Lord Goldsmith and Peter Hill.

Q1 The Chair: Good morning, everyone. Welcome to this meeting of the House of Lords Environment and Climate Change Committee. I would very much like to welcome the Minister of State from the Foreign, Commonwealth and Development Office and Defra, Lord Goldsmith, and Peter Hill, who is the CEO of COP 26.

I remind everyone that the purpose today is to explore what steps the Government are taking to ensure that all departments across government are embedding climate change considerations into their processes, to ensure that we have climate-credible policies and contribute to a successful COP 26 outcome.

There are a few housekeeping points. A transcript will be taken and will be made public. Both witnesses will have a chance to see it before it is published. This session is being broadcast live and will be made available to you via the parliamentary website. I remind Members, please, to declare relevant interests before asking questions.

Without further ado, I will ask the first question. In advance of this session we had nine submissions from government departments, where they were outlining their contributions, mainly trying to persuade us that they were demonstrating credible domestic policies on climate issues. I think we would say that some did it with more success than others. Minister, are you satisfied with departments’ efforts to date to develop climate-credible policies and to engage positively in the negotiations to support a successful COP 26?

Lord Goldsmith: Am I satisfied? I would always want departments to do more. My services are limited to a couple of years, so I do not have a lot to compare it to, but my sense is that we are in a much better place now when it comes to joined-up thinking across government. A bunch of vehicles have been created to try to make sure that is the case.

We have the Climate Action Implementation Committee, which you will know as the CAI, chaired by Alok Sharma, the COP president-designate. That looks at quite a range of issues—everything from delivery of COP 26 to domestic net zero and building up the UK’s resilience to climate impact. That is a very powerful machine that has regular meetings.

We have CAS, the climate action strategy committee, which is chaired by the Prime Minister and looks at our overarching climate strategy domestically and internationally. To be clear, when I talk about climate I am also talking about nature; the two are one and the same. Increasingly, we have reached a point where we see and treat them as one and the same. That is a big objective of COP.

Then we have NSIG. Peter might need to help me on this. It is the national strategy implementation group, which was designed and set up to deliver the whole-of-government approach to climate policy. Within COP, Peter has this responsibility but there are well over 200 people now from across government—Defra, BEIS, FCDO and Treasury—all working to deliver a successful COP. I believe it is the case that we have the biggest international diplomatic team, climate attachés and so on, that has ever existed with any country. So much of what we are trying to do is about lifting ambition globally.

There is a lot of stuff happening. I suggest that most of the meetings that are happening in government to talk about COP and related issues include people from all the key departments. You would not necessarily even know which department people come from. I am quite impressed by how the Civil Service, with the help of various politicians, not least the Prime Minister, has managed to create that network across government to ensure that there is cross-government thinking. That is not to say that every department has the same level of enthusiasm, but there is no push-back on the principle. The question is ambition. There are always discussions happening within government with a view to trying to raise ambition.

I hope I got the numbers right. Peter will correct me if I am wrong.

The Chair: Peter, would you like to add something to that?

Peter Hill: I think we may even be above 200 now in the central COP unit because we are growing as the event approaches. It is also worth mentioning that there are huge teams now across government in every relevant department. It is a very significant effort, as you would expect, given that this is the largest single political event that the UK has ever hosted, on arguably the largest and most important issue of our time, while of course having to manage some fairly tricky Covid-related challenges in hosting a large event. It really is a very significant whole-of-government effort.

The Chair: Thank you.

Q2 Lord Cameron of Dillington: Good morning, Minister and Peter. My question is very much along the lines you have just been talking about. How is NSIG working to pull all the departments together? Clearly, the climate change agenda has to permeate every aspect of our lives and therefore every department there is.

In my experience, departments tend to treat other departments like rival football teams. Somehow, we have to make them all work together. How effective has that been? Have you had to put out challenges? How have the challenges been reacted to? In the long-term future—because obviously after COP 26 will be important—how are you intending to push the co-ordination and the activities through? How effective is it going to be?

Lord Goldsmith: It is a very good question. It has been a concern of mine that we ratchet everything up in the run-up to this gigantic event that Peter is managing and that, afterwards, the brightest and the best who have been seconded to this endeavour will go back to what they were doing before. That has been an anxiety for me, but there are no plans to reduce, for example, our climate attachés overseas or to pull people away from the work they are doing.

There will no doubt be discussions about elements of that, but the reassurance I have at the moment is that we will not see a massive scaling back, or even a scaling back, after COP because so much of the heavy lifting will happen after that. The focus will shift, but not completely, back to our domestic action. We need to continue to keep the wheels going internationally. Commitments are being made that we will have to monitor. There is a huge amount of work to ensure that the private sector steps up. We are not going to have enough voices from the private sector at COP making the commitments that we need. I hope we will have a lot and that there will be an unprecedented number, but we will need to continue to build that momentum, almost exponentially, and for that we need to maintain the team that Peter has built.

You ask whether I have had to cajole other departments. My department is Defra. Obviously, I am not the Secretary of State but a Minister, but we, like every department, are cajoled. A lot of that comes from BEIS, which has responsibility for ensuring that each and every department has a credible plan for net zero. All departments have challenges, including Defra. Defra is full of people with real enthusiasm and total commitment to this issue, but there are still questions remaining about how. Defra is responsible for land management across the country; how do we deliver net zero? What do we do in relation to agriculture, which plays such a big role? In the waste sector, huge movements are going to be needed to reduce the carbon impacts in waste generation, treatment and disposal.

There is a lot of work to be done. There is no department that does not need to be continuously cajoled to answer those difficult questions and raise ambition.

Lord Cameron of Dillington: Peter, the Minister is well known for his great optimism. Do you support that? For instance, we have had problems getting a decent response from the Department for Education. How do you feel about all the departmental responses?

Peter Hill: I am obviously particularly focused on the international rather than the domestic from a COP perspective. I am sure you know this, but next year is our presidency year. This year, we have been the incoming presidency and next year is our presidency year. We have been working very closely with Chile. I know that we are going to work very closely with the incoming presidency. It is our job and our responsibility to manage the UN process. There is no question that, having organised an event, you can then pack up and say, “Thanks very much”. We will have to maintain that engagement over the year.

