Mr Peter Lilley (Hitchin and Harpenden) (Con): It is a great pleasure to participate in this debate under your chairmanship, Mr Turner. Like the Chair of the Energy and Climate Change Committee, my hon. Friend the Member for South Suffolk (Mr Yeo), I must draw the Chamber’s attention to my entry in the Register of Members’ Financial Interests—not that I am aware of any way in which the outcome of this debate or the issues raised in it could affect my well-being through those interests.
I admit that I was not a member of the Select Committee when it drew up the two reports that we are considering, so I cannot claim credit for them or share in any blame. I put myself forward for the Committee precisely because I was concerned about the rather over-cosy relationship between it and the Government, which has allowed them both, and the whole intellectual establishment in this country, to live in a dream world on energy and climate change issues. Mercifully, through the operation of a secret ballot, I was elected to the Committee.
Those whom the gods wish to destroy they first make mad. One of the early signs of madness is an indulgence in compulsive displacement activity, which could not be a better description of the whole COP process. Tens of thousands of people are displaced across the globe to an environment where they are cut off from reality and the rest of the world, where they can indulge themselves in demonstrating their lack of realism and reality, and where the original objective of obtaining a legally binding agreement between nations to reduce worldwide emissions has itself been displaced by the alternative objective of reaching an agreement to meet again—and to agree to reach an agreement at some distant future time. That is displacement activity on a massive scale, and it involves a massive degree of hypocrisy, given the huge emissions incurred by these eco-warriors as they swan across the globe in jets and hire fleets of limousines, so emitting more CO2 than a small African country.
The aim of displacement activity is of course to avoid facing up to reality, so I will just point out a few facts that have not found their way into the report or into
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discussions of such matters, but seem to me to be rather pertinent. The original aim of the Kyoto protocol and the agreement in 1992 was to reduce emissions by the contracting parties by 5% by now—or by last year, but world emissions have actually gone up by nearer 50%. By happy chance, the rise in the world temperature over that period was much less than anticipated, despite the fact that the supposed cause of that rise in temperature was even greater and more powerful than anticipated.
Since the Kyoto agreement was signed, Canada, Japan and Russia have resiled from it. Far from making progress in getting countries to sign up, we have lost three very important world players. The US will not sign up to Kyoto or its successor, or to any legally binding agreement, as long as developing countries are allowed to continue to increase their emissions unconstrained. It was not President Bush who prevented America signing up, but the Senate. Senators refused to sign up to Kyoto by 98 votes to zero.
That situation has not changed since President Obama’s election: there is no chance of America signing up to legally binding restraints on its emissions as long as developing countries are not also bound by them. But the developing countries want to grow, and I want them to grow. I do not like seeing hundreds of millions of my fellow human beings wallowing in misery and living lives that are stunted relative to what their material living standards might be if they achieved economic growth. But growth requires energy—it is almost synonymous with the rise in the use of energy—and the growth in energy use needed to raise their living standards will absorb much of their capacity to invest and much of the capital available for them to invest in future decades.
Fossil fuels are the cheapest form of energy. Renewables cost two or more times as much as fossil fuels to produce a given amount of energy. If developing countries are forced to use renewables, they could only afford less than half as much energy as they would otherwise be able to bring on stream. That means they will not use renewables; they will continue to develop by exploiting the use of fossil fuels.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I do not know whether the right hon. Gentleman has had the chance to go to any developing countries, but I had the opportunity to go to Tanzania last year and saw for myself at first hand how communities, which do not have access to any gas or electricity on grid, were successfully harnessing the power of the sun via solar panels to provide whole villages with energy.
Mr Lilley: The hon. Lady may seriously believe in the use of renewables in places where it is sensible to use them. If an area is a long way from the grid, it may be sensible to use a windmill or a solar panel, even though it will not provide light at night or electricity when the wind is not blowing.
Gregory Barker: Batteries.
Mr Lilley: If my right hon. Friend, who is a Minister of this Government, thinks that it is economic at present to store electricity in batteries, he is living in a dream world. That means that it will be not two times as expensive, as is the case with wind, or eight times as
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expensive, as is the case with solar, but more like 20 times as expensive if it is stored in batteries. If someone could develop storage for renewables, that would be wonderful; I would be grateful to him and he would be a great benefactor to humanity. However, I do not think that my right hon. Friend knows of such an invention.
Gregory Barker: My right hon. Friend is comparing two completely different things. He is talking about industrial-scale storage. As the hon. Member for Liverpool, Wavertree (Luciana Berger) said, the reality in the developing world is that most people require very small amounts of energy. Typically, they need it to use a laptop, a phone and possibly a refrigerator. Battery storage is not only viable, but happening at scale. There are nearly 500 million people in India off the grid, and hundreds of millions of people in Africa.
Mr Andrew Turner (in the Chair): Order. I have two points. First, the intervention was too long. Secondly, Mr Lilley needs to bring his remarks closer to the subject.
Mr Lilley: I am merely explaining why the COP process is completely ridiculous and will not result in any agreement. We have this unrealistic agreement between the two Front-Bench speakers that the matter will be solved by installing a few wind turbines and solar panels in villages in Tanzania. India and China, in which effectively half the world’s population live, are industrialising. They are industrialising not by building a few windmills and solar panels, but by building nuclear—sometimes, but that is very expensive—coal above all and gas where they have it. Of course they will sometimes use renewables where it is appropriate and where an area is a long way from the grid, but let us not kid ourselves that because we have seen one windmill in Africa, the whole developing world will develop by means of renewables. If the two Front-Bench speakers, who are united in their lunacy, would like to tell me that that is seriously their belief and that they think the developing countries will grow primarily by harnessing renewables, I will give way to them.
Gregory Barker rose—
Dr Whitehead rose—
Mr Andrew Turner (in the Chair): Mr Lilley, it is your choice as to who is to speak. Who do you wish to speak?
Mr Lilley: The Minister.
Gregory Barker: I thank my right hon. Friend. The key point here is that we are not comparing shale gas in America with the opportunity for development in the developing world. We are comparing the marginal cost of a diesel generator for hundreds of millions of people in the developing world with a renewable alternative. In most cases, it is viable without any form of subsidy.
Mr Lilley: Well, that is fine. Let it go ahead.
