Prepared: 16:49 on 18 December 2007, 12.33 pm

The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): With permission, Mr. Speaker, I would like to make a statement on last week’s international climate change negotiations in Indonesia.

The Minister for the Environment and I attended the 13th conference of the parties to the United Nations framework convention on climate change and the third meeting of the parties to the Kyoto protocol, in Bali. After intensive, and at times difficult, talks we reached an historic agreement in which for the first time all the countries of the world agreed to start negotiations on a new climate deal for implementation after the Kyoto protocol’s first commitment period ends in 2012. These negotiations will begin next year and will be concluded in Copenhagen in 2009.

The Bali action plan represents the most significant collective agreement to protect the world from dangerous climate change since the Kyoto protocol was signed exactly 10 years ago. It recognises the need for deep cuts in global emissions as set out in the fourth assessment report of the intergovernmental panel on climate change. In addition, in the ad hoc working group—or AWG—on further commitments for annex 1 parties under the Kyoto protocol, which forms part of what we agreed, we recognised the need for global emissions to be reduced by at least 50 per cent. by 2050 compared with 1990 levels, and for developed countries to reduce their emissions by 25 to 40 per cent. by 2020.

The Bali action plan commits developed and developing countries over the next two years to negotiate a long-term global goal for emission reductions, and to agree measurable, reportable and verifiable national and international action to mitigate climate change by all countries, including commitments to emission limitation and reduction objectives by developed countries. The action plan will bear in mind the different national economic and social circumstances of developed and developing countries, in line with the United Nations framework convention on climate change—or UNFCCC—principle of common but differentiated responsibilities and respective capabilities. Negotiations will take place in an ad hoc working group on long-term co-operative action under the convention and four meetings will take place next year.

In addition to the action plan, Bali resulted in some significant breakthroughs on technology transfer, deforestation, adaptation and carbon markets, which will begin almost immediately. On technology, there was agreement on an ambitious work programme covering both mitigation and adaptation. A UNFCCC expert group will examine ways and means of speeding up technology development and transfer, and its funding.

On deforestation, which, as the House will be aware, is responsible for about 20 per cent. of global emissions, the agreement in Bali will pave the way for incentives to reduce those emissions, and those will cover both wholesale deforestation and more gradual damage. The agreement will set the rules for projects that can be piloted to common UN-approved guidelines, so that what is learned can feed into a future climate framework. I announced a UK contribution of £15 million to the World Bank forest carbon partnership facility, which will assist countries to try out that new approach.

A decision was also reached on the governance of the adaptation fund, which will support developing countries to adapt to the climate change that is already inevitable. That will be funded by a 2 per cent. levy on the clean development mechanism.

On carbon markets, it was agreed to abolish registration fees and levies on clean development mechanism projects in the least developed countries, and to approve the use of non-renewable biomass CDM, which means that projects such as encouraging small cooking stoves will now be possible through the CDM. Changes were also agreed to improve the way in which the CDM and the CDM board function, and the UK announced the Africa Springboard project, in which we will work with 10 UK financial institutions to try to increase the number of CDM projects in Africa.

The success of the Bali conference was, I think, made both possible and necessary by the compelling clarity of the science contained in the recent intergovernmental panel on climate change report, by the strength of the economic case for urgent action set out in Nick Stern’s findings, and by the way in which our changing climate is changing our politics. I pay particular tribute to the leadership of the UN Secretary-General Ban Ki-moon, to the President and Government of Indonesia, to Portugal as the EU presidency, and to the recognition by every delegation that we could not let the next generation down. I also personally thank officials from across the UK Government and from the embassy in Jakarta for their extraordinary knowledge, dedication and commitment.

This agreement represents a successful outcome to extensive lobbying by the UK and the EU over the past 12 months, building on the results of G8 summits and other meetings. It very much reflects the elements of a future framework agreed by EU Heads of Government earlier this year. The hardest stage, however, begins now, and we will of course play our full part over the next two years in seeking to reach a global climate deal that will take us beyond 2012. However, without what has been agreed in Bali, there would be no negotiations and no possibility of a deal. That is the real significance of what the world resolved to do in Bali last week.

Mr. Peter Ainsworth (East Surrey) (Con): I welcome the Secretary of State’s statement and thank him for it. I join him in paying tribute to Ban Ki-moon and the others involved in what appeared to be at some times tortuous and emotional negotiations.

The outcome of the Bali conference represents progress on the part of the global community, but does the Secretary of State agree that the absence of binding targets is a significant weakness? Despite the huge amount of work that went into creating an agreement, it is not quite the Christmas present for which the world hoped. On reflection, does he not think that to call the agreement historic is a little premature? What really matters now is progress on the negotiations leading up to the 2009 conference in Copenhagen. Vital decisions have effectively been deferred.

