Question for Short Debate (Lords) on Global Energy Sector - June 15

Asked by

Baroness Sheehan

To ask Her Majesty’s Government what assessment they have made of the report by the International Energy Agency Net Zero by 2050: A Roadmap for the Global Energy Sector, published in May 2021.

Baroness Sheehan (LD)

My Lords, the gathering pace of extreme weather events, far earlier than scientists predicted, is the planet telling us that “enough is enough”. The IPCC states that

“some of the changes already set in motion—such as continued sea level rise—are irreversible over hundreds to thousands of years.”

The International Energy Agency, created in 1974, is an autonomous intergovernmental organisational hosted by the venerable OECD. It accepts that climate change is real and happening now. It has put its shoulder to the wheel and used its awe-inspiring expertise in the global energy sector to produce a report that is a road map to meet the net-zero target by 2050, keep global warming to 1.5 degrees and, crucially, safeguard our way of living. This is a report commissioned by our own Government. They should find succour in the IEA’s conclusion that there is a pathway by which net zero by 2050 is achievable, and in how the IEA has dotted the “i”s and crossed the “t”s and detailed how the challenge can be met.

In introducing this debate, I openly declare that I stand with those international agencies and am a fully paid-up member of the “We must act now—this is a climate emergency” brigade. I also declare that I am a director of Peers for the Planet. I suspect that others may be contributing to this debate from a standpoint either of denying that climate change is real or that reaction to it is overenthusiastic. I hope that they will make a declaration on that and on membership of any groups that promote those points of view early on in their contributions.

There is a chant among children in playgrounds, “Sticks and stones may break my bones, but words will never hurt me.” It is so right. Words alone will not undo the deep damage that we humans have inflicted on our planet and its life support systems. I am not a violent person. Rather than sticks and stones, the metaphorical carrot would be my preference, and it seems to me that Russia’s invasion of Ukraine has shown us the real carrot, the real prize: to rid ourselves once and for all of dependence on essential energy supplies from geopolitically unstable and unpredictable sources of energy. That carrot is being dangled in front of us at a time when alternative sources are available, sources that are free from the taint of human rights abuses, free from dependency on rogue regimes that have heads of states with delusions of grandeur, cheaper by far, and becoming ever more so than fossil fuel sources.

Instead, we have the prospect of infinite clean energy from the sun, wind and ground, generated on domestic soil and available for domestic use rather than destined for the global trading floor and the highest bidder, as would be the case for oil and gas from UK waters, because pumping more gas out of the North Sea will do precisely nothing to ease the energy crunch and cost of living crisis in the UK. Supply from UK waters in the North Sea will make not so much as a dent in the shortage of global supply, and it is not ours anyway—we sold our assets in the North Sea decades ago. Maybe the noble Lord, Lord Lilley, who I am delighted to see is taking part in this debate, will confirm this, given his background as a practitioner in the oil trade. I look forward to his contribution to this debate and hope that we will be able to find some common ground.

Investing in new fossil fuel infrastructure would be a wilful act of self-harm. It shows a complete lack of imagination in analysing the science, programming in our knowledge of how the earth has moved through cycles of extreme weather over the millennia, and not taking on board that giving the finely balanced forces of nature a sharp shove risks damaging our planet irreversibly for the foreseeable future. I accept that there are uncertainties, as there always will be in science, but who can deny that the planet is creaking and who, until last year, had heard of heat domes or atmospheric rivers? If the planet cracks, there is no planet B to which we can evacuate. Common sense says that we must ensure our future.

Serendipitously, the steps that we can take are a win-win scenario. The IEA’s authoritative report lays out the wins very clearly in Net Zero by 2050: A Roadmap for the Global Energy Sector. Its findings are quite explosive. It says that net zero by 2050 is a tall ask but that it is doable. If the world followed its road map, it would reap huge benefits—benefits which include millions of new jobs, many of them skilled, in manufacturing, construction, engineering et cetera, with the option of deployment where there is the greatest need for quality jobs. Millions more green jobs would be created than if investment was pumped into fossil fuels. Economic growth would exceed expectations, all the while ensuring clean, stable and affordable energy supplies, resilient against the vagaries of rogue regimes. What is not to like?

