Nigel Topping.

Q1 The Chair: Good morning, and welcome to the House of Lords Environment and Climate Change Committee. Today, we are very pleased to have with us Nigel Topping, newly appointed chair of the Government’s statutory advisory body on climate change, the Climate Change Committee. I warmly welcome our witness. Thank you, Nigel, for taking the time to be with us this morning; it is very much appreciated.

I have just a few words on housekeeping. I should remind everyone that the session is broadcast live, and that a transcript will be taken and made public. The witness will be able to review the transcript and make minor amendments, if necessary. Before moving on to questions, I remind all members that relevant interests should be declared the first time they speak. I take the opportunity now to declare that I am a director of Peers for the Planet. We move straight to Lord Rooker for the first question.

Q2 Lord Rooker: I have nothing to declare except that I introduced the Climate Change Bill to Parliament, because it started life in the Lords. I will ask about your priorities—you cannot have more than a couple of top priorities—a bit further down, from your point of view. To start with, I will give you the opportunity to talk about your background and experience in the private sector that is relevant to the committee. The floor is yours.

Nigel Topping: Thank you, Lord Rooker. My background originally was as a mathematician. I went into industry from university. Almost exactly half of my career was spent in industry and half on how to harness the power of industry and markets to tackle climate change. For the first 18 years, I was consulting and then running factories and businesses in Manchester and Hartlepool. I was then part of a team that bought a division of a listed company, took it private and built the biggest manufacturer of brake pads in the world, headquartered in Germany. I probably know more than anyone else about brake pads, or at least I did. In 2006, I came back to the UK from Germany and went back to study. I was a climber before. I had seen first-hand the effect of climate change in terms of glacial retreat in places like Greenland and Patagonia, where I had been on climbing and scientific expeditions, and discovered that there was a lot of concern about climate change and finger pointing, but not a lot of talk about solutions. This was before the Climate Change Act.

Since then, in one way or another I have been working on how to harness the power of businesses, industry and markets. I joined a then quite young NGO, the Carbon Disclosure Project, launched in the UK in 2000, which led to what we now know as the ISSB, the formal disclosure of climate change information by large companies. In the run-up to the Paris COP in 2015, a group of NGOs including CDP formed a coalition called We Mean Business to try to mobilise the positive voice of business to help get the Paris agreement over the line. I was CEO of that for five years. When the UK was awarded the presidency of COP 26 I was appointed by the Prime Minister to the role of UN high-level climate champion. That was a role created by the Paris agreement to work with what the UN calls non-state actors: businesses, finance and sub-national governments in particular. I did that for three years, at COP 26 and COP 27. Since then, I have been in multiple roles. I joined the Climate Change Committee as an ordinary member soon after that. I am also a non-exec director of the National Wealth Fund, which, as you know, directs public money to help drive the transition. I also run an international NGO.

Lord Rooker: Could you set out what your top priorities are? You can have only one top priority, whatever you are doing, but you must have an idea of a list. I would also be interested in things that you think are important that might not be delivered, because of either lack of resources or something of that ilk.

Nigel Topping: I split my thinking about priorities into three. No. 1 is to do whatever I can to ensure that Parliament and Government are provided with the best evidence to make some of the difficult decisions, particularly with the CB7 vote coming up. I can say more about how I plan to do that, but it is a complicated subject. Our reports run to hundreds of pages. The No. 1 priority is to make sure that the evidence is presented in a way that is understood so that we have a debate informed by fact.

As to the short and longer term, which you are alluding to, the short term is about the bits of the economy that are decarbonising now because the solutions are there. How do we make sure they go as fast as they can? In particular, that is the power system, which we have already decarbonised by 85%, but needs to get bigger, as you know. Then there is road transport and domestic heating. Road transport is going rather well. We are very confident that the continued cost down will deliver the pace of change needed, but domestic heating is the biggest priority in the short term. Maybe later we can talk more about some of the issues around bills.

As to the longer term, it is about making sure we are doing enough so that the technologies that need to take off in the 2030s and 2040s are ready, even though they may not make much difference in the next five years. I am referring to things like sustainable aviation fuel, which will not make much difference in the next five years, but we need to have it on a trajectory so that in the 2030s and 2040s it does.

I tend to think about getting the message right, then the short-term scale, and in the longer term getting technologies to the right place.

Lord Rooker: Thank you. We will look into the detail.

Q3 The Chair: Can I ask you about COP 26? Was that the first COP when the Race to Zero was officially adopted?

Nigel Topping: COP 26 was unusual in a couple of respects. First, we had two years to prepare for it, which is a big difference. One year is really only six months, because, by the time you have figured out what you have to do, you are actually doing event planning. Also, there are always two people in this high-level champion role as it is rotating. I worked with Gonzalo Muñoz, the Chilean-appointed champion for COP 25. We were the first two champions with a private sector background. We took a slightly different approach. We were religiously led by the science, hence the Race to Zero, but we were also trying to be much more ambitious about mobilisation. I think we launched the Race to Zero campaign in the January ahead of COP 26. Lord Sharma, the incoming president of the COP, officially launched it. That was an effort to get as many businesses, universities, hospitals, cities and states as possible to commit publicly to a rigorous, science-based target. It was launched in the run-up to COP 26 and is still going.

The Chair: How successful do you think it has been? Does it need a new injection? I am not sure that many people have heard about it, unless I am mistaken. In this year’s COP 30, it was one of the few areas where there was some consensus and agreement. Talk us through that.

Nigel Topping: It was and remains wildly successful in terms of numbers. The attempt was to get away from vague, long-term commitments. It is easy for any CEO or Prime Minister to say what they are going to do in 2050. The question is: what are you going to do on your watch in the next five years? The Race to Zero was linked very strongly to Science Based Targets, which is an NGO-led initiative to help organisations set those rigorous targets based on the science. It went much better than expected. Remember, we were in the grips of Covid at the time and did not know whether anybody would pay attention, but the numbers went up exponentially and have continued. I think the number of companies globally with Science Based Targets has gone up by about 150% in the past two years. Already in the UK and Europe, there are very high numbers of large, listed companies which have those targets, but there is more and more growth in Latin America and Asia. It is not something which formally forms part of what is negotiated in the COPs because that is between sovereign nations, the parties to the convention, but it is part of the action agenda, which again is UN-speak for everything that is happening outside the formal negotiations in the real economy. Personally, I think it has largely done its job in normalising that level of ambition. Most of the hard work now is at a sectoral level. How do we get enough green steel plants built? How do we get the cost of batteries down to drive up electric vehicle production? That is much more the focus that Brazil put on the action agenda for COP 30, of which I am very supportive.

The Chair: Excellent. There is a little time before we move on to the next question. The Budget was published a few days ago. That has added a tax, if you like, on EVs based on mileage driven. You mentioned transport as a critical driver of the transition to net zero. How helpful do you think this will be?

Nigel Topping: It is a bit early to digest all the details of the Budget. As you say, it is quite a complicated transition, but my preliminary thoughts are that the prevailing economic dynamics of the transition to electric vehicles are very much intact. We see battery prices coming down by an order of magnitude of 20% a year. Our modelling for the CB7 advice suggested that the uptake of electric vehicles would reach 93% by 2030 on the basis of costs coming down alone. I do not think anybody paying attention to this transition is very surprised about the mileage duty. If you look at past OBR reports, there has been a big hole because there has been no policy to address the gap left when fuel duties are removed from the tax system. It is common sense that any Government would find some way of addressing that hole, and the most likely and fair way is that, if combustion engine drivers pay fuel duty, electric vehicle drivers should pay a similar fuel duty for the services provided. I do not think it is surprising. Of course, it will provide a bit of a lag on uptake because it does change the economics, but it is too soon to show how much. I think the OBR has already done some numbers. We will look at that closely when we do our progress report next year, but overall we expect the trajectory to continue exponentially.