David Mowat: I just wanted to put my tuppence-worth into the example from Tanzania. If that were the way forward at scale, China would not be building 50 unabated coal stations every year. That is what is happening, but
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it does not mean that solar power cannot power laptops in Tanzania. The proof is in the pudding. I want to go back to the remarks made by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). Where does he see nuclear?
Mr Andrew Turner (in the Chair): Order. Interventions are too long.
Mr Lilley: I am grateful to hear that there is another voice of common sense in this Chamber. Where do I see nuclear? Unfortunately, it has become extremely expensive but it is, none the less, a source of major power that is not dependent on the vagaries of the weather or the fact that the sun goes in at night.
Dr Whitehead: For completeness, will the right hon. Gentleman put on the record the extent to which he accepts any externalities in the extraction, transportation and use of fossil fuels, or does he think that they could be made even cheaper by having 12-year-olds dig them out of the ground with no safety rules whatever, no transportation and no concerns? What are his particular parameters in terms of the comparisons he is making?
Mr Andrew Turner (in the Chair): Order. I am sorry but we must have brief interventions. That will get us back on to a swifter speech.
Mr Lilley: I do not know why the hon. Gentleman raises the issue of 12-year-olds being employed in any particular industry; I am not in favour of that. Do I accept that there are externalities involved in the activities? Yes I do, and, for the sake of argument, I will accept all the externalities that are attributed to CO2. I am simply pointing to the reality that India and China, with half the population of the world, Africa, with a further major share of the world, and Latin America are going to develop by harnessing fossil fuels. We will not prevent them from doing so unless we ourselves are prepared to subsidise the difference between fossil fuels and the cost of renewable alternatives.
Mr Yeo rose—
Sir Malcolm Bruce: Will the right hon. Gentleman give way?
Mr Lilley: I will do so in a moment. I do not believe that this country, or Europe as a whole, can afford simultaneously to bear the costs of cutting its own emissions by 80% and the cost of the developing world’s developing at the speed and pace they want to while we absorb the additional costs we would force them to incur if they did so using renewables instead of fossil fuels. It just will not happen. It cannot happen, and the Government would not get re-elected if they proposed to the British electorate that we should incur that burden.
Sir Malcolm Bruce: May I suggest that the right hon. Gentleman is advancing a false prospectus? No one is suggesting that developing countries should not use fossil fuels. We are saying that they should use a sensible mix, and be encouraged to have access to renewables. That is why, for example, Ethiopia is building dams to
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generate hydroelectric power and China has a huge investment programme in renewable energy. They know that they have a mix. The right hon. Gentleman seems to be arguing that there should be no mix.
Mr Lilley: The Chinese, whom we will come on to in the next debate, are planning to produce, by 2030, 11% of their energy from renewables. The bulk of it will be hydroelectric, which is a conventional source of electricity; no one would argue against that. Where countries have hydro power and they can harness it, they should go ahead and do so. That has always been happening and it will happen anyway. It is happening regardless of whether CO2 is a serious problem for them. Hon. Members must recognise that the world is developing using fossil fuels. We can wish that that was not the case. We can finance great jamborees every year or two. We can all get together and pretend to ignore it, but as long as those in the developing world are free to exploit fossil fuels and any renewables they find economic or choose to inflict on themselves, America will not sign up either. If America, China, India, Canada, Russia and Japan will not sign up, it seems slightly perverse of us to assume that by gathering together we are somehow going to overcome that resistance; we will not.
Mr Yeo: For the sake of accuracy—I may have misheard my right hon. Friend—let me say that the target in China is for 11.4% of its energy mix to come from non-fossil sources by 2015. That is in less than three years from now. I might have misheard my right hon. Friend, but I think that he mentioned a later date. May I also put it on the record that China’s explicit goal is to reduce substantially the use of coal as a proportion of its total energy mix over the next two decades, and it is already the world’s largest investor in renewable energy sources?
Mr Lilley: I take all those points, and I probably did give the wrong date for the Chinese. However, I remember also seeing their figure for further ahead, which was not much higher. There would be a large increase in the amount of renewables, but not in the percentage of renewables, and still the vast bulk of their energy will come from conventional sources.
We can make ourselves feel better by bigging up in our mind the amount of renewables and by getting warm feelings about the sight of solar panels bringing light to small villages in isolated parts of Africa. However, if we seriously imagine that these great jamborees will result in an agreement by the countries in the developing world to constrain significantly their ability to grow by constraining their ability to use fossil fuels, we are living in a dream world, and everything that has happened in this debate suggests that the majority of Members present for it are part of that dream.
David Mowat: I will make a quick intervention to point out that we are saying that fossil fuel usage is a developing world phenomenon—it is not. The EU is increasing its use of coal. Last year, the increase of coal use in the EU was significant. For example, it is one of the reasons why Germany has much higher carbon usage than we do, both per head and per unit of GDP.
Mr Lilley: My hon. Friend is absolutely right. Of course, Germany is moving away from renewables, if one counts nuclear as a renewable. It is moving away from nuclear. It is planning to close down all its nuclear
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plants, and by and large that will mean replacing them with fossil fuel plants instead.
Does the hon. Member for Southampton, Test (Dr Whitehead) want to intervene?
Dr Whitehead: I was just pointing out that the right hon. Gentleman said that nuclear is a renewable. I recall the process of getting uranium out of the ground in order to fuel nuclear reactors, and once it is out of the ground it cannot be put back in again. Nuclear is not a renewable.
Mr Lilley: Okay. I take the hon. Gentleman’s pedantry in good heart, since I am a pedant myself. I should not have said “renewable”; I should have said “non-fossil fuel”. Nevertheless, Germany is moving away from its dependence on nuclear, which is a non-fossil fuel, and it will rely more on fossil fuels, despite its already large commitment to solar and wind.
At this point, Mr Turner, to avoid yet more interventions, which might incur your wrath, and further replies to them from me, which might be too long, I will leave Westminster Hall to those who wish to indulge their fantasies in public, so that they can have their say.
Barry Gardiner (Brent North) (Lab): Mr Turner, it is a great pleasure to speak in this debate under your chairmanship. I should declare my interests, such as they are. They are non-pecuniary, but I am the chairman of the board of GLOBE International, which has already been referenced in this debate.