There will be a huge amount of focus next year on people implementing what they have said they are going to do. As we know, that is where the rubber hits the road and things get really challenging. There will have to be domestic support if you are trying to persuade people to make the energy transition, because so much of what you are trying to do and the expertise for that will come from domestic departments. If you are trying to convince people to speed up the rollout of electric vehicles, again that comes from the domestic. If we want to maintain a meaningful international effort, it will have to be supported by domestic departments.

The Department for Education—at least the bits I am responsible for—is very heavily involved in the youth and public engagement aspects of the COP. A day will be particularly focused on those aspects; I think it is the Friday of the first week. The Department for Education is front and centre working with us in leading those and bringing in Education Ministers from other countries and so on. At least as far as the COP is concerned, I think the DfE is very closely involved.

Lord Goldsmith: Chair, can I make one further point that I should have made earlier? We may come to this later. Obviously, COP 26 does not exist in isolation. We have COP 15 and other COPs. COP 15 is coming up, hosted by China in Kunming. A good climate COP is one that will have a direct bearing. If we get the right outcome from our COP, the next COP’s chances will be significantly boosted.

It works the other way as well. We need a really ambitious global biodiversity framework to be agreed at the CBD in just a few months’ time for much of the stuff that we are trying to do in the climate COP to be successful. Part of what we are trying to do is build as thick and as strong a bridge as possible between our COP and the CBD. Yes it involves working with China, but it also involves trying to get other countries and the High Ambition Coalition signatories to the Leaders’ Pledge for Nature, et cetera, to make good the soft commitments that they made through those various declarations. A huge amount of work is going on alongside this.

The Chair: Thank you for that, Minister. As you know, this committee is very fortunate in that the Lords has set it up such that we can look at both the nature and the climate change aspects together. You have kindly come before us already on the issues around COP 15. I know that we want to explore that further a bit later in this session.

Q3 The Lord Bishop of Oxford: Minister, I want to focus on finance and the Treasury. Could you give us an update on what the UK is doing to secure the finance commitments needed at COP, the role the Treasury is playing in that and the Treasury’s own commitment to the process?

Lord Goldsmith: The main commitment that the world is aware of and that has real value, and real symbolic value, is the $100 billion commitment that was made, I think in Paris. Nevertheless, it was made, and a very significant part of our challenge is to try to deliver that.

Peter will have more up-to-date figures because we see movement all the time on this. We have had some very big movements by some of the big donor countries. I hope I am not breaking a confidence, but we know the US has doubled its finance to $11.4 billion. The EU has committed an additional €4 billion over the period until 2027. Denmark has increased its contribution to around half a billion dollars. Sweden and Monaco have stepped up. Canada, Germany and Japan have really stepped up. A lot of countries are coming forward. All the G7 countries, incidentally, through the G7 communiqué, committed to increasing not just their spending but their adaptation spending, which is a really important part of this, particularly for climate-vulnerable nations and small island developing states.

I do not want to be unnaturally optimistic. I am not normally called an optimist, by the way. When you deal with environmental issues there is not always that much to be optimistic about, but I know that we are making very good progress towards $100 billion. I am going to ask Peter to tell you whether or not he thinks we are going to get to $100 billion.

Just before I swerve that particular question, the $100 billion is just part of it. We know that we need to massively increase finance for nature. We know that there are some high forest, low deforestation countries that we are incredibly grateful to, but we cannot take them for granted because a change of regime could easily change that equation. Until we find a way to make those living, breathing, healthy forests valuable in the short term—obviously the long term goes without saying—for local people, local communities and local economies, there will always be a sword hanging over them. That is a real challenge.

In addition, alongside many other countries and in line with the UNFCCC requirements or guidance, we have committed that there should be a balance between mitigation and adaptation. That matters for all the obvious reasons that I know you are very familiar with. I am more familiar with them now than I was, having engaged so much with climate-vulnerable nations for whom climate change is a reality. Clearly, they want us to do as much mitigation as we possibly can—they want us to throw the kitchen sink at it—but at the same time they know that their lives are being turned upside down and that that will get worse as a consequence of climate change. Therefore, they need to find ways of living with that change.

This is a really important part of it and we are doing everything we can to secure the commitments that are needed from other donor countries as well. It is not always easy, but again, in nature, as with so many things, we tend to have the answer. Are we going to come on to adaptation, or can I make one point on it now?

The Chair: We are going to come on to adaptation, Minister, but feel free. If you want to make the point, please do.

Lord Goldsmith: I was going off on a tangent; I will stop there. Peter, do you mind if I put you on the spot about the $100 billion? I know we are edging very close to it and we are doing well, but can you add more to that?

Peter Hill: I think you are absolutely right. As donors, we have collectively not done well enough. We have fallen short. The 2019 OECD figures showed that we were roughly $20 billion short of the $100 billion. I do not think anyone could have mistaken the clarity with which Alok Sharma has said that this is a matter of trust and that we need to deliver. He asked his German and Canadian ministerial counterparts to pull together a plan and a report for how, collectively, we were going to get there. That will issue before the COP in Glasgow.

As Lord Goldsmith says, it is the effort of every waking hour at the moment at all levels, from the Prime Minister down, to lobby donors so that we can get there as soon as possible. That is not yet done; it is not over, but we are making progress and I hope that in the not-too-distant future we will be able to show how we have done. Until that is signed and sealed and the report is out, I do not want to give the impression that it is all fine and sorted. We literally have a large number of people lobbying on all fronts at every level because it is so important to the developing countries and the negotiations. As Lord Goldsmith said, and maybe we will come on to this, the spend on adaptation and on nature within that is very important. We know that we are falling short on spending on adaptation collectively.

There is obviously a broader point, which is that the $100 billion, important though it is, is not the sum total of the answer. The sums that need to be mobilised are much greater. I think across the financial system we are seeing a real move as finance looks to move out of brown investments and into green. That raises all sorts of questions that you will be aware of: how do we account for that? How do we measure it? How do we monitor it and what are the standards? Those are all very important questions.

As regards regulators, asset owners, asset managers and businesses, I think there is movement across the financial sector, which we are pushing. Mark Carney is doing a lot on that, as is the Treasury. I think we are seeing progress in the IMF and the World Bank. I hope some of that will also be apparent this week from the annuals. I think it will be a big theme of the third day of Glasgow, the finance day, which will in particular be about the greening of the entire financial system to support those transitions.