What must we do to get there? First, the report recommends a major worldwide push to increase energy efficiency. Would it not make sense to put a stop to the hideous waste of energy through leaky pipes, transmission lines and walls and rooves of buildings? A 2015 report from the Association for Decentralised Energy states that 54% of energy of energy produced in this country is wasted, equivalent to more than half the average UK annual electricity bill, or about £592, in 2015. The report said that the amount wasted was equivalent to the power generated by 37 nuclear plants. Maybe the situation is better now than it was in 2015. If so, can the Minister update the House? If the data are not to hand, can he write to me and place the letter in the Library?

The IEA has just published its report, The Value of Urgent Action on Energy Efficiency. The report says that by doubling the global economy’s energy efficiency from 2% to 4% each year this decade, we could avoid 30 million barrels of oil per day, about triple Russia’s 2021 production, and 650 billion cubic metres of gas per year, which is four times the amount that Europe imports annually from Russia.

Secondly, the Government must engage with the public. The Climate Change Committee’s analysis shows that 40% of the changes needed to get to net zero require some sort of behaviour change. BEIS’s own public attitudes survey shows a whopping 85% of people are concerned about climate change but lack information about how best to do their bit. Why is there no government strategy to improve climate education to encourage the behaviour change necessary to reach net zero by 2050?

Thirdly, the IEA’s analysis has shown that there is no need to build new supply infrastructure for transitional gas. We already have all that we need, and more, to tide us over until we have the renewables in place for the vast majority of our energy needs, and mitigation measures in place for the minuscule amount of gas that may still be needed by 2050. Can the Minister explain why the Government think it necessary in the British Energy Security Strategy to announce a new licensing round in the autumn for new North Sea oil and gas projects that will not deliver for many years? Why is that preferable to investing in renewables, which will generate energy much quicker and more cheaply and have zero risk of becoming stranded assets?

Why do our Government handle the oil and gas sector with kid gloves and insist on continuing support for it despite clear evidence that support for the sector is incompatible with reaching their own statutory target of net zero by 2050? This is exemplified clearly in last month’s energy profits levy. The framework includes doubling investment relief for oil and gas companies, but no such tax relief for investment in renewables or for demand-side measures has been proposed. This is Jekyll and Hyde politics. It is as if the Government were being held to ransom by hardcore climate deniers on their own Benches.

7.48pm
Lord Lilley (Con)

My Lords, noble Lords may recall the debate we had in February 2020 on Absolute Zero, the report produced by the Cambridge University engineering department and other universities in this country. It had almost the universal approval of this House. The central thesis of that report was that we cannot rely on

“new or breakthrough technologies … they won’t be operating at scale within thirty years.”

We have to rely on existing technologies and reducing demand. But the IEA road map assumes that what it calls “technologies under development” but not yet in the market will provide almost half the emissions savings by 2050. The main innovation opportunities it identifies to produce these savings are what it calls

“advanced batteries, hydrogen electrolysers, and direct air capture and storage.”

I simply ask noble Lords participating in this debate or reading it in Hansard whether that is remotely credible. Clearly, the practical people in the Cambridge University engineering department do not believe it is. I am prepared to believe that the occasional pig might fly, but the IEA report assumes a whole farmyard of pigs will take to the air. That seems a little unlikely.

It is worth looking at how rapidly—or not—new technologies have been deployed in our pursuit of reducing carbon emissions over the last couple of decades. After 20 years of effort, low-carbon technologies provide just 21% of this country’s total primary energy. That is little more than double the 9.4% that they provided in 2000, almost all of which was from old-fashioned bioenergy. It is that which has produced most of the savings in the subsequent 20 years; it provides 8.8% of our energy now.

The somewhat newer but scarcely novel technologies that have contributed to our progress over that period are wind and solar. Wind has been around since the Middle Ages and solar has been around for quite a long time. Although they have developed over the last 20 years, together they provide just 4.7% of our primary energy in this country. That has taken 20 years to come about.

The IEA also makes heroic assumptions about deploying existing technologies. For example, it says that, from 2025, throughout the world, including this country, no new gas boilers should be installed. I ask participants in the debate whether they believe that should be the case. Should we ban the introduction of new gas boilers from 2025? Presumably they are to be replaced by either heat pumps or direct electricity. We know the problems with heat pumps. They are available and I wanted to install one in my flat, but I was advised by my architect and builder that, unless I was insane, I should not do so. If they are not yet available or cheap, and the costs of insulation and changing radiators are not viable, we will have to do it by direct electricity. Electricity costs four times as much as gas to provide the same amount of therms. Is that what supporters of this report want to see? If not, where are they going to conjure up heat for our households from, once they are no longer allowed to replace their gas boilers?

