Decarbonisation and the Energy Bill

24 April 2013

Table of Contents

INTRODUCTION ...... 3

BACKGROUND & CCC ANALYSIS ...... 3

POLITICAL IMPLICATIONS ...... 4

THE AMENDMENTS ...... 5

GOVERNMENT AND PARTY POSITIONS ...... 7

Coalition ...... 7 Conservatives ...... 8 Labour ...... 9 Liberal Democrats ...... 10 Other Parties...... 12

VOTING SPECULATION ...... 13

EARLY DAY MOTION...... 14

PROJECTED RESULTS ...... 15

LIST OF SIGNATORIES ...... 17

MEDIA AND INDUSTRY POSITIONS ...... 20

KEY LINKS ...... 24

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Introduction

The landmark Energy Bill will enter Report Stage in the Commons in the coming weeks. An Energy Bill Clerk has "The delay in setting this confirmed to DeHavilland that this will almost certainly commence after the Queen’s Speech, which is on 8 May. [target] until 2016 at the earliest means that a high The passage of the Bill will hinge on the vote on degree of uncertainty about amendments tabled by Conservative Chair of the Energy and Climate Change Select Committee Tim Yeo and his sector development beyond Labour Committee colleague Barry Gardiner, which calls for 2020 remains." – CCC the introduction of a 2030 decarbonisation target for the power sector in 2014. Chairman Lord Deben

The Government has stated that it will seek to reject the amendments, while Labour and other opposition parties have declared their support for a target by April 2014. The Government would like a decision on the decarbonisation target to be made in 2016, after the next General Election. With the prospect of a significant rebellion of Liberal Democrat MPs in support of the measure, two competing visions of the future of UK energy policy face a close fight.

Background & CCC analysis

Britain faces a looming energy supply crunch. The Government’s response, the Energy Bill and its central policy of Electricity Market Reform (EMR), is designed to usher in a decade or more of increased investment in electricity generation capacity.

However, the UK’s power sector faces other stresses and obligations; in particular the requirement to help decarbonise the economy in order to meet the legally-binding emissions reduction targets set out in the Climate Change Act and timetabled by the Carbon Budgets.

The Carbon Budget scheme restricts the total amount of greenhouse gases emitted by the UK over a five-year period, and has been implemented in law from 2008 to 2027. The Government has committed to halving UK emissions relative to 1990 during the fourth Carbon Budget period, from 2023 to 2027.

The Government aims to use the Energy Bill to create a framework to enable the market to deliver this decarbonisation at the appropriate speed with which to meet emissions reduction obligations.

However, the independent advisory body on the UK’s legally-binding targets under the Climate Change Act 2008, the Committee on Climate Change (CCC) has warned that the energy sector may not deliver new low carbon capacity at the requisite scale unless a 2030 carbon intensity target is adopted.

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In September 2012, CCC Chair and Conservative peer Lord Deben made headlines when he wrote to Energy and Climate Change Secretary Ed Davey to “strongly urge” him “Investors need a signal of to ‘accept the recommendation of the Energy and Climate the direction of travel Change Select Committee and address investor concerns by beyond 2020. Without that setting a 2030 carbon intensity target in secondary legislation with a reference to this in the next draft of the we will not get investment Energy Bill.’ now that we need. There is a

In its analysis, the CCC notes three scenarios put forward by high degree of policy DECC that reach a carbon-intensity of 50g, 100g and 200g uncertainty at the moment CO2/kWh in 2030. It warns that under the 200g scenario and that needs to be renewables investment would taper off post-2020, with a ‘dash for gas’ squeezing out competing low carbon addressed as a matter of technologies. urgency." – David Kennedy,

Indeed, its prediction is that under this scenario the share of CCC Chief Executive unabated gas generation would expand to approximately 45 per cent of the mix by 2030, leaving consumers vulnerable to volatile prices and undermining emissions reduction targets.

The CCC argues that low carbon investment must continue through the 2020s if the power sector is to play its part in decarbonising the economy.

As a result, it has urged Mr Davey to signal “a clear commitment to continue investing in low- carbon technologies through the 2020s (e.g. to reduce carbon-intensity to around 50g CO2/kWh in 2030 subject to cost reductions being achieved)” in order to provide certainty to investors, develop supply chains and help bring down the cost of renewable technologies. "Banks are horrified about Mr Gardiner has argued that the amendments would how risky all this has offer “certainty”, benefit the gas and renewable become. We have very industries, and help avert the risk of power shortages unclear and contradictory later in the decade.

narratives." – Anonymous He has furthermore stated that adopting a target would energy executive represent “the cheapest path towards decarbonisation” according to DECC’s own modelling.