There is one thing at least on which I agree with the right hon. Member for Hitchin and Harpenden (Mr Lilley), and that is that those whom the gods wish to destroy they first make mad. I wonder whether he would agree with me on another epithet, or epigram: that just as the stone age did not end because of a lack of stone, so the oil age will not end because of a shortage of oil. But while we have many fossil fuel resources left in the world that we are able to mine and access, and which countries are seeking ever more to discover the resources to dig or pump up and use, none the less there will be a time, I think, when we realise that the effects of doing so are such that we have to desist.
I will focus my remarks more clearly on the UNFCCC itself and the process of the UNFCCC. I begin by outlining why a change in climate should matter at all. The UNFCCC is the United Nations framework convention on climate change and the world has occupied itself with this problem of climate change for a very long time now; why should we? It is certainly the most complex and intractable question of justice that the world has ever seen, in that it is not simply about justice between peoples separated by geography and wealth but about justice between peoples separated in time, across the generations. It has proved a singularly intractable problem to reconcile those competing interests.
Why does a change in climate matter? In and of itself it should not, were it not for the fact that species—biodiversity—find it difficult to keep pace with the rate of climate change. What we have seen is a change in the rate of extinctions in the modern era that has gathered pace to such an extent that we now have, in comparison with the fossil record, a 1,000% increase in the rate of
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extinctions. That is higher than in any other period in the whole of the fossil record. We are living in the midst of that, and sometimes when living in the midst of things it is difficult to see the wood for the trees; but that is what is going on. The rate of extinctions that we are experiencing is really quite remarkable.
Mr Lilley: Does the hon. Gentleman recognise that although extinctions are taking place, particularly localised extinctions, they are almost exclusively due to change in habitat as a result of economic development, not as a result of change in temperature? I believe that only one species is known to have been rendered extinct by a change in temperature.
Barry Gardiner: No, I do not accept that at all—not at all—because if the right hon. Gentleman looks at marine life in the oceans, he will see what is happening in tropical coral reefs because of the changes in temperature in the oceans. Whole ecosystems are quite simply being destroyed by the changes in temperature in the oceans.
Mr Lilley: The hon. Gentleman said that we were living through the biggest extinction since perhaps the Palaeozoic era, and he implied that that was through climate change, but he has been unable to cite a single species that has been rendered extinct through climate change. I invite him to do so, or to give me a source where I could find that information.
Luciana Berger rose—
Barry Gardiner: I give way to my hon. Friend.
Luciana Berger: I thank my hon. Friend for giving way. I was able to do some research on my iPad during those interventions, and I was able to identify just one such species—the Ecuadorian harlequin frog.
Mr Lilley: That is the one that I was referring to—I said there was one.
Luciana Berger: Forgive me. Well, I just found that first one; I will endeavour to find some more species during the course of our debate. That was the first one that came up in my Google search.
Barry Gardiner: I think that the right hon. Member for Hitchin and Harpenden will not dispute the fact that we are living through the greatest period of extinctions that has been known in the fossil record; he has not disputed that. What he has sought to dispute is whether it is in any way linked to a change in climate, and therefore whether it is in any way linked to the rise in the use of fossil fuels. I think that if he looks at the way in which species are migrating—he talked about a loss of habitat, but the reason that there is a loss of habitat in many parts of the world is, of course, because of the change in climate, which has actually destroyed the habitat that used to be there. So I do not think that he can separate out, in the way that he seeks to, the effects of climate change from the effects of habitat destruction. To do so is precisely to ignore what is going on.
We have to understand that 50% of the GDP of the poorest people in the world is dependent upon their immediate environment, and it is that immediate environment that is under such significant threat. In
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parts of Africa, we have seen whole habitats destroyed. I sometimes wonder why we spend millions of pounds protecting our vessels as they pass the coasts of Ethiopia and Somalia but never give a thought as to why the pirates that we are protecting them from are there in the first place. Of course, they are there in large part because of the desertification that has taken place in that part of Africa—because of the loss of agriculture and of economic opportunities there. Not to link what is happening with climate change to the sustainable development goals would be a serious error indeed.
Let us consider the Durban platform for enhanced action that has been established, and let us look at the way in which, by 2015, we are to try and arrive at an agreement between countries as to what will happen in 2020 in respect of the commitments made there. Many hon. Members have talked of the difficulty in securing those commitments and the difficulty of some countries agreeing their programme of action without certainty and knowledge of what other countries are prepared to do. Russia, Canada and Japan have been mentioned as examples. These are extremely difficult negotiations because, as the Committee’s report acknowledges, every country will act in its own national interest. During the negotiations, we have been true to form and have very often acted in our national interest as well.
I would challenge the Minister on some of the positions that our country has adopted in the negotiations. Let us consider the position that we have adopted with respect to Russia. We have been saying, “With all the hot air that they had after the demise of the Soviet Union, they have arrived in a much more fortunate position, and we want now to discount that.” But in that negotiation any Russian with common sense would say simply, “Look, our economy suffered an enormous transition—an enormous hit on our domestic economy. We’ve paid the price for being in the position that we are now in, with that hot air, with those emissions credits.”
The original intention of Kyoto was simply that we should see the reduction below 1990 levels. Perhaps due to the collapse of the old Soviet economy, Russia has achieved that reduction, but it has not achieved it without substantial cost. That is just one example of the way in which the negotiations that we believe we are entering into in good faith may be perceived by the other side as negotiations that are not being conducted in good faith. Sometimes we have to look much more carefully at the principles of equity when we consider how one reaches a just settlement in this area.
For example, in discussions that are often entered into about what is happening in China and India—we will debate China more specifically later—we often say, “These are the emerging economies and emerging powers and, of course, China is building so many more coal-fired power stations and its emissions are growing at a tremendous rate.” Yet somebody in India will say, “Yes, but let’s look at our population and let’s see what our emissions per capita are.” They will say that, in India, the emissions are approximately 2 tonnes per capita, whereas in this country they are well into double figures and in America it is probably 10 times that which the average Indian would expend.
We have all entered into the negotiations at the UNFCCC from a position of national self-interest. Unless we
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understand that this is genuinely a boat in which we all either sink or float, we will not arrive at a resolution that is fair and has any chance of success.
