HL Deb 07 March 2002 vol 632 cc398-411

3.40 p.m.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Environment, Food and Rural Affairs. The Statement is as follows:

"Following agreement at the European Community Environment Council on Monday, I am very pleased to announce that the Government have today laid the Kyoto Protocol before both Houses of Parliament. This significant step begins the formal process of UK ratification of this hugely important protocol.

"This House is aware of the leading role that the Government have always played in the fight against climate change and, in particular, the pivotal role played by my right honourable friends the Deputy Prime Minister and the Minister for the Environment in the original negotiations on the protocol in Kyoto. We have maintained that lead in subsequent negotiations and we are making strong progress with implementing a strategic and innovative programme of action to reduce the UK's greenhouse gas emissions. I firmly believe that the UK, as well as the rest of world, has much to gain from meeting the challenge of climate change head-on.

"The deal that I helped to secure, first in Bonn and then in Marrakesh last year, was the latest in a series of major political achievements and paved the way for ratification. Since then, the EU has set an aim for the Kyoto Protocol to enter into force in time for the World Summit on Sustainable Development at the end of August. The summit will mark the 10th anniversary of the Rio Earth Summit, which set up the UN Framework Convention on Climate Change in the first place. Although we do not expect or wish climate change as such to feature prominently on the summit's agenda, entry into force of the protocol before it takes place will demonstrate beyond doubt the world's commitment to taking its environmental responsibilities seriously.

"The Environment Council's agreement on Monday to the Council Decision on European Community ratification and to the EU "bubble" was a significant milestone. This needed to happen first, so that the reduction targets agreed politically by each member state in 1998 became legally fixed. I am delighted with the outcome of the Council meeting which followed detailed and, at times, sensitive negotiations. It means that all member states are now able to complete their own national ratification procedures, and that the EC and its member states will be the first of the key developed countries to ratify the protocol.

"This Government are certainly wasting no time in ensuring that the UK ratifies the protocol as soon as possible. Today's event marks the start of our process. The protocol will be before Parliament for the next 21 sitting days. At the end of this period, my right honourable friend the Foreign Secretary will sign the UK's instrument of ratification. For legal and presentational reasons, the UK will deposit its instrument with the UN Depository at same time as the European Community and other member states. We are aiming to do this by June at the latest.

"UK ratification of the Kyoto Protocol sends an important message to the world that we are committed to the protocol and to tackling climate change. It reaffirms the Government's pledge to meet their environmental objectives. And it meets our manifesto commitment to provide leadership abroad and to work for international agreement on climate change.

"I hope that countries not yet committed to ratifying will follow the EU's lead. The House will be aware that the US has recently announced proposals for domestic action to tackle climate change. We welcome the fact that President Bush accepts climate change as a serious problem and has increased support for climate science and for climate-friendly innovation. However, our analysis of his proposals suggests that US greenhouse gas emissions will be around 25 per cent higher in 2010 than in 1990. This contrasts quite starkly with the 7 per cent reduction to which the US had originally agreed under Kyoto. We continue to believe that the Kyoto Protocol represents the only workable option for the international community to take forward serious action on climate change, and we hope that the US will re-engage with this process in the future. It is of course extremely important that we maintain a constructive dialogue with the US on climate change and we will seek to establish a process through which this can be achieved.

"UK ratification of the protocol will mean that we become legally bound by the target to reduce our greenhouse gas emissions to 12.5 per cent below 1990 levels by 2008–12. The UK's climate change programme sets out a range of policies that could reduce emissions by 23 per cent by 2010, well in excess of our Kyoto target and setting us in good stead for future reductions. The programme, therefore, also addresses the Government's ambitious domestic goal to cut carbon dioxide emissions to 20 per cent below 1990 levels by 2010.

"Our climate change programme is providing a strategic focus for action. It is stimulating positive action by UK businesses, local government and other organisations. It is encouraging longer-term changes and a move towards a low carbon economy. And it is implementing a series of innovative and creative policies to ensure that the UK cuts its emissions in a flexible and cost-effective way.