It is very good news that the United States, China and India have jointly signed up to an undertaking to work towards a new global climate accord, but does he agree that much greater political leadership is required, from the United States in particular, for the next round of talks to produce a truly historic outcome, an outcome that puts real weight behind global efforts both to mitigate the future impacts of climate change and to help those already affected?

None the less, we welcome the agreement to help developing countries with funds to meet the challenges of adaptation. Rises in global temperatures are already having an effect on some of the world’s most disadvantaged people, in the form of increased risk of flood, drought and food shortages. We also welcome the agreement to review how developed countries can share clean low-carbon technologies with the developing world. In particular, I welcome the agreement to tackle the problem of deforestation. It is vital to put a realistic value on the environmental services provided by the rainforests. I appreciate that this will not be an easy process, but it is perhaps the most essential one of all.

I am sure that the right hon. Gentleman will want to take this opportunity to respond to reports that the United Kingdom helped the US to remove binding targets from the main text of the agreement. Did the actions of the Government deviate in any way from the EU position, which was to seek agreement on emissions cuts on the part of developed countries of 25 to 40 per cent. by 2020? Can he comment on the difficulties he faces in international negotiations on climate change when the UK's own carbon emissions have risen in four of the last seven years? Will he join us in working to develop a decentralised approach to energy with the capacity to reduce our domestic carbon emissions? Will he join us in seeking to strengthen the Climate Change Bill to ensure greater transparency and accountability?

Will the Secretary of State confirm that the United Kingdom attempted, without success, to get aviation included in the Bali mandate? Does that not confirm the Government’s awareness of the contribution of aviation to climate change? How does he square this with the Department for Transport’s plans for a massive increase in aviation capacity?

Is the Secretary of State aware of the comments of Dr. James Hansen, Director of the NASA Goddard Institute in New York, concerning the United Kingdom’s proposals to press ahead with a new generation of coal-fired power stations without carbon capture and storage? If we go down that path, will not the benefits of carbon reduction measures taken elsewhere be negated, and the Government’s rhetoric on climate change dissolve, as it has so often before, into a lot of hot air?

Will the Secretary of State assure the House that he will work closely with other Departments, especially the Department for Business, Enterprise and Regulatory Reform and the Department for Transport, to achieve the genuinely joined-up approach that is so badly needed if we are to play an effective and honourable role in rising to the greatest challenge facing this generation?

Hilary Benn: I am grateful to the hon. Gentleman for what he has said, and for his welcome for what was agreed in Bali. Of course we will need binding commitments, which is why the UK has made them, as have a number of other countries. It is inconceivable that we will deal with this problem if the largest economy in the world does not come on board. The politics is changing, including in the United States of America, as the hon. Gentleman knows: we can look at what is happening in California and Florida, and in the east coast states which will introduce an emissions trading scheme for the power sector next year, and at the Bill that has been before Congress. Different countries are at different stages of understanding and commitment on climate change. The significance of this agreement—this is why I stick with my description of it as historic—is that for the very first time every country in the world, including the United States of America, has signed up to a negotiation that recognises in its overarching document the need for deep cuts in emissions.

On deforestation, the hon. Gentleman is right to say that the incentives must be changed. The forest carbon partnership facility will help to pilot ways of counting, verifying and reporting what the baseline is for the state of forestation, which will make it possible to record whether the rate of deforestation has been reduced so that we can then allow the carbon market to support that.

I can look the hon. Gentleman in the eye and say that there is no truth whatever in the suggestion made in one newspaper. I am sure that he did not really think that there was. The House will be shocked to learn that not everything that is reported in our newspapers is necessarily true. We stuck foursquare with the EU position on that, and he will see a reference to the 25 to 40 per cent. figure in the AWG report.

We will indeed have to change the way we produce our energy. The announcement made by my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform on renewables offers a good example of that. I look forward to working with everybody concerned as we discuss the Climate Change Bill, to make sure that it is as effective as possible.

It is true that we were unable to make progress on including aviation in the Bali discussions, and I simply say to the House that we will have to return to that. However, on Thursday of this week we will discuss the inclusion of aviation in the EU emissions trading scheme. As the hon. Gentleman will be aware, the UK has been in the forefront in Europe in pressing for that, and for the earliest possible start date—I do not know what we will get as a result of that discussion—and for the baseline for emissions to be the 2004–06 level, which means that any further growth in emissions must be either constrained within the aviation sector or offset by emission reductions elsewhere. That is why inclusion in the ETS is so important.