Political implications

Should the Government decline to set a decarbonisation target by 2014, it would be the first time Ministers had chosen to reject the advice of the CCC since its inception in 2008. There is concern about what this would mean for the credibility of the Committee, and indeed future Governments’ willingness or ability to deviate from climate targets.

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Senior Conservatives, and Chancellor George Osborne in particular, are anxious to avoid setting a target before the 2015 election in order to give a future Tory Government “There is a very real adequate room to dictate its own energy policy. possibility that we could win this.” – Barry Gardiner MP Mr Osborne is known to favour developing the UK as a gas hub, and as a supporter of the development of shale gas.

The Amendments

The amendments, if introduced in full, would require the Government to institute a decarbonisation target for the power sector by April 2014, instead of permitting its proposed compromise in which a decision on whether to adopt a target would be delayed until 2016 at the earliest.

Furthermore, the Government would be required ‘to set a carbon intensity target for the power sector for 2030 based on the Committee on Climate Change's (CCC) advice’, which could only be changed if the Secretary of State were to demonstrate that significant changes had occurred to the target’s original justification.

The Secretary of State would also be required to publish a delivery plan to outline how the target would be met.

Amendments 11 to 20 on decarbonisation, published under the names of Mr Yeo and Mr Gardiner are to be considered at Report stage.

Amendment 11 reads:

“‘Page 1, line 4 [Clause 1], after ‘ensure’, insert ‘that a decarbonisation target range is set and that’.”

Amendment 12 reads:

“‘Page 1, line 5 [Clause 13], leave out ‘a decarbonisation target range is set, that’ and insert ‘such a target range is set’.”

These two changes would mean that instead of describing a hypothetical situation in which a target might be set, the language refers to a definite target.

Amendment 13 reads:

“‘Page 1, line 8 [Clause 1], leave out ‘may’ and insert ‘must’.”

This also changes the possibility of setting a target into a requirement.

Amendment 14 adds:

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“Page 2, line 2 [Clause 1], at end insert — ‘(4) Subject to section 2(1) the decarbonisation level must not exceed the level deemed consistent with a low-carbon trajectory as advised by the Committee on Climate Change.’.”

This would ensure that the target would be guided by the CCC’s advice.

Amendment 15 sets out a specific date, April 2014, by which a target must be set. It reads:

“Page 2, line 6 [Clause 1], leave out from ‘and the first decarbonisation order may not’ to ‘Climate Change Act 2008’ and insert ‘a decarbonisation order must be made by 1 April 2014’.”

Amendment 16 reads:

“Page 2, line 9 [Clause 1], leave ‘A’ and insert ‘Subject to section 2(1), a’.”

Amendment 17 adds an explicit role for the CCC. It reads:

“Page 2, line 33 [Clause 2], leave out from ‘The following matters’ to ‘target range’ and insert ‘Before exercising the power to make a decarbonisation order the Secretary of State must obtain and take into account the advice of the Committe [sic] on Climate Change.’.”

Amendment 18 consolidates this role, ordering that the CCC takes a lead on the matters that must be taken into account when setting or amending the target range. At present, the Bill affords this responsibility to the Secretary of State. It reads:

“Page 2, line 35 [Clause 2], leave out ‘the matters are’ and insert ‘In providing its advice to the Secretary of State the Committee on Climate Change must take into account the following matters’.”

Amendment 19 adds a requirement for the CCC to explain the reasons behind its decisions:

“Page 3, line 4 [Clause 2], at end insert — ‘(3) As soon as is reasonably practicable after giving its advice to the Secretary of State, the Committee must publish that advice in such manner as it considers appropriate. (4) If in making a decarbonisation order the Secretary of State makes provision different from that recommended by the Commitee [sic], the Secretary of State must, on making the order, publish a statement setting out the reasons for that decision.’.”

Amendment 20 involves a further insertion:

“Page 3, line 7 [Clause 3], leave out from ‘a report setting out’ to the end of subsection and insert ‘and publish a delivery plan setting out proposals to achieve the duty in section 1 to ensure that the decarbonisation target range is not exceeded.’.”

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Government and Party Positions

Coalition

The Government’s proposal is that the Energy Bill establishes a power to set a legally binding decarbonisation target for the electricity sector. However, its stated preference is that no target is set until after the Fifth Carbon Budget, which will cover the years 2028-32, is determined. The budget must be set before June 2016.