The Chair: You do not think that the polluter pays principle applies in this case for drivers of cars that emit greenhouse gases. That is my view.

Nigel Topping: I absolutely believe that the polluter pays principle applies. There is a difference here between the polluter pays and the user pays. There is a need to raise money to maintain roads, and that tax has to come from somewhere. If historically it has come from a fuel levy and that will go away because that fuel will go away, it will have to come from somewhere else. Of course, it is up to government to decide, but I do not think anyone is really surprised that that move has been made, because it was likely to be made at some point.

Q4 Lord Duncan of Springbank: I have quite a few interests which I will summarise as energy issues: nature-based solutions, nuclear and some other things beneath that.

My question is related to the Chair’s point about electric vehicles. China is driving the depression in the cost of electric vehicles, and a point will be reached when they become remarkably attractive and almost certainly will undercut the European Union’s ability to manufacture vehicles of comparable cost, likely leading to tariffs by the EU to prevent Chinese vehicles coming in en masse and cutting the ability of the EU to do its job. Do you see a tension arising with the technology being driven forward and the reality of how western economies will cope with that challenge? If your principal driver is climate change you accept it, but if you are trying to balance your economic well-being you need to find a different way of examining that.

Nigel Topping: I think you describe the tension well. I spent the first 20 years of my career in the automotive industry. I started as a young engineer at Lucas Engineering & Systems studying what we then called Japanese manufacturing; we now call it the lean manufacturing system. There are some parallels; it is not an entirely one-to-one analogy. If you look at what has happened, the Japanese became very competitive in manufacturing very good cars—something that the Chinese are now doing in this transition. There was a loss of market share from western manufacturers. Ultimately, the balance was addressed by manufacturing facilities being put up in Europe and North America, because there is a limit to how much tariffs can stop that. My sense is that that is likely. We already see that in some parts of Europe, or on the edges of Europe, or in Mexico and Latin America.

The Chinese are starting to build manufacturing facilities elsewhere. They are also driving down the cost of components. For Tesla, about 70% of its components are Chinese. Our battery-manufacturing facilities will benefit from the processing and material improvements. I think that tension will remain, but I do not think it is black-and-white; it is not either all import or no import. It is a very complicated, intertwined industry and a lot of components are already sourced from China. I think we will see more and more Chinese brands manufactured outside China. It has already started.

Lord Duncan of Springbank: There seems to be quite a pressure within the European Union and European Parliament to use the threat of tariffs as leverage to try to bring about a change in the way the Chinese invest in Europe. I think that is a high-risk strategy, because it might not deliver what they expect, and the tariffs might arrive anyway and therefore undercut it. That is more of a technical question.

Nigel Topping: I know the German automotive industry quite well. I lived there for three years whilst at part of TMD, and in 2018 and 2019 I did some work there with Mercedes as it was looking at its transition. To rely on tariffs alone is very risky, in particular because it allows the narrative that somehow “they” cheated and it takes some competitive pressure off the need to innovate. It is a fact that German cars have a lot more labour content in them than Japanese cars because of the way that the Betriebsräte and strength of the unions in Germany have lobbied for a particular cost base. If you speak to any German automotive CEO in private, they will tell you that, first, they wish they did not have some of those locked-in cost bases, and, secondly, they wish they had started electrifying 10 years earlier when they were still dismissing Tesla as not being able to make proper cars and did not know the names of any Chinese brands. Now they are in a massive catch-up.

Q5 Lord Trees: Thank you very much for coming to talk to us. It is going to be a very interesting session. You have been to a lot of COPs by now. What is your analysis of COP 30 and the future of the whole COP process? Are there aspects of it that you think are outdated and need to be reviewed?

Nigel Topping: Many aspects of it are outdated and, in a Utopian world, would be and need to be reviewed. Whether they can be reviewed, given the consensus decision-making process, is an important question. I have probably been to all the COPs since Peru, and before Paris because I had that formal role with We Mean Business. The press tends to overfocus on the negotiations and underfocus on what is actually happening in the real economy. That is understandable because that is where a lot of the theatre is, but it is not where most of the action is now. We did a lot in the UK presidency to elevate the action agenda, but the process has evolved a lot. Remember that before Peru and Paris the idea that anyone other than a sovereign country that was a signatory to the convention had any role was kind of forbidden; it was an absolute taboo.

In 2013, when I was in a room at the side of a COP, the then Secretary-General of the United Nations brought a few of us together and said, “We need to bring in the dynamism, voice and political power, not the legal voting right, of cities, businesses and those actors”. I think that the Brazilians, for the first time as a presidency, said that the action agenda, as they called it, was one of their top objectives. They did a lot to mobilise that. There was a massive gathering of the finance sector in São Paulo and Rio the week before—more than I had ever seen—and much greater focus on rolling up sleeves and getting things done. Not much of that has been reported. There has been some good stuff in the FT recently pointing to the need to look beyond the drama of the negotiations to what is actually happening at country and sectoral level. The Brazilians did a very good job of elevating that. I hope that the Turks, who will be the presidency of COP 31, will maintain that.

When we look at the drama and language around fossil fuel phase-out, there is 100% consensus. If one country that may be a fossil-fuel exporter decides it does not like that language, it does not make it into the final version. At the same time, we are seeing renewable energy being deployed exponentially and faster. In the first nine months of this year, for the first time ever, renewable power additions were outpacing power demand growth, so that is a tipping point reached. There is exponential growth of electric vehicles, which we talked about. The price of solar is getting so low that countries such as Pakistan and Nepal are now able to deploy those technologies to drive human and economic development first, with a climate benefit being second or third.

I think the COP has evolved. In particular, what was taboo, like the idea that anything that was not consensual could be welcomed by the COP, has changed. Now you see the COP process full of clubs of the willing, whether it is all those countries that committed to trebling renewable energy or to taking action on food. In every one of those sectors there is now a club of the willing of countries and non-state actors all committed to moving really fast. It does not include everyone, but it is welcomed by the COP. Quite a significant change in the dynamic has been opened up by the idea of the action agenda.

Lord Trees: Earlier this year you spoke to the Environmental Audit Committee and you were reported as suggesting that there was a weakening of political consensus behind the whole COP thing. We have seen a lot of that in the press. Why do you think that is happening? Is there objective merit in some of the criticism?

Nigel Topping: I am not sure I was reported as suggesting that. I was directly asked a question about what I was going to do about the weakening of political consensus. I have a few thoughts on that. One is that in several countries, including our own, we see a weakening of political consensus, although I would say it is the beginnings of that and where it goes we will see. The latest surveys I have seen show that about 83% of MPs are still supportive of net zero; it is a similar percentage of the population. Two parties have said they would do something about the Climate Change Act and no longer seem to believe that net zero is a good target. This is where I take the role of the Climate Change Committee very seriously in providing sober, thoughtful, evidence-based advice.

Some very reasonable questions are being asked. Can we afford the transition to net zero? I think we have provided in long reports very strong evidence that, economically, it puts the country in a much stronger position. We have to invest to save, but if we save we do quite a lot, fundamentally because the electrification particularly of transport and heat gives massive efficiency benefits. Heat pumps and EVs are three to four times more efficient than burning fossil fuels, but it is a reasonable question because the numbers are large. Is it the right thing to do?