David Mowat: I am interested in the hon. Gentleman’s analysis, particularly in respect of the national point and Russia. Some countries—how can I put this?—might benefit from climate change, including Russia, because there is a lot of tundra there. I wonder whether COP might look at the possibility of globally taking advantage of that phenomenon, given that my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) may be right in saying that we are not going to stop coal being burned at the present rate.
Barry Gardiner: The hon. Gentleman makes an important point. I do point out that he has conceded that climate change is real, and that it will have a differential effect in different parts of the globe. It is difficult to predict what that differential effect will be, but one of the core predictions is that there is every expectation that parts of Russia that are now tundra and unfarmable will gradually be released as good agricultural land. Therefore, from the Russian point of view, climate change, if and when it happens, will not be a significant problem. However, the problem is that with the release of that land into farmable condition, a lot of methane will be released into the atmosphere, which will turbo-charge the process. But the hon. Gentleman is right to mention that.
The international negotiations must take on board the fact that although there are real downsides for some economies—indeed, small island states are in danger not just of their economy, but their whole territory going down the pan—countries such as Canada and Russia may make substantial economic gains through this process. That is why we cannot simply go into the negotiations with the viewpoint that climate change is a universal disaster and we must stop it at all costs. We have to understand that some people expect to gain and some expect to lose. That makes these negotiations all the more intractable, and makes it more difficult to get a just resolution. I absolutely endorse the hon. Gentleman’s point.
David Mowat: It might be a more fertile route for the world to look at that interaction between those that are gaining and losing, rather than trying to stop what would appear to be the unstoppable, in terms of coal burning at scale.
Barry Gardiner: The negotiations absolutely have to consider where the balance of costs and benefit lies and take that into account. Without doing that, we will not get anywhere; I agree.
The funding of the climate negotiations process is critical. I congratulate the Government on the way in which our country has stepped up to the plate with the short-term funding committed in 2009 through to 2012. They have delivered that, if not 100%—it may be 100%—then pretty damn close to 99%. They have not just committed and delivered the funding, but ensured that 50% of it went to adaptation. Many countries that promised such start-up funding committed themselves to the principle of at least 50% going to adaptation but then did not deliver. It is absolutely vital that such
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commitments are honoured, because they are the ones that build trust into the negotiation. When countries see other nations commit funds and then deliver them in the way that has been promised, it builds trust into the whole process.
When Christiana Figueres, the executive secretary of the UNFCCC, came to London in January and spoke in the Locarno suite of the Foreign and Commonwealth Office, she made it clear that the only way in which we would achieve success on the Durban platform and see a resolution and a conclusion to the negotiations in 2015 was to build trust at national level. She made it clear that any agreement in 2015 would as much reflect what was going on at the national level—the legislation that was being passed and the regulations and policies that were being enacted by Governments—as it would define climate legislation into the future.
For many years, Governments across the world appeared to think that all we needed to do to solve the problem of climate was to get together and reach a legally binding agreement. Well, that was always a chimera; it was never going to be the case because, no matter what Governments agree to, it must be brought back and legislated on in their Parliaments. That legislation must then be implemented. Funds have to be voted to ensure that the legislation is implemented properly and fully, and the implementation must be monitored, audited and carried out.
That is why I refer to the study launched by Christiana Figueres in the Locarno suite—the GLOBE International climate legislation study—which focuses on climate legislation enacted in 33 countries. The study sets out the progress that each country is making on enacting its own legislation and regulation, and that builds trust into the whole system. Often countries ask, “Why should we act to the detriment of our own industry by enacting climate legislation? It will put us at a disadvantage to everyone else.” But actually, countries are not acting alone. Countries throughout the world are taking positive steps to enact legislation on climate because they perceive the problem. Such a study is perhaps the best way to show the sceptics that their country is not alone, to build trust and enable the negotiations to proceed in the way alluded to by Christiana Figueres.
Finally, since the Bali conference, REDD—reducing emissions from deforestation and forest degradation—and REDD+ have been one of the most important ways of advancing our aspirations for reducing emissions into the atmosphere. Emissions from deforestation and forest degradation amount to about 17% to 20% of emissions produced each year. I pay tribute to legislators in Brazil for the work that they have recently concluded on the forest code, and for reducing their own emissions so substantially over the past three years. I pay particular tribute to legislators in Mexico, who passed important REDD+ legislation to enable REDD funding to come through.
We often find that, in countries that are major forested domains, property rights are very difficult to establish because there are different layers and levels of rights, such as customary use rights, that sometimes make it impossible to disentangle who has the right to operate, to log or to use a piece of land in a particular way. By teasing those out and codifying all the issues, REDD+
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will be enabled, as part of the international negotiations, to reduce really effectively the emissions from that most important sector.
Colleagues are keen to move on to the second part of our debate, so I will draw my remarks on the UNFCCC to a close. I believe that the process is worth while, but I recognise that it is not simply the international negotiations process, in which thousands of people come together every year, that will resolve the matter; it is by detailed work at national level, open to scrutiny by national Parliaments and enacted through national legislation, that we shall build the trust in the international community that will enable the executives, through the UNFCCC, to arrive at a negotiated agreement, we hope, in 2015.
[Mr Clive Betts in the Chair]
Dr Alan Whitehead (Southampton, Test) (Lab): I, too, will try to be brief, because I know that an important debate on China and the low-carbon economy will follow. That debate may shed light on some of our interesting diversions in this debate.
Fundamentally, we have been invited this afternoon to justify why the COP process is important. There are those who say that it is all a complete waste of time—we will burn all the fossil fuel that we can get our hands on—and ask why we are concerning ourselves with the process. Most simply, the Earth is very good at storing stuff and does not need over million of years to balance how it works as a planet. Humans, with the great gift of consciousness, are also very good at finding all that stuff, digging it up and burning it within a few hundred years, compared with the millions of years that the Earth has taken to store and balance it in the first place. I assume that the right hon. Member for Hitchin and Harpenden (Mr Lilley) also agrees with this, but if, over the next 100 years or so, clever humans find and burn all the fossil fuel, the outlook for the world would be very poor indeed.