"Let me run through the key policies in the programme. First, we have established the world's first economy-wide emissions trading scheme, backed by a government incentive of £215 million over five years. The scheme is due to "go live" early next month and is one of our major priorities. Emissions trading is a cost-effective way of making a low carbon future a reality, and by pioneering this scheme, we intend the City of London to become the world centre for emissions trading.

"We have set a target to provide 10 per cent of the UK's electricity from renewable sources of energy by 2010, backed up by government funding of at least £250 million over the next three years. We also have a target to at least double the UK capacity of combined heat and power by 2010. We will be publishing our draft CHP strategy shortly, with a range of measures to achieve the target.

"We have put in place the climate change levy package that will help to fund measures to promote better energy efficiency in business. We established the Carbon Trust which will recycle around £100 million of climate change levy receipts to boost the take-up of cost-effective, low carbon technologies.

"There are a range of programmes and schemes to promote better energy efficiency in the domestic sector. And at European Union level, we secured voluntary agreements with car manufacturers to improve fuel efficiency by at least 25 per cent, backed up by changes to vehicle excise duty and company car tax to encourage more fuel efficient, low-emission cars.

"Finally, the Government's 10 Year Plan for Transport will address projected emissions growth in this key sector.

"The programme also looks at what we might need to do to adapt to the effects of climate change in the UK. The Government are taking early action to identify adaptation priorities and we are supporting the introduction of adaptation strategies on the ground through the UK Climate Impacts Programme.

"In addition, the programme begins to put in place policies to reduce emissions in the longer term—beyond 2012. We know that Kyoto, while important in itself, is only a first step, and that much deeper cuts in emissions will be needed if we are to avoid dangerous climate change. The Government are determined to continue towards a low carbon economy in a way that benefits both the environment and UK industry. This is one reason why we commissioned the recent PIU energy report that we are now considering, and to which we will respond later this year.

"I would like to finish by re-stating the Government's belief that meeting climate change targets will not only be good for the environment, but also presents new opportunities for businesses to improve energy efficiency, to cut costs and to get ahead of their international competitors by developing cleaner technologies and moving into new markets. It presents new job opportunities for people living and working in the UK. And it offers more choice for the consumer. We want to make sure that the UK makes the most it possibly can of these opportunities, as well as making a strong and determined contribution to the global fight against climate change. Ratifying the Kyoto Protocol is one of the most important steps on that road".

My Lords, that concludes the Statement.

3.49 p.m.

Baroness Byford

My Lords, I thank the Minister for repeating the Statement made in another place. We welcome the progress made by the EU towards ratification of the Kyoto Protocol, but there is much more to do. The UK's fight against climate change, initiated some 10 years ago in Rio by John Major and taken further by my noble friend Lord Gummer, laid the foundations for the international agreement to tackle climate change.

The Statement today refers to the pivotal role played by the Deputy Prime Minister. But that was not without its difficulties. It was the same Deputy Prime Minister who, back in November 2000, lost his nerve and his cool during negotiations with the French environment Minister, causing her to refer to him as a "male, chauvinistic pig". There has been slow progress since then, but the UK statistics are poor. We are one of the dirtiest countries—98th out of 142—and we have a poor record on recycling. We recycle a paltry 11 per cent compared to Switzerland, Germany and Austria with recycling rates of around 50 per cent. Is the Minister confident that local authorities will meet the government target of 25 per cent by 2005? Will that figure include the extra huge costs that local authorities are currently facing because of the fridge mountain debacle? It is hoped that other countries will ratify and, in particular, that the United States will reengage with the process. What risk does US exclusion from the process pose to its eventual legal status?

The Government have set a target of providing 10 per cent of the UK's electricity from renewable sources of energy by 2010. Will the Government take urgent action to implement the recommendation in the energy review and remove the institutional barrier to, the working of the planning system which at present fails to place local concerns within a wider framework of national and regional need"? Will the Government take into account the emissions from aircraft which heavily pollute our skies? The Statement refers to "deeper cuts". Is this one aspect that the Government are considering?

