Tag: Ed Davey

Below is the text of the speech made by Ed Davey, the then Secretary of State for Energy and Climate Change, on 27 January 2015.

I’d like to start by expressing my gratitude to Connie for the work she did at the European Commission.

She was fundamental to putting the 2030 Energy Framework in place.

Connie knows just what a challenge it was to bring 28 member states to unanimous agreement on the Framework.

How much more difficult, then, will it be to bring 195 countries to agreement in Paris.

So I want to talk today about two things.

What are the prospects for achieving that deal?

And second – what can we do between now and then to make it happen.

And by ‘we’ I mean, all of you too.

Because success will require a great coalition of the willing from across all parts of global society.

And that includes you in the business community. You the Corporate Leaders Group.

Who, through initiatives like the Green Growth Platform to show what can be done, have already done so much to demonstrate that climate change action is not just economically useful, it is an economic requirement.

So let me turn to the prospects for a deal in Paris.

The prospects for a deal in Paris

You know at one point in Lima, when I was frustrated and the clock was ticking, I was looking around my European counterparts and I realised that I was the longest serving Energy Secretary among them.

Indeed, at over three years, I am the longest serving UK Secretary of State for Energy in over a quarter of a century. Which shows how quick the turnovers have been in the past.

And that got me thinking about how much individuals and personalities matter in these kinds of diplomatic negotiations.

Are they just about the faceless forces of history and the lucky confluence national interests?

Or are just they as much about the coming together of the right people, in the right place, at the right time.

Well, we can certainly claim necessity.

The science on climate change is clear. We’ve got to do a deal.

And the more we see the impacts of the warming world around us, the more we understand the future risks.

We are already some way off where we need to be by 2020, of the most cost effective pathway for keeping climate change to below the 2 degree rise the scientists judge is needed to avoid the most catastrophic effects.

And if we do not reach agreement in Paris the vector of action needed becomes increasingly steep with each passing year;

And the economic cost increasingly expensive.

So are these forces of enlightened self-interest strong enough in themselves to make a deal inevitable?

With regret my answer is no.

Whether we are thinking today about the 70th year since Auschwitz was liberated or the commemoration of the start of the Great War last year which claimed the lives of at least 16 million souls;

We should reflect that the historical record shows many examples of national leaders pursuing narrow interests, playing to domestic galleries, and ignoring wider imperatives and horrific costs.

The stakes are very high.

And that is why I do believe personality matters. It will matter who is sitting round the table in Paris in December.

Who will be willing to take risks? To embrace enlightened self-interest? To move beyond the narrow confines of their domestic politics? To take that leap?

Preparation and personalities

People ask me. Will Paris be another Copenhagen at which we agree to disagree?

And my firm answer is no.

For two reasons: Preparation and Personality

First, preparation.

At Copenhagen the writing was on the wall when pledges only came forward in the last few days before the Conference, with no time for any sensible debate or compromise to happen.

It seems to me that since then, momentum has really shifted.

Over the last few years we have seen national climate change legislation proliferating, carbon pricing mechanisms spreading and new policies and regulations being introduced.

Almost 500 climate laws have been passed in 66 of the world’s largest emitting countries.

Carbon markets have now been put in place in over 36 countries. Not always working as well as they might.

But the world has changed since Copenhagen.

Many of the mechanisms and concepts that implementing a global climate deal will need already exist.

But for me what is most encouraging is what is happening with the so called ‘big four’ – the EU, China, the US and India – who together are responsible for half of global emissions.

And this is where personality has mattered.

In India, the election of Prime Minister Modi has changed the mood, raising the prospect that he can duplicate the effective low carbon policies he implemented in Gujarat across the whole of India – and bring a constructive India to the negotiating table in the lead up to Paris.

In China, President Xi Jinping has been pursuing since he took over his vision of an ecological civilization that embeds climate action in its national planning process.

China is already the world’s largest non-fossil fuel energy producer.

It is one of the world’s leaders on sub-national carbon markets.

And they are preparing to launch a national scheme from 2016 which will be bigger than the EU’s ETS.

In the United States, President Obama is increasingly seeing climate change action as part of his legacy.