The world simply cannot do that over the next 100 or 150 years. That seems to me to be a fairly self-evident fact, assuming that people agree that there is some relation between what we do—burning fossil fuels in particular, and human activity in general—and the state of the world’s atmosphere and the extent to which the Earth will warm up as result. Someone who thinks that there is no connection whatever would presumably not be concerned about finding all the fossil fuel in the world and burning it all. Someone who thinks that there is a connection, and an urgent one, would presumably wish to do something about it fairly urgently. Since climate change and, in particular, the results of the burning of fossil fuels know no boundaries, the only way that we can do something about the situation over the medium term is through interaction and discussion between states throughout the world about achieving an outcome that is not as disastrous as it would be if every country went its own way individually.
That seems to be the basic point about the COP process, and although I shall come to a caveat in a moment, that cannot be replicated by people doing what they feel like individually in different countries around the world, partly for the reasons that have been rehearsed this afternoon: people want to go their own way in how to develop their economies. Realising the
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extent to which that is not an option for any of us over the next 100 years or so is part of the process of recognition that international agreements are important. Indeed, under certain circumstances some consequences have been turned back by international agreements. The Montreal protocol and the action on chlorofluorocarbons was a global agreement to the disadvantage of certain places resulting in a substantial change; what would otherwise have been a difficult outcome for at least parts of our climate has apparently been substantially mitigated and possibly reversed. The COP process is important in that respect.
For the record, one of the immediate consequences of deciding to go off in a different direction can be seen in the 2013 Budget: the carbon floor price is a unilateral tax introduced in the UK, the operation of which does not directly save a single tonne of carbon. It was supposed to be introduced on the basis of a £1 rider on the EU ETS—an inter-country co-operation on carbon cap and trade—but that turned into a £4.94 rider on the ETS when it comes in this year. From next year, it will be £9.55 on top and, in 2015, £18.08 on top, compared with what would have been £7.28 and £9.86, respectively, under the original proposals. That is not mission creep but mission gallop, and often in an entirely different direction. The result is an £18 differential between a power station introducing energy to the UK from the Netherlands and a power station producing energy within the UK. A power station developer might now think, “I will go and put one up in The Hague now because, for my power station developments, that will save me £18 per tonne of CO2 over the next few years.”
As my hon. Friend the Member for Brent North (Barry Gardiner) outlined, the free money—not for new nuclear, but for existing nuclear—turns out to be not only for all the nuclear power stations in place, but for the two extensions agreed last year and this year. Calculations based on what the carbon floor price would have been when it was first introduced make that £44 billion over the life of the extensions for the four power stations; the new figures are about 30% more. Frankly, I will be surprised if EDF does not go ahead with a new power station on the back of that free money, although I know those are two slightly different things. My point is about the distorting effects of a one-country go at such a scheme, even if that was the intention, rather than its being a dash for money by the Treasury. That illustrates, as other things might not immediately, how important it is to go ahead with international negotiations and to get collective action. Every one would then be in the same place and on the same level playing field.
David Mowat: The hon. Gentleman makes the argument for the money being used as a cross-subsidy. Unfortunately, EDF will not look at it that way; I would be happier if it did, because that would mean getting Hinkley Point, but I am concerned that that will not happen.
Dr Whitehead: The hon. Gentleman is absolutely right. EDF will probably use the money to shore up its dodgy international finances, rather than to develop new nuclear power stations. Nevertheless, the effect is there: a substantial subsidy, merely for continuing to do
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what it did, as a result of an instrument in one country alone. That is my point, not how EDF will use the money.
That is why the international COP process and, contributing to it, joint targets backed up by individual country targets are important. My hon. Friend the Member for Brent North mentioned the extent to which, almost under the radar internationally, countries are beginning to take the sort of action that we in this country have already taken with climate change legislation. One of the ongoing processes recorded in the Select Committee report is that countries, even those that might be advantaged by global warming, are undertaking their own climate change legislation.
It is vital the UK does everything that it can over the next few years to support countries to develop their own climate change targets and to join us in ours, so that progress towards a level playing field can be considerably advantaged as the negotiations take place. One thing that we should resolve today not to do is to indulge in any tinkering with our climate change targets, as we try to move towards international agreement on other people’s climate change targets, given that that would send a very bad signal indeed to other countries, some of which are beginning to take their climate change legislation directly from what we have done in the UK.
That is a call not for action, but for us to defend what this country has done. Our actions have not just made a contribution to what will subsequently be the international level playing field, but are a beacon that shows how these things can be done. Our duty now is not just to say, “We’ve done it, so you should do it, too,” but to stick with what we have done and to ensure that the process that we are working to is not revised way, wished away, downgraded or put in a cupboard by others, while some take what we consider a more appropriate direction on international agreements.
Of course, there is a whole range of other issues regarding COP 18 and beyond, but what I have just described is among the important emerging issues; indeed, it featured substantially at the Doha discussions. It may be a mark of our contribution over future years that the steps that I have described are among those that we take to move discussions forward in a way that produces international agreements, which are vital to any hope of ensuring that our planet lasts in a fit state for the next few hundred years. Of course, it will last, but perhaps not in a fit state for us, although it might be in a fit state for somebody else. Whether our planet will be in a fit state for us over the next few hundred years, however, will be very much determined by whether people from around the world gather to discuss these issues. The issue is whether we make the planet fit for purpose, fit for us and fit for the future; that is what we have to concentrate our minds on.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Betts. I thank the Chair of the Committee, the hon. Member for South Suffolk (Mr Yeo), for the way he introduced the debate and congratulate the Committee on producing its report.
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We have heard some insightful speeches from my hon. Friends the Members for Glasgow North West (John Robertson), for Southampton, Test (Dr Whitehead) and for Brent North (Barry Gardiner). Members will not be surprised to hear that I do not necessarily share the views of the right hon. Member for Hitchin and Harpenden (Mr Lilley).
As the Chair of the Committee said, events have moved on somewhat since the report was produced, not least because COP 18 has taken place. During the conference, four Gulf states—Qatar, Saudi Arabia, Bahrain and the United Arab Emirates—announced that they were ready to submit emission reduction plans to the UNFCCC. I listened to what the right hon. Gentleman said about the developing world, but I am not sure whether he knows that, last month, the group of 49 least developed countries also announced they are now prepared to commit themselves to binding cuts in their greenhouse gas emissions.
While some progress has been made, many challenges remain. Canada, Japan and Russia have all said they will not be part of the extension of the Kyoto protocol, and yesterday the International Energy Agency warned that the continued global reliance on coal and the rapid development of emerging economies meant that despite
“a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago.”
