Wednesday, 10 December 2008

Nigella's Father Bites Again

One Cuts a Ridiculous Figure Leading the World

On the 17th November, 2008 Nigel Lawson addressed the House of Lords on the most monumental piece of legislative mania ever to grace the House of Commons. The text of Lawson's speech is reproduced from Hansard, here. (Even New Zealand gets a mention)

Lord Lawson of Blaby: My Lords, the Minister has given an excellent summary of what we have to discuss here. Let me say just two things. The first is that, as many noble Lords may know, I have taken an interest in this issue for some time. Indeed, I have even written a book on the subject which, I am glad to say, has already been translated into two European languages and three more foreign editions are on the way. It is possible that I have had slightly more influence in that way on affairs than by speaking in this House. That is not the only reason why I have not spoken previously in this House on the Bill. The other reason is that I felt that it was unbecoming for an unbeliever to take part in a religious service, which is what all this is really about.

Nevertheless, we have the amendments that come back from the Commons to us today. The Bill will go down in history, and future generations will see it, as the most absurd Bill that this House and Parliament as a whole as ever had to examine, and it has now become more absurd with the increase from 60 per cent to 80 per cent. I should like to address as briefly as I can—because I do not propose to speak on any subsequent occasion on this subject— why I think that the Bill is so absurd.

Let us pretend that the planet is warming. We know, of course, that it is not. The figures published each year and, indeed, monthly, by the Met Office or the Hadley Centre, which is a department of the Met Office in association with the climate research unit of the University of East Anglia, show without any doubt that there has been no warming so far this century at all. Some people say that there has been a cooling but, although that has been the slight trend, I think that the margin for error is so great that I would not press that, but there has certainly been no warming. The majority of climate scientists do not think that if there were a warming, it would be a disaster.

Nevertheless, it is possible that warming will resume. The majority of climate scientists believe that warming will resume. I am completely agnostic on that; I do not know. Maybe it will, maybe it will not. The complete standstill this century so far was certainly totally unpredicted by all the elaborate computer models that the scientists use. That is not surprising. The climate is an extremely complex system.

What lies behind this? It was implicit in what the Minister said, although he did not spell it out on this occasion, that by taking this massive step of virtually complete decarbonisation of our economy by 2050 in a mandatory way—something that no other country has done for good reason, because no other country has been so foolish, nor do other countries have the slightest intention of going in this way, but I will come to that in a moment—we in the United Kingdom are giving a global lead that other countries will follow.

To understand that, we have to go back briefly to the G8 meeting last year. At that meeting, Europe, led by Germany and the United Kingdom, sought to isolate the United States in its opposition to binding commitments to cut back carbon dioxide emissions by proposing that the whole of the G8 should agree to a 50 per cent cut in carbon dioxide emissions by 2050. I can understand why people are not dying to support anything that President George W Bush supports, but the plan to isolate the United States backfired horribly. Europe was isolated when we got to the G8 summit. The other member countries, Japan, Canada and Russia, all accepted the United States’ position and therefore there was no agreement on a 50 per cent binding commitment to a reduction in carbon dioxide emissions by 2050. Fast forward from that, what has happened? Far from making any headway in persuading the rest of the world, even Europe is now backing off.

I remind the Minister of the original plan, the unilateral European cut. We are committing ourselves to a unilateral cut really, irrespective of what any other country does. After all, we account for less than 2 per cent of total carbon dioxide emissions and that is falling. Therefore, it makes sense only if we can persuade the rest of the world to go along with this.

Even our supporters in Europe are busy backing off. The unilateral cut of 20 per cent by 2020, agreed to by the European Union—with a little teaser that, if the rest of the world joined in, we would go up to 30 per cent—has been completely abandoned. It was never a binding commitment because you can bind only individual member countries and the individual countries of the union had not agreed—we had but the others had not—to go along with their share in the 20 per cent cut. The seven accession states of central and eastern Europe, plus Italy, have now said that there is definitely no way that they are going to go along with this. The European Union has agreed that this should be looked at again. Nothing will happen. It can only be agreed unanimously and will be looked at again in December this year, after the Poznan meeting, which I hope the Minister will grace with his presence. It will be an educational event for him.