The IEA also says there should be no new oil or gas fields developed from now. The approach that we and most countries have adopted, in trying to move towards net zero, has been the sensible one of reducing demand, not supply: phasing out demand for fossil fuels by providing alternatives, not forbidding the supply of fossil fuels. That is the sensible thing to do. If, in spelling out how we are going to reduce demand, oil companies none the less go ahead and develop fields that subsequently prove surplus to requirements, they will be left with stranded assets. That is their fault; I am not going to shed any tears for them. If, on the contrary, we stop them developing enough oil and gas to meet our schedule of reduced demand, there will be a shortage. We are seeing it now as a result of the war in Ukraine. Oil has gone up by 60% to 70% and gas has gone up by 130% of what it was before Covid. That is hard and tough for consumers, but it makes wonderful profits for suppliers. Is that what those who advocate this approach of cutting back on supply, rather than on demand, want?

The noble Baroness, Lady Sheehan, asked us to spell out our credentials. I spell out mine. I studied science at Cambridge. Of course, I do not deny the science of global warming; it is about as robust as any science I know, although it is not as alarming as some would have us believe. There is double the amount of CO2 in the atmosphere; the direct effect is to raise the temperature of the world by 1% and then knock-on effects will significantly increase that. I accept that.

Likewise, the noble Baroness asked whether we had any vested interests. I twice worked for an oil company and, long before that, studied energy and was an energy analyst in the City. I used to upset the oil companies by advocating that we, in this country, stopped giving them free assets in the North Sea. I published something called North Sea Giveaway that prompted the Government of the day—this was before I was in Parliament—to introduce auctions to siphon off some of the profits the oil companies were making. That may be why none of them has ever asked me to go on its board.

The noble Baroness, Lady Sheehan, asserted that there is no benefit from developing new fields, or supplies of oil and gas, in the North Sea or, by extension, shale gas on land. There is; there is a direct reduction in the amount of emissions you would have for a given consumption of gas and oil. Instead of having to liquefy the gas in Qatar, ship it across the ocean and regasify it here, with the creation of emissions at those three stages, you would provide it locally, with reduced emissions. If people are sincere about wanting to reduce emissions, rather than simply wanting to punish oil companies and stop them going about their business, they would welcome domestic production for those reasons.

I hope that the House looks at this report with a critical eye and finds either that my analysis of it is incorrect and that it is full of realistic proposals, rather than flying pigs—if so, I hope someone will tell me what they are—or that it looks at a better solution to reach net zero by 2050 than what is laid out in this report.

7.58pm
Baroness Bennett of Manor Castle (GP)

My Lords, I begin by declaring my membership of the advisory panel of Peers for the Planet. In following the noble Lord, Lord Lilley, I actually agree with him, in some respects. I do think the International Energy Agency report is far too reliant on novel technologies. However, that is because it assumes continuing economic growth on a planet that is already exceeding many planetary boundaries, not just the climate emergency one. There are enough resources on this planet for everyone to have a decent life if we share them out fairly, and that means a different economic model: system change, not climate change, is the answer. The current system, the acceleration of which the noble Lord is promoting, cannot continue. That is not politics; it is physics. I also point out to the noble Lord that the solar and wind he was deprecating are the cheapest sources of energy now, which we can use to cut people’s bills. Had the Government proceeded with them more in the past decade, we would see people having significantly lower bills already.

I want to begin not the rebuttal but the formal part of my speech by thanking very sincerely the noble Baroness, Lady Sheehan, for securing this debate on the report. I hope the Government will also thank her, given that the report was requested by Alok Sharma as chair of COP 26 to provide a road map for the energy sector to net zero by 2050. I think that 2050 is far too late, certainly for the UK—we should be looking at 2030—but at least it is heading in somewhat the right direction. Given that the noble Baroness has secured us this time, rather than skimming over the top, I want to focus on three areas.