And although there remain political obstacles to overcome, but the commitment of the White House to achieve agreement in Paris has never been so strong, of course supported by Secretary Kerry.

Historically the EU has been one of the world’s leading advocates of climate change action.

And with the new 2030 agreement, that remains the case.

The Green Growth Group I set up to build consensus around a low-carbon, pro-growth policy position, now boasts 13 member states representing 75% of Europe’s population, 85% of Europe’s GDP and 60% of the votes in the Council of Ministers.

And we are extremely lucky to be able to draw on the support, expertise and insights of the Prince of Wales’ Corporate Leaders’ Group.

Indeed, the CLG is the backbone underpinning the Green Growth Platform, bringing together nearly 50 business from multiple sectors and from across the EU.

Let me take this opportunity to thank all of you and Sandrine and her team, for all the hard work they have put in over the last 2 years into making the Green Growth Platform viable.

So what does all this mean for Paris in December?

It means we are more prepared than ever before.

And the right people are in the right place at the right time, we hope.

There were some signs of this Lima.

Discussions were difficult, and it looked like a deal was being cooked up in Beijing and Washington, but I genuinely believe things are looking good and not one country wanted to leave Lima without an outcome that took us the next step towards the deal.

So, I judge the prospects of a comprehensive climate change deal to be the best since we first began this journey many decades ago.

But now is definitely not the time to rest

The negotiations are going to get tougher, and tensions are inevitable.

So let me turn to what needs to be done between now and December to increase the chances of success.

Making Paris a success

The timetable is tight.

By April, we expect many countries to have shared their proposed targets for the new deal – Intended Nationally Determined Contributions or INDCs in the jargon.

We’ll see what people come forward with.

By May we will have a draft text of the Paris Treaty.

In September leaders will gather in New York at the UN for high-level discussions on the post-2015 development agenda, and that will look into climate-proofed development.

And then in December, the Paris Conference.

But this will be like the proverbial duck on the water – serenely moving forward but paddling furiously underneath.

We will have to use every international opportunity to maintain ambition and keep up the momentum.

Whether it be the Major Economies Forum meetings in April and July.

The G7 meetings in June.

Or any other international gathering that allows us to raise the issue and exert pressure.

But let me focus in on those INDCs expected by April.

At Lima we agreed that INDCs would be mitigation focussed and represent a progression in ambition for what is currently on offer.

Let me deal with the EU first.

We need to get the EU’s INDC in place by the deadline.

And we should set the INDC gold standard acting as a template and benchmark against which we can judge others.

Second, it has always been the position of the UK that the EU needs to be ready to commit to increasing its GHG offer beyond 40% in the context of a global deal.

The two words ‘at least’ in the October deal were important, challenging though it might be.

So we need to set out the credible options on how we could deliver this, in order to help drive further ambition and momentum through to Paris.

But we have been the first to put some of our cards on the table. And it will be impossible to raise the EU’s level of ambition without seeing ambition from others.

Finally, we shouldn’t wait for a global deal before getting on with implementing the 2030 package in Europe.

That means, in particular, repairing the EU Emissions Trading System through a strengthened Market Stability Reserve.

It also means pushing the Commission to bring forward robust ETS and Effort Sharing legislation to implement the EU’s 40% GHG target for 2030, without delay.

But looking wider at the INDC process, the Lima decision did not set out any formal way of assessing the fairness and ambition of individual INDCs.

And it is highly likely that the aggregate of INDCs will not reflect what is needed globally.

And that is where you and others come in.

The UK can of course do its own analysis, but as a Party in the process we will need to be careful about accusations of pursuing our own interests or playing politics when it comes to pointing fingers.

So we are expecting and indeed encouraging civil society to carry out assessments on INDCs – to make judgements about who is and who is not pulling their weight.

I hope we can build on the green growth message.

But we need your help internationally in other ways too.

We need to work together to unlock breakthrough low carbon technologies particularly for heavy industry;

We need to work together on the financial instruments and integrated energy markets that can smooth the transition to a low-carbon economy;

And we need your help to take the message on green growth that you have helped deliver so effectively within Europe during the 2030 campaign, to a new international audience – explaining what the 2030 agreement means and what can be gained from a low-carbon economy.