I think there is real progress. There are loads of issues to resolve. On the $100 billion, we know we have fallen short, but I would not want you to underestimate how much work we are putting in to try to sort that problem.

The Lord Bishop of Oxford: Thank you very much. That is a more encouraging picture than we heard a few months ago.

Could I press a bit more for detail of what the Treasury is doing? One of the things that I have been researching over the summer, because of the energy issues that have been around, is whether the Treasury is engaging at all with the carbon fee and dividend type notion, to share out the burden of higher energy prices while needing to reduce fossil fuels in the future.

Lord Goldsmith: I am going to have to get back to you on the second question, because I am afraid that I cannot give you an authoritative answer. On the first question, just a few days ago a Treasury Minister was hosting a round table specifically designed to close that funding gap. There has been much similar engagement in the run-up to COP.

This really has been a whole-government approach. Peter will be the air traffic control, telling departments what they need to do and how they can add most value to the process. Just as a Minister with a particular interest in this issue, I had seen that the Treasury was there and stepping up. I was talking informally an hour and a half ago to a Treasury Minister and getting an update on what they are up to, and talking through how we might raise ambition still further in relation to nature, particularly our overseas finance. The engagement there is good.

The only thing I would add—this is probably inappropriate, but I am going to do it anyway—is that we have now, in the Chief Secretary to the Treasury, Simon Clarke, a person who is absolutely committed to the issues that we are discussing and has been for a very long time. I think he was one of the key people who led the campaign, which was a cross-party endeavour, to get the Government to make the net-zero commitment back in the day. That is very good news for us. Historically, the Treasury has often been a block when it comes to really stepping up and tackling these issues. When a real, proper ally emerges in the Treasury, it is something to be celebrated. We certainly have that.

The Lord Bishop of Oxford: Thank you very much.

Q4 Baroness Boycott: Good morning. This question is sticking on finance but more domestically. Earlier in the process of this committee, when we went round and asked various departments what assessments they had made of the costs and benefits of adaptation and mitigation, we found that we got some pretty weak responses. There was not much co-ordination and we felt that not a lot of thought and planning had gone into it.

Listening to your previous answer to the Bishop of Oxford, I felt more confident that in fact things had changed in the time since we received those letters earlier in the summer, and that maybe the departments themselves had really started to look at things. Could you give us an assessment of where you see departments understanding that they need to spend money, domestically and abroad, on areas of both adaptation and mitigation?

Lord Goldsmith: The abroad bit is not exclusively but largely FCDO. Clearly, BEIS has a big role to play in relation specifically to forest and REDD+. Defra has international spend, mostly around biodiversity. All of it, obviously, has a people component. All of it is about tackling poverty, which we know cannot be achieved if we do not also deal with nature.

On the international side, there is an international nature strategy. There is an international nature board, which is a government board. It is internal. It is very senior officials but not Ministers. I engage with them regularly. That is where the strategy is set that the three key departments will follow, each working to its own strengths but nevertheless following the same strategy. It is a relatively new thing. We do not have a huge pipeline of projects that I can point to and say, “This is what we have done and this is what we are going to do”.

It was not that long ago that we were spending about £10 million or £15 million on nature through our ODA. We now have the commitment from the Prime Minister that at least £3 billion of our ICF will be invested in nature-based solutions. There is non-ICF spending as well on nature. That mostly happens in Defra around Darwin Plus and things like that—the new programmes that we are about to announce or have announced: Darwin Extra, the biodiverse landscapes fund, the blue planet fund, et cetera.

Each of the departments is doing very different things, but they all clearly form part of an overall approach. I am happy with where we are going. I am not happy with where we are because we still have a lot to do to really ensure that we get the most out of that £3 billion. We have to spend it as well as we possibly can. There will no doubt be a bit of trial and error. There are no other countries that we can look to and say, “Look, they’ve got it right, we’re going to copy them”. On the contrary, I think we are probably leaders in this area. We are trying to get other countries to step up. France is more or less matching what we are doing on nature spend. I hope that we will have something similar from the Netherlands. Germany, Canada and Japan are moving in that direction. We are going from a position where there were virtually no international efforts around nature to significant sums of money. Some of that money will be spent badly. Some of that money they will struggle to deploy because it is zero to 100 in a very quick time.

In addition to all that, a big part of what we will be doing in COP is trying to raise private finance from the philanthropic sector—it is not just the philanthropic sector, but there is particular focus there. We had the Bezos Earth Fund announcement at UNGA. There will be other, even bigger, announcements to come at COP. I do not think I can go into the details, but there will be a lot more money for nature than has ever been available.

In addition to having a strategic and coherent approach in HMG, we are trying to work as closely as we can with other donor countries to ensure that we complement one another in how we invest. It is not yet done. It is not perfect. The architecture is being built. It is all happening very quickly and there will be mistakes, but it is incredibly exciting. It is a great problem to have. Please come back on the international side if that does not answer your question.

On the national side, every department has a role to play. Education has a massive role to play, as you know through your own work, by getting the environment into the curriculum and engaging schools as much as possible. I am not sure that it is as clear as it should be whose responsibility that is. There is a bit of work that happens in Defra. Rebecca Pow has been pushing it very hard. It is an area that she is particularly interested in and rightly so. There are responsibilities with the Department for Education for ecological literacy. It is around the edges. There is a lot more work to be done in really ensuring that the thread of environmental awareness and action runs through the educational system. That is the basis of many discussions, both now and undoubtedly in the future, with the Department for Education.

I think you were asking specifically about finance. The Treasury is the source of all the dosh. We have negotiations happening now. One of the reasons why I was talking this morning to a Treasury Minister was the spending review. I hope that the spending review will at least get closer to closing the gap between where we are and where we need to be in financing nature.

In the meantime, we have the nature for climate fund of £640 million. That is almost all for trees, natural regeneration and natural assisted colonisation. It is also for restoring peatlands, but it is not going to be enough. It is a stopgap measure until we get right the new subsidy system that replaces the common agricultural policy, and on which I and many other people are pinning a lot of hope. We have to get that right. If we do, it becomes a major engine of renewal, the likes of which we have never had in the past, even anything remotely close. That is a very important part.