Not only have those countries said that they will not go along with it, but Germany has always had a slightly equivocal position, because, in addition to ostensibly being very keen on this policy, it subsidises its coal industry more than the rest of the European Union put together. Indeed that is contrary to European Union law and it has to secure a waiver from European law to enable it do that, for which it fights to the death, and successfully so far. However, the German Government, have said that energy-intensive sectors must be exempted from the European emissions trading system. Indeed, an official government spokesman said only the other day that we have got to prevent companies being threatened by climate protection requirements. That makes nonsense of the whole policy. If Germany is saying that, the others will go the same way. Therefore, we are in the position of being completely on our own. The point is to get an agreement at Copenhagen, as the Minister said, a successor to the Kyoto agreement which will be about to expire.

The Kyoto agreement called for only a 5 per cent reduction in carbon dioxide emissions. So far, there has been at least a 5 per cent increase in carbon dioxide emissions from the signatories to the Kyoto agreement, and it is rising all the time. This country’s emissions have been rising steadily ever since this Government took office in 1997. The disparity between the words and the facts is astonishing. We got as close as we did to the Kyoto agreement—which was not very close—only because we in effect outsourced our emissions very substantially to the developing world, in particular India and China. This is because manufacturing industry relies on carbon-based energy to a very high degree, and the industry has migrated to a considerable extent to China and India. This is why China is now the biggest emitter of carbon dioxide in the world—bigger even than the United States.

Given that we could not get close to 5 per cent even while it was possible to outsource emissions, it beggars belief that we think we can get to a 50 per cent reduction by 2050, of which our share will be an 80 per cent reduction, at least—the agreement is meant to include China, India and everyone. There is no way in which we can outsource emissions to Mars, so this must be a real reduction. China and India have said that in no way will they accept this kind of curb on their emissions, and quite rightly so. These countries have a real problem that is very serious for them; they suffer from poverty, malnutrition, disease and premature death on a massive scale. They can get out of that only by the fastest possible rate of economic development, which requires using the cheapest energy that they can find. It might not be for ever, but for now and for the foreseeable future that energy is carbon-based energy. They will not take part in this.

Interestingly, the Indian Government recently received a report from a whole lot of experts who said that climate change presented no threat to India. One of the signatories to that report was Mr Pachauri, the chairman of the Intergovernmental Panel on Climate Change, who is Indian himself. No one who has looked at this seriously and dispassionately thinks that this is a sensible policy. Professor Gwyn Prins of the London School of Economics has written very eloquently on the subject—I am sure that the Minister has read what he has written. He is not a scientist, but he entirely accepts the conventional view of the science. He says simply that this policy is madness and cannot possibly work. He has written two well-argued papers, Time to Ditch Kyoto—which means the whole Kyoto approach—and a sequel, which he wrote to help the Poznan conference. The United Kingdom is completely isolated in this. What we are seeking to do is absolutely crazy; it will be immensely damaging to the economy as a whole, and to the poorest people in this country in particular, if we carry it through.

Some people may say that I have forgotten the business opportunities from going along the route of non-carbon-based energy. I confess that there are business opportunities. Noble Lords may or may not be aware that there was a conference in London perhaps 10 days ago called “Cashing in on Carbon”. The promoters said of the conference:
It is aimed squarely at investment banks, investors and major compliance buyers and is focused on how they can profit today from an increasingly diverse range of carbon-related investment opportunities. The programme features some of the most experienced and respected practitioners in the market and should have very strong appeal to anyone with a stake in this burgeoning market.
I am glad to say that among those prominently represented was the group of which the noble Lord, Lord Stern, is deputy chairman. I am sorry that he is not in his place on a Bill of this importance. So the people who gave you the glories and the joys of mortgage-backed securities are now offering the great business opportunity of carbon-backed securities.