In some ways, that is depressingly familiar, but it reinforces the point that any solution to climate change requires a global agreement that limits carbon emissions, as well as a rapid expansion of low-carbon energy generation. In that context, the main consensus on the proceedings at Doha was that they were a modest step forward.
Sitting suspended for a Division in the House.
Luciana Berger: During the Committee’s special evidence sitting following the conference, my hon. Friend the Member for Glasgow North West commented:
“If it was a road map, the car is still on the road”.
There was not the forward movement we hoped for. Only one country—the Dominican Republic—signed up to new carbon emission targets. Although I welcome the fact that four Gulf states made a commitment to submit reduction plans, that has yet to happen. The most important thing was that the conference agreed an extension of the Kyoto protocol and re-established a timetable for agreeing a global deal in 2015.
As to the substance of the report, Labour Front Benchers support many of the Committee’s recommendations. We have supported and will continue to support the Government’s efforts to secure a global, legally binding framework to cut CO2 emissions. We agree with the Committee and the Government that the UNFCCC is the forum that offers the best opportunity for securing such an agreement, and that there is a need for a single transparent accounting regime, but this is the point at which I want to hold the Government to account.
We also support an EU target of a 30% reduction in carbon emissions by 2020. Anyone reading the Government’s response to the Committee’s report would be led to believe that the Conservative party supports
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that as well, yet proposals to introduce a 30% target have come before the EU Parliament twice in the past two years, and have twice been defeated because Conservative MEPs voted against them. I hope that the Minister might share with us his thoughts on why they did that, or, more to the point, why the Prime Minster did not do anything to stop them.
Will the Minister also tell us why this week 21 Conservative MEPs voted against attempts to rescue the EU ETS by back-loading 900 million carbon allowances that were due to be auctioned later this year? That was despite the fact that the Secretary of State told the Select Committee:
“We have the proposal for back-loading on the table. We do not think it is ambitious enough. We think we want to see both back-loading and cancelling, because that could make a significant difference to increasing EU ambition almost in one leap.”
Given that the Secretary of State clearly stated that the Government support back-loading, why did Conservative MEPs actively scupper the proposals?
The UK is responsible for 2% of the world’s carbon emissions. We have a responsibility to reduce them, for all manner of reasons, but on our own we cannot solve the problem of global climate change. Part of the leadership role that we can play in international climate negotiations will be as part of an EU bloc, so why are the Minister and the Prime Minister allowing the UK’s credibility to be undermined by Conservative MEPs? I know from previous exchanges on such matters that the Minister has a habit of dismissing anything that he does not want to hear, or that highlights the shortcomings of the Government, as partisan rhetoric, but it is not partisan to point out that the view of the UK as a climate change leader on the international stage is diminishing. As my hon. Friend the Member for Glasgow North West said during the Committee’s hearing following Doha, the message that he heard from our European partners was that they felt the UK was backing off from the leadership it had shown in the past.
In an ideal world, between now and 2015 the Prime Minster would go around Europe and the rest of the world championing Britain’s low-carbon progress, but we know that he cannot do that. He can try, and I hope he will. He can go to China, the United States and our European neighbours, and I am sure they will listen politely to his spiel about how the Government are the greenest Government ever, and nod as he tells them how personally committed he is to combating climate change. I am equally sure that they will then disregard what he says, because they read newspapers, too, and they know the Government’s record as well as we do. They know that under this Government investment in renewable energy has halved, and that the Prime Minister barely talks about climate change any more—he has not yet attended an international conference on the matter, and cannot get his own MEPs to support an increase in carbon reduction, let alone ask them to do more. No matter what the Prime Minster says, he cannot change the reality.
Things do not have to stay that way, however. The Government should act now to improve their record and give the UK a stronger negotiating position in the run-up to 2015.
David Mowat: From the tone of the hon. Lady’s remarks it would seem as if the UK were among the higher producers of carbon in the EU, whereas, according
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to EU figures, we produce 8.8 tonnes per capita. That is among the lowest in the EU and 30% lower than countries such as Germany, Holland, Ireland and Poland. I find her remarks odd in that context.
Luciana Berger: I am not sure how that point relates to mine about our responsibility to continue in our leadership role on the international stage—a role for which, in the past, we have been held in high esteem and taken seriously—and about remarks recorded in the report that show a diminishing in our standing, and therefore our effectiveness, on that international stage. As I said, 2% of global emissions come from the UK. We have a responsibility, domestically, to reduce them, but we cannot solve the problem alone.
John Robertson: Does my hon. Friend agree that leadership from this country is important in the international arena, mainly because we were the country that set the pace, with the first ever Bill that had climate change in it?
Luciana Berger: We were, proudly, the first country in the world to do that, when we passed the Climate Change Act 2008, with a view to reducing our emissions by 2015 in relation to 1990 levels. The Act is held in high regard in countries that I have visited, but legislation is not enough if it is not acted on and if the Government’s actions do not match it. That is why it is important that the Government do all they can to live up to their ambition to be the greenest Government ever, and not slip behind. Then they would be held in high esteem on the international stage.
Mr Lilley: The hon. Lady’s party has abandoned unilateralism in nuclear weapons on the ground that setting an example would not stop other countries following a policy of obtaining nuclear weapons, so why does she favour unilateralism in this sphere and argue that inflicting pain and damage on the British economy will encourage other countries to do likewise?
Luciana Berger: I disagree with the right hon. Gentleman’s comment.
Mr Lilley: It was a question, not a comment.
Luciana Berger: We were the first country to introduce a climate change Act, but other countries, such as Mexico, have followed suit, and many others are considering how to reduce their carbon emissions. I agree with the Chancellor’s comments back in 2007, when he said that investment in low carbon could go hand in hand with growth and support our economy. We have seen global trade in low carbon surpass growth in all other fields. Without domestic investment in low carbon in the UK, our national growth figures last year would have been much worse. I believe the two go hand in hand.
What should the Government do? First, they should back the cross-party amendment proposed by the Chair of the Select Committee and my hon. Friend the Member for Brent North, which would put an explicit target for decarbonising the UK energy sector by 2030 in the Energy Bill. That would give businesses the confidence and certainty they are crying out for to invest in low-carbon and renewable generation, and would signal to other nations that we were serious about meeting our climate change targets and moving to a low-carbon economy.
