Contribution
My Lords, I will address carbon pricing in the UK, its unfortunate consequences for policy-making, and its devastating results for the public purse and the future of our economy. This confusion is embedded in these instruments, so I speak in support of my noble friend’s amendment. I refer the House to my registered interests as an owner and developer of wind and solar energy generation projects, and as an owner and developer of forests that target carbon sequestration under the Woodland Carbon Code, as well as growing timber that addresses the UK’s structural deficit in construction-grade timber. I am also a partially regenerative dairy and beef farmer.
Our carbon pricing in the UK is muddled. UK Woodland Carbon Code units trade at around £30 per tonne; the UK Emissions Trading Scheme is trading at around £55 to £60 per tonne; the Government’s internal valuation for carbon emissions, used in calculating the relative merits of policy and projects, ranges from a low case of £130 to a high of £390 for this year, and that rises to £568 in 2050. The average carbon emissions per head in the UK are nine tonnes per annum, and that includes scope 2 and scope 3—so offshore emissions. That can be offset for a total cost of £270 through woodland carbon units or £510 through the emissions trading scheme, yet the Government’s cost, used for policy, implies up to £3,510 per head. The first two figures sound reasonably affordable to me, the third does not sound at all affordable.
I believe we are expecting the Government to publish an update to this valuation framework alongside this Carbon Budget Order. I ask the Minister, first, when is this five-year review of valuation of greenhouse emissions likely to be published? Secondly, is he prepared to look again at the whole basis of how this valuation is done, in order to create an environment for better policy-making? The argument that this is based on marginal abatement cost is ludicrous. In effect, the Government are using the extortionate cost of some of the technologies they are throwing money at to justify that cost. In Microsoft Excel, this would cause a circular reference error.
Net zero can be achieved through pragmatic decision-making based on an orderly market where technologies are assessed based on the cost of carbon set by buyers and sellers. Unfortunately, this Government are chasing fantasies around green hydrogen, carbon capture and storage, and direct air capture, as well as some of the renewable projects coming forward, and these have been justified by this ludicrous carbon pricing. It is leading us to ruin, discredits any efforts to keep atmospheric carbon down, and needs to be reassessed. It takes no heed of affordability for the consumer, who feels cost of living pressures everywhere, and is already providing huge subsidies to renewable energy and grid improvements through electricity bills, and suffering the tax burden of funding fantastical technologies, when this money really should be spent on our defence. It pays no heed to industry, which is forced to compete with peers that can access considerably cheaper power almost anywhere in the world. As my noble friend has described, this will simply lead to our jobs and industry being taken offshore, and probably means that the best chance of meeting these targets is by deindustrialising our economy even further.
My noble friend’s amendment regrets the impact on meat and livestock production and consumption, which I fully support. Latest scientific evidence and dietary advice concludes that animal protein, fat and vitamins are critical to our health. Calculations underpinning livestock’s impact on greenhouse gases are highly biased and unfairly penalise livestock for the transitory impact of methane in the atmosphere. They fail to recognise that livestock farming, particularly in a regenerative system, is simply recirculating carbon, in the same way as supposedly sustainable aviation fuel, Drax and renewable heating installations. Why are animals being villainised while these are promoted and grant-aided? This also undermines the affordability of dealing with climate change, exposes the Government to ridicule and poses a threat to our health. I look forward to the Minister’s reply.