There is another question about bills right now. We have uncompetitively high bills which affect both cost of living and industry. It also affects our ability economically to make the transition to heat because it depends on the ratio between electricity and gas prices. That is why taking policy costs off electricity bills has been our No. 1 piece of advice to Governments. The previous Government accepted that advice and ran out of legislative time to enact it. This Government started to move in that direction, although there is still a long way to go. Reasonable questions will always arise. It is a big transition for the whole world, so to think that it is easy or without bumps in the road would be naive. It is right that the pathway and analysis is questioned. As for some of the dramatic headlines, for example that net zero will bankrupt Britain, I have yet to see anyone provide any evidence of that and it is absolutely contrary to the research and evidence we have provided.

Lord Trees: We will come to bills in a later question, but perhaps I might have a last supplementary. Touching on what you introduced, clearly your remit is to try to support the move to net zero, but does your committee feel any need to advise the Government as well about all the trade-offs that would be necessary, which you already hinted at? Is there a red team saying, “If we did that, we would have these negative consequences”, and so on? Do you have any role in your committee in that context? We will come to some of these trade-offs later.

Nigel Topping: That is a good question. The answer is “partly”. Although the mandate is limited and we are wary of going off the reservation, as it were, the primary purpose is to provide advice on what the carbon budget should be, and not just take into consideration carbon but pounds and pence as well. It is fundamentally scientific and economic advice. If our research suggested that it would be economically better to go much faster or slower, that would be within scope. We talk about some of the other key variables such as jobs, health, et cetera. If you have some specific trade-offs in mind, maybe I could think about them.

Lord Trees: I am sure we will come back to them.

Lord Duncan of Springbank: Yesterday, I met with a representative of the Central Committee of the Chinese Government. On a question about coal, he declared it to be a national security issue. China would continue to depend upon coal, and he could not at that point see a horizon point at which it would not. He also said they would continue to ramp up their green engineering and green world, but he was not in any way minded to pivot away from coal, which I would have thought would be an issue given that they are such a big player. Do you have any thoughts on that particular part?

Nigel Topping: China has probably hit peak coal round about now. As you know, it is massively investing in renewables and building some very competitive international industries on the back of that. In particular for developing countries whose economies are growing fast, there is pretty much a one-to-one correlation between energy demand and economic growth. There is real nervousness about turning off any supplies lest that leads to a supply crunch on energy.

It is also worth saying that the Chinese culturally have very consistently under-promised and over-delivered on their transition. For the first time, they have committed to an NDC which reduces their absolute emissions, not just their intensity. Again, that looks very conservative given the real economic trajectory they are on. Their oil demand has peaked because EVs are already over 50% and the IEA now forecasts demand destruction of between 5 million and 7 million barrels of oil a day. Quite a lot of that comes from China electrifying its vehicle fleet. Of course, the rest of the world is not going quite as fast. Then it will be a question of how fast their economy grows versus how fast renewables continue to outpace that, as to how quickly coal deteriorates.

As for the geopolitics, it is worth noting that China in the UN context has a net-zero goal of 2060, and India in the UN context has a net-zero goal of 2070. It would be interesting to discuss whether that is their real goal or whether that is a political statement, because within the UN system the issue of common but differentiated responsibilities—i.e. that developed countries cause the problem and should decarbonise faster—is sacrosanct. Quite often, those signals are more political than actual planning. As the Climate Change Committee, we meet our counterparts in China, who are very bullish on how fast the transition is going.

Lord Duncan of Springbank: It just struck me that the declaration was a national interest. If you were to place it in the negotiations of the UN, it is very hard to counter a country saying that it is in their national interest to retain this. It sends a message as well in a wider sense.

Nigel Topping: Yes, but I do not think we would find any country that did not say its energy system was a matter of national interest.

Lord Ashcombe: You mentioned energy being tied to growth to a degree. Our industrial background in this country is going down, I would argue, partly because we are basically closing down the North Sea ahead of when it needs to be closed down. How would you react to that? I am not saying that I do not agree with net zero in the long term.

Nigel Topping: As somebody who spent the first half of their career in the manufacturing industry, mainly in the UK at a time when it seemed to be de rigueur to have no industrial strategy, I have always thought that no industrial strategy is still a strategy; it is one to let everyone else make hay. We have been in a secular decline in our manufacturing sector for a very long time.

Let me deal with two things. The first is the cost of electricity; and, secondly, I will come to the North Sea. We have done a lot of thinking about the cost of electricity. If you look at our six highest-emitting sectors now, the power system is the sixth. People often think this is all about power. No. 1 is road transport—EVs. That is moving. The direction is fairly well understood. No. 2 is domestic heating. No. 3 is industry, and a lot of that is heating. Nos. 4 and 5 are aviation and agriculture.

It is interesting that Lord Duncan talked about the critical importance of the power system. This would be my view as a former industrialist rather than a well-formed Climate Change Committee view. As a country across many Governments of different stripes, we do not seem to have taken our power system seriously as a critical piece of infrastructure that drives competitiveness and growth or non-growth. Through a whole series of policy decisions, we have piled costs on our electricity system. These are policy decisions rather than facts. We have put on a lot of what you might call innovation costs. The feed-in tariffs or the costs of early technology in many other countries would not be put on the bill but would just be considered as part of how we innovate. Particularly since 2010, we have put on more and more, and we have diverged from European power averages.

There is an issue about how we have considered electricity and the electricity system as a critical piece of strategic infrastructure. Over the last few years—this is not a point about one Government or another; this is across Governments—there has been a growing realisation that we need to reform a lot of things like planning and auctioning processes to get market prices and now bills down, so we are seeing some movement in that. It is complicated as to what is the interplay between the western decline as a manufacturing base versus lower labour arbitrage in other countries and some of these other issues.

When it comes to the North Sea, it is a perfectly fair question to ask about the relationship between jobs in the North Sea and our transition to net zero.

Lord Ashcombe: I am also talking particularly about the gas that comes in. I am less concerned about the oil, because we export all the oil to refine anyway.

Nigel Topping: North Sea Transition Authority figures show that production will decline by 85% by 2050. It has already declined by 75% since the 1990s.

Lord Ashcombe: There is still enough to keep a significant percentage of the country going—up to 50%—for quite a while yet.

Nigel Topping: It is a basin in decline. It is important that we unpick what the arguments might be for or against going faster or slower in that decline. In the past, we have heard an argument that doing as much as we can would help prices. I do not see anyone making that argument now because these are commodities that are traded internationally, and the amounts that we produce are so relatively small that they will not affect international prices. There is an energy security argument. Most of what we produce is exported at the moment. If we really wanted to make the energy security argument, we might have to demand that it is not exported, but then that would, effectively, be nationalising it. That is an interesting thought experiment.

The thing that most drives energy security in the next 30 years is the transition away from fossil fuels. That does two things. Displacing them makes us much more energy secure. It also takes us off the whiplash effect of volatile fossil fuel prices. Two or three years ago, the OBR did some analysis looking at the impact of a once-a-decade gas price spike, and said that by 2050 that would mean that the national debt was 13% of GDP higher. If it ran that now, the impact of the last gas price spike—which we are still in and is inflating electricity prices, sucking money out of the fiscus—would be even greater.

Lord Ashcombe: Inflating electricity prices because of the way we price electricity.