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Secondly, the Prime Minister should get a grip on his MEPs and force them to vote in the European Parliament in accordance with the UK Government’s position. That is the only way to regain our lost credibility in the eyes of our EU neighbours. Thirdly, the UK should renew its role as an international political leader on climate change.
David Mowat: The hon. Lady refers to lack of credibility with our EU neighbours. I could accept that if our carbon emissions were higher than those of our EU neighbours, but, with the exception of France, they are significantly lower. Surely actions drive the issue, not words.
Luciana Berger: I thank the hon. Gentleman for his intervention. I referred first and foremost to the actions of Conservative MEPs in the European Parliament who have twice contradicted and been in conflict with British Government policy. There has been a reduction in our emissions, but we must ensure that we meet our ambitious emissions reduction target in the long term. We have made significant progress in the short term, but we must make significant investment in the short and medium term to ensure that we meet the long-term targets.
This month, Lord Stern, author of the world famous Stern report, said that the only thing missing in the efforts to tackle climate change “is the political will”. There are signs that that is beginning to change. In his second inaugural address, President Obama reaffirmed his commitment to tackling climate change. Even emerging economies such as China—we will discuss this in more detail in our next debate—are making progress.
We must seize this opportunity for our planet and for the jobs and growth that it will create. It is time for Minsters, especially the Prime Minister, to stop talking about showing leadership and get on and do it. I hope the Minister will take note of my suggestions, and I look forward to hearing his explanation of the vote by his party’s MEPs this week.
The Minister of State, Department of Energy and Climate Change (Gregory Barker): I thank my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) because I thought this might be a slightly dry debate with the usual suspects in violent agreement, but it has been much more rigorous, thoughtful and lively. The real thanks for the debate must go to my hon. Friend the Member for South Suffolk (Mr Yeo), Chair of the Select Committee. I thought at the outset that this is a strange time in the calendar for a debate on the United Nations framework convention on climate change, because the reality of seasonality in such matters is that negotiators do not start to clear their throats and focus on COP until the second half of the year. The debate has shown that there is a great deal to discuss, and some important points have come out.
I do not share all the analysis of my hon. Friend the Member for South Suffolk, particularly of the carbon floor price, but I share his view and take on board some of the criticism from the shadow Minister about the need for a strong emissions trading scheme and a uniform price signal on carbon throughout the European Union. It would negate the need for a carbon floor price here in the UK and for a unilateral policy. We consider the
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impact on British industry’s competitiveness in every policy. We take that extremely seriously, and that is why the Government broke with previous policy and introduced a substantial package of measures to help energy-intensive industries to deal with the cost impact on their businesses of supporting renewables.
The hon. Member for Glasgow North West (John Robertson) made a sensible speech, and I listened carefully to his points about members of the Select Committee and GLOBE attending COP last year and before then. When I first attended as a Minister, I was struck by the lack of support, hospitality and information-sharing with parliamentarians at those important negotiations. In the past couple of years, I have tried to go out of my way to make parliamentarians feel more part of team GB and certainly to make available more of the facilities. However, we can go further, and the hon. Gentleman is right that we should co-ordinate more closely. I am happy to consider whether there is a possibility of including them in the delegation.
I am not making a commitment, because clearly there is a difference between the Executive, who speak for Her Majesty’s Government, and the House of Commons, which challenges and scrutinises the Government. We would not expect it to have the Government’s role, but the hon. Gentleman and the hon. Member for Brent North (Barry Gardiner) are absolutely right that, because of the reputation of GLOBE UK and Parliament, they can bring a lot to the party. The issue does not involve partisan politics, but there may be some subtleties about the legislature and the Executive. I will look at the example that the hon. Members raised, and perhaps return to it at a meeting here or in the Department.
Perhaps the liveliest part of the debate was the speech and interventions from my right hon. Friend the Member for Hitchin and Harpenden. However, I fear that his whole thesis was to drag us down into the climate and energy politics of either/or when we are trying to develop, both here and globally, a pluralistic approach to energy. We do not want either/or—fossil fuels or renewables—but gas and wind. There will be a need for coal, but also for biomass. We want solar and hydro. We want large-scale solutions deployed, as well as distributed generation. We want industrial-scale generation and consumer generation. The 21st century calls for plurality of energy supply, sources and technology, as opposed to a monolithic, one-size, fossil-fits-all model at home and abroad. That will be good for security as well as value and climate.
Glyn Davies (Montgomeryshire) (Con): I am particularly interested in plurality and retaining public support. As a political institution, Parliament can act only with public support. Does the Minister accept that, whatever avenue the Government go down that impacts on our climate change policy, public support is important? We have a disconnect growing between the people and the Government. Eventually, the Government’s policy will fail.
Gregory Barker: There is an important balance to be struck. Of course, we are here to listen to and represent our constituents, but we also have a leadership role. If ever we were reminded of the importance of not bending to public opinion in the short term, but aiming for the right long-term solution, it was this week, with the funeral of Lady Thatcher, who understood that being unpopular in the short term and not listening to the crowd can often not only be the sensible and right thing to do, but pay dividends in the long term.
On the issue of Lady Thatcher, perhaps because of the week of that extraordinary and very moving funeral, it is worth remembering that it was Mrs Thatcher, as she was then—a scientist by training and a Conservative by conviction—who more than any other world leader acted to put climate change on the international agenda. At the Royal Society, of which she was a fellow—one of the very small band of Conservative MP scientists—she said:
“For generations, we have assumed that the efforts of mankind would leave the fundamental equilibrium of the world’s systems and atmosphere stable. But it is possible that with all these enormous changes—population, agricultural, use of fossil fuels—concentrated into such a short period of time, we have unwittingly begun a massive experiment with the system of this planet itself.”
That was said in 1988, which shows extraordinary foresight.
Pursuing that line of inquiry—Lady Thatcher did not just make one speech on climate change, but several important interventions—she went to the United Nations the following year, in 1989, and crystallised her thinking. More than 20 years later, what she said then is relevant to this debate today, which was that
“the problem of global climate change is one that affects us all and action will only be effective if it is taken at the international level.”
Lady Thatcher’s actions led, in large part, to the Rio Earth summit of 1992 and to the UNFCCC process that continues today.