According to CCC Chief Executive David Kennedy, this “In the long discussions we would mean any target would be unlikely to be set until had within Government 2018 at the earliest, while its level of ambition would about the electricity market depend on the priorities of the Government of the day.

reform Bill, there was of The decision not to set a target immediately is a key course a semi-open debate component of a ‘grand bargain’ on energy policy agreed between senior Conservative and Liberal about when you set that so- Democrat Ministers. called decarbonisation target. I was one of those Under this deal, Chancellor George Osborne agreed to £7.6bn of Government support for low-carbon energy who wanted to set it earlier; generation through the Levy Control Framework. In others didn’t want it at all return, the Liberal Democrats have agreed not to press for a pre-2015 decarbonisation target. and felt it was an unnecessary target, so we This has led to a situation uncommon in British politics, came up with a perfectly where the Liberal Democrat Energy Secretary Ed Davey is seeking to pass the Bill in its current form, despite open compromise.” – Nick publically admitting that he is sympathetic to an earlier Clegg introduction of the target.

Both Mr Davey and Deputy Prime Minister Nick Clegg have regularly insisted that such compromises are part and parcel of coalition politics. However, it is likely that many Liberal Democrat MPs will interpret the vote as a personal or conscience issue.

On 5 February 2013, the Government announced that it had tabled new clauses to the Energy Bill on the decarbonisation target. These were passed during Commons Committee stage.

Mr Davey said that the Government would: “take powers to set a decarbonisation target range for the power sector in 2016, which will provide a clear signal to industry and investors that we are serious about moving to low-carbon economy.”

Four new Clauses were added to the Bill. These were originally labelled New Clauses 8 to 11. These are now Clauses 1 to 4 in the Bill as amended at Committee stage.

The addition of these amendments could be interpreted as a preventative move by the Government to reduce the likelihood of backbenchers (particularly Lib Dems) joining a rebellion

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on the decarbonisation target. ECC Committee Chairman Tim Yeo had already pledged to table amendments on the decarbonisation target. Therefore the Government wanted “Setting inflexible targets to be seen to be addressing the concerns of backbenchers on the energy sector is who felt the Bill did not provide a clear path to 2030 decarbonisation. inefficient.” – George Osborne, July 2012 During the debate on these new amendments, Energy Minister John Hayes (now replaced by Michael Fallon) outlined three principles behind the new amendments.

First, a target could act as a mechanism to provide greater policy and investor certainty. Second, the electricity sector was inextricably linked to the whole economy, and therefore a target range should not be set before the level of the Fifth Carbon Budget, which covered the corresponding period, was set in law. Third, the amendments could introduce a simple but effective framework for meeting a target range which, once set, would be integrated within the framework already set by the Climate Change Act.

However, the Government is committed to deferring a decision on the target until at least 2016.

Conservatives: 303 MPs

Official position: Opposed to the amendments.

Five Conservative MPs have pledged to support the amendments, which are co-sponsored by Conservative Tim Yeo.

The party’s leadership, however, have expressed scepticism about the worth of a target. Appearing before the Public Liaison Committee in December 2012, Prime Minister David Cameron said he would “challenge whether a decarbonisation target is really necessary to give industry the certainty it wants.”

Later in his evidence, Mr Cameron gave further indication of his lukewarm support for a target, arguing that it would “only really make sense when you know what is going to be possible in terms of carbon capture and storage”. He stressed the potential of shale and unconventional gas, and said the UK needed to wait to see how transformative these technologies could be.

Meanwhile, appearing before the same Committee in February this year, his Deputy Nick Clegg revealed that senior Conservatives involved in the negotiation over the Government’s position had been opposed to any target.

In July 2012, the Financial Times reported that Mr Osborne had “offered to drop his demands for tougher cuts to onshore wind subsidies if the Liberal Democrats back down over “inflexible” targets for Britain’s shift away from fossil fuels”.

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However, some Conservative MPs have expressed apparent reservations about their party’s direction on the issue. Opening a debate on the subject of energy infrastructure and the UK supply chain on 26 March, backbench MP Peter Aldous described the 2030 decarbonisation target as “the elephant in the room”, and said that it was “unfortunate that the issue has become a bit of a political football”.

He called on the Government to “look behind any political positioning and decide what is best for Britain, and particularly the development of the UK energy supply chain”, adding that his views on the matter were “determined by what industry and investors” told him.

It was important for the Energy Bill to provide “the stable long-term policy environment that is required to attract supply chain investment”, Mr Aldous argued.

Labour: 257 MPs

Official position: Supportive of the amendments.

Labour Leader and former Energy Secretary Ed Miliband has committed his party to a 2030 decarbonisation target, arguing that “a much more active role for Government” was needed.

‘To attract the investment we need, governments must cover that risk and commit to a clear goal of decarbonising the power sector by 2030, as the independent Committee on Climate Change has recommended’, he wrote in the Autumn 2012 edition of Inside Track, the journal of the Green Alliance.

‘We need to create instruments that will give the private sector the confidence it needs to invest in new low carbon sources of energy’, Mr Miliband wrote, adding that low carbon infrastructure would ‘kick start’ growth and make the British economy ‘resilient to price shocks in an age of scarcity’.