The first is that the IEA very clearly says, as the noble Baroness highlighted, that pledges are just words, or hot air, without action. The report states that the nations of the world collectively fall well short of what is needed. One of the report’s top recommendations is that there should be no investment in new fossil fuel projects. It is quite horrifying that this report came to Alok Sharma, as chair of COP 26 and a government Minister, in May last year and since that time 50 new fossil fuel schemes have been approved in the UK, including the Abigail oil and gas field development, an extension to a coal extraction licence in south Wales, and the expansion of oil production in West Newton in east Yorkshire. The figure of 50 comes from mid-May; since then we have had the Jackdaw gas field, and there is the threat of the proposed Cumbria coal mine, all of which are new projects. I point to the conclusion of the Committee on Climate Change which states that extra extraction in the UK supports a larger global market for fossil fuels. The assessment of the climate campaign Uplift shows that 56 more projects could be approved between 2022 and 2025 because they started the process before the climate compatibility checks announced by the UK Government last year.

I notice that in these areas we do not see the Government using their favourite phrases “world-leading” and “world-beating”, because they cannot claim to be. That label belongs to the nations of the Beyond Oil & Gas Alliance, which is promoting the fossil fuel non-proliferation treaty. It draws its terminology from the nuclear non-proliferation treaty. It is exactly the right terminology because we face a carbon bomb which is being considerably enhanced, and its threat greatly increased, by all this new development of fossils fuels. The 2021 Production Gap Report from UNEP warns that Governments collectively plan to produce more than twice the amount of fossil fuels in 2030 than is consistent with the 1.5 degrees target. This cannot be magicked away; this is infrastructure.

It is worth highlighting that the fossil fuel non-proliferation treaty originated in 2015, with Pacific island nations. When I was in Paris at the COP talks, it was thought that the target of 1.5 degrees was necessary to protect those small island states, but we now understand that it is crucial for all of us, as our Committee on Climate Change says, to ensure the survivability of this planet and that we do not have runaway, chaotic climate change.

My second point draws on a debate in the other place which was originated by my honourable friend Caroline Lucas. Lee Rowley, speaking for BEIS, referred to the authors of the non-proliferation treaty and said that they were talking about changes that demanded a lowering of demand for goods and energy, a lowering of material consumption and a clear change in people’s diets.

Here I want to pick up a point made by the noble Baroness, Lady Sheehan, who talked about the crucial nature of reducing waste. The reports she mentioned looked at waste as the very obvious things that we all see from uninsulated homes and buildings, with lights blazing away when they are not needed. But there are more sources of energy consumption and carbon emissions in our society that are damaging to people’s lives and well-being and are actively harmful, such as fast fashion, factory farming and much of the advertising that bombards us from every corner, which these days is often video powered, for gambling, alcoholic products or junk food. We could greatly improve our mental health with more mindful energy use and by thinking about where we should be using our energy and where we could improve our lives by using less.

My third point is about social justice. The IEA report crucially points out that there are currently 785 million people in the world without access to electricity and 2.6 billion people who lack access to clean cooking options. I said at the start of my speech that there are enough resources on this planet for everyone to have a decent life if we share them out fairly. They are the people who clearly need considerably more access to the planet’s resources. We need to ensure that they have access to the technologies and infrastructure for renewable energy and the clean technologies that are also the cheapest form of technology available to them.

The noble Lord, Lord Lilley, suggested that people are being alarmist about the climate emergency. I invite him to look at an article on Reuters news agency today. It draws on research from the BMJ about the threat that high temperatures present to pregnant women, resulting in higher maternal mortality and morbidity and higher infant mortality. The article refers to Jacobabad, a city in Pakistan, where on 14 May the temperature exceed 51 degrees Celsius. In the UK people are talking about the heatwave, but it is vastly below that figure of 51 degrees, which is utterly unseasonable in May. We are talking about climate justice. We often use that as a phrase, but it means liveable conditions for pregnant women in that Pakistani city who are suffering, working and trying to survive.

8.08pm
Lord Teverson (LD)

My Lords, I must unplug myself from the excellent forensic analysis by the noble Baroness, Lady Bennett.

One of the great things about the IEA report is that it shows a pathway and is optimistic, if you like, that the pathway is

“narrow but still achievable”—

it is possible. I have now been shown the pessimistic side of that: it is not possible, as we still have the problem and we do not have all the solutions to it. Having said that, our UK Climate Change Committee bases most of its analysis on proven technologies. However, as we all know, the UK is only a small part of this issue and the rest of the globe is something extra. I hope we can get some optimism back in this debate somehow, although I recognise a number of those arguments.

At the moment, it seems to me that we are a cross-roads on this debate, particularly because of decisions made in the Kremlin on Ukraine, as mentioned by my noble friend Lady Sheehan, and a resurgence of the dilemma about whether to get through the cost of living crisis and the cost of energy crisis by investing in fossil fuels again or accelerating the transition to renewables and other forms of decarbonisation in our economy. I am convinced, as my party would be, that it is clear that we need to take the fork in the road and follow the path that pushes for further decarbonisation of our planet, our energy systems and our economy. The other way to go is not necessarily right.

