the environment. In 1990, we produced the Environmental Protection Act, which had as its centrepiece the new system of integrated pollution control. IPC was introduced for industrial processes responsible for the major releases of polluting substances to air, land and water. It recognises that for such processes the different environmental media cannot be treated in isolation. Her Majesty's Inspectorate of Pollution enforces IPC and existing processes will be brought into the system over the next five years. The Act also gives local authorities new air pollution control powers in relation to a range of less polluting processes.

With IPC we have developed an approach to pollution control which puts us among the leaders in Europe and the rest of the world. The system does, of course, impose requirements on industry; after all, higher standards are the ultimate goal. But we believe that there are practical benefits for both industry and the environment. It also acts as a spur to innovation and opens up new markets for British industry in pollution abatement equipment and techniques.

It might be helpful at this point if I were to say a few words about our proposals for the new environment agency. Our intention is to create a powerful independent agency that will provide consistent and coherent controls on discharges to air, land and water. This will involve bringing functions into the agency that are at present carried out by HMIP; by the National Rivers Authority; and, for waste regulation, by local authorities. We have also proposed that the drinking water inspectorate might transfer to the agency.

We need an environment agency to provide a fully integrated, multi-media approach to pollution control. It would avoid the overlaps, and gaps and potential conflicts, that can exist between regulatory bodies. It would also help industry by simplifying its relationship with its environmental regulators. It would meet the real public concern which exists about the different status of the existing bodies: at present only the NRA with its independent board has a public standing and a voice of its own.

The environment agency will therefore be a major step forward. It will be able to develop a consistent and cohesive approach to environmental protection. It will be able to develop greater expertise and authority than the current arrangements allow. Above all, it will be a powerful voice in influencing the adoption of better environmental standards and practice. We issued a consultation paper on our proposals in October and we are at present seeking full comments on the options set out there. We hope that all interested parties will let us have their comments by the closing date of 31st January 1992. We hope to reach decisions on the structure of the agency in spring next year and introduce a Bill early in the new Parliament. We intend to use the interim period to develop consultative arrangements with the NRA and local government to pave the way for the creation of the agency.

One of the Government's White Paper commitments was to establish a dialogue with the business community on environment issues. The Secretaries of State for the Environment and for Trade and Industry appointed the Advisory Committee on Business and the Environment in May. Since then the 25 businessmen and women on the committee have been working to an ambitious programme, mainly through three working groups on global warming, recycling and environmental management.

I shall now reply to some of the points raised in the debate. As the noble Lord, Lord Donoughue, said, he is the Opposition spokesman on energy. He quite rightly pointed out that I am the spokesman for the Department of the Environment. There is an overlap between the two departments. The noble Lord may have noticed that my noble friend Lord Cavendish is sitting at my left elbow and I hope he will steer me in the right direction as regards issues that relate to the two departments.

My noble friend Lord Campbell of Croy mentioned road and rail. Many differences exist between road and rail, for example as regards the kind of journeys made and safety issues. It is not a case of choosing between a new road or a new rail line as both have their place. Both use energy, as do trams. The noble Lord, Lord Dean of Beswick, mentioned that.

Rail can be more energy efficient than road in certain circumstances provided it is well used. As a mode of travel it is most suitable when many people want to travel in the same direction at the same time. Some 75 per cent. of the people who travel to London every day travel by rail. Comparability of assessment between road and rail is extremely complex. The Government have no bias against public transport: hence the current high levels of investment in public transport.

As regards the general question of environmental appraisal, the Department of Transport has just published a document on the role of environmental appraisal in road and rail transport. That document sets out the department's current methodology and copies have been made available in your Lordships' Library today.

My noble friend Lord Campbell of Croy also referred to taxation and road transport. My right honourable friend the Chancellor of the Exchequer has continued the policy of shifting the balance of motor taxation from vehicle excise duty to fuel duty. That gives the motorist a strong incentive to use less fuel and ensures that those who pollute most pay most.

My noble friend also asked me about Scotland and the non-fossil fuel obligation. My right honourable friend the Secretary of State for Scotland has so far taken the view that a Scottish non-fossil fuel obligation is not necessary because of existing over-capacity in electricity generation and substantial existing renewables capacity within Scotland. However, the renewable energy advisory group under my honourable friend the Parliamentary Under-Secretary of State for Energy is considering future exploitation of renewable energy sources in Scotland and would welcome submissions from interested parties. I understand that a number of Scottish renewable projects will be produced under the arrangements announced by the Government in May.

The noble Lord, Lord Dean of Beswick, referred to nuclear energy. He compared that energy with coal and other sources of energy. The Government believe it is right to maintain the nuclear option but the industry must be more competitive with other fuels without compromising its high safety standards. Further development of the nuclear industry will be reviewed in 1994.

My noble friend Lord Campbell of Croy referred to wave energy, as did the noble Lord, Lord Hatch. The Department of Energy spent £12.5 million on wave energy research between 1974 and 1979. The current expenditure is running at about £450,000 per year. The shoreline wave energy project on Islay is the most technically advanced in the world. The UK is collaborating in a European programme which is currently assessing the prospects for more wave power.