During the Second Reading of the Energy Bill in December, Labour moved a motion to include a target, which was rejected.

During the Second Reading debate, Shadow Energy Secretary Caroline Flint said the Bill needed a “commitment to decarbonise the power sector by 2030, because that is not only the most cost-effective way to meet our climate obligations, but the best way to protect our economy and consumers from volatile international gas prices and to attract long-term investment in new jobs and "Britain's growing green industries.”

industry is facing a crisis of Commenting on the Coalition’s position, she said the the government's own Liberal Democrats “want to insist that a target is just making, caused by around the corner, and the Tories do not want to have to admit that, if they were ever elected on their own, scepticism at the heart of they would have no intention of setting a target”. government. It is a policy shambles." – Ed Miliband

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Barry Gardiner is reported by the Independent as having said that he would be “very surprised” if any Labour MPs voted against the amendments.

In addition to the party’s stated support for the amendments, Labour MPs who have prominently endorsed decarbonisation targets include Alan Whitehead, Caroline Flint, Willie Bain, Meg Hillier, Barry Sheerman, Nia Griffith and Mark Lazarowicz. “It may not be helpful to our Liberal Democrats: 57 MPs bargaining position if the

Official position: Opposed to the amendments. president of the Liberal Democrats were to distract Commenting on the compromise reached by the Coalition, attention from the efforts of the Liberal Democrat press office told DeHavilland: “The Liberal Democrats are rightly proud of what we have our ministers by signing the secured in the Energy Bill and our parliamentary party will Greenpeace pledge” – deliver on this agreement”. Liberal Democrat President While the party would not go into detail on whether Tim Farron MP rebellious MPs would be sanctioned by the Whips for failing to back the Government, the spokesperson was clear that it would “not be a free vote”.

In early March, Ed Davey warned his Liberal Democrat colleagues that it would be wrong to vote in favour of the decarbonisation target amendments, as this would constitute a rejection of the agreement made between the Coalition partners on the subject.

While he expressed sympathy for the amendments, he said that backbenchers should honour the deal, adding: "I've made it clear I would have preferred to have [a decarbonisation target set] in 2014, I've made no secret of that. [...] But we are in a Coalition".

"I won't do anything to undermine that and I don't think anyone should", he added.

These public statements notwithstanding, in early February the Independent quoted a “Westminster source” as saying that Mr Davey “would not be ‘distraught’ if backbench Lib Dems defied the Government whip to back the amendment”.

Eleven Liberal Democrats have pledged their support for some or all of the amendments. Party President Tim Farron, who has not, is described by the Guardian as having “[indicated] he will back the move, vowing that he will “maintain the pressure on the Government at best he can”.

On 24 March, the paper reported that Mr Farron had written to a constituent on the issue, explaining his view on the matter.

In the letter, he described the need to tackle climate change as “urgent”, and said that “this issue is too important to be used as some kind of political football”.

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“I am fully committed to this principle and I can assure you that rigorous efforts are being made to secure this amendment within the Government”, he stated. “Liberal Democrats can’t hope for a credible green Mr Farron also stated his belief “that a legally binding target will help to secure confidence and investment in low carbon legacy without putting their projects”, adding: “I am advised that it may not be helpful to key green policy on the our bargaining position, if the president of the Liberal Democrats were to distract attention from the efforts of our statute books” – Oliver ministers by signing the Greenpeace pledge”. Hayes, Friends of the Earth

This, he said, was “intended to increase the chances of winning Treasury acceptance of the need for the amendment to be adopted”.

“If the negotiations were to fail, I will certainly be voting for the Tim Yeo amendments when the Energy Bill comes before the House”, he stated.

“I strongly believe that a decarbonisation target should be included in the Bill because we need to make a firm commitment to tackling climate change”.

If the amendments are to pass, the vote will likely be determined by the number of Liberal Democrat MPs that share Fallon’s view.

Among those targeted on Twitter as potential supporters are Simon Hughes, Stephen Gilbert, Lorely Burt and Annette Brooke.

Friends of the Earth UK Political and Legal Campaigner Oliver Hayes has also quoted Liberal Democrat Tessa Munt, another targeted MP, as saying: “If I can, I will support it”.

Liberal Democrat MP Roger Williams is among those to have confirmed his support for the amendments publicly, and urged his fellow party members to follow suit via a blog post on Liberal Democrat Voice. Describing the “momentum” behind a decarbonisation target as “palpable”, he wrote on 21 March that he had added his name to the Yeo and Gardiner amendments.

Setting a target at this point, he argued, “would be a profoundly sensible, necessary and Liberal Democrat act”, which would “boost jobs and growth in all our constituencies, and get us off the crippling gas hook that’s sending fuel bills through the roof”.