I always like to look on the bright side: it is possible that this Bill is not as bad as it might seem on paper. Under the Bill, there is no reason why we need to cut our carbon emissions. We can do it entirely by purchasing emission reduction certificates under the clean development mechanism from China, India or wherever. Although that would be a quite unnecessary transfer of resources to other countries—perhaps they deserve it, I do not know—it would be less costly than trying to cut back carbon dioxide emissions ourselves, which would be immensely more damaging.

A number of journalists and other academics have demonstrated the clean development mechanism to be a complete scam. What now happens is elementary economics: if a price is put on carbon dioxide, people will produce it. Various countries are busy producing emission reduction certificates so that they can be sold. The Chinese have done a very good business in this. They are very sharp and very much on the ball. They are now getting huge revenue from the certificates, which have no bearing on the carbon dioxide concentrated in the atmosphere. They are making so much money that the Chinese Government are taxing them in order to help their government revenues, which gives them more money to spend on their massive coal-fired power station programme. That is not only madness, but also highly unpopular.

There has been so much interest in the American presidential election that people have not looked as closely as they might have done to two other elections which have also taken place in recent weeks in English speaking democracies—in Canada and New Zealand. I say to my own party, in particular, that it should watch and take note of the fact that in both countries this issue was prominent in the debate. There was a rather weak, very shaky minority Conservative Government in Canada. The Liberal Opposition thought that it could come to power with what it called the “green shift”, which really tackled this issue. It was so unpopular that the minority Conservative Government increased their representation considerably and the leader of the Liberal Party of Canada is about to resign his post, if he has not already done so.

In New Zealand, a Labour Government, led by a very able woman Prime Minister, was in power for a very long time. Again, they said, “This is the big issue”. Although we may think that it is ridiculous for New Zealand to say that it is giving a global lead, it is no more ridiculous than us saying that. Having an elaborate system to cut back on emissions and having an emissions trading system was so unpopular that the Labour Party lost office. The Conservative Opposition, to their great astonishment, found that they won the election.

Lord Teverson: My Lords, as the noble Lord is sticking to the Commonwealth, what about the Australian election where it perhaps was slightly different?

Lord Lawson of Blaby: My Lords, that is a very good point. The main thing in the Australian election was that the people were sick and tired of John Howard, whom they felt had been there for far too long. It is true that the Leader of the Australian Labor Party said that he would sign the Kyoto agreement. People thought that that was a good idea. I happened to be in Australia at the time of the election and watched people being interviewed on television. The interviewer rather shrewdly asked a lot of people, “Are you in favour of signing the Kyoto agreement?”. A great majority said, “Yes, we are”. The next question was: “Do you know what the Kyoto agreement is?”. They said, “No, we don’t”. The new Australian Government are now having to implement these things and their standing in the polls has plummeted. I am glad that the noble Lord raised the issue of the Australian political scene, which is always an interesting one.

I shall take a moment to warn my noble friends on these Benches. This is extremely unpopular. The Government are shrewd in turning the tables on the Conservative Party on the tax issue, deftly jettisoning any idea of prudence and saying, “We are now the party of tax cuts”. As we move closer to the next general election, if it should happen that the Labour Party feels there is a possibility that it might lose it, the Prime Minister will have no hesitation at all in putting this issue on the back burner, saying grave things about other countries not having agreed to it, or the need to look after the economy in these difficult and stressful economic times, thereby leaving the Conservative Party high and dry.

The noble Lord, Lord Mandelson, who I am delighted is now a Member of our House, adds greatly to the gaiety of nations wherever he goes. It is great that he has come here. He is very shrewd, and I am quite sure that that is the advice he will be giving the Prime Minister. I hope that not merely for our party’s sake but, above all, for the sake of our country, we recognise that this is complete madness. We are on our own completely and should desist from going ahead with it.

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