The process continues with all its imperfections. There have been huge setbacks to date, not least at Copenhagen in 2009. Having participated on behalf of the Government in three COPs now and their subsidiary meetings, I am under no illusions about the difficulty of negotiating a global treaty. However, I must tell the Chamber that having returned last week from the Major Economies Forum on Energy and Climate, which meets during the year to consider action in the UNFCCC, I detect movements of the tectonic plates. I am not suggesting that we are back to where we were in 2008, when we were all expecting global cap and trade, but we are seeing significant policy shifts—or at least the consideration of policy shifts—between what is now termed the G2, or the key players, which are China and the USA. That will not come overnight. A lot more is still to be delivered, but we are seeing the signs of a recognition that they have to deal with the problem. It cannot be ducked.
Part of the reason why we are seeing politicians show, at national leadership level, a willingness to return to the subject from which President Obama and the Chinese leadership were severely scorched—from the experience of Copenhagen in 2009—is that they are driven not only by the science, but by the economic reality of the imperative of diversifying energy sources away from fossil fuels and the recognition that the low-carbon goods and services sector globally is now worth more than $3 trillion, and is growing.
As the hon. Member for Liverpool, Wavertree (Luciana Berger) pointed out, here in the UK, that is a sizable factor in our growth, not only in terms of the narrow subsection of wind or subsidised renewable energy, as the low-carbon sector runs much more broadly than that and includes energy efficiency and a range of innovation of products and services. That is why, this year, in recommitting the coalition to being the greenest Government ever, our Prime Minister said that not only are we in a global race, but the countries and economies that will win the global race are those that are most efficient, and the most efficient will be those that drive after energy efficiency and renewable energy.
The Government’s clear ambition is to be a leader, not because we are on a moral mission at the expense of our national prospects, but because we recognise that it is a massive economic opportunity. That is why we think that we can seek not to disadvantage industry, but to obtain a first-mover advantage. My right hon. Friend the Member for Hitchin and Harpenden is out of step with the CBI and with a whole range of smaller businesses, which make that argument strongly to the Government.
Barry Gardiner: I wholeheartedly agree with the point that the Minister is making. Is he aware of research now being conducted that seems to suggest that countries that have legislated on climate are attracting most of the international investment in this area?
Gregory Barker: There is certainly a strong correlation between regulatory certainty and investor certainty, and lower cost of capital and the flowing of funds into those high-growth sectors. However, another canard that I have to shoot down is the idea that we live in an era of cheap fossil fuels and expensive renewables. Certainly, in the developing world, that is not true. I simply draw the attention of my right hon. Friend the Member for Hitchin and Harpenden to the fact that, between 2011 and 2014, India will spend $14.267 billion subsidising kerosene, LPG and natural gas. That is one of the largest elements in its national budget; it is largely responsible for the massive calls for structural reform in India, and it is seen as a brake on growth, because the country is subsidising not renewables, but fossil fuels. It is simply wrong to argue anything other, but nor is it an either/or choice.
Mr Lilley: The Minister is making an ineffective debating point. The Indians want their consumers to have cheap fuel at the point of purchase. That may be a misguided policy; it would not be one of the British Government’s, but they choose to subsidise the products that are already the cheapest, not those that are initially the most expensive. If wind and sun were cheaper, perhaps they would subsidise them, but the Minister cannot really pretend that wind is therefore cheaper, because they are subsidising other things.
Gregory Barker: No, but my right hon. Friend will know that last year, the wholesale cost of gas rose by 35%. The cost of renewables is consistently coming down. He will know that the cost of solar crashed in the past two years, and that in many cases, with high irradiation, such as in the developing world—
Mr Lilley: The Minister is changing his argument.
Gregory Barker: No, I am not. I am responding to my right hon. Friend’s point. The cost of fossil fuels in the developing world in the past two years has largely increased—in some cases, very substantially. The cost of renewables is coming down. That is why India has launched its national solar mission and why it is investing in wind. It is using the subsidy not simply to subsidise consumers for a product that they cannot afford, but as an investment to bring down the cost to the point that they can afford it. When the counterfactual is distributed diesel generators, often no subsidy at all is needed.
Small-scale generation is not some piffling irrelevance, as my right hon. Friend seemed to imply, but it is the reality for hundreds of millions of people in the developing world. Hundreds of millions in Africa and about 400 million in India do not have access to the grid and are not likely to get it any time soon. That is not just an economic imperative; it is a moral one as well. They are not sitting there wanting American-style fridge-freezers and huge cars; for them, a luxury is a light at night or a laptop, so that their kids can have an education or the most rudimentary internt access.
My right hon. Friend seems to think that the American economic model for shale gas is easily replicable in the rest of the world. It is not. If there is cheap gas to be had, we want it here, but it is not a binary world of black and white choices between renewables and fossil fuels.
Mr Lilley: I am overwhelmed by my right hon. Friend’s eloquence and verbosity. If he is saying that renewables are more economic than fossil fuels, that is wonderful—let us leave it to the market, and they will be adopted—but he cannot simultaneously say that we ought to be subsidising them and that they are already as cheap as or cheaper than fossil fuels.
Gregory Barker: Let me explain it one more time. Fossil fuels have been around for centuries. They have had plenty of time to develop, as I think my right hon. Friend will agree. I think that he may have worked, as I have, in the oil and gas industry before coming into politics. The fact is that continuing to supply oil and gas, LPG, petroleum and kerosene at scale to the Indian population requires a structural subsidy. We are not proposing a structural subsidy for renewables; subsidy is justifiable only in any circumstance if there is a chance of getting to a non-subsidised point. We should not subsidise any technology, whether renewable or fossil fuel, if all we are doing is pouring good money after bad. Subsidy for renewables can only be a short-term or at best a medium-term strategy.
Barry Gardiner: Perhaps a common point of agreement between the Minister, the right hon. Member for Hitchin and Harpenden (Mr Lilley) and myself is that any subsidy should be in place only because of a market failure. It is almost impossible to justify a subsidy on that basis to fossil fuels, which have had more than enough time to establish themselves, whereas there is a failure in the renewables market. We need to get renewables to the point where they become a full-scale technology and are able to operate at only marginal cost. I presume that the Minister, the right hon. Gentleman and I would all agree that, at that point, subsidies should be withdrawn from them also.