Mr Williams also hinted that former Energy Minister and Conservative MP Charles Hendry might be “supportive” of the move.

Writing on his blog, John Hemming MP also confirmed “The momentum behind a his support for the amendments. He wrote: ‘I have […] decarbonisation target is rebelled by supporting the Yeo amendment on the Energy Bill. This, to me, is not such a different position palpable” – Roger Williams to that of the Government which is progressing on MP getting more cost effective sustainable energy.’

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However, he added, ‘In a Coalition compromises do need to be made and at times that can get a better result than a rebellion on the floor of the House which fails. Hence I do need to keep this issue under review.’

Other Parties

The SNP and Plaid Cymru are both listed by Friends of the Earth as having pledged their support to the amendments.

An SDLP spokesperson confirmed the party’s support for the amendments directly to DeHavilland. One of its three MPs, Dr Mark Durkan, was among those who signed the Yeo and Gardiner amendments.

Two members of the DUP, Jim Shannon and Jeffrey Donaldson, signed Barry Gardiner’s Early Day Motion on Climate Week, suggesting possible support for decarbonisation targets.

DeHavilland has received a statement from the DUP suggesting that the party is broadly supportive of the decarbonisation target amendment. However, one DUP MP who could object to the notion of decarbonisation targets is Sammy Wilson, a prominent climate change sceptic.

The EDM on Climate Week was also backed by Alliance Party MP Naomi Long and Independent Lady Hermon.

The five Sinn Féin MPs do not take up their seats in Westminster and therefore will not be voting on the issue.

Of the other MPs not aligned to major parties, Respect MP George Galloway joined Labour in voting in favour of a decarbonisation target at Second Reading, suggesting that he would also be likely to favour the cross-party amendments. Independent former Labour MP Eric Joyce was also among those who voted in favour of a target in December.

The other independent MP, Nadine Dorries, from whom the Conservative whip has been withdrawn, was not present for the December decarbonisation amendment vote. When contacted, her representatives were unable to offer any information on her position. In our projections DeHavilland has assumed that Ms Dorries will vote with the Government on this issue.

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Voting Speculation

For the decarbonisation target amendments to succeed, it is likely that up to 40 Government MPs will need to rebel in the Commons vote.

Supporters of the target have focussed on the fact that the Liberal Democrats endorsed a target at their 2012 party conference, meaning that any MPs who vote to reject the amendments will be breaking with party policy.

However, in 2010, Liberal Democrats did not rebel in sufficient numbers to block a significant rise in tuition fees; a totemic issue on which the party had staked far more of its political capital. On that occasion, 21 Liberal Democrat and six Conservative MPs rebelled, but the Government’s policy was approved by 21 votes.

Proponents of a target will have to hope that the stresses of three years of coalition will put backbench Government MPs in a more rebellious mood than in 2010. Since the amendments were lodged in February, supporters have engaged in a concerted lobbying campaign, seeking to secure as many MPs in support of the target as possible.

A number of environmental campaigners have been briefing on what has been referred to as the “green jobs amendment”. On 5 March, Greenpeace claimed that “currently 272 MPs have shown support for the amendment”, citing emails sent to MPs by “more than 29,000 people”.

Campaign groups have been providing updated lists of politicians pledging their support for decarbonisation targets.

Oliver Hayes of Friends of the Earth tweeted: “If smaller parties vote in favour, then 20-30 Liberal Democrat backbenchers and 10-15 Tories would do it. Sky's the limit though!”.

Citing unspecified parliamentary sources, the BusinessGreen website said that there was ‘evidence more Coalition MPs are willing to rebel than has been previously reported’.

However, quoting responses to its letter-writing campaign, Greenpeace charged that “some Lib Dems have responded with excuses as to why they cannot support the target despite it being their own party’s policy”.

On 15 April, Friends of the Earth activist Guy Shrubsole quoted Conservative MP Jason McCartney as saying: “I will tell my whip that I haven’t made my mind up yet”.

Writing in the Guardian on 28 March, Barry Gardiner urged new Energy Minister Michael Fallon to support a 2030 decarbonisation target.

In producing the amendments, Mr Gardiner said that he had aimed to “maximise Conservative support” for them by putting the amendment into secondary legislation and leaving the Energy and Climate Change Committee to offer guidance on the precise target for decarbonisation at a later date. He argued that through such an approach, “there is a very real possibility that we could win this”.

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On 5 March Labour Energy Spokesperson Baroness Worthington tweeted: “Timing of energy bill decarb amendment at report stage is crucial. Apparently will be harder to win if debated after Queen’s speech”. MPs “feel less rebellious” at the start of a new session, she added.