Three things in particular sprang out at me from the report. They have been mentioned by Members already so I will not spend a lot of time on them, but it was clear to me that, in the order in which the report listed remedies, energy efficiency was once again number one. I know the Minister completely agrees with that, but what amazed me was the statistic where the report estimated that some 30% of what we need to do for decarbonisation could be achieved through not just energy efficiency but demand-reduction measures that included energy efficiency.

In this country at the moment, with the cost of energy in particular at the core of the cost of living crisis, the figure quoted is that the Government are committing some £37 billion to sort out the issue of customer bills and so on—but that is dead money; it goes but it does not improve the situation. Where are we when it comes to using money to invest in energy efficiency and ways of producing demand reduction? I would be interested to know whether, given energy efficiency’s absence without leave in the Government’s energy security strategy, there will be measures in the Bill that is coming forward to make sure that we can move on from the green homes farce over the last two years and really take that issue on.

The other area that noble Lords have mentioned is ending investment in future fossil fuels. I might slightly disagree with my noble friend, in that when we have a crisis, as we do at the moment, I would expect existing assets to be sweated out. If President Biden manages to persuade Middle East countries to increase their production when we have a reduction in supply from Russia and its allies then, to me, that is a way forward. However, on the question of investing in fossil fuels in the long term, coming from an economist’s background, I know there will be supply where there is demand. However, it is important that we say no more about energy investment; it gives the wrong signals. There is a risk of stranded assets for the corporations that decide to do that, but there needs to be leadership on that.

I was amazed to hear that the Government recently approved, despite the Conservative local authority being against it, the exploration in Surrey. I would be interested to hear from the Minister why he feels that should have taken place.

The other strong message that has come out, and not just in the IEA report, is that there are economic benefits of decarbonisation, not just in terms of bringing down the costs of energy due to energy efficiency; in the whole area of jobs, growth and levelling up, the report estimates that would be an additional 0.4% of growth per annum. I expect that there is a strong standard deviation around that figure, but it shows that there is a way of moving forward that is economically positive but also brings the environmental benefits of clean air and a much better atmosphere altogether.

I have a question for the Minister. Suddenly COP 26 seemed to discover methane and the challenges around it. I thought that was a positive part of the Glasgow conference, in that there was an allowance to do that. The IEA report points out that if we stopped the leakage from gas that there is at the moment and put it back in the market, we could bring down the cost of gas substantially, so what are we doing in the North Sea, and indeed internationally, to reduce methane emissions?

An interesting part of the report said that we could get rid of 17% of regional air flights globally through surface transport if we invested properly in high-speed rail. Given the decades that it is taking to do that in this country, that is something that I feel is a bit late for us to do.

The report lays a good foundation globally. The Climate Change Committee has shown that we can achieve what we want to in the UK with existing technologies, but for me the key message is that we need to move forward on both energy efficiency and renewables. Indeed, the IEA chief executive, Dr Fatih Birol, said that energy efficiency and renewables are “the Romeo and Juliet” of energy transition. That is absolutely right. I will leave the subject at that, except to say: let us focus on those areas and make sure that we in the UK are able to deliver net zero by 2050.

8.16pm
Baroness Blake of Leeds (Lab)

Follow that, my Lords. I have not heard “Romeo and Juliet” brought into this debate before, and I appreciate that.

I welcome this opportunity to debate the International Energy Agency report from May 2021. I thank the noble Baroness, Lady Sheehan, for tabling the debate and setting out the context so well. That is really important, particularly against the backdrop of more announcements just this week about what is unfolding, with more extreme events coming forward.

It is welcome that tackling the climate crisis is a shared national objective across this House, in spite of the caution of the noble Lord, Lord Lilley, on the subject. As we know, it is also a shared global objective. Unfortunately, the UK’s current broken free-market energy system under this Government leaves us uniquely badly placed to cope and to act, but, as the noble Lord, Lord Teverson, said, we need to keep our focus on optimism as we go forward. We cannot simply go from a high-carbon, unjust, unfair and unequal country to a zero-carbon, unjust, unfair and unequal country. We need urgent answers from the Government on next steps.

