Mr. Tam Dalyell (Linlithgow): My hon. Friend has been very candid and well informed in speaking to the House, but how can we duck the question that to achieve those objectives, nuclear capacity will be needed?

Mr. Chaytor: If over the past 50 years a fraction of the public investment that has been made in developing nuclear energy had been applied to developing renewable energy and energy conservation, we would not now need nuclear energy. I think that there is a future role for nuclear energy, but all kinds of questions surround that role, and I do not think that it will be as large as the role that nuclear power now plays. I repeat that at the moment, for reasons of safety and sustainability, I do not believe that there is a strong argument for an expansion of nuclear power.

On the domestic front, the climate change levy is one of the most important economic instruments at the Government's disposal. My right hon. Friend the

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In that context, I draw attention to renewables, to combined heat and power, to the recycling of the revenue from the levy into energy efficiency, and to the need to protect small businesses. If the levy is to be generally accepted as a sensible measure, it must operate with consistency. It would be inconsistent if renewable forms of electricity were subject to the levy to the same extent as other forms, as that would undermine the part of the industry that, by definition, is contributing to the solution rather than causing the problem. A similar case can be made for combined heat and power because of the additional efficiency of CHP plants, although clearly such plants generate significant emissions.

The Government have been at pains to stress the revenue neutrality of the whole operation of recycling revenues. Some £50 million has been set aside for investment in energy efficiency schemes, and there is a strong case for increasing that allocation. It would be self-defeating if the demand for investment in energy efficiency schemes could not be met because of arbitrary limits on the share of climate change levy revenues to be recycled. In the long run, of course, recycling the revenues into energy efficiency could be more productive than simply providing national insurance rebates. However, the key aim underlying the levy must be to deliver whatever form of recycling of revenues will achieve the most effective reduction in CO ₂ emissions.

Although the domestic programme is important, when the Government draw up their final strategy, we must accept that whatever they can achieve domestically depends on international developments. However radical our local programme in this country might be, global climate change will not be halted or even slowed down without international agreement. In no other context is the limitation of the power of the nation state in today's inter-dependent world more obvious, or the need for international co-operation through international institutions more important.

Therefore, I wish to comment on the state of negotiations on the Kyoto protocol, which will be enforced only when the signatory nations choose to ratify it. Currently, there is a problem with the position of the United States and of the major blocs representing the developing countries. The Americans will not agree to reduce emissions unless the Chinese and others agree to a reciprocal reduction, while the developing countries do not see why they should have to prejudice the chance of economic growth when the problem of climate change has been created by emissions from the industrial countries. It is crucial that we find a way forward to which the Americans, the Chinese, the Indians and the African nations can agree.

In many analysts' opinion, a policy of contraction and convergence provides the way out of the logjam. Under such a policy, each nation would be allocated a quota of emissions based on population, and set in the context of agreed environmental limits. Over time, industrial nations would be required gradually to reduce emissions, while

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That seems to provide the only practical and principled resolution of the conflicting interests of the developed world and the developing world, based on equal rights for all human beings. I urge the Government to present the case for contraction and convergence as a realistic means of facilitating the ratification of the Kyoto protocol. I commend the research conducted by the Global Commons Institute in developing that model.

Another issue related to the Kyoto protocol has to do with the so-called flexibility mechanisms, and in particular with the use of emissions trading, whereby countries can buy pollution credits from other countries. Realistically, that is a necessary device to enable the United States to ratify the protocol and achieve some progress in reducing emissions. However, unless a framework of contraction and convergence is agreed, there remains the problem of the proportion of any country's total emission reductions that can be achieved through emissions trading. Above a specific figure--50 per cent., for example--it would be unlikely that any global emissions reduction would be achieved, as countries would merely buy and sell each other's permissions to emit. Emissions trading can provide an incentive to reduce emissions, but it could also be a device to defer indefinitely the reduction of emissions. To avoid the latter possibility, it is essential that a policy of contraction and convergence is established in advance of agreeing an emissions trading regime.

I have spoken widely about the domestic and international dimensions of the policy changes needed to avoid the worst effects of climate change. Some people will say that it is an unnecessarily complex, bureaucratic and cumbersome set of responses to a single scientific assertion--that accumulated carbon deposits are the direct cause of climate change--and ask what would happen if that theory were to be disproved in a few years' time.

My answer would be simple. Even if the collective wisdom of the intergovernmental panel on climate change were subsequently to be disproved, and even if the political judgment of almost every nation in the world were to be reversed, it would still make absolute sense to start now to reduce our consumption of fossil fuels because, by definition, they will not last for ever. If sustainable development means anything, it surely means that we do not leave the next generation without the means to power factories or heat homes, schools or hospitals.

The finite nature of fossil fuels is most evident with oil. Industrial progress and economic growth in the 20th century have been built on the assumption of infinite supplies of cheap and accessible oil. Empires have been built on the back of cheap oil, and wars fought to maintain its supply. As older oil fields dried up, new ones were discovered and it was assumed that the process would continue indefinitely.

Until recently, it was assumed that current reserves of oil would be plentiful until about 2050. Unfortunately, some of the latest research--and I refer to the work of Colin Campbell and Jean Laherrere, published in the past few months--indicates that that assumption was based on inaccurate figures generated by a dubious methodology that stemmed from the need of oil companies and

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There are two consequences of that. First, it is inevitable that the price of crude oil will start to rise, as has happened quite dramatically in the past few months. Secondly, given that North sea production will start to peak even earlier, probably within the next two years, in the early years of the next century the industrialised world will once again be largely dependent on oil from the middle east. Therefore, the geopolitics of the next century will allow only two scenarios: either we start now drastically to reduce our consumption of oil through energy conservation, the exploitation of renewable forms of energy and the development of alternative sources of fuel, or we find ourselves involved in a semi-permanent conflict with Iraq--or another country--throughout the early years of the next century.

To avoid the worst effects of climate change and the possibility of future military conflicts fought in a vain attempt to continue the illusion of infinite supplies of cheap oil, we must initiate now a radical programme of energy conservation, renewables and the development of alternative sources of fuels.

Mr. David Drew (Stroud): I am sorry that I missed the very start of my hon. Friend's speech, but he has concentrated on the role of producers of energy. Will he comment on the role of consumers? In my constituency, consumers have attempted to form a co-operative so that they can buy renewable energies. Is that not a valuable addition to the movement away from our traditional treatment of our climate?

Mr. Chaytor: That is an extremely important point. People's willingness to act depends on the extent to which they understand the scale of the problem, which in turn depends on the extent to which the Government are prepared to introduce a significant programme of political education on these matters. My gut feeling is that many people in Britain have a general understanding that something called global warming is taking place, but that they have not yet understood fully the scale of the problem. There is a major responsibility on the Government and industry not to shy away from the reality of the situation. I welcome my hon. Friend's remarks. I know that many similar bottom-up schemes exist elsewhere in the country, where people understand the need to take action at local level.