On 11 March, she wrote: “Hopefully MPs will win decarb target at report stage. If not we’re gearing up in the Lords with Larry Whitty and Roy Kennedy joining team”.

Once the Bill has completed Report stage and third reading in the Commons it will proceed to the Lords. As the Government does not enjoy an outright majority in the Lords it is more likely to be defeated on any Lords amendments relating to the decarbonisation target.

Early Day Motion

In mid-February, an Early Day Motion tabled by Mr Gardiner provided a sense of which MPs might ultimately be amenable to supporting the amendments to the “This House […] urges the

Energy Bill. Government to act on the

The Motion, in honour of Climate Week, called on the recommendation from the Government to take “further steps to encourage Committee on Climate investment in the green economy, greater use of renewable energy and positive action across society”, Change to include de- and, tellingly, urged the Government “to act on the carbonisation targets in the recommendation from the Committee on Climate Change Energy Bill.” to include de-carbonisation targets in the Energy Bill”.

Some 34 MPs signed the EDM, of whom four were Conservatives and six were Liberal Democrats.

Conservative signatories were Mr Yeo, David Amess, Peter Bottomley and Zac Goldsmith. Liberal Democrat signatories were Annette Brooke, Andrew George, Mike Hancock, Nick Harvey, John Leech and Bob Russell.

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Projected Results

Based on an assumption of 100 per cent turnout amongst sitting MPs, and that those who have not pledged a vote either way keep to the official line of their party, the amendment looks set to be rejected by 48 votes.

This is based on the following assumptions:

In favour – 298 MPs

 All 257 Labour MPs support the amendments  All 25 “Other MPs” (Minor parties and independents) support the amendment  The 11 Liberal Democrat amendment signatories vote for the amendments  The 5 Conservative amendment signatories vote for the amendments

Against – 346 MPs

 All 139 Government Ministers, Whips and Parliamentary Private Secretaries (PPSs) vote against the amendment  184 Conservative Backbenchers vote against the amendment (including Nadine Dorries who has had the whip withdrawn)  23 Liberal Democrat Backbenchers vote against the amendment

These projections should only be taken as a guide, as it is unlikely that all MPs will attend the vote or that they will all take the whip. It is not guaranteed that all signatories to the amendments will vote for every amendment, particularly those who have only signed some of the amendments.

If our projection is accurate, another 25 Liberal Democrat and Conservative MPs will need to support the amendments in order for them to be passed.

Besides those who have signed the amendments, there are only 23 Liberal Democrat backbenchers remaining to potentially rebel against the Government. As previously mentioned, the Liberal Democrat rebellion on tuition fees attracted a total of 21 MPs. Hypothetically, if this number were repeated in relation to the decarbonisation target, the amendment would still fall short by around 15 votes.

Therefore a backbench Conservative rebellion of around 20 MPs will be needed for the amendments to have a chance passing. It is important to note that the Coalition Government currently enjoys a sizeable working majority of 79 MPs.

Overall, DeHavilland predicts that it is quite unlikely but not impossible for the amendments to be passed. The graph on the following page illustrates our current projection.

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400

350 23 Lib Dem 300 11 backbenchers 5 25 Conservative 250 backbenchers 184 Ministers and PPSs 200 Other parties

150 Labour MPs 257

100

139 50

0 No Yes

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List of Signatories

An updated official list of those who have signed up to amendments to the Energy Bill can be found here.

Conservative Labour Liberal Democrats Green SNP SDLP Tim Yeo Barry Gardiner Julian Huppert Caroline Lucas Mike Weir Mark Durkan Peter Bottomley John McDonnell John Hemming David Amess Alan Whitehead Martin Horwood Zac Goldsmith Gerald Kaufman Andrew George Caroline Nokes Dai Havard Mike Hancock Katy Clark Greg Mulholland John Cryer Roger Williams John Robertson John Leech Kelvin Hopkins Andrew Stunell Joan Ruddock Mark Williams Frank Field Adrian Sanders Mike Gapes Hywel Francis Mark Lazarowicz Nia Griffith David Anderson Paul Blomfield Paul Goggins Martin Caton Mike Wood Andrew Smith Brian Donohoe Steve McCabe

Some MPs have signed all ten amendments on decarbonisation tabled by Mr Yeo and Mr Gardiner. However, others have not signed all of the amendments.

DeHavilland has produced a summary table (found overleaf) of these endorsement patterns, broken down according to each separate numbered amendment. A green-shaded “x” indicates that an MP signed a given amendment, while an orange-shaded “o” indicates that they did not.

Any further updates will be published here.