Although much has happened on the world stage since the report was published, I am afraid that little progress can be noted. To be fair, the Government published both the net-zero strategy in October 2021 and the energy security strategy in April this year, but we seem to be falling short on where actions will be taken. In addition, plans made at COP 26 last November in my view fell short of what was needed, in spite of the modest progress. So when we look at the report’s findings, which I will turn to shortly, there is little if anything that no longer applies, and ensuring that our efforts towards net zero are on course is only more urgent given recent developments in Russia and Ukraine. Energy security has taken on a whole new imperative and brought a new urgency, if that were possible, to the debate.

With regard to the report, as we have heard, the current trajectory for net zero by 2050 is not going to be met with the current climate commitments. That should not shock anyone; there has been a growing sense that the Government are finding the climate emergency too big to ignore yet too hard to grasp. This is not new. David Cameron’s austerity Government slashed the renewable energy incentives and set us back both in terms of action and confidence. This report makes it clear that it has taken them too long to learn from these mistakes. The report sets out a road map for how the world can transition to a net-zero energy system while ensuring stable and affordable energy supplies, providing universal energy access and enabling economic growth. These are the broad criteria against which we will judge the Government’s actions. The noble Baroness, Lady Bennett, is right to highlight the imperative of social justice.

The road map set out is far too comprehensive for me to cover in detail in nine minutes and far too comprehensive for a one hour debate, so I will focus on broader themes and a few key issues. Let us start with what happened yesterday, when the Government announced they were ending the plug-in subsidy scheme that provides grants of £1,500 towards buying electric cars, leaving the UK as the only large European country without any incentives for electric cars. While I completely agree with the need to expand the charging network and support other battery-powered vehicles, it is disappointing that measures to make the upfront cost barrier smaller for those on low to middle incomes are now being scaled back with no warning, when positive progress was being made. Over half the cars now sold are electric or hybrid, but given that the report makes it clear that we need to stop sales of combustion engine cars entirely by 2035, has the Minister considered replacing this scheme with long-term interest-free loans for new and used electric vehicles to tackle this instead?

The road map also called for no future investment in fossil fuel supply projects and no further final investment decisions for new unabated coal plants. This, in the short term, requires an immediate and massive push towards all available clean and efficient energy technologies, combined with a major push to accelerate innovation. The energy security strategy and the Bill that will follow soon are the Government’s opportunity to get on track in this area. There is, of course, still time for the Bill to deliver what is needed. But the energy security strategy was a missed opportunity. There were welcome elements, of course, around nuclear energy and offshore wind, but the measures in the strategy do not constitute the green energy sprint that is required to cut emissions this decade. On the cheapest, quickest, cleanest renewables such as onshore wind and solar, the Government, we assume, caved to Back-Bench pressure. Furthermore, why the silence on energy efficiency and retrofitting projects and demand reduction, as outlined by the noble Lord, Lord Teverson?

Onshore wind is four times cheaper than gas and overwhelmingly popular, but hundreds of projects that communities want and are ready and waiting have been blocked. Earlier versions of the strategy showed that the Government are aware of this. Yet this strategy contains little beyond vague platitudes and nothing to reverse their ban on onshore wind projects in 2015, which destroyed the market, with only 20 new turbines granted planning permission between 2016 and 2021. Doubling onshore wind capacity to 30 gigawatts by 2030 could power an extra 10 million homes, add £45 billion to the UK economy and create 27,000 high-quality jobs. With the Bill coming soon, will the Government revert to their initial thinking and reconsider onshore wind? Will they commit to tripling solar power by 2030?

As we have heard, the door remains open to fracking, against local wishes, and the idea of a new coal mine in Cumbria is still being floated even though the chief executive of the Materials Processing Institute research centre has said that only one client, Tata Steel, would buy the coal and would not want much. How can the Minister expect to reassure this place of the Government’s commitment to net zero if they continue to act to the contrary?

I believe the report also emphasises the need for research and development into new technologies to achieve the long-term goals, which is welcome. While most of the global reductions expected up to 2030 can and will come from technologies readily available, we have heard that this will not be the case beyond that and by 2050, around half of the required reductions will demand technology that exists today only in demonstration or prototype phases.

The IEA has therefore called for Governments quickly to increase and reprioritise their spending on research and development, with the most impactful suggestions being in respect of advanced batteries, electrolysers for hydrogen and direct air capture and storage. The Government’s Ten Point Planfor a Green IndustrialRevolution addressed this, as have the various documents built upon it. However, the sense remains that this Government are taking a scattergun approach to where support and investment fall, and to which technologies to back, rather than having a strategic focus on the impactful technologies the road map calls for.