Nigel Topping: Yes.

Lord Ashcombe: We could price it some other way, as you mentioned earlier.

Nigel Topping: We could, and again—

Lord Ashcombe: That is a policy decision.

Nigel Topping: That is a policy decision, yes. At the moment and since the Ukraine invasion, we have been paying a lot for gas and electricity as a result of that volatility. I do not think the price argument holds. The jobs argument is small because you are talking about the difference between two trajectories. Again, I think of NSTA. Sometimes we hear the number of 200,000 North Sea jobs. That comes from a report that said that there are 60,000 direct jobs, 60,000 indirect ones and about 80,000 creative jobs like sandwich makers and accountants. The number is 60,000 direct jobs. For the transition to offshore wind, a lot of those skills are transferable. It is important that we get the order of magnitude right in this argument because it may be that we are arguing about quite a small difference. It is something that should be discussed, but I do not think it is of the order of magnitude of, “Should we do this or should we not do that?” It is a tweak and relatively small amounts of gas and a relatively small number of jobs. They are all important, but it does not determine the overall trajectory.

The Chair: Thank you. Before we move away from COP 30, given your experience within the process, can you say a few words about the outcome of COP 30 where in the final text it was not possible to include the words “transitioning away from fossil fuels”, and therefore a parallel process seems to have been initiated for the first time, a coalition of those willing to transition away from fossil fuels? First, what are your views on that departure from the norm? That would be very interesting to know.

Nigel Topping: Chair, that is a really astute question. This is an example for me of the process evolving in quite a radical way. Remember, the president of the COP is given the job to corral 194—now 195 minus one, as we know—countries through a lot of quite complicated technical discussions.

The Chair: Now there are two: North Korea and America.

Nigel Topping: Yes, but just one has withdrawn. It is very complicated diplomatically to land on consensus. We have had language on fossil fuels, but, again, there were a lot of countries—over 80—pushing hard. The presidency declared very early on in its year running up that it wanted a road map for the transition away from fossil fuels to be one of the outcomes. As you know, it only takes one country, and a few countries decided that they were not going to allow that. There is nothing that a president can do if a few countries say they do not want something in the text. They cannot force it.

For the first time ever that I am aware of, in the plenary, the president said, “Okay, you lot don’t agree this, but I am going to lead a process anyway as the president of the COP”. The presidency starts the first day of the COP. André Corrêa do Lago, the Brazilian diplomat who is the president of the COP now until November/December next year when the COP reconvenes in Turkey, said he will lead a process to work with those who want to work with him. That is an interesting innovation in the process itself that a president feels he or she can make that statement. Again, it is another step away from the full thing. We will see what he is able to do.

A very important conference is going to take place in Columbia in April looking at the fossil fuel non-proliferation treaty, an idea that is gaining momentum and now will have its first formal multilateral conference. That is another innovation on the side of the process.

The Chair: I have what I hope are two quick questions on the COP process. The first is about parliamentarians. At the moment, it is not easy for parliamentarians to take part within the COP process directly. Yes, you can peripherally, through GLOBE Legislators and so on, and yet 1,600 fossil fuel industry representatives are present. That has always struck me as being rather unhelpful given that 83% of parliamentarians are in favour of the process. It seems to be skewed wrongly. How can we change that? Should it be changed?

Nigel Topping: The COP is a manifestation of the beautiful diversity of humanity that is run by the UN, with sovereign nations able to bring whomever they want to bring. Suggestions that the UN might find a way of banning certain people seems to me in the “highly unlikely” category because everyone would have to agree that. If you are a hydrocarbon-exporting country, you have a vote and a right to be there.

It is worth looking at the research behind that often-quoted number, which has counted a lot of businesspeople who are present as oil lobbyists even though some of them, we know, are absolutely not oil lobbyists. That number is probably on the high side. There are hundreds of indigenous peoples’ representatives and hundreds of youth representatives. I do not know how many parliamentarians there were. I know there was a cross-party group of six UK parliamentarians who went out and whom I met there. It is very difficult for anybody who is not part of a formal negotiating delegation to formally engage in the process. In fact, most people are either observing the process, which is an important structure since the beginning of the convention, or they are working on these side tracks. I do not see any way to change that fact. A very broad church of people turn up at the COP, and of course it includes some people who do not want the process to go as fast as we do.

The Chair: I have a very last question, and it will be quick. Why are the Turks so keen to host COP 31?

Nigel Topping: I do not know.

The Chair: Okay.

Lord Lennie: How big is the split between what you call the coalition of the willing and the less willing? Is it a big divide, or is it just we roll on and carry on?

Nigel Topping: My sense having been to COPs for at least the last 10 years would be that the vast majority of people going to them are genuinely working to progress this, and the country delegations are representing their national interests. It is a classic negotiation.

Lord Lennie: If Britain became part of the “we are not for net zero” brigade, that would—

Nigel Topping: That would be catastrophic for the process. The UK has very consistently for a long time been a very respected and productive voice in that process. Our diplomats are held in very high regard. Our Climate Change Act is held in very high regard.

Lord Lennie: Even to pause our thinking about—

Nigel Topping: That would be a bombshell going off in the process. That would embolden those who want to go slower, for sure.

Q6 Lord Layard: Coming back to Britain, we have the climate change objective of net zero by 2050. What is your assessment of whether the existing targets and carbon budgets are consistent with getting to that? Secondly, are the growth delivery plans consistent with the carbon budgets?

Nigel Topping: The carbon budgets that we have in law are consistent with getting to net zero. The Carbon Budget 7 advice that we presented to Government and shared with parliamentarians is another step towards that 2050 target. They are achievable, but they are not easy. That is why our annual progress report tries to put a very strong spotlight not just on what policies are in place that are working but where we see risks that there are either not strong enough policies or a lack of them. We welcome the delivery and attention to detail of the Carbon Budget and Growth Delivery Plan. We hope that now we can be in a period of focusing on delivery, not planning. We will do a thorough review of the latest plan and other legislation that comes through. The warm homes plan has yet to be delivered. That is going to be critical to our No. 1 concern about the heat pump transition. We will publish all our findings and recommendations in our annual progress report that we present to you in June next year.

Lord Layard: Apart from warm homes, where are the other weakest elements in the growth delivery plans?

Nigel Topping: From an initial look, we really welcome the thoroughness. It seems to cover all areas. The devil is always in the detail. In some areas, the Government have reduced their ambition, such as in hydrogen and CCS, and it is now more in line with the pathway that we modelled as reasonable. In some areas, they are not as ambitious as we are. We will look at all those nuances. There are no gaping holes that we see, but it is important that we give the technical team the time to look policy by policy and sector by sector to make that judgment, which we will present to you all in June.

Lord Layard: Is the co-ordination between the different departments that are involved in this adequate? A particular question has always interested me. I was a proposer of what is now called Mission Innovation, which is the research side of all this. We spend a certain amount on research on clean energy production. Do you feel that that is sufficiently mission-oriented and powerfully led? Our idea with Mission Innovation was that it would be, a bit like the Apollo programme or whatever, quite strongly mission-led. Do you feel that the British research effort on clean energy is sufficiently mission-led?

Nigel Topping: I do not honestly know. I perhaps see a bit more of that from my role in the National Wealth Fund. There is a general sense in industry and academia that our innovation ecosystem is not as well organised as it could be and that, therefore, we risk, in particular, talent drain to other countries at a time when those ideas get to the point of commercial scale. But that is more anecdotal. It is not something that we have looked at in particular.