Does the Minister accept that the Government's failure to put in place a coherent transport policy has led to the queues of traffic that still pollute our air on a daily basis and add to an already critical situation?

Does the Minister take seriously the remarks of the Chief Scientific Adviser who, on radio this morning, called for an increase in the number of nuclear power stations if some of the targets are to be achieved?

Will the Government assure the House that the climate change levy will not damage the competitiveness of UK industry? The energy review to which I referred earlier states that, it would not make any sense for the UK to incur large abatement costs, harming its international competitiveness, if other countries are not doing so". The whole tone of the Statement is self-congratulatory. However, the Government's ability to achieve their objectives and rational strategies is suspect, particularly in relation to what was the Department of the Environment and MA FF, now the unjoined-up DEFRA, and other government departments.

The PIU report makes clear that, to achieve the objectives set out in the Statement, major institutional changes, including to the planning system, need to be made to deliver the strategy. When do the Government intend to put these changes in motion?

3.53 p.m.

Baroness Miller of Chilthorne Domer

My Lords, we on these Benches warmly welcome the ratification. We would also welcome an early debate in the House on both the Kyoto Protocol and the Government's objectives for Johannesburg because the two go hand in hand.

I was slightly surprised to hear the noble Baroness on the Conservative Front Bench label the UK as the 98th out of the 142 "dirtiest men in the world". It was under the Conservative government that we first received the label of the "dirtiest man in Europe"—because that is what the measurements were at that time—but no government to date have proved themselves to be firmly behind environmental taxes and the kinds of actions needed to move us forward.

We should certainly debate further the issue of nuclear power. It is easy to say that it is a cleaner technology, but its legacy in terms of expense for future generations is something for which they will not thank us. More than that, it has not proved itself economically in the present generation, although governments find that easy to ignore when searching for an answer to climate change.

At the beginning of the Statement the Minister said that the world has much to gain from meeting the challenge of climate change head-on. That somewhat plays down the issue. The position is that the world has everything to lose if it does not meet that challenge.

The Minister went on to say that the Government would be funding renewables to the tune of £250 million over the next three years. That is only £80 million a year. He did not say whether that money was for research and development or for infrastructure development or both. The west coast of Scotland, if developed properly, has an enormous amount of renewable energy but it desperately needs investment in its infrastructure to bring that energy down to where it is needed. I would welcome the Minister's comments.

Noble Lords will know that my noble friend Lord Ezra has often spoken of the enormous potential of combined heat and power plants. I welcome the fact that the strategy for that will be published shortly. Will the Minister define what "shortly" means, because that policy is certainly in a mess at the moment?

As to the range of programmes and schemes to promote better energy efficiency in the domestic sector, one of the Government's biggest failures to date has been the absence of a change to building regulations and planning policy guidance so that account is taken of simple things such as passive solar gain—big windows that face south. It is not rocket science but it does require firm policies.

Can the Minister comment on the Government's 10-year plan for transport? He says that it will address the issue of projected emissions growth in this key sector. The plan will count for nothing if action does not follow. To date, we have not seen any action which has reduced congestion and we still wait to hear what will happen with the railways. It is a fine Statement, but I hope that action will follow.

3.57 p.m.

Lord Whitty

My Lords, I am grateful for the support of both Opposition Front Benches for the ratification process. It is very important that we should be united across the parties on Kyoto. The noble Baroness, Lady Byford, slightly spoilt it by saying that the Statement was self-congratulatory, but we do, as a country, have something to congratulate ourselves on. As the noble Baroness said, the process started under the previous regime at Rio and we have led the way, not only in the negotiating field but in being on target to meet our Kyoto objectives to a far greater degree than many other countries. Therefore, self-congratulation is appropriate without falling into complacency. We must not be complacent on this front at all.

Both noble Baronesses asked a number of questions. Recycling is certainly an important part of our delivery of aspects of the climate change programme and of other objectives. We believe that local government will play a major part in that delivery and that it is setting itself up so to do. It will receive help from the Government.