In 1988 it was decided to conduct a review of wave energy. A steering group with independent members was appointed. The review involved a detailed technical and commercial assessment of the leading wave energy devices, including Professor Salter's "duck." The noble Lord, Lord Hatch, mentioned that. The assessment is now largely complete and the interim report is about to be published. The outcome of the study will form part of the regular review of all renewable technologies.

Lord Hatch of Lusby

My Lords, when will the review be published? I heard that it was due to be published in January and that there has been a postponement for electoral purposes. Will the Minister give a date for publication?

Viscount Astor

My Lords, I cannot give a date, but the review will be published shortly. The noble Lord, Lord Hatch, also asked about wave energy and renewables. No separate wave band was included in the 1991 renewables order as there were no indications that enough wave projects would be in a position to take advantage of the obligation to make a distinctive band necessary. However, those who had developed wave projects were able to apply for inclusion in the other band indicated in the Secretary of State's November Statement. No wave projects appear among applicants for inclusion in the 1991 renewables order.

The noble Lord, Lord Hatch, also sought to draw comparisons between the amount of money spent on nuclear technology research and that spent on research on other technologies. That is not a fair comparison because the industries differ in size. The Government are committed to expenditure on research and development of all sources of energy which contribute to the security of the electricity supply. However, nuclear power is a proven and mature technology which is available now.

The noble Lord, Lord Ezra, mentioned combined heat and power. He made some interesting remarks about how waste can be turned into power. The Government will continue to promote the use of highly efficient combined heat and power schemes with the aim, set out in the Government White Paper, of doubling present capacity by the year 2000.

The noble Lord, Lord Ezra, talked about energy efficiency in houses. The Government are interested in the two energy rating schemes for new homes—Star Point and NEF. We are trying to define the common ground between the systems with a view to agreeing one system of assessment. We hope that that so-called home energy labelling will be sufficiently developed to enable it to be incorporated into the building regulations when they are next amended.

The noble Lord, Lord Donoughue, covered a wide range of areas which other noble Lords and I have also covered. However, he said that the privatisation of the electricity industry has hindered energy efficiency. That is not true and I do not believe that the evidence shows that. If customers are properly informed about energy efficiency, and prices properly reflect costs, they can make the right decisions about their energy usage. Both utilities are obliged by regulatory schemes to set prices that reflect costs. In addition they have a statutory obligation to provide advice on energy efficiency to customers. Their licences oblige them to provide codes of practice on energy efficiency. Those codes have now been approved by OFFER. British Gas has produced its own voluntary code of practice. Under the Citizen's Charter Bill currently being drafted it is proposed to give OFGAS similar powers to determine standards in relation to the promotion of energy efficiency as exist in the Electricity Act.

I seem to be becoming increasingly polluted and short of energy myself, but I conclude by saying that all environmental problems sound very daunting. I want to redress the balance by emphasising that the challenges which face us offer opportunities as well. Industry has created some environmental problems but it has also given us the means to solve many more.

We want cleaner industrial processes; we look for advances in renewable energy technology; and we demand machines that use energy efficiently. The market for such products is growing, not only here but the world over. I hope that British companies will be the first to benefit from that market and in doing so improve the environment for us all.

5.12 p.m.

Lord Campbell of Croy

My Lords, I am grateful to all those noble Lords who have taken part in the debate. We still have some time left but I shall be brief. First, I must comment on something that was said by the noble Lord, Lord Dean of Beswick. He unintentionally credited me with the gift of second sight by saying that I had said that fusion would be with us in 50 years. My words were to the effect that it would be at least 50 years before fusion was available to us. No one can predict accurately when it will be available: it may be much further away than that. I mentioned fusion because it is reassuring to be aware that there is hope of better things in the distant future. Otherwise the future would look very black indeed.

The noble Lord, Lord Ezra, as I hoped he would, spoke of the need for clean coal technologies. I was not surprised that he also felt that Britain could make a contribution which would be used in other countries. The noble Lord, Lord Donoughue, said that coal was unfriendly to the environment unless technology could make it burn cleanly. I believe that we are all agreed that coal will be used in large quantities in developing countries and that we also have valuable supplies still in this country which we should like to use efficiently and cleanly.

I am particularly grateful to my noble friend Lord Astor for his response to the debate, bringing us up to date as he did on international discussions and meetings on climate change. I shall read what he had to say in reply to my question about the non-fossil obligation. It sounds as though something is being considered to extend to Scotland measures which would encourage the use of renewables.

My noble friend also took the opportunity to make a statement about the new environmental agency. Some months ago I put down a Question for Written Answer asking whether that would apply to the whole of the United Kingdom or just to England and Wales. The answer I received then was that that was still being considered. It is clear from what my noble friend said today that it will apply to England and Wales only. He also mentioned the National Rivers Authority which, as I have pointed out before to your Lordships' House, in my opinion is misnamed because it has no jurisdiction in Scotland or Northern Ireland. Because it is called a "national" authority, the press and others have not taken that point. I understand that the Secretary of State for Scotland announced a few months ago the establishment of a separate Scottish environmental agency. I am not surprised by that because the Department of the Environment and its Ministers have no functions in Scotland. That is how I expected things would work out.

Again, I thank those noble Lords who have taken part in the debate. I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.