In terms of co-ordination, it is complicated because both mitigation and adaptation cross all departments. There are teams doing a lot of work under the leadership of Baroness Brown, who chairs the Adaptation Committee, on the big adaptation report for next year. In particular, the co-ordination between Defra and DESNZ on mitigation and adaptation, with one being responsible for mitigation, one for adaptation and then overlapping when it comes to land, could be better. I have not been asked to the mission board yet. I look forward to that. I am not sure that the mission board is meeting regularly, which was supposed to be the co-ordinating mechanism. I honestly do not know, but I suspect that co-ordination could be improved.

Q7 Lord Lennie: We are going back to costs and how we get them down. In your response to the Carbon Budget and Growth Delivery Plan, your No. 1 recommendation was to make electricity cheaper. In light of the announcements in the Budget—you said it has not been fully assessed and felt yet—what further action would you like to see the Government take? You talked about policy cost being taken out of the electricity cost. What kind of value would that mean in terms of a bill reduction?

Nigel Topping: It may be worth taking a step back and saying why we think that is so important. It is because the second-highest sector that we need to decarbonise now is domestic heating. Heat networks have a role, but the majority of that shift will be about the shift from gas boilers to electric heat pumps. Heat pumps are three to four times more efficient. You take one unit of electricity and you create three to four units of heat. Of course, if the electricity price is three to four times the cost of gas, you do not get an economic benefit as a bill payer from that transition and you have to make the upfront investment. That is why our No. 1 piece of advice is to get the ratio of electricity. This is important. It is not just taking electricity down. If you took VAT off electricity and gas, the ratio of prices would stay the same. It would be a saving for bill owners, but it would not change the economics of the transition. It is really about changing the relative price of electricity to gas. Based on our early analysis, we welcome the moves to take some of the policy costs off, but our early analysis suggests that the ratio remains above four, and it needs to be in the range of two to three.

If you will forgive me, there is a great chart on page 56 of our progress report from last year. I know it off by heart; I do not need to look at it. It compares countries and their electricity to gas price ratio and their market penetration of heat pumps. It is a straight line from us in the bottom right-hand corner at about 4% and a ratio of four to Sweden in the top left-hand corner with 95% and a ratio of one. It has very cheap hydro, so it may be an outlier, but, in between, you have France, Germany and Italy with much higher heat pump penetration and much lower electricity to gas ratios.

There is a lot more that the Government could do. The main thing that could be done is to take more policy costs off. There is still a lot of what I would call innovation boosters such as feed-in tariffs and early contracts for difference from when we all knew that the technology of the future was still expensive. It is a policy decision to make the bill payer pay for that innovation rather than through general taxation. The other thing that could be done would be to create specific tariffs for those who switch to heat pumps. In that case, you get access to cheaper electricity. I predict that will still be our No. 1 piece of advice. We will probably get more granular as to all the different things that could be done.

I have just installed heat pumps in our home. The other thing that is important and we do not talk about enough is that, when you switch to electrified heat, you then have the ability to use time-of-use tariffs to great advantage. There are time-of-use tariffs where you can get eight hours a day of half-price electricity. If you add a battery, you could basically run your whole home on half-price electricity. There is a huge benefit in moving to flexible time-of-use tariffs.

Lord Lennie: I live in a sixth-floor flat. We could not get a heat pump. We got electricity installed. It is a German system that heats the stone, effectively, and that heats the home and the water. I know a heat pump is the branded solution, but I am not sure it is the only solution.

Nigel Topping: It is not the only solution. Heat networks, often in very dense urban environments, is another solution. The heat may come from a heat pump, a waste-to-heat plant or other sources. There is not just the heat pump, but the heat pump is the solution for the majority of homes.

Earl Russell: I want to quickly ask you a supplementary to this, about the current spark gap. Electricity to gas price ratios are at their highest level since 2022. In light of that and going back to heat pumps, that fundamentally alters the economics of making a heat pump attractive in the market to run to save money. Fundamentally, in light of that, has this issue become a lot more pressing for urgent action from the Government? You talked in the evidence that you have given us today about other Governments running out of time to make these changes. Do we need more, further and faster? Could I ask you briefly about energy market reform? You talked about taking off levies. I would agree with you on that. Would you support the RAB model and looking at other fundamental changes to the energy market system?

Nigel Topping: First, it is very pressing. We have ambitious heat pump targets. The fundamental economics must be right. The interesting thing of course is that at the moment Government are subsidising. If we got the ratio down to two to one, there would be no need for subsidy because the savings would be so great. We already have some retailers offering very interesting things like no bills for five years but on new-build only. It is very pressing and it is likely to be our No. 1 piece of advice. We will lay out more detailed recommendations in response to what we have already heard in the Budget and what we look forward to seeing in the warm homes plan. I am not sure about your question about broader market reform.

Earl Russell: Really, it was about that overall package. There are measures related to bills. There are also energy market reforms. One plan is regulated asset base, effectively nationalising dispatchable gas to try to bring down that price. Obviously, gas sets the price. It is 85% of the market. Is there a need to do more fundamental change in this space to try to make electricity cheaper to help with the transition and meet the carbon budgets?

Nigel Topping: This is one of the questions about scope. Our job is not to prescribe policy but to—

Earl Russell: Yes, I understand.

Nigel Topping: —advise on the direction and options. Right now, we basically take the electricity market reform process as given. The whole question about zonal pricing has settled for now. That is also a very long, complicated process. It is also important that when we discuss this transition we are honest about the fact that this is not a UK-only challenge. Bills and the cost of the transition are a huge issue. The amount of capital that is needed for the transition is huge. We are at a relatively high cost-of-capital moment, so we also need to talk about what we can do to alleviate supply chain constraints and the cost of capital. Again, the National Wealth Fund has a role there. Sometimes it has provided guarantees for some of the big interconnectors that take new power from the North Sea down. It needs to be looked at holistically because many different things contribute to those high prices, including the wholesale price, as you say. We would all hope that peace will prevail in Ukraine and that gas prices will come down, but that is something that we cannot control.

Lord Duncan of Springbank: The Government have been quite consistent in their support for heat pumps, but less consistent in their support for the other challenges of heat pumps, which are with the insulation of the house, the retention of heat and so on. Given the cost attached to that being not insignificant, that is a push against the Government in the other direction that might depress the uptake of heat pumps. Is there any prospect from your committee of a push toward recognising that insulation still needs support from the Government in a number of areas, especially in certain sectors of the standard housing stock?

Nigel Topping: Yes.

The Chair: We will pick this up in one of the later questions.

Nigel Topping: Okay, the simple answer is yes.

Lord Trees: I have a couple of quick questions that reveal my ignorance. We have the highest energy costs of any industrialised nation. We are always told that it is expensive because of the wholesale price of gas, but my gas bill is much cheaper per kilowatt hour than my electricity bill. How is that happening? Secondly, a substantial part of the energy bill is green levy, which, correct me if I am wrong, is about 8% at the minute, but I would be interested to know exactly what you suggest it is. Could that be reduced or that subsidy provided in a different way that would substantially bring down the costs of energy immediately?