Baroness Boycott: Can we go a tiny bit further into some of the other areas, such as transport, building and all the other things in big infrastructure? Where do they see their commitment to adaptation and mitigation, and the funding that they are putting in for that now? All these things are coming towards us very quickly.

Lord Goldsmith: On transport there has been quite a lot of movement, partly in response to Covid, where we have seen record investment in active transport—I forget the term—such as cycling, walking, et cetera. Apologies if this is wrong, but I think the original commitment was £2.9 billion from the Government to invest in active transport in a way that we have probably not seen before. We have brought forward our commitments—in other words made them earlier—to phase out the internal combustion engine; 2035 is the cut-off point, after which we will not be able to sell them. We could easily exceed that. At the time everyone said it was unrealistic, but the movement in the market is such that I think it is likely that we will get there earlier. On the back of that commitment and similar commitments that other Governments have made, we are seeing the car companies really falling into line. General Motors, Volvo, Volkswagen, et cetera, are all making commitments.

It is not all about money. The Government’s job, yes of course, is to provide money where the market cannot. It is also to create the signals and make sure that existing money flows in the right direction. That is obviously true domestically, but it is just as true internationally. We could quadruple or multiply the amount of money we are actively investing as a Government in nature and climate, but if we do not get the systemic changes as well, and if we do not stop the market investing in destruction, we are always going to be playing catch-up.

I have one example from a previous debate; I may even be quoting you. The top 50 food-producing countries spend around $700 billion a year subsidising or supporting often mostly destructive land use. That is four times bigger than the world’s aid budgets combined. We can keep increasing the amount of aid we are spending on nature, but if we do not deal with that we will always be going downhill.

A huge part of what we need to do is ensure that the mainstream of money flows in the right direction and not towards destruction. That is a massive challenge, but it is probably the most important challenge of all. It is not all about government money, subsidy and grants. There is a lot more to it than that.

Peter Hill: May I come in on the international side? We are very conscious that the bulk of climate finance at the moment goes towards mitigation and that not enough goes towards adaptation, which is a particular priority for poorer and more vulnerable developing countries. Getting private money into adaptation tends to be more difficult than getting private money into mitigation. We have made a priority in this COP of trying to get adaptation on an even footing with mitigation. With a number of other donors, we launched at the UN General Assembly a month ago a high-ambition group on adaptation finance to encourage more countries to aim towards balance. I am sure that that will be one of the themes of Glasgow and will continue afterwards.

We are not starting from where we want, but that is one of the priorities for us because it is so important and we know that the need is growing really strongly. We are at roughly 25% of the $100 billion being adaptation finance. We need to do better collectively.

Q5 Lord Whitty: Thank you, Minister. You have given a pretty positive view of the degree of cohesion across Whitehall and in all departments, with the resources and expertise that have been put in. It is not so evident in individual policy areas.

Have you given consideration to a robust system of net-zero assessment of all policy lines, both ongoing and new, so that we will be able to assess department by department, but more specifically policy area by policy area, what their contribution to net zero is, with possibly similar measures on adaptation and nature? Has that been considered? At the moment, a lot of policy areas have, at best, anti-warm words—I was going to say warm words—but very little measurement of what the totality of the policy is actually delivering?

Lord Goldsmith: It is a valid question and I am not going to disagree strongly with you because there is a lot that the Government still need to do. That is the purpose of the road map to net zero: each and every department of government has to contribute to it, and it will be published imminently. I do not know if there is a date—Peter might chip in, or I might be sent a note—but that is the purpose. Each department of government has to demonstrate how it will contribute to net zero.

There is some low-hanging fruit, of course, but there will come a moment when the easy stuff has been done and it becomes very difficult. It is at that point that the inconsistencies that you are alluding to become much more apparent. I am not going to pretend that those inconsistencies are not there. Of course they are there. There are things that the Government do where nature is not sufficiently taken into account. There are transport decisions taken where climate is not sufficiently taken into account. We have upcoming planning reforms that will be absolutely crucial because currently the planning system does not sufficiently take nature into account. There are a lot of things that need to be done.

The Environment Bill, which obviously you are very engaged in, will provide the apparatus we need to move significantly in the right direction, but a lot of other stuff that needs to happen as well. I imagine that when the planning reforms come to the Lords, for example, there will be very robust debate. The process is in the hands of Michael Gove, who I think most people recognise was a very effective Defra Minister who understands these issues. I am very optimistic about it, but again we are at the very early stages.

Those inconsistencies are there, but by requiring each government department to demonstrate how they are going to do their bit for net zero, not just in a woolly aspirational way but in real terms—how they are going to do it and then measure what they have done—it is flushing out the difficulties. That is when you start to see policy decisions in a different light. I have already seen that in Defra in internal discussions, where the threat, or however you want to describe it, of not getting to net zero is absolutely ever present, and where a decision taken now that would make that harder is a decision that is much less likely to be made than it would have been before each department of government was required to engage in the process.

I am not going to pretend that we are there yet. I think the structures are in place, not least putting net zero into law and signing up to the most ambitious NDC pathway of any developed country. The structural changes and sticks that have been put in place are being very effective in sharpening the various minds in government who will have to meet those targets. That will throw up difficulties, but it will also ensure that some decisions that might have been made as a default are less likely to be made now.

Lord Whitty: I am still not clear from that, Minister, whether you recognise the need for a more effective assessment of policies. You say the structure is there, but where in the structure is it? Which organisation is going to hold departments to account for the net effect on emissions, say, of their policies? Are you assuming it is the OEP? Will the Treasury do it? Where does it rest with sufficient authority to ensure that all policies genuinely follow it?

Lord Goldsmith: Obviously, the OEP is not within government. Within government, I mentioned the CAI—the coming together of Ministers—and the PM-chaired climate action strategy committee. We have the NSIG, which I think Baroness Parminter mentioned, or maybe I mentioned it, which is designed to create that whole-of-government approach. It is a very rigorous process. The Government have already signed up to net zero. The Government have already agreed and signed off on the NDC. We have agreed our 2035 cuts. That is not what those committees are about. That is done. Those committees, particularly the NSIG, are designed to ensure that we now follow up those commitments with steps that enable us to meet them. Internally, that is the machinery that I hope will deliver, and is certainly designed to deliver, the commitments we have made.