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Amendment Amendment Amendment Amendment Amendment Amendment Amendment Amendment Amendment Amendment 11 12 13 14 15 16 17 18 19 20

Conservative

Tim Yeo x x x x x x x x x x

Sir Peter Bottomley x x x x x x x x x x

David Amess x x x x x x x x x x

Zac Goldsmith x x x x x x x x x x

Caroline Nokes x x x x x x x x x x

Labour

Barry Gardiner x x x x x x x x x x

John McDonnell x x x x x x x x x x

Alan Whitehead x x x x x x x x x x

Sir Gerald Kaufman x x x x x x x x x x

Dai Havard x x x x x x x x x x

Katy Clark x x x x x x x x x x

John Cryer x x x x x x x x x o

John Robertson x x x x x x x x x x

Kelvin Hopkins x x x x x x x x x x

Dame Joan Ruddock x x x x x x x x x x

Mike Gapes x x x x x x x x x x

Frank Field x x x x x x x x x x

Hywel Francis x x x x x x x x x x

Mark Lazarowicz x x x x x x x x x x

Nia Griffith x x x x x x x x x x

David Anderson x x x x x x x x x x

Paul Blomfield x x x x x x x x x x

Paul Goggins x x x x x x x x x x

Martin Caton x x x x x x x x x x

Mike Wood x x x x x x x x x x

Andrew Smith x x x x x x x x x x

Brian Donohoe x x x x x x x x x x

Steve McCabe x x x x x o o o o o

Liberal Democrats

Julian Huppert x x x x x x x x x x

John Hemming x x x x x x x x x x

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Martin Horwood x x x o x o o o o o

Andrew George x x o x x x x x x x

Mike Hancock x x x x x x x x x x

Greg Mulholland x x x x x x x x x x

Roger Williams x x x x x o o o o o

John Leech x x x x x x x x x x

Andrew Stunell x o o o o o o o o o

Mark Williams x x x x x o o o o o

Adrian Sanders o o o o x o o o o o

Green

Caroline Lucas x x x x x x x x x x

SNP

Mike Weir x x x x x x x x x x

SDLP

Mark Durkan x o x x x x x x x x

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Media and Industry Positions

Charities and Unions

In early April, the charity Christian Aid issued its own call for “The absence of a target, MPs to back the decarbonisation target amendments, saying which forces action in the that “this is a fight we cannot afford to lose”. sector, until 2016 at the “Without strong and binding targets to reduce our carbon earliest could have the emissions, we risk sending the message to green business to go elsewhere, we risk our carbon emissions increasing and damaging effect of deterring we risk losing the fight against catastrophic climate change private sector investment.” – that is already devastating communities across the world”, Times Editorial spokesperson Helen Collinson said.

On 15 April, TUC General Secretary Frances O’Grady accused the Government of “dithering” over energy and climate policy, and endorsed the setting of “a long-term carbon reduction target for 2030, which must be set out in the Energy Bill”.

“Postponing the decision about our 2030 target until 2016 has only succeeded in creating more uncertainty and threatens to deter businesses from investing”, she argued, adding that the delay in setting the target was “bad for business, bad for workers, and bad for Britain”.

Friends of the Earth Campaign

Friends of the Earth have published an updated list of the MPs who have pledged their support to the decarbonisation target amendments according to its own records, which can be found here.

A number of its activists have tweeted prominently about the issue, using hashtags including #2030decarb and #getcbe.

Media

In an editorial dated 11 March, the Times backed (£) the institution of decarbonisation targets, writing that ‘the case for setting a target now is a good one’.

Citing the requirement for an ‘ethos of security’ for effective energy business, the paper argued that ‘the absence of a target, which forces action in the sector, until 2016 at the earliest could have the damaging effect of deterring private sector investment and impairing the otherwise realistic prospect that Britain could become a world leader in the associated energy sectors’.

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Business

On 20 February, an alliance of more than 35 organisations convened by the WWF signed a joint statement calling on MPs to back a decarbonisation target.

These groups included environmental campaigners, as well as SSE, Cisco, PZ Cussons, the Cooperative, various religious groups, and the TUC.

Commenting, Chief Executive of WWF-UK David Nussbaum said: “This statement represents a compelling argument – from sectors across the economy and civil society – in favour of the Energy Bill being amended to include a decarbonisation target for 2030”.

In a letter dated 7 March, six major energy companies “Postponing the 2030 target wrote a letter to Government ministers welcoming the Yeo and Gardiner amendments and detailing their decision until 2016 creates “strong support” for targets that would decarbonise the entirely avoidable political electricity sector by 2030. risk. This will slow growth in The letter, addressed to Chancellor George Osborne, the low carbon sector, Energy and Climate Change Secretary Edward Davey handicap the UK supply and Business Secretary Vince Cable, cited the critical importance of “a long-term, stable policy framework”. chain, reduce UK R&D and produce fewer new jobs.” The signatories to the letter were Alstom, Areva, Doosan, Gamesa, Mitsubishi and Vestas.