Nigel Topping: First, the reason why we always talk about the cost of gas when we talk about the cost of electricity is the way that our electricity prices are set through the auction process. All the bids come in, and then the closing bid sets the price, which economists consider to be very efficient. That means that it is nearly always gas. Over 95% of the time, it is the cost of generating electricity with gas that determines the wholesale price of electricity. It is a big chunk of the bill, but it is not the whole bill. There are other elements. There are all the levies, as you say, and those are all policy choices. Those are not costs of producing electricity. In most other countries, those policy choices have been made to move that into general taxation. They are also regressive. There is more than one reason for doing that. Then there are a whole host of system costs. Again, that is a policy choice about what system costs you put on the bill. Very expensive nuclear will put everyone’s bills up. We talked earlier about energy security. You might decide that the reason we are building nuclear is for energy security and that we do not put all the costs of that on to the electricity bill, just as we do not put on the costs of military security. There is a whole host of policy costs.

We are also investing significantly in our grid, for three reasons. First, we are catching up with investment that should have been made a long time ago. Secondly, we are growing the size of the grid because we are electrifying everything. Thirdly, some things are needed to manage the new, more distributed nature of this. I mentioned earlier the connectors from the North Sea to England. Those are also starting to see some rise in cost. It is the balance of all three of those things—the wholesale, the system costs and the levies—that needs to be tackled to get the ratio down to where we need.

Lord Trees: Most of that is a policy decision, it seems, from your explanation. Somebody could decide in government that we will make energy cheaper and subsidise from taxation. Are they right?

Nigel Topping: The way that we set electricity prices is a very complex policy decision. Changing the mechanism of the wholesale price is the most complex because that is about markets and investment. That process has been going on for some time and has been partly resolved. The levies are easier to change because you can put them on and take them off without changing the way the wholesale market works. Then of course it is a policy question about whether you take that from a specific piece of taxation to general taxation. It will be very interesting in the months and years to come to see how policy changes impact inflation. With electricity prices coming down, there is a lot of evidence to suggest that inflation will come down with it, and then maybe the costs of borrowing.

Q8 Lord Ashcombe: I have two quick questions. You talked a lot about home heat pumps. I have to admit that I have just put in a new gas boiler, so I will not be your best friend. There is a lot of chat about it, but there is no hard information out there for the public to get hold of. That is the first issue. The public are sceptical about change, as we know, generically. On heat pumps in homes, what about industry? Is it way ahead of the game? I am not just talking about industry; I am talking about every office block in London or what have you as well.

The Chair: We need a short answer.

Nigel Topping: On your first point, more public information about the pros and cons and the issues about heat pumps—

Lord Ashcombe: And good figures.

Nigel Topping: —would be helpful, and good reliable figures. Secondly, the issue about electricity versus gas prices is pretty much the same in industry.

Lord Ashcombe: There seems to be a lot of push for heat pumps for homes. I do not see that happening on the industrial/business scale. I do not see that push in the big, bad world.

Nigel Topping: It is a good point. One of our recommendations has been that the Government should lead with implementation across public buildings.

Lord Ashcombe: Their own estate.

Nigel Topping: Yes, their own estate.

The Chair: Okay, we will move on to Baroness Whitaker’s question, which will cover the same ground.

Q9 Baroness Whitaker: Thank you very much for all this interesting analysis. In fact, my question will amplify what has just gone on. Your committee’s progress report just before your arrival highlighted the importance of the warm homes plan and the industrial strategy to secure building decarbonisation, which I think is your No. 2 area of relevance. What is your assessment of the measures set out in the industrial strategy? What do you hope to see in the warm homes plan?

Nigel Topping: In our report we will lay out in real detail our assessment of the industrial strategy, the Budget measures and the warm homes plan.

Baroness Whitaker: We are hoping for a summary.

Nigel Topping: I will not prejudge the detailed analysis that the team is going to do, but I will give you some initial thoughts. We welcome the industrial strategy and the focus on some sectors that are so key to the transition, and we welcome the recognition and the move on electricity prices. We will judge how effective we think that will be in more detail. The direction of travel is good but you will have to wait for the detail. We still hope that the warm homes plan will be published before Christmas. We will particularly look for a further shift to get that electricity to gas price ratio down. That is the most important thing to support the market and homeowners driving up adoption of heat pumps. In particular, we want to make sure that the removal of ECO4 from the bill and the £1.5 billion that has been put aside will help to address fuel poverty so that—this is one of the trade-offs—we do not end up with the negative consequence of the transition that support for the fuel-poor deteriorates as a result. That is something that the warm homes plan should address.

Baroness Whitaker: Okay, thank you. Still in the region of realistic optimism in the industry, you talked earlier about improvements in grid capacity. The position at the moment is that some renewables have to queue up for one year or sometimes two years to get on to the grid. When is all this improvement actually going to happen, because it is really holding up the deployment of renewables?

Nigel Topping: This is a really good example of the way that, across Governments, we are seeing a lot of institutional reform that one Government started and another Government are continuing on clearer spatial planning.

Baroness Whitaker: Yes, in the planning Bill.

Nigel Topping: And more practical management of the queue. This is happening right now. In a year’s time, we should have seen quite a significant improvement as all these things that have been consulted on and developed over the last few years in terms of the spatial planning and reform come in.

Baroness Whitaker: That would make a big difference. On the warm homes plan, you already talked a bit about heat pumps. Quite a lot of people in this country live in flats. I live in a flat that has the boiler on the inside of an outside wall, which is on the balcony, so I could perfectly well have a heat pump installed with a few tweaks to the radiator system—that is to say if I could afford it—but I cannot get anybody to give me an estimate. They do not do flats. What sort of pressure can be brought to bear on installers to be a little bit more innovative about heat pumps?

Nigel Topping: First, I will reiterate that heat pumps work for a lot of properties but heat networks, particularly in urban and dense areas, are also a solution that we see being picked up in a lot of cities.

Baroness Whitaker: I did put that to the board but they did not go for it.

Nigel Topping: That is a collective and maybe an agency problem. We can improve efficiency standards. Private and rented have different dynamics. We have seen a lot of investment commitments in the social housing space to retrofitting. Again, it depends whether it is a rented or an owned property. It is quite hard to put pressure on installers to do anything beyond some of the existing mechanisms that incentivise the transition. The thing that will make the most difference is to make it economically attractive, and then people will do it. That will be the incentive. Then we will see a couple of heat pump factories in the UK and tens of thousands of heat pump engineers trained, because millions of homes will need to be upgraded in the next 20 years.

Baroness Whitaker: Do you think installers would be more likely to do it if it were cheaper for the consumer?

Nigel Topping: Yes, because there will be more demand. If you ring up an installer and say you want a heat pump, they will do it for you. This goes back to my point about time-of-use tariffs. We will see what the warm homes plan unlocks and anything it suggests about preferential tariffs, which is one thing we have looked at as a possibility. If the ratios are changed and the tariffs opened up, we will start seeing creative tariffs being offered by electricity retailers. There is some of this going on. Then we will get market competition driving this. That is what we want to see unlocked with getting the ratio right.

Baroness Whitaker: This is something like in a year or two years.

Nigel Topping: It depends on the warm homes plan.

Baroness Whitaker: It is important. I ought to declare, by the way, that I am an honorary fellow of the RIBA, if that is relevant. Thank you very much. We look forward to hearing what is going to be in your report.

Q10 Lord Ashcombe: I am really pleased to see somebody in your position who has some private company experience. You are maybe a slightly rarer beast than one would like. How does your Climate Change Committee engage with the private sector to inform its carbon budget advice and reports? I should say that I work in the same company as Swenja Surminski, who is on your committee. As a second part of that, what are your expectations of the private sector in relation to climate adaptation specifically?