Outside government, yes, there is the OEP. The OEP’s job will be to hold government to account principally to the commitments that are legally binding. Where the Climate Change Committee, for example, provides guidance, the OEP can choose to do whatever it wants because it is sufficiently independent. The OEP might bash the Government over the head for not taking that advice. Where the Government are legally committed to net zero or soon, once the Environment Bill becomes law, our 2030 targets on biodiversity, yes, the OEP will be the organisation that can hold the Government to account and, if necessary, haul the Government through court.

Lord Whitty: For example, in the Budget in a couple of weeks’ time, will there be a net figure for the total effect of fiscal changes on the achievement of net zero? When we sign a new trade agreement, will there be a net-zero computation that somebody with authority can double-check for the individual department’s commitment to it?

Lord Goldsmith: There was a lot of coverage, as you will remember, around the Australia trade agreement. The Australia trade agreement will reference very clearly the Paris Agreement, which has within it a recognition of the need to stay within 1.5 degrees. I personally think that there was a lot of anxiety that was misplaced and unnecessary. To do a free trade agreement with Australia and have climate change bang in the middle of it, with the Paris Agreement, was a step forward. It was a good thing. That is a theme that will run through all our new trading arrangements in a way that is quite progressive. Of course I would like us to go further; any environmentalist would. That is a live issue within government, but I think the reports were unfair and not right. They left people with a misleading impression.

I cannot answer your question about the Budget. I wish I was writing the Budget, but I am not and I just cannot tell you in advance what the details will be. I can say that sooner rather than later it will have to be the case that in this country, as with others, such budgets will need very clearly to be linked to our overall climate ambitions and nature endeavours. There will have to be a very clear link. The climate and the environment are not separate boxes to tick. They need to be absolutely central to every decision made by every department of the Government, including the Treasury. Whether the answer to your question is yes or no, it will have to be yes at some point pretty soon if we are to move significantly or adequately in the right direction. I am afraid I do not know the answer to your question and I am not going to ask Peter because I know that he will not know either. Unfortunately, he does not have his fingers on the till in relation to the Budget. I am afraid I just cannot answer that.

Lord Whitty: We do not need to know the details. We know that the OBR will comment on the economic effect of the Budget. Is there someone commenting on the climate effects or the nature effects of the Budget? Who it is could be quite important.

Lord Goldsmith: That is something that the OEP will do once it is properly up and running. That would be within its remit, unless it decides that it is not useful, but I would find that very hard to believe. That is precisely what the OEP exists to do. It will go through and look at the contradictions, the good, the bad and the ugly in the Budget, and it will report publicly. It will do so in such a way that the Government have to respond. It will be able to hold the Government to account. I suggest that for both the Opposition and external campaign groups it will be a very powerful tool.

Lord Whitty: Thank you.

The Chair: Minister, could we probe a little more on the analytical expertise within departments? Are the Government clear that there is that analytical expertise? Has someone done a review of that? If not, why not? If they have, will there be extra resources, extra training and other support to ensure that departments have the analytical expertise to measure up their potential policies against net-zero objectives?

Lord Goldsmith: It is hard for me to give you an authoritative answer because I cannot tell you about the personnel or even the level of expertise in departments outside Defra. What I do know is that every policy decision made in departments is made against an estimate of what impact it will have in relation to climate and, increasingly, to how it directly relates to our new commitment to reverse or halt biodiversity loss by 2030.

Do we have enough expertise in all those departments? I do not know, but if we do not, the Government will have no choice but to scale up. It is for departments to decide whether they lack expertise or have expertise. It will have to be there, if it is not already. I cannot guarantee to you, I am afraid, that every department has enough expertise and is capable of providing exactly the analysis required. Clearly, that will have to happen, if it is not already the case that departments are scaling up.

Do not forget that the biodiversity target that we set will become law. We can both be pretty sure that it will not be blocked; there is a majority for it. When the Environment Bill becomes law, an Act, there will be a binding target. That is pretty new. It was added only quite late in the day to the Environment Bill. Every department of government has a direct bearing on biodiversity and nature in one way or another. I would be surprised if they are absolutely and properly in place to be able to do their part to meet that target, but they are going to have to because it is only eight years. It is a very serious challenge. It will be very difficult and it will require every part of government to do its bit.

Q6 Lord Lilley: I want to follow on from the points raised by Baroness Boycott. The previous 25 COPs have produced no discernible impact on the steady growth of CO2 in the atmosphere, if you look at the chart. It has continued to grow and neither individual COPs nor collectively the previous 25 COPs have produced any slowing down.

Obviously, you hope that your tremendous efforts may achieve a difference at the 26th attempt. If it does not and the rest of the world, particularly the developing countries of east Asia and south Asia, soon to be joined by Africa and Latin America, continues to put the growth of its economies ahead of the desire to reduce emissions, would it be sensible for Britain to continue to spend trillions of pounds reducing its emissions to zero rather than devoting that money to adaptation to the effects that the rest of the world is bringing in its train?

Lord Goldsmith: I take issue with the premise of the question that the heavy lifting is being done only by countries such as the United Kingdom and the developed world. By the way, I agree with you very strongly about the lack of movement that we have seen following previous COPs, but I think Paris was a breakthrough. Paris provided a framework. The job now is to make good on the commitments that were made at Paris. Our job is to make sure that all the commitments that were made are now followed up by more granular commitments and a demonstration of how we are going to meet those aspirations.

If you look at some of the commitments that are coming from other countries and less-developed countries, they add up. It is not enough, and I do not pretend that it is. If you put all the commitments together they do not yet add up to enough, but we are moving very quickly in the right direction. We had a commitment from China, which I think surprised a lot of people, that it will stop funding new coal plants outside China. Japan and South Korea have made similar commitments. Between them I believe they represent 90% of funding for new coal power plants overseas. That is a very big and significant commitment.

Pakistan, again taking people by surprise, committed to building no new coal plants in Pakistan. We think that the Philippines, Malaysia and Indonesia—Peter might update me—are moving in the same direction. A lot of stuff is happening that is making very significant steps within the low-carbon transition that the world has to go through. It is not the case that it is just the UK, the European Union and more recently the US doing the heavy lifting.