The current difficult situation with fridges is outside our assumptions. The help that we have already announced in regard to fridges is over and above the general help we are giving to meet recycling targets. We expect local government itself to have in-put in meeting the recycling general targets. It is to be hoped that the situation with fridges can be surmounted, and we shall focus on meeting those targets over the medium term.

The noble Baroness, Lady Byford, asked about the United States. We all regret the position taken by the United States but, as the Statement indicates, there has been a significant shift. President Bush now recognises that climate change problems exist and he is prepared to fund scientific research and to make general exhortations to United States industry. That is a different position from the one he adopted on taking power, so there is some progress.

There is also considerable progress in US corporate circles and US public opinion. The situation can change, but it is at the moment a major problem not having the United States on board. There is no point in balking that. The US needs to be persuaded to rejoin the process.

As regards the legal status, a US presence is not absolutely essential. The requirement for the protocol to come into force is that 55 nations must sign it, among which must be countries representing 55 per cent of the developed world in terms of emissions. That can be done without the United States— although it does require the signature of some of the other powers which are "teetering" in regard to a decision—of Japan, for example, which is further along the line towards committing itself than it was a few weeks ago, and of Russia, where major decisions will be taken in the next few weeks. Those two nations need to be included if we want to reach the 55 per cent target.

The noble Baroness, Lady Byford, raised important issues relating to the energy review. The Government's response will come shortly, and will include issues relating to planning. She also raised issues on the transport side, as did the noble Baroness, Lady Miller. Clearly, transport is a very important area in which further action is required in order to meet the targets. In relation to aircraft, international agreement will be necessary. At present, it is very difficult for one nation, or even the EU, to take the lead. However, discussions are beginning on aircraft emissions. More substantial are the emissions from motor traffic. The 10-year plan—about which both noble Baronesses were slightly sceptical—is geared very much to reducing congestion on the one hand and emissions per vehicle on the other, as well as transferring some traffic away from the roads and adopting less carbon-intensive systems.

On all those fronts—the 10-year plan for transport; improving the infrastructure; taking other measures to reduce congestion; and, in concert with the corporate sector, changing the basis of fuels and increasing the fuel efficiency of vehicles that remain dependent on carbon technology—we are making an important contribution. It is particularly important since transport is the one area where emissions are still rising.

Nuclear power will be covered in the Government's response to the energy review. It is fairly clear, both from the review and from the Government's announced position hitherto, that the UK does not need new nuclear capacity to meet the Kyoto target. The dilemma for energy policy in that sense is what will happen beyond the 2012 date when there may be a gap and the PIU may make reference to doubling the target for renewables, for example. Others would advocate an increased nuclear role. But there is no need, in order to meet the Kyoto targets, for us to presume any increase in the nuclear component. At present, there are no proposals for additional nuclear capacity. However, both for our own purposes and for world purposes, we wish to retain a capacity in nuclear technology.

The climate change levy is one of the most important of the environmental taxes which the noble Baroness, Lady Miller, regretted that we did not have. It is an important environment tax. It is also one that is geared to improving the ability of British industry to be ahead of the game in developing technology and the production and distribution methods that minimise carbon emissions. That will give British industry a competitive advantage in the medium term, both in terms of the pressures on industry to act quickly and in terms of recycling some of the climate change levy into carbon-saving technology.

The noble Baroness, Lady Miller, referred to renewables. I have stressed their importance, and the importance of CHP on which a study will come shortly. I know that "shortly" can be interpreted as meaning tomorrow. It will not be quite as shortly as that but it will be within a reasonable time.

The noble Baroness also mentioned building regulations. We made significant progress in that area a few months ago. My colleague, Nick Raynsford, announced some significant changes in future building regulations. There is some more work to be done, but that will be an important contribution. The noble Baroness also raised the question of a debate on Kyoto and Johannesburg. That is a matter not for me but for the usual processes.