Nigel Topping: We take engagement with the private sector very seriously. We engage with the organisations that you would probably expect like the CBI, Make UK, Energy UK and UK Finance. I met the chair of UK Finance in Brazil recently. A lot of the technical work of the secretariat is in modelling. Talking to practitioners in industry is important to make sure that our modelling is anchored not just in academic research but in what is happening in the markets. Especially as some of these things are changing so fast, if you are not talking to people who are implementing, there is a risk of things being lost. Depending on the topic, we will host round tables and invite people to speak. We engage quite a lot. We have just closed the deadline for hiring some more members on to the committee. One thing that I am looking for in particular is somebody else with a strong private sector background. We want to maintain the climate science base and have that background. Sorry, what was the second part of the question?

Lord Ashcombe: I asked about the carbon budget advice that goes around that and the reports. Secondly, what are the expectations of the private sector in relation to climate adaptation?

Nigel Topping: Historically, adaptation has always been the poor relation to mitigation. I am really pleased to see the work that the Adaptation Committee led by Baroness Brown is doing at the request of Government to get more specific and move towards more of a five-year-budget-type process, asking what the metrics and targets are for each period. Without very specific metrics, it is very difficult to engage with anyone. Moving towards a much more action-oriented approach to thinking about adaptation is the first step. The CCRA report that comes out next year will be useful.

Secondly, the technical team is organised sectorally; the sectoral teams are responsible for the modelling on mitigation and the thinking about adaptation. We talked about co-ordination earlier. If you separate the two, then you separate the two, whereas for a business what it does to mitigate and adapt are both part of its capex plans. We also see some improvement in some of the central banking thinking about risk management. For businesses, this is fundamentally a risk management issue. We have already given some very clear advice about what average temperature rises we recommend are considered for risk management purposes in 2050 and 2100. That is the sort of thing that we will be recommending. Think about mitigation and adaptation together. Be clear about the scenarios that you are modelling for. The thing that I see a lot of now is more evidence that suggests that there are strong risks of tipping points and non-linear change. Do not just assume that the future will be a little bit different from the past. There are some areas in which it could be very different.

Lord Ashcombe: Do you think that companies are beginning to do this properly? Do you think that the market is reacting to it?

Nigel Topping: Yes, but it is slow. It is a very big change in risk management thinking. We have had TCFD and now ISSB-mandating scenario planning, but some of that scenario planning is, “It is either going to flood a little or flood a bit more”. The value of scenario planning is to stretch the thinking around some of the surprises that might come. There are central banks, the private finance sector in general and the academic community of modellers. Swenja, as you know, is part of that and on the committee with a strong insurance background. The insurance industry is the one that thinks about that the most. Everyone is getting better, but it is often from quite a low base.

Lord Ashcombe: So there is some way to go.

Nigel Topping: There is definitely some way to go. I hope that the committee’s adaptation report next year will help parliamentarians and industry to think about adaptation in a more structured way.

Lord Ashcombe: It is really important to get the message out there.

Lord Duncan of Springbank: I want to pick up a small point from earlier. We talked about heat networks as an alternative to heat pumps. The estate where I live in London is a combination of social and private. The private owners have just received a bill for £50,000 to upgrade. As you could imagine, that has not been warmly welcomed by those individuals. Trying to find a way through this is going to be the measure of whether it works, but that approach probably is not going to work as a way of encouraging people to buy into the process. Would you accept that?

Nigel Topping: It depends on how many people there are and what the benefits are going to be. I unapologetically keep beating the drum about electricity to gas prices. All these problems are mitigated massively by addressing that. On page 56 of our report from last year, there is the very instructive diagram that shows that we are at the bottom right-hand corner of high electricity to gas ratio and very low market penetration of heat pumps. Everybody else in our neighbourhood, including much colder countries, is doing a much better job, and it is pretty much directly correlated to how they have addressed that gap. All those economic questions largely melt away when you get that gap down to between two and three to one.

Lord Duncan of Springbank: You are right. It is easier to climb the stairs, but if the first step is very high it is hard to get to the other steps. Following up on that, earlier, you touched on the erosion of the political consensus in the UK, with the two large parties being no longer quite signed up to where net zero was.

Nigel Topping: One large party and one small party.

Lord Duncan of Springbank: Indeed. It is hard to tell which will be which in future, but that is for others to decide.

Nigel Topping: A factual, evidence-based assessment.

Lord Duncan of Springbank: I accept that. The analogy that I was going to give was the situation in Canada. I am not going to say Mark Carney has pivoted away from his statements before, but he has certainly redefined them in a way that has been more consensually supportive to some of the hydrocarbon interests in Canada. He has done that quite explicitly and gained some traction and consensus within the political arena in Canada. I am trying to understand if there is a prospect. This touches on Lord Ashcombe’s point about the North Sea basin. That is a mature basin. There is no question about that.

I should declare that I am a fellow of the Geological Society. We are still going to be reliant on the North Sea basin within the Norwegian zone for much of our hydrocarbon going forward. Is there a “Carney route” that allows us to strike that balance in a way that might not lead to the utter collapse of that consensus going forward but rather find a way of navigating through it, balancing out the conflicting interests? It is a slightly political point, but I am trying to ensure that we can get to a point where the consensus does not fall over, come the next election.

Nigel Topping: It would be helpful to bound the debate here. This goes back to my point about trying to use some of the figures. I was asked to speak at a conference in Scotland, and I had two different parties using two different numbers. It is very hard. The number that is often quoted for North Sea jobs is 200,000. If you go back to the source of that report to Government in 2023, it is very clearly 60,000 direct jobs, 60,000 indirect and 80,000 in third. First, it is important, if we are going to have an important political debate, that we base it on the same set of numbers. There is NSTA’s suggestion of an 85% reduction. The question is: could that reduction be slowed to 75% or accelerated to 90%? That is the wedge that we are talking about. It is quite a small wedge, but politically it would be important to explore that.

Lord Duncan of Springbank: I have a house in Aberdeen. Aberdeen feels very different now. When you are there, it feels like a city that no longer has what it had before, which is the momentum, the prospects and the jobs. Literally, you see in the city structure now a feeling of decline. A lot of parties will use that as a way of emblematically stating, “This is a problem. This is the consequence of these actions”. It is trying to find that way of navigating to see if there is a possible middle ground, through what is quite a challenging environment, to maintain as much of a consensus as possible against very strong headwinds.

Nigel Topping: I agree. I would hope that we can help provide some evidence and that that debate can be had on the basis of solid shared facts. There are not 200,000 off-sea jobs to be saved. When that becomes the mantra, it is a misleading starting point. There are 60,000. If NSTA thinks that is going to decline by 85%, the question is: can we slow it down to 75% or speed it up to 90%? It is 15% of 60,000. We are talking an order of magnitude of 9,000 or 10,000 jobs, not hundreds of thousands because of the secular decline. It would be very different if we did not have the basin in decline, as you say.

The Chair: We have a quick question from Earl Russell, and then we will move on to the final question.

Earl Russell: I very quickly want to ask you a supplementary on adaptation. The Adaptation Committee report came out last year and found that not a single pathway was good in terms of that. It is the classic boiling the frog problem: if you do it slow enough, nobody reacts. This is a horrible question to you and I apologise. Fundamentally, how does the Climate Change Committee propose to take that forward when Government do not really want to listen, we are on five-year terms and it is a problem for somebody else to look at, but we fundamentally face a climate emergency?