The second thing is that it is not all about direct emissions and technology. Technology is no substitute for natural systems. That is why we are focusing so much on nature. We are one of the most nature-depleted countries on earth, as a consequence, partly, of our absurd subsidy system that thankfully we are now able to get rid of. It was literally subsidising, using public money, the degradation of the public good—the biodiversity of nature. Other countries in the world have not done that. Gabon is 89% forest. Colombia—I forget the figure—has the third-largest share of the Amazon. Ecuador and Brazil are in a place where we completely depend on them. Our relationship with them has to be one where, one way or another, we provide some kind of financial recognition for the ecological services that they provide by not destroying their forest, on which we completely depend.

The third point is that it is not either/or; it is not either deal with climate change or grow your economy. It is inconceivable that we will not go through this low-carbon transition. You would have to be pretty brave to bet that in 20 years’ time we are going to have something like the same fossil fuel global infrastructure that we have at the moment. The market would certainly suggest otherwise. President Trump tried very hard to keep the coal industry going on his watch, but it declined faster on his watch than it did under President Obama.

We were told to expect offshore wind to reach parity in 2040 or 2045. That was generally accepted and was an internal government view as well. We are very close, within the next year or two, maybe three years, to reaching that point, over a decade earlier than anticipated. All the trends in relation to solar power are the same. The transition to electric vehicles is happening far faster than people anticipated. I think that our 2035 target will look a bit silly at some point. The car companies will just make that transition because it is an economically sensible thing to do.

For us to decide that we are not going to deal with climate change and we are going to cling to this old system, which will probably be obsolete in 20 years’ time in any case, would be a huge strategic error, let alone an ethical one. It would be a strategic economic error. We would be miles behind in a world that had left us behind, and we would have failed to take advantage of the opportunities that naturally and unavoidably will be there in what is one of the biggest economic transitions, if not the biggest, this country and the world will ever have experienced. Within such transition, there are opportunities. For me, it makes sense that the UK should be trying to tap into and take advantage of those opportunities. Let us go out and be the world leader in offshore wind. We pretty much are, I think, but let us cement that position—although cement is the wrong analogy.

In battery technology, carbon capture and storage and other forms of renewable energy, we are in a good place in the UK, and there will be advantages to us from that. We would be mad to turn away. It feels to me that doing so would be like pouring public money into keeping fax machines going at a time when people use email. That is also a clumsy analogy, but it does not make sense from an economic point of view, in my view.

Peter Hill: Could I say something about how it looks on the international side? My impression is that this transition is happening, and it is going to happen. The only question is the speed of it. I do not think there is any plausible scenario in which the transition does not take place, as Lord Goldsmith said. There are a couple of reasons for that.

First, the costs of the transition keep falling and the costs of not transitioning keep going up. That is true when you look at the cost of renewables such as batteries and managing grids based on renewables. The second is that impacts are now being felt. They are not a distant prospect; they are a now prospect. That is having an impact on politics everywhere.

That has led to a change in appreciation in many countries that this is not a zero-sum game, which is that adapting to climate change is a burden imposed on the developing world by the developed. There is still some of that around, but if you look at what leaders in many developing countries are saying, they know they are going to do this and they have to do it. What they want is support and finance for it, but it is not a simple analogy of, “This is a burden; you have to pay us”; it is, “We need to make this happen for our own sakes”. If you compare that to where we were two years ago, I agree that the picture was not rosy; I think less than a third of the world had committed to net zero. Now, getting close to 80% of global GDP has a net-zero commitment.

It is perfectly reasonable to be a bit sceptical about long-term commitments without short-term action, but I do not think we should discount the fact that people are now making those commitments. The fact that they have been hard fought shows that they have not been lightly made. The challenge for us is not only to get the commitments but to get people to take the short-term actions. One of our big focuses as a presidency has been: what are we doing this decade? Without action in some areas, this decade and the longer term is very hard to manage.

As Lord Goldsmith says, you have to do both mitigation and adaptation. If you do not get mitigation in a better place, I cannot, myself, see how you are going to be able to finance the costs of adaptation to a 3 degree world. It just does not seem plausible to me. We already see signs of concern about that in the developing world when they talk about loss and damage. Why are they talking about loss and damage? It is because they are concerned that you cannot adapt to some of these threats. The potential costs of that are extremely high.

As Lord Goldsmith said, I do not think it is either/or. We know we are likely heading for 1.5 degrees. The challenge is to limit it. In that world, there is already a lot of adaptation cost, but beyond that I struggle to see where the funding from public or private sources will come from if you really think that a 3 degree world is one we could manage.

Lord Lilley: I admire your optimism. In fact, I find it breath-taking. Do you work within a cost envelope as to how much we are allowed to commit Britain to spend to meet its net-zero contribution, even if others do not do likewise?

Lord Goldsmith: Do we have a government cost envelope? I am not in the Treasury. I do not deal with all departments of government. I have my own portfolio, so I cannot tell you what the global government figure is. Does the Treasury have a sense, or better than a sense, of what costs will be required to accelerate the transition in the way we believe it needs to happen? I have absolutely no doubt that that exists, but I am afraid I cannot give you those figures.

BEIS is the department of government responsible for driving progress towards net zero across all departments. It is effectively HQ for net zero and is closely involved in spending review bids from departments in the context of net zero. For example, if Defra needs more money to restore more peatlands, plant more trees or tackle the waste issues that I mentioned, BEIS will be very closely monitoring that. The request from Defra will go to the Treasury with a view to having a whole-government approach to what net zero requires and what net zero is going to cost.

Peter Hill: As an addendum, there are three things. The CCC has obviously come up with its own assessment of the costs of getting to net zero, and I think those came out in the summer. I think the Treasury is planning to publish the net-zero strategy before COP. There are also the costs of net-zero work that the Treasury has been leading.

The third thing is that from a global perspective the costs are obviously lower for everybody if you do this through collaboration. It is true nationally and internationally. Whether you are talking about renewables, hydrogen, aviation or maritime, if you can collaborate, you bring the costs down and move faster. It is one of the reasons why we focused, in our presidency, particularly on the science and innovation side and on bringing communities of countries and investors together to try to accelerate those transitions and bring the costs down. We launched a number of those earlier this year, and we will launch some more of them at Glasgow when leaders come together on the second day.