We would like to hear about the long-term plans and the funding that we need. We need to know that positive words will be matched with positive action. There is a huge opportunity around this agenda to grow the economy. Finally, I ask the Minister to confirm that the Treasury is fully committed to helping industry and the public move towards net zero.

8.26pm
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)

I thank the noble Baroness, Lady Sheehan, very much for securing this debate on a vital topic. It was an interesting and informative, albeit brief, debate with some excellent contributions from all sides. I am very grateful to all who contributed.

The UK became the first major economy in the world to pass legislation to end its contribution to global warming by 2050. I confirm to the noble Baroness, Lady Blake, that we remain absolutely committed to that goal and to achieving net zero. The report we are debating, the IEA’s Net Zero by 2050 report, sets out in very concise terms and detail for the international community to see how we can make that vision reality. We emphatically welcome the report, as has been pointed out. In fact, as COP 26 president, the UK asked the IEA to develop it. We peer-reviewed it and provided feedback and input into it. In doing so we believe we have helped the IEA to sharpen its focus on driving a clean energy transition, and to think through the positive impacts net-zero policies are having on quality job creation and investment, for example, with up to 30 million more people working globally in clean energy, energy efficiency and low-emission technologies by 2030, as the noble Baroness, Lady Sheehan, reminded us.

The report provides a robust basis for the UK, as COP 26 president, to seek raised climate ambition through international diplomacy. The reality is that we need all countries to deliver on their commitment in the pact to revisit and strengthen their 2030 targets to align with the Paris agreement temperature goal by the end of this year. In our presidency year, we are working with all parties to deliver on this commitment and to go further and faster to close the 2030 emissions gap to 1.5 degrees centigrade.

We also recognise, as pointed out in the report, that this transition must be fair and inclusive. That is why we launched the International Just Transition Declaration at COP 26, which commits to using our overseas development assistance to support a just transition globally, as the noble Baroness, Lady Bennett, mentioned. Just transition is also about the health implications of energy transition, and the UK is also promoting this internationally.

Turning to what we are doing at home, we are taking urgent action to make sure that the UK pulls its weight in the effort to shift the world on to the path to 1.5 degrees centigrade, as set out by the IEA in its report. The Prime Minister’s Ten Point Plan for a Green Industrial Revolution, the net zero strategy, sets out a clear vision for how the UK will transform its production and its use of energy in a decisive shift away from fossil fuels. The UK Government have set in law, as I said, the world’s most ambitious climate change targets, cutting emissions by 78% by 2035 compared to 1990 levels. This would bring the UK more than three-quarters of the way to net zero by 2050. As part of this, the Government remain committed to phasing out unabated coal generation in Great Britain by October 2024.

The recently announced British Energy Security Strategy, which was referenced in the debate, accelerates this plan in a series of fairly bold commitments that put Great Britain at the leading edge of the global energy revolution, which could see 95% of Great Britain’s electricity set to be low carbon by 2030. We have a new offshore wind ambition of up to 50 gigawatts by 2030; this is more than enough to power every home in the United Kingdom. We want to see up to 5 gigawatts of that coming from floating offshore wind, which can of course be deployed in deeper waters. The Net Zero Strategy and the British Energy Security Strategy will level up the UK by supporting up to 190,000 jobs by the middle of the 2020s and around 480,000 jobs by 2030. We are also attempting to leverage an unprecedented £100 billion-worth of private investment by 2030.

A number of noble Lords—particularly the noble Lord, Lord Teverson, and the noble Baronesses, Lady Blake and Lady Sheehan—referred, of course, to the central news item in the world at the moment: the appalling illegal Russian invasion of Ukraine. This has underlined the need to address our vulnerability to international oil and gas prices by helping to reduce our dependence on oil and gas imports. Building a robust and secure UK energy market is now an issue of national security, and it is an important driver of the transformation of the UK economy, alongside decarbonisation.

More than ever, we need to work together to accelerate the shift to clean power generation and zero-carbon economies. An accelerated and more ambitious shift to clean energy provides the most effective route to ensuring climate and energy security and, ultimately, our long-term prosperity. As the IEA pointed out at last month’s Energy Transition Council ministerial, a clean energy transition will support energy autonomy and reduce energy cost over time—I agree with the noble Baroness, Lady Sheehan, that this is a win-win scenario.