The noble Baroness, Lady Miller, commented that we have everything to lose if we do not achieve the targets. That is true. The world has a lot to lose if we do not deliver on Kyoto as the first step to delivering climate change. The ratification process at EU level undertaken by this Government and the lead that Britain and the EU have taken will help us to take that first step.

4.5 p.m.

Lord Palmer

My Lords, will the Minister confirm that he believes that the British biofuel industry has a significant contribution to make in meeting the Kyoto objectives?.

Lord Whitty

My Lords, biofuels—both in the sense of potential in liquid biofuels and in biomass for energy production—are certainly alternative fuel technologies that we need to develop as a contribution towards meeting the renewables target. It is also part of the synergy of the new department—which the noble Baroness indicated had not gone as far as it should. I dispute that. We have made great progress. It is in terms of a synergy between the agricultural dimension of the department and the environment dimension that we could develop alternative crops which could be profitable for the agricultural sector and help in meeting our renewables targets. That, if nothing else, is a justification for DEFRA.

Lord Judd

My Lords, does my noble friend agree that, although he suggests that it is not essential to have the United States on board, it is nevertheless highly regrettable if it is not? Does he accept, therefore, that the Government will receive all possible support in the robust stand they seem to be taking with our United States friends? Does he further agree that, in taking such a stand, the time has come to make the argument very toughly that failure to get to grips internationally with this issue will result in more economic disruption and more human suffering than is ever likely to result from terrorism?

Lord Whitty

My Lords, that is profoundly true. It is part of the tone of what we are trying to convey at all levels to our United States friends in an attempt to persuade them off the course of abandoning the Kyoto Protocol and to re-engage with it. I said that we could manage to deliver the terms of the protocol without the United States. But that would be in a narrow legal sense. Clearly, when we are talking about a country which contributes over a quarter of all emissions, the absence of that country from the process is an important problem in terms of delivering it.

There are some matters which President Bush is prepared to put into place to slow down the growth of emissions. But his predecessors, in 1990—indeed, the government led by his father—committed themselves to a 7 per cent reduction. Our calculations at present are that, as was indicated in the Statement, there will he a 25 per cent growth of emissions despite President Bush's package. That will make the delivery of the Kyoto targets very difficult to achieve. We and our allies and other friends of America need to try to persuade it to change course.

The Earl of Mar and Kellie

My Lords, the Minister will be aware that Scotland has an excess in terms of its capacity to generate electricity. He may also be aware that I believe that that is excellent. I want to ask the Minister about hydro-generation, which currently represents 10 per cent of Scottish electricity generation Do the Government plan to expand this well-proven technology, especially as it is acceptable within the landscape? The Minister will no doubt be aware that Scotland's neighbours in Norway have sufficient hydro-capacity to be self-sufficient should there be a bad, rainy summer. It is an excellent feature—had weather can equal sufficiency in energy.

Lord Whitty

My Lords, in the improbable event of a summer of heavy rain in Scotland, I have no doubt that the hydro facilities that it has, and other potential projects, could make a significant contribution. Hydro-electricity is not, strictly speaking, as effective in terms of renewables and carbon minimisation as some other areas. Nevertheless, we recognise the capacity of Scotland to create energy from its natural resources. Along with many other areas, Scotland will no doubt be making a major contribution to saving the world from climate change. Its natural advantages need to be developed. In that sense the Government will certainly support hydro-technology.

Lord Brooke of Alverthorpe

My Lords, I welcome the ratification of the Kyoto Protocol and the actions that the Government are taking. I note the Minister's response to the question about the nuclear industry. However, does he agree that the amount of CO2 emissions currently saved by the nuclear power that we generate is helping towards meeting those targets? In particular, looking to the longer term, does the Minister agree that we shall need to take decisions soon on whether we can maintain the current figure of 20 per cent of electricity that is generated by nuclear power in this country if we are to try to make progress on limiting CO2 emissions? Does he also agree that the previous government and the present Government have failed to deal with the major issue at the heart of public concern about the nuclear industry, which relates to the safe disposal of nuclear waste? I know that my noble friend the Minister has previously expressed concern about that. What is his department doing about the problem and when can we expect some decisions to be taken about the safe disposal of nuclear waste?.