Lord Lilley: Is that not equivalent to saying that those who act first face the highest costs, and those who were somewhat slower get the advantages of technological change and lower costs?

Lord Goldsmith: All our estimates have been wrong in relation to costs. It is amazing how wrong we have been. Every internal UK Government prediction in relation to the costs of transition has been massively out and massively pessimistic, whether that is offshore or onshore wind, solar or the reducing prices for electric vehicles, batteries and so on. The European Commission’s predictions in relation to the uptake of solar in the UK were out by about 15 years. It is very hard to know or to predict where the market is going. The market is so far ahead of the politics.

My view is that the job of the politician is to try not to force the market but to accelerate it. You can take politicians out of the picture, but this transition is still going to happen, as Peter said. Everything points in that direction. The question is one of speed. My view is that the Government’s job, and internationally other Governments as well, is to do what we can to deploy the levers where we can to accelerate that transition. Key to that is not also, at the same time as talking about moving towards net zero, using public money to take us in the opposite direction. We are one of the biggest contributors to the multilateral system. We put money through the World Bank and other multilateral development banks. Those organisations continue to fund initiatives, projects and infrastructure around the world that take us in the wrong direction. That is something we need to reconcile.

As a major donor, we should and can be much more robust than we are being. It is not all about new money. A lot of it is about making sure that the money that is already being spent by Governments or with Governments is spent in a way that takes us in the right direction and is not taking us backwards. That applies as much to carbon transition as to nature. It is one of the reasons why I am pushing, along with colleagues in other countries, for the multilateral development banks not just to commit to go carbon neutral but to go nature positive. Until they do they are part of the problem, and I think we should be explicit about that; the World Bank today is a major part of the problem. Moving it is a major part of what we are trying to achieve, and, likewise, some other multilateral development banks as well. It is not all about new money or about subsidy; it is about having a more intelligent and coherent approach.

The Chair: Thank you, gentlemen, for that exchange. I have to bring it to a close so that we have time for the remaining questions we need to cover. Perhaps we could move to Lord Puttnam.

Q7 Lord Puttnam: Minister, I am genuinely impressed by your response to Peter Lilley’s first question. I have known you long enough—30 years—to know how sincere those views are. They have not changed. That is admirable.

I am going to ask you one very straightforward question and then a slightly more complicated one. The straightforward one is: what are government departments doing to contribute to and to implement a public engagement and communications strategy for COP 26?

The more complex one is this. I come from a world where I lived and died by my ability to have a plan B, every single day, making a movie—every day. What is plan B in the event of COP 26 being a visible disappointment post-Paris? Which department or departments have responsibility for contingency planning should the impacts obviously rise to over 2% of warming?

Lord Goldsmith: On the first part, I would be surprised if there has ever been an event that the UK has organised where there has been as much engagement as we have had on this from Ministers and junior Ministers. There have been hundreds and hundreds of bilaterals. I have a note somewhere—I was amazed by the numbers—that the CPD has spoken to 85. Actually, I do not want to make the numbers up so I am going to see whether I can find them. I do not need to give you the figures. There has been an enormous amount of country engagement by the Prime Minister. Every discussion he has had has involved doing some heavy lifting in relation to COP 26, as well as the CBD hosted by China. As you can imagine, he has spoken to Biden, to Macron, to Modi, to Morrison, to Trudeau and the President of the European Commission—to everyone. In every one of those calls he has a number of asks that are relevant to the discussion we are having at the moment.

The current Foreign Secretary has been there for only a very short period, but she has already had bilaterals and engagement in New York, in the UN General Assembly and in Washington. She has had numerous calls, all with the purpose of trying to raise ambition in the run-up to COP. Of course, Ministers across government have had many calls, and I have been particularly involved in that, mostly around the issue of nature and COP. We have been trying to raise ambition with difficult countries and trying to form partnerships with ambitious countries, trying to get donor countries on board. I have worked very closely with John Kerry and with the GNU—Germany, Norway and the UK—forest partnership. We hope to make a really big announcement at COP.

There is a lot of stuff happening Government to Government. There has been a lot of engagement, particularly with youth. That is particularly important. It is difficult to do that in a way that is authentic and not just box-ticking or patronising, but I think the CPD, Alok Sharma, has struck the right balance. A number of organisations and coalitions have been established, made up of young voices who are not told what to do or directed by the centre, but are there to add their advice, to be heard and to influence the agenda. It is hard to know which policies have been shifted by that process, but what is very clear is that the passion and the energy is contagious. That is one of the principal values that can be brought by involving young people who really understand this. They see it very clearly.

We are very keen for the COP itself to ensure that indigenous voices are not just heard but listened to and that indigenous people feel that they are listened to. Indigenous people have shown after centuries that they are pretty well placed to know what we need to do to protect natural environments. They are politically at the bottom of the ladder. They are persecuted by Governments in some parts of the world. They need and want support, and they need to be empowered to do what we know they are capable of doing. It is not a coincidence that a third of the world’s intact forests are inhabited by indigenous people. There is a reason for that. Likewise, you can make the same point about carbon and biodiversity.

On engagement, a pretty impressive frenzy of activity is happening. I think we are in a good place in relation to voices that do not often feel that they are heard. The other huge constituency, which is a particularly important one—Peter touched on this—is the climate-vulnerable nations. They are the countries, particularly small island states, that, having contributed very little to the problem, are overwhelmingly ahead of us in mitigation policies. It gives them an extraordinary moral authority when they speak because they are on the front line. They are the ones that will be hit hardest. They are the ones that are already being hit by storm surges and changing weather patterns, with the increasing intensity of weather events making agriculture difficult. For that reason, they also have a real insight into the solutions.

In Colombia, it is very measurably and clearly the case that, when a hurricane hit a year or so ago, the homes that existed behind the natural barrier of mangroves or corals were protected. They were not affected, whereas homes that either were protected by concrete defences or had no protection at all, where the mangroves had been grubbed out, were not. When you talk to climate-vulnerable nations, they know what we need to do. They know where the answers are, but they have never properly been given the kind of platform that they need, in my view.

Lord Puttnam: I totally agree with that. I also agree about the amount of enthusiasm, particularly among young people, that is being generated. I am trying to address something else. If that enthusiasm is disappointed, who is doing the “What if?” thinking? Who is going to address that and pick people up off the canvas? What is plan B?