I will move on to some of the points made by noble Lords in the debate. The noble Baronesses, Lady Sheehan and Lady Blake, the noble Lord, Lord Teverson, and virtually everyone else in the debate mentioned the critical issue of energy efficiency and how essential it is—they will hear no disagreement from me on that. The cheapest energy is that which we do not use. The IEA report confirms energy efficiency measures as one of the most effective means of promoting the energy transition. Leading into COP 26, the UK and our partners launched a product efficiency call to action, with the goal of doubling the efficiency of four priority products that will account for 40% of global energy consumption by 2030. The Super-efficient Equipment and Appliances Deployment initiative—SEAD—today supports more than 20 countries in achieving this ambition quickly and at lower cost.

Domestically, our Heat and Buildings Strategy committed a further £3.9 billion-worth of investment in energy efficiency and low-carbon heating over the next three years, which takes our total investment to almost £6.6 billion during the lifetime of this Parliament. I know that noble Lords will push me, saying, “It’s important to do more”, “We could do more” et cetera—but let us at least agree that we are spending considerable sums of money on energy efficiency, and the vast majority of this is targeted to those in our society who are on lower incomes.

Furthermore, we are making significant progress on improving the energy efficiency of UK homes—again, you would not know it from some of the speeches that we have heard this evening. Back in 2008, just 9% of homes had an energy performance certificate—EPC—of band C or above; now, 46% do. We are committed to upgrading to EPC band C as many homes as is cost-effective, practical and affordable by 2035, and—I repeat—we are spending £6.6 billion during the lifetime of this Parliament to help to achieve that goal.

The noble Baroness, Lady Sheehan, asked about the government strategy to improve climate education and encourage the behaviour change necessary to reach net zero. We are, in fact, increasing our work on public engagement and net zero, both in communicating the challenge and in giving people a say in shaping future policies. The Net Zero Strategy sets out the Government’s vision for transitioning to a net-zero economy, outlining our approach to public engagement through building public acceptability for major change and presenting a clear vision for how we will get to net zero. For example, in our Together for Our Planet campaign in the run-up to COP 26, our 26 “One Step Greener” champions showed how taking one step can have a positive impact on the environment, encouraging the public to do their bit, however large or small—everyone can make a contribution.

My noble friend Lord Lilley and the noble Baroness, Lady Bennett, both referenced the IEA modelling, which found that developers of oil and gas fields and coal mines will in fact not find it profitable to open new fields when demand for fossil fuel drops. Like the noble Lord, Lord Lilley, I say that they will not find much sympathy from me. But the IEA report was published before Russia’s invasion of Ukraine and the subsequent turmoil in international energy markets.

We have made it clear, and I make no apology for saying, that we need to source from British waters more of the gas that we need and will use in the transition, in order to protect our energy security. I totally agree with my noble friend Lord Lilley that it has to be more climate effective to source the gas that we need in the transition—as recognised by the Climate Change Committee—from UK supplies, rather than very carbon-inefficient international sources of supply, through things like LNG. While we are working hard to drive down demand for fossil fuels, there will be continuing demand for oil and gas over the coming years, as we transition to cleaner, lower-carbon energy. The IEA report makes this clear, and we must be clear that it does not lock the UK into fossil fuel dependency in the longer term.

In response to the question raised by the noble Lord, Lord Teverson, regarding exploration at Loxley, the Government have now consented to a three-year drilling programme to establish the extent of the gas fields. The field could hold a sizeable volume of around 43 billion cubic feet of gas, helping the UK to respond to the current and unfolding energy crisis.

Unfortunately, I am running out of time, but I will deal with one point raised by the noble Lord, Lord Teverson, about methane emissions; I want to note this other crucial area that was referred to in the report. Action on methane is critical and can avoid up to 0.3 degrees centigrade of warming by 2040. The UK has started to answer that challenge: the global methane pledge, which was referred to, was launched at COP 26, with the UK as one of the first signatories. More than 100 countries—which are responsible for just under half of all global methane emissions—have now joined that pledge to cut methane emissions by 30%. That includes six of the top 10 methane emitters.

The noble Baroness, Lady Blake, asked me a number of questions on renewables which I would like to address, but I will write to her about them separately because I am running out of time.

I thank all noble Lords who have contributed to this important discussion, and for their sincere and considered questions and comments.