The hon. Gentleman is right about carbon capture and storage, and the generation of power by coal. China is building one coal-fired power station a week. That is why steps such as the investment we are making in a post-combustion pilot project here in the UK, the EU NZEC—near-zero emissions from coal—project that we are supporting in China, and our willingness to work with the Government of India on carbon capture and storage, are so important, because if we cannot perfect this technology and apply it, retrofitting it to existing plants and building it into new plants, we will have little prospect of meeting the targets that the world will have to set as a result of this negotiation.

In conclusion, let me say that I genuinely look forward to working with all Members in this House and all Governments around the world as we take forward the agreement that we reached in Bali this week and get on with the tough task ahead. I acknowledge what the hon. Gentleman said about it being a tough task, but at least we now have a means of achieving that deal, which we did not have a week ago.

Ms Karen Buck (Regent’s Park and Kensington, North) (Lab): As my right hon. Friend said, shipping and aviation emissions account for a growing share of the total carbon emissions in our atmosphere, and the EU trading scheme, although welcome, accounts for a relatively small proportion of that global share. In light of the failure to make progress on this issue at Bali, will my right hon. Friend say what he sees as the next steps towards ensuring that aviation bears the full economic cost of its environmental impact?

Hilary Benn: The best next step is, indeed, its inclusion in the EU ETS, because that will impact both on airlines from within Europe and those that choose to fly into Europe. Ideally, we would want the International Civil Aviation Organisation to take the lead, but I have to say that, as Members who follow this matter carefully will be aware, so far ICAO has failed miserably to face up to the task. For that reason, leadership from Europe is important. Just as Europe gave terrific leadership in the Bali talks—for which I pay particular tribute to Humberto Rosa, the climate change Minister from Portugal, who did an outstanding job—the strength of a common European position by being committed to Europe and using its voice to provide leadership to the world is fundamental if we are to make progress. I very much hope that when we meet on Thursday, we can take a significant step forward in getting aviation where it should be—inside the emissions trading scheme.

Martin Horwood (Cheltenham) (LD): I thank the Secretary of State for advance notice of his statement. The Bali conference was an opportunity for the much-maligned politicians of the world to give the planet the most important Christmas bonus it has ever had. On our common Christmas list is a road map to a climate change agreement that is tough enough to contain global warming emissions to within 2° of pre-industrial levels, fair enough to bring developing countries and emerging economies on board, and comprehensive enough to include deforestation and shipping—and of course, it must include aviation. Due credit should be given to the Secretary of State for supporting those common European objectives.

However, were the Government playing Santa’s little helper, or were they behaving like a character from “The Nightmare Before Christmas”, helping Jack Frost to spoil the party? The Secretary of State needs to be absolutely specific with the House. While publicly supporting the common European position, which called for tough and specific targets in the action plan, did the Government have any contact with the United States Government that might have helped them to relegate those targets to a footnote? Among the genuine welcome achievements at Bali, that was a major failing. Even the commitment to measurable support for clean technology transfer to the developing world was only achieved, against initial American opposition, because of a united European Union acting in concert with countries such as India, showing real leadership in the battle against climate change.

Of course, we have been here before with the US. The Kyoto protocol was watered down thanks to US pressure, and the US did not even ratify it in the end. Let us all hope that by 2009 the American people will, like the Australians, have elected a leader who will not behave like a cartoon villain.

Our own credibility over the next two years is crucial, too. Does the Secretary of State accept that it undermines our own attempt to bring others into line with tough emissions reduction targets if we fiddle the cost of carbon, as we did over the Heathrow runway consultation, and fail to include the cuts of at least 80 per cent. that the science tells us are necessary in our own Climate Change Bill? The Government risk looking as silly as the Conservatives, who called for cross-party collaboration on green issues but then failed to back the Liberal Democrats, Friends of the Earth and the many other groups calling for such domestic targets.

May I finally ask the Secretary of State two questions, the answers to which could reassure us of his good intentions? When during the next two years does he expect tough binding targets to be agreed? Secondly, will he make contact now with Hillary Clinton, Barack Obama, John Edwards, Rudy Giuliani and other realistic presidential hopefuls to impress upon them Britain’s absolute commitment to those targets and our expectation that, if elected, they, at least, will play ball? It is time for our special relationship with America to deliver for the planet.

Hilary Benn: I thank the hon. Gentleman for his kind words about the agreement that we reached. He will know that the EU’s position, strongly supported by the UK, is that we should aim to keep the temperature increase to within 2°. There is not yet global agreement on that target, and my view is that the first thing the negotiations must address is the question of what we are trying to achieve. “Do you have a view on what sort of temperature increase your country could cope with? What impact will that have on crop failure, the availability of water and the movement of people around the world?” Those are very interesting questions to ask colleagues from other countries. Once we can get agreement on them, the science will tell us certain numbers and the size of the effort required. Then, the task of the negotiation will be to divide up who is going to do what.