Lord Whitty

My Lords, I recognise the concern in your Lordships' House about nuclear waste, which reflects the public concern. My noble friend will know that we have now engaged in a consultation process on the options for disposal of nuclear waste over the long term. Clearly, whatever level of nuclear capacity we have over the longer term—and there are decisions that will have to be made on that—the amount of nuclear waste that has already been generated, together with that which will be generated by power stations that will be operational for a number of years yet, is sufficient for us to need a strategy for its longterm disposal. We are addressing that now.

My only point about nuclear capacity, as I said earlier, is that we do not have to take a decision on it in order to meet the Kyoto targets. However, that does not mean that we can wait until beyond 2012 before we take the serious decisions on our future mix of energy sources.

Lord Brooke of Sutton Mandeville

My Lords, under the Kyoto agreement, the Republic of Ireland was afforded a marked increase in relevant emissions, in contrast with the reductions required in the United Kingdom. A significant consequence of that has been a substantial differential in excise duties on road fuel between the Republic and Northern Ireland, with an ancillary consequence of massive smuggling between the two. I do not dissent in any way from the Kyoto principles, but I should like to know whether the Government have advanced any new resolution to that problem, which leads to massive disrespect for the rule of law in the Province, to the despair of honest traders, quite apart from misgivings as to where the proceeds of smuggling might be going.

Lord Whitty

My Lords, I am not sure that that serious problem of differential fuel taxing and the resultant smuggling or legal crossing of the border to fill up with petrol can be ascribed directly to the Kyoto Protocol. The Republic of Ireland and the United Kingdom take separate decisions on their mix of taxes. Our argument is that other fiscal measures will be needed in the Republic of Ireland and in other EU states to ensure that they meet their Kyoto targets and contribute to their given figures within the Eli bubble. Ireland may be allowed some increase, but it needs to ensure that it keeps within the requirements of the EU bubble, which may mean that some additional taxation is needed. It is for the Government of the Republic of Ireland to decide on that mix of taxation. The difference in relative taxes has caused some serious disturbance in Northern Ireland, but that is a consequence of us all maintaining separate sovereignty over taxes. I know that some of the noble Lord's friends would not wish to upset that position in the European Community.

The Duke of Montrose

My Lords, if I recollect correctly, the House recently passed a statutory instrument devolving the setting of targets for renewable energy to the Scottish Parliament. Do the targets that the Minister is talking about today relate only to England and Wales, or are they targets for the whole of the UK?.

Lord Whitty

My Lords, the targets relating to our international obligations are for the whole of the UK. The devolved administrations are all party to the UK programme for dealing with climate change. There are separate chapters of the climate change programme relating to the contributions of the devolved administrations. In some cases, the way in which they are meeting their targets is different, because of devolution.

Baroness Byford

My Lords, if no one else wants to speak from the Back Benches, I believe that I am entitled to ask a follow-up question, in view of the time available. I should like to press the Minister on the subject raised by the noble Lord, Lord Palmer. We all hope that we shall be able to get some fuel from our crops. The Minister and I share that hope. However, it is difficult to ensure that bio-generating power stations are placed near to where the crops will be grown. He will remember that one recent application in Wiltshire was turned down. One of the problems that we shall face if we are not careful is that we may grow crops in one part of the country and then waste huge amounts of energy and money on transporting them to the other end of the country. Planning for fuel generating plants is hugely important.

Lord Whitty

My Lords, I am familiar with the case that the noble Baroness refers to. She raised the general issue of planning consents earlier. This is an important issue. The Curry commission on agriculture made great play of the importance of energy crops. A market for those crops is needed, which requires appropriate investment. The PIU report's comments on planning consents will have to be taken up in our review of planning and will be part of our response to the PIU energy review.