Nigel Topping: Baroness Brown is all over the detail of this. We are right in the middle of preparing the report for next year. The Government asked the Adaptation Committee for more structured advice. The committee has already written back to the Government recommending that we focus our adaptation planning around 2 degrees by 2050 and 4 degrees by 2100. That is very clear. That is saying, “Let’s plan for a 4-degree world in terms of mitigation, but in terms of risk management what do we have to do?” That is a long way away. The planning and the verticals of food security, energy security, health, business and infrastructure have been laid out in that letter. I am more hopeful now on this issue of the poor relation of adaptation than before because Government asked for specific advice and they will get a specific recommendation. I hope that can shift the national conversation to be more pragmatic about what we have to do.

The Chair: Thank you very much. Lord Ashcombe has a pressing question.

Lord Ashcombe: I have a very quick question for you that slightly follows on from Earl Russell. You suggested that the Government might do what they say we should all do, which is adapt electric heating means and so on for their own estate. How much difference would that make to the country in terms of going forward?

Nigel Topping: I do not know in percentage terms. We were thinking more in terms of market demonstration effect.

Lord Ashcombe: With the real estate that they have, I suspect it would be fairly significant.

Nigel Topping: I do not have that off the top of my head, but we can come back to you on that.

Q11 The Chair: Thank you. We come to the final question, on methane. I do not know whether you are aware, Nigel, that the first report that this committee did under my chairship was on methane, published in December 2024. Just by way of background, methane is a very potent greenhouse gas, 80 times more potent than carbon dioxide, and—this came as a surprise to me—responsible for a full third of the global warming that we see to date. The great thing about methane is that it lasts only 10 to 12 years in the environment. It is an essential tool in our toolbox for slowing down warming and, if we can reduce emissions fast enough, to start to cool the planet. The Government led on the work at COP 26 in launching the Global Methane Pledge and within that they asked all countries that signed up to it to publish a methane action plan, but the UK did not have one then. The committee’s key ask was that the Government publish one. They have just announced one. Could you give your assessment of the measures within that plan and how you think they will impact emissions from each of the three key three sectors—oil and gas, waste management, and agriculture? Do you think that the fact that the Government have not set sectoral methane targets will hinder delivery of that plan?

Nigel Topping: First, I fully recognise and agree with your views on the importance of tackling methane given its strength as a greenhouse gas and the possibility of maybe even buying some time relative to other measures. Some of the sectoral specifics will have to wait until the June report. We are very pleased to have seen methane specifically called out in the Carbon Budget and Growth Delivery Plan, with a 68% reduction by 2030. From a quick reading, we will have to wait, I am afraid, until June to say whether the measures there in terms of feedstock additives for agriculture, gas leakage and waste reform are green, amber or red in terms of the specific reduction potential that we see from the policies and whether we think they match the targets. That is our exam question for the progress report.

The Chair: Okay. One of the other recommendations of the committee was that the oil and gas sector is committed to delivering the World Bank’s Zero Routine Flaring by 2030 Initiative. We asked the industry to produce a road map to track its progress to that net-zero target by 2030, and specifically to implement a leak detection and repair regime, but that has not been announced. How important do you think that is for the UK’s leadership on this issue on the global stage?

Nigel Topping: In moving from targets to actions, that is an example of the kind of practical thing that is important. That is what I mean in terms of us assessing not just the targets—it is great to have a good target—but the chances of the policies delivering on that. That is broadly the assessment that we make in saying whether something is on track.

The Chair: Will your committee be able to push the Government for more details and a more transparent methane action plan in terms of its delivery?

Nigel Topping: If in our progress report we deem that the policies in place—the cut-off is normally May next year—are not sufficient, we will indicate that, and we will make recommendations on how that can be addressed.

Q12 The Chair: Excellent, thank you very much. I have a question from Lord Krebs, who unfortunately could not be with us. For the closing question, as we have a few minutes, I will indulge his request that it be asked. He says, “If I had been there, I would have liked to have asked Nigel: what should happen when the Government of the day fails to meet the recommendations made by the Climate Change Committee?” His declaration is that he chaired the committee, I think, as its first Chair, was it?

Nigel Topping: Second Chair. Lord Turner was the first.

The Chair: Of course.

Nigel Topping: That is a question for Parliament, is it not? When the Government put forward a carbon budget and Parliament votes it in, it becomes a legally binding budget. We make recommendations to support the Government and parliamentarians in putting forward that budget and discussing it, but we are not responsible for its delivery, and neither do we have any means other than pointing out weaknesses, which we do quite robustly. We are very prepared to publish a report covered in red that allows parliamentarians, the public and industry to understand whether we have policies in place that will deliver our legal targets.

Lord Trees: I declare an interest: I like cows; I am a vet but have no financial interests. I would like to ask you a little bit about that. You mentioned feed additives. I am very optimistic that we can do a lot here. The low-hanging fruit about ruminants is to improve health and reduce morbidity and mortality. Metrics are very important and they influence policy. As you well know, GWP100 does not accurately reflect the warming potential of methane, which is particularly pertinent to agriculture and livestock. What is your committee’s view about using GWP*?

Nigel Topping: I do not know that we have a committee view on it. I would have to go back to some of the climate scientists on the committee. There is a challenge in using mixed metrics. The whole international community and the IPCC use one approach. The Chair made a very valid point on the importance of methane given its shorter-term impact. We need to be careful that we do not pick and choose the metrics that we want to suit a particular argument. We need a consistent approach across the whole economy, but then we may use additional arguments to point to urgency. For me, that is the nub of the question. We need to be careful not to pick and choose but sometimes use an additional metric when we are making a supplementary argument.

Lord Trees: It affects comparisons of intensity of the emissions and comparing imported products with what we do in Britain, for example. So I think it has an importance.

The Chair: Thank you. We are at 11.30. I have two colleagues who would like to ask short, succinct questions, but I will defer to you, Nigel, given that we have used up the time that you committed to us.

Nigel Topping: It is fine.

The Chair: Excellent. Earl Russell and then Lord Duncan, please keep the questions short and succinct. Thank you.

Q13 Earl Russell: I will be very short. I think your answer might be that this is a question for Parliament. Could I ask you about the need to update our climate legislation? We have had a Climate and Nature Bill. You may well say it is a question for Parliament, but do you think it is something that should be on Parliament’s radar?

Nigel Topping: I do not have a strong opinion, to be honest.

Q14 Lord Duncan of Springbank: This straddles Earl Russell’s and Lord Krebs’s question. You are right that this is a political question. If you look at the deadline set for a number of high-emitting countries, including China, India and so on, it is not inconceivable that certain parties might wish to push our time deadline further into the future as a means of mitigating the immediate economic challenges. Is that something you can anticipate? Should the committee be alert to that as a potential prospect and be doing planning around something like that, or is that just outlandish?

Nigel Topping: That is not outlandish. We would need a specific request and resources. All the modelling is very complicated. 2050 is getting closer. I know it is still a long way away, but not in terms of capital cycles and technology cycles. You will know that our advice at the moment stops at 2050. We are through the investment costs of the transition by then and the benefits are accruing. Certainly, as a minimum, it is likely that we extend our economic assessment through to, say, 2060 so that we see a more complete economic picture of the benefit that we get from the investments that we make. Obviously, you always have to invest up front. The question of changing the target to go faster or slower would have to be a specific request from Government.

Lord Duncan of Springbank: That is helpful.

The Chair: Excellent. Thank you very much, Nigel Topping, for coming before the committee and answering our questions so openly. It should not be a surprise to you that there was a political element. You sit plumb in that interface between policy and delivery, so thank you very much for being with us.