I do not think that I could have been more specific than I was in answering the question asked by the hon. Member for East Surrey (Mr. Ainsworth) about what was reported in one newspaper. I talked to lots of delegations; that is my job, as part of the negotiations. I should point out to the hon. Member for Cheltenham (Martin Horwood) that the United States of America has made its position crystal clear before the negotiations, at them and subsequently. It does not currently sign up to a 25 to 40 per cent. reduction in emissions by 2020, it is not a ratifier of the Kyoto protocol, and it needed no encouragement from anyone, because it made its position absolutely clear. However, what we did get in the AWG report was indeed a reference to precisely those figures, because they arise from the science; they were also referred to in the overall document, albeit by way of a footnote. Nevertheless, everyone can read the documents and see what the IPCC had to say.

On the 80 per cent. figure, I hope that the hon. Gentleman listened to what the Prime Minister had to say in his speech three weeks ago, in which he said that we recognise that the science is changing. That is why we will ask the committee on climate change, when it advises the Government on the first three five-year carbon budgets, should our target be stronger still—should it be up to 80 per cent.? That is the right process for answering the legitimate question that the hon. Gentleman and other Members ask—and, believe it or not, that the Government ask themselves, which is why the Prime Minister said what he said: do we need to do more?

I turn to the hon. Gentleman’s two specific questions. He asked when we would get agreement on binding targets, and the honest answer is, I do not know; it depends how the negotiations go and how individual countries respond. I think that he was encouraging me to involve myself in the political decision that the American people have to make about who their new President is going to be—and tempting though it is, I hope he will understand when I say that that is not a job for me. However, whoever the new President is, I look forward to him or her bringing the United States into the world community by recognising its responsibility to lead, as the largest emitter in the world, by taking on binding commitments to reduce its emissions.

Mr. Elliot Morley (Scunthorpe) (Lab): I congratulate my right hon. Friend, my hon. Friend the Minister for the Environment and their team on the success that they had in very difficult negotiations in Bali. When Opposition Front Benchers attack the Department for Environment, Food and Rural Affairs, they should note the respect with which our people are regarded internationally for the role that they played—diplomatically, technically and politically. It is true that the United States was not prepared to accept binding targets. It is hosting the major emitters conference, and many people believe that that is an attempt to advocate a voluntary approach, rather than a mandatory one. May I ask my right hon. Friend to use his influence and that of the EU to make it clear that that is not going to deliver the kind of changes that we need?

Hilary Benn: I pay tribute to my right hon. Friend for the work that he did in Bali and the work that he does through GLOBE—the Global Legislators Organisation for a Balanced Environment—in talking to other parliamentarians about how we can work together on this task; it makes a hugely significant contribution. He refers to the major economies process, and my clear view is this. Every contribution to dealing with this problem should be welcomed, but my right hon. Friend is absolutely right: pledging and reviewing, and saying, “We’ll have a go. We’ll come back later and find out whether it was enough,” simply will not do. That is the truth and we know it, so eventually, all the rich countries will have to acknowledge that.

However, one of the other difficult things that we will have to address in the negotiations is this plain fact: even if, for the sake of argument, every rich developed country went zero-carbon in 10 or 20 years, we would still be left with the threat of dangerous climate change because of the rising emissions from developing countries, in particular China and India. That is the tough part, and we all know it—including China and India—because we all read the science and see the impact that dangerous climate change will have on our countries. The real task, which in the end will be the only means by which we can bring the richest country in the world and developing countries together, is to work out a fair mechanism—in the end, this is an issue of equity—for dividing up the contribution that each will make, according to their ability. That is the heart of the negotiation.

Mr. Michael Jack (Fylde) (Con): To achieve an agreement involving 130 countries is quite remarkable, but having read the White House press release of 15 December, I have to say that I still harbour concerns about the United States’ position: it quite likes the menu, but it does not want the prices. What diplomatic effort is the United Kingdom going to make, particularly with the partners in the United States who take a more positive view about climate change issues, to whom he referred in his statement, to bring them as individual entities into the negotiation process, so that there can be true internal pressure from within the United States to enable its Government to sign up properly to something that really does have prices and menus at the end of the process?

Hilary Benn: The right hon. Gentleman is absolutely right about the nature of the task. One practical thing that we can do is to try to connect the initiatives being taken at state level within the United States of America with other trading schemes, in particular, including in Europe and elsewhere.

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