Lord Goldsmith: All our energy has to be to have a successful COP. I know this will sound like a political answer, but we have to deliver the very best we can deliver and use every single tool we have. There will be lots of good news. There will be lots of good things that happen, but will we have closed the gap between where we are and where we need to be? Definitely not. There will be disappointment. There is no doubt about that, but this is not the end of the process.

For us, taking the responsibility for hosting COP is not just an event; it is the beginning of something that will endure. This is something we take very seriously. The whole of government has been infected with enthusiasm but also a sense of urgency. We will continue, and where we do not get a particular company, financial institution or country over the line, that process, that lobbying, that cajoling will continue long after COP.

CBD happens just a few months later. We need CBD to be successful, otherwise our aspirations that we sign up to at COP will be meaningless. We have to work with China. We have to get other countries to step up. It is a continuous process. I suspect it will extend far beyond the CBD as well in the need to continuously raise ambition.

Unfortunately, I know that there will be people, including us in many respects, who will be disappointed by aspects of COP. We have already moved things pretty dramatically in the right direction, and will continue to move them. I think that COP will represent a turning point, not just for net zero but, just as importantly, in relation to nature.

Lord Puttnam: Thank you very much.

Q8 Baroness Young of Old Scone: That leads to the question I want to ask. As you said, Minister, we cannot solve climate change without solving biodiversity loss. The links between COP 15 and COP 26 will be really important. The Kunming process is looking a bit limp at the moment. The declaration does not really set up any measurable goalposts for taking forward the discussion in April.

When we had the Chinese ambassador in front of us, he was very clear that Britain’s interference in what he called domestic Chinese issues was getting in the way of good relationships between us and the Chinese over COP 15. What are the ways of getting lasting links between the two processes, and how confident are you that we can work with the Chinese in these circumstances?

Lord Goldsmith: It is a very difficult question. I think the UK is quite good at talking to other countries positively on some issues even while we might disagree on others. China takes a whole-government approach. If there is a disagreement between two countries on one issue, that means it is very hard to discuss other issues. That is just the nature of the way it does things. I am not an expert, but that is certainly my experience. That is a problem and it makes conversation difficult.

The Chinese Government are very clear about the need for links between COP and CBD. That has been acknowledged very clearly by President Xi. The Kunming Declaration, which the UK worked on with China, absolutely recognises not just the synergies but the absolutely necessary links between COP 26 and COP 15. Alok Sharma went to China in September and had extensive and deep discussions with China’s special envoy on climate change, Minister Xie, who also has oversight for issues relating to nature. Those talks, according to the reports that I got back, were very positive.

There has been a lot of engagement recently. It feels to me that we are in a much better place than perhaps we were when you had that discussion with the ambassador. The Prince of Wales delivered a very strong message for the leaders’ summit that China organised just three days ago. We have had Treasury Ministers working with China to see whether we can collectively raise ambition around finance to try to close the gap that we were talking about earlier. I spoke at the round table on biodiversity hosted by China. Professor Dasgupta has been very busy. Mark Carney has been very busy. There has been a lot more engagement than there was before. That is very positive. I think China recognises that this has to be a success.

The last thing is that China is the host, the convener of Kunming, but it can deliver only what other countries agree to, which means that working with other countries is just as important. That is why the UK has been very actively involved in growing the High Ambition Coalition, and trying to create coalitions of real ambition with Costa Rica, Gabon, Colombia, et cetera, to try to really raise ambition there. That coalition has grown. It is why the UK not only helped to draft the Leaders’ Pledge for Nature but has used it as a campaign tool effectively. We got over 90 countries to sign up to it. It is a very ambitious document. We are using that to try to explain to those countries what they need to do to make good on the commitment they signed up to through the Leaders’ Pledge for Nature.

We are pushing 30x30. I should know the number, but we now have more than 90 countries signed up in one way or another and committed to 30x30, which is protecting 30% of the world’s land and ocean by 2030. We have our forest declaration, which is a Glasgow process. It will absolutely be picked up, continued and grown in the run-up to and at the CBD.

I am not pretending that this is easy. There is an enormous amount to do to make sure that we have the highest possible ambition and that targets are agreed at the CBD, so that the global biodiversity framework is what it needs to be to match the scale of the crisis. We must have the mechanisms agreed that will allow countries to be held to account, otherwise we will just have a repeat of the Aichi targets that countries signed up to and then missed. Then there is the finance question. So many of the finance commitments that we are delivering for COP are actually finance commitments that are going to be more relevant to the CBD, particularly the philanthropic money that we are raising.

Everything we are doing is about trying to enhance the links between the two COPs and to work as closely as we can with China. I feel that things are in a much better place than they were even a few weeks ago. I am going to ask Peter to come in, if he does not mind, because he is on the front line of the negotiations. It feels to me that the growth of ambition within things like the High Ambition Coalition as such means that we are almost getting to a point where we will have a critical mass of voices calling for the highest possible ambition. Then it becomes more inevitable. China is certainly not blocking the ambition that we are pressing for.

Peter will probably come in with a slightly more diplomatic answer.

Peter Hill: I completely agree; these are mutually supportive but distinct processes. That is how we are running them and that is the right way to do it, particularly when you think about the forest and land use dimensions, sustainable agriculture and what we will be doing on oceans. Obviously, they are in support of the framework of the UNFCCC, but they are directly relevant to the CBD work.

On China, Alok Sharma was there in September. As you probably know, it is quite difficult to travel to China. There are quite a lot of protocols in place, but he managed to get there and spend a good amount of time with the Chinese lead. He is having regular calls.

On the COP dimension, we have a productive exchange with the Chinese. As you would expect, there are issues and some challenges, but we are talking to each other. It is generally, I would say, a good and productive relationship.

The Chair: Thank you for the question, Baroness Young, and thank you, gentlemen. I am afraid I have to bring this session to a close because we have come to the end of our time. We are awaiting some letters sent to the department by Alok Sharma outlining their role in COP 26, but once we have received those we will be reviewing the evidence we have heard from you both today and the evidence submitted by the nine departments, and then writing to the Government. I thank you both, Lord Goldsmith and Peter Hill, for your clarity in your answers today. I now formally end this meeting. Thank you.