Amber Rudd is MP for Hastings and Rye. She is a former Secretary of State for Energy and Climate Change and former Home Secretary.
“Keep the bills down and get me a deal in Paris.” Those were my instructions from David Cameron, the then-Prime Minister, when he made me Secretary of State for Energy and Climate Change in June 2015.
In many ways, it summed up the huge challenge of tackling climate change, a challenge that we are, as yet, struggling to address, as set out starkly in the IPCC report published yesterday. You need to make sure the low carbon future is better (and probably cheaper) and you need to make sure the rest of the world is doing its bit.
When Cameron set me the challenge, the overall costs of subsidies for clean energy such as wind and solar were rising fast. Fossil fuels such as gas and coal remained plentiful and relatively cheap. That meant adding costs to people’s bills, as the subsidies for clean energy are passed through to consumers. It was right that we gripped those costs, which often fell disproportionately on the poorest and on struggling businesses. It meant some painful cuts for those who had got used to subsidies.
Perhaps the most remarkable change since I took the DECC role is that the presumption that clean energy would always be more expensive than fossil fuels has proven wrong. What has brought about that change? First, much greater competition. There is no better example than the offshore wind industry. A few years ago, Government was giving out administratively set prices and offshore wind was costing more than £140/MWh, around three times the wholesale price. We then introduced auctions. And as Secretary of State I introduced a cap on the auction prices; if auctions did not come in below a certain level, we would not provide any support.
Some in the industry said it couldn’t be done. They said we were effectively killing the offshore industry. But I was determined to set ambitious targets for cost reduction. If we combined reducing costs with providing industry with certainty over the size of the potential market then we challenged industry: could you drive down costs year after year? In fact, they massively exceeded our (and indeed their own) expectations. The cost of offshore wind has fallen by 60 per cent over four years, with last year’s stunning auction coming in at £57.50/MWh.
This tough competition was supported by a doubling of energy innovation spending by 2020, a commitment that will be exceeded thanks to the current Government’s dramatic increase in research and innovation spending, including on clean technologies. All of this is underpinned by the architecture of the 2008 Climate Change Act.
Our nation’s young people know and understand the cost of dangerous climate change; they will be the ones experiencing the consequences for the longest. It should come as no surprise that almost a third of 18- to 34-year-olds are extremely worried about climate change, a figure that drops to under a fifth for people who are over 65. So doing the right thing on climate change is also appealing to that section of voters that are leaving the Conservatives. We are the party that has delivered on new energy sources to address climate change and in Government we have shown international leadership bringing others with us.
This is the Conservative approach: commitment to ambitious targets, significant support for innovation and new ideas, combined with conditional subsidy based on rigorous competition.
The UK’s most important contributions to addressing climate change should be providing a compelling example for the rest of the world on how to decarbonise, and using our diplomatic muscle to ensure the rest of the world is matching our ambition. This is a global problem. The Paris Climate Change agreement of 2015 acknowledges that. After years of preparation we worked for two weeks in a large shed on the outskirts of Paris until we got an agreement. During the last two days the food and, more critically, the coffee began to run out. It was a masterclass in French diplomacy, forcing hungry and under-caffeinated delegates towards an agreement. And it worked. Imperfect, but still remarkable. When Laurent Fabius, then France’s foreign minister, brought down the gavel it was a moment for celebration and one of my proudest days in Government.
The Agreement called for action to limit climate change to a maximum of two degrees, but with best efforts towards 1.5 degrees. The new IPCC report shows how hard it will be to meet those commitments.
We do not need to run around saying the sky will fall in to make the point for addressing climate change. We know it is happening, we are experiencing the results, and we have in the Paris Climate Change Agreement a road map to address it. We have experience of driving down the cost of clean technology and we must replicate that experience in other technologies beyond electricity and across the world. This is not a “nice to have”. It is essential.
Politicians are often criticised for thinking too short-term. But nothing is more Conservative than demonstrating our responsibilities to the next generation. Tackling climate change is an essential to those responsibilities. We must rise to the challenge.