Lord Haslam

My Lords, the response to the Statement has been favourable, but I have to strike a sour note. I have lived through the history of this issue. Going back to Rio, its effects were minimal. The main reason for that is that when Mr Clinton went to the Senate, it put down a protocol that said that any environmental measures must not affect the United States economy adversely. That protocol remains in force. Mr Bush has been perfectly honest, because that has been the American position throughout the Rio and Kyoto negotiations.

The other issue that annoyed the Americans beyond measure about Kyoto was the fact that Britain, Germany and France insisted that the base date should be 1990. The Americans wanted 1997, which was the date of the Kyoto agreement. We more or less destroyed our coal industry during this intervening period, while the merger with East Germany gave the Germans a great bonus and the French were going nuclear at the time. We all got the benefit of rapid change that has long gone. We will not have any similar opportunity in the future.

We are now faced with a situation in which America is not in, along with China, India and all the developing world. That represents more than half the potential world consumption and these economies are growing and growing. More coal and gas is being burned in the world now. That trend will continue. Demand for electricity and power is going up all the time. We say that we shall make a reduction of 10 per cent, but we are working on a moving target, not a fixed one. Renewables would have difficulty keeping up with that growth, let alone exceeding it.

The other problem with Kyoto is that, to get people on board, concessions were made that rendered the agreement somewhat flawed. There is trading of emissions between countries—emissions can be bought and sold. Another important development is that a country can grow forests that act as a sink for CO2. This could become a cheater's charter.

We would like to believe that the agreement is a wonderful thing that will change the world. We may feel good about setting an example, but the industry in this country is not in such a wonderful state that we can put ourselves in an uncompetitive position. All the renewables that we are talking about, even the successful ones, are far more expensive than the traditional forms of energy with which we are familiar.

We are at a critical stage and it would be wrong to blind ourselves to the real situation.

Lord Whitty

My Lords, much of what the noble Lord said is correct, and I have never said—nor has any UK Government or EU spokesman—that Kyoto resolves the problem of climate change. However, the conferences at Rio and at Kyoto were the first occasion on which the world as a whole collectively accepted responsibility for trying to slow down and reverse a process that could be devastating for the world as a whole. That was a major political achievement.

Delivering the commitment will be a major first step—although only a first step—in dealing with these problems. As far deeper cuts in carbon will be required post-Kyoto, far more substantial changes in our production and economic methods will be required. Nevertheless, it is a first step. As with any journey, the first step is vital. In this case, the exercise of leadership also is vital. Britain and the EU as a whole, but particularly Britain, have taken that vital first step in leadership. A significant proportion of developed countries must follow that lead before we can expect countries such as India, Brazil and China to come on board.

Significantly, the Chinese have announced for the first time some very serious action to clean up their technology. In the past five years, China's carbon emissions in relation to per capita GDP have been reduced drastically. China has made a start in decoupling carbon emissions growth from economic growth. That process must be greatly intensified. However, we cannot expect countries with a standard of living comparable to China's to adopt the ambitious Kyoto Protocol carbon reduction programme unless a lead is given by countries with much higher levels of per capita carbon emissions. That is why it is vital that 55 per cent—the key figure—of developed countries make that commitment. We can then begin to put pressure on the Chinas and the Indias of this world to come on board.

That is one more reason why it is regrettable that the United States is not with us. I am not accusing President Bush of being dishonest in any sense; I just think that he is wrong—wrong for America and wrong for the world. I believe that American industry and American public opinion need to be persuaded to change that position so that America can take its rightful place as a leader in this process. America is currently on the wrong track, although it is beginning to see the arguments on the need to stop climate change. Those arguments will become much more substantial as time goes on.

I do not believe that our commitment to Kyoto and to this process puts British industry—except, very momentarily, in a few sectors—at a disadvantage. In the short to medium-term, this type of technological change in production and other methods will give British industry a competitive advantage because, eventually, industry around the world will have to adopt those methods. As we are in the lead in this technology, our commitment is economically sensible as well as vital for the survival of the planet.