Postponing the target decision until 2016, they argued, would create “entirely avoidable political risk”, slowing growth and damaging job creation, as well as reassuring foreign investors and underpinning savings on the deployment of low-carbon technologies.

The Institute for Civil Engineers has also said that a target is essential. Director General Nick Baveystock highlighted how, in his view, it would play a part in shifting public attitudes on the economic reforms necessary in tackling climate change.

The IPPR has argued that adopting a target would represent the best way to bring consumer energy bills down in the decades to come. Its ‘Energy pathways to 2030’ report argues that Britain could save £23bn by 2045 by adopting a low-carbon investment strategy.

In November 2012, a consortium of businesses wrote a joint letter to Prime Minister David Cameron under the banner of the Prince of Wales’s UK Corporate Leaders Group on Climate Change and the University of Cambridge Programme for Sustainability Leadership, suggesting that he take account of climate change by adopting the use of indicative 2030 carbon emissions targets for the power sector.

They wrote: ‘Whilst the EU ETS should be the principle policy mechanism for decarbonising the power sector we nevertheless recognise that a low carbon investment signal is needed today.’

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‘Therefore we suggest that the Committee on Climate Change’s recommendation of an indicative target for the carbon emissions intensity of the UK power sector in 2030 introduced through secondary legislation is a useful step to help deliver the required certainty and should be adopted.’

The signatories were senior representatives of Unilever, Doosan Power Systems, Anglian Water, Philips Electronics UK, Kingfisher, EDF Energy, Johnson Matthey and Heathrow Airport.

In their February response to the proposed Energy Bill, Ernst & Young warned that the delay in setting a 2030 decarbonisation target until 2016 “casts doubts over UK’s carbon emissions commitment”. This was the “main source of disappointment for investors”, its Environmental Finance Leader Ben Warren said, as it left them with “a sense of uncertainty”.

In November 2012, the UK dropped a place in Ernst & Young’s Renewable Energy Country Attractiveness Index, with uncertainty over a decarbonisation target cited as a key reason.

The UK Energy Research Centre (UKERC) recently carried out an examination of a variety of paths towards the UK’s 2050 emissions reduction target.

An “absolutely consistent result” of its study was that achieving decarbonisation cost-effectively required electricity sector CO2 intensity of less than 100gCO2/KWh by 2030. The UKERC also concluded that a target for that date was essential to guarantee delivery.

Scepticism

Ben Caldecott, Head of Policy at Climate Change Capital, is among those who have argued that a target is not the key factor in improving policy certainty.

Quoted in late 2012, he explained: “As investors and investment advisors, we are not unduly concerned about the current lack of a decarbonisation target in the Energy Bill, which is after all, meant to be implementing robust targets already enshrined in law. “Any extra effort in the UK’s There is already a clear legal commitment to build a cleaner, better energy system”. electricity system to decarbonise just allows less Mr Caldecott also stressed that having a Government- backed counterparty behind Contracts for Difference would effort by other European do more to bring down the cost of capital for investors. countries. If a Europe-wide

Ian Simm, Chief Executive of Impax Asset Management, cap is in place, a UK made a similar case before the Energy and Climate Change decarbonisation target’s Committee in November 2012. He said that “a 2030 effect on global emissions – decarbonisation target now could fly in the face of what the European Union is trying to achieve with input from the UK the problem we are trying to and may be difficult to reconcile with the targets of the solve – is nil.” – Guy Newey, Climate Change Act. Policy Exchange “Cost of capital, in simple terms, reflects the risk premium

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that certain groups of investors want to put on a sector that has inputs from a wide variety of sources and what happens in 2030, to be honest, is a second or third order issue compared to all the other points”.

Opposition

Guy Newey, Head of Environment and Energy at Policy Exchange, has argued against “targetism” and the idea that policy makers can and should try and predict how the market will evolve over such long timeframes.

He reports that privately, senior officials in DECC and the CCC have conceded “they are pushing for the target because they worry about the Treasury and, in particular, George Osborne’s commitment to climate action.”

BusinessGreen reported in November 2012 that RWE npower and Centrica had confirmed their opposition to the inclusion of a decarbonisation target in the Energy Bill, citing concerns that this could leave new gas-fired power plants as “stranded assets” that would have to be closed in 2030 to ensure compliance.

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Key Links

Documents

The Energy Bill at GOV.UK.

The Energy Bill: Progress and related documents at Parliament.uk.

Notices of Amendments to the Energy Bill, with updated lists of signatories.

Barry Gardiner’s Early Day Motion.

From the Campaigns

Friends of the Earth MP support tracking page.

WWF Consortium statement.

Energy business leaders’ letter to the Chancellor.

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