We are looking at an intensive year of climate diplomacy and we look to you, the progressive business community, to help us in this effort.

Including the planned establishment of a new Pacific Alliance Green Growth Platform, which will bring together governments, business and experts in that region to collectively explore and pursue a new climate growth model.

One of the most encouraging things in Lima was the Pacific Alliance being built.

This is a great opportunity to export some of what we have developed together in Europe.

Conclusion

So in conclusion ladies and gentlemen.

Will the deal in Paris be perfect? No.

Will we need to ensure that the Treaty includes a mechanism to ratchet up ambition overtime? Yes.

But I am ever more confident that we will emerge from Paris with a comprehensive agreement that all Parties will sign.

And this achievement on its own is not to be underestimated or undervalued.

But we have to drive ambition forward.

We want an agreement that does the job.

Like many who have been looking forward to this moment for decades, I am clear, we must still keep our sights on the prize – meeting that 2 degree target.

The good news I think is that that ambition is shared across the main parties in the UK.

I don’t think you will see backsliding in May, there is consensus.

But whoever does this role next will need help from you our business community, our scientists and engineers, our academics and faith leaders, and our committed, vocal community of environmental NGOs.

But between now and Paris we will need all the efforts of all of you to push us over the line.

Below is the text of the speech made by Ed Davey, the then Secretary of State for Energy and Climate Change, at the Royal Society in London on 9 September 2013.

Introduction

It’s an honour to be here at the Royal Society today.

For over 350 years, the Society has served the common good.

Your Charter, updated and approved by the Queen just last year, tasks the Royal Society to ensure that the light of science and learning “shines conspicuously”.

Not just amongst our own people – but the “length of the whole world”;

To be a “patron of every kind of truth”.

It is because of your rich history, your reputation for independence, your dedication to the scientific method, that people turn to the Royal Society for understanding when confronted with new and complex challenges.

That is why last year, the Government’s former Chief Scientific Adviser, Sir John Beddington, asked the Royal Society and the Royal Academy of Engineering, to review the scientific and engineering evidence on the advances being made in shale gas extraction.

Specifically the technology of hydraulic fracturing – popularly known as fracking.

And he asked you to make recommendations to ensure exploration in the UK could proceed safely and extraction be managed effectively;

Recommendations based on the scientific evidence to ensure that the way forward is informed by fact and not by myth.

On behalf of the Government, I accepted the recommendations of your report in full.

And today I want to talk about the progress we’re making in implementing them.

But I also want to take this opportunity to address other concerns that have been raised.

And to set shale gas in the context of Britain’s overall energy strategy.

The debate on shale gas

There has been quite a debate on the future of shale gas this summer.

And if you took at face value some of the claims made about fracking, such has been the exaggeration and misunderstanding, you would be forgiven for thinking that it represents a great evil;

One of the gravest threats that has ever existed to the environment, to the health of our children and to the future of the planet.

On the other side of the coin, you could have been led to believe that shale gas is the sole answer to all our energy problems;

That we can turn our backs on developing renewables and nuclear, safe in the knowledge that shale gas will meet all our energy needs.

Both of these positions are just plain wrong.

I understand the concerns people have that shale gas extraction could be taken forward irresponsibly and without proper protections.

And I stand shoulder to shoulder with those who want to tackle climate change;

Just as I stand shoulder to shoulder with those who want to keep our homes warm and our businesses powered at a price people can afford.

But our society is ill served when we allow myths to proliferate or when we allow debates to be hijacked by zealots or vested interests.

So, today, I want to make the calm, rational, objective case for shale gas exploration in the UK in the light of the three equal and overarching objectives I have as Secretary of State for Energy and Climate Change.

First, powering the country – keeping the lights on – planning properly to meet our future energy needs.

Second, protecting the planet – cutting carbon emissions and preserving our environment – being responsible guardians of our children’s inheritance.

And third – making sure the whole of society benefits from the exploitation of energy resources – revenues, growth and jobs – and, of course, affordable bills.

My message to you today is this:

UK shale gas can be developed sensibly and safely, protecting the local environment, with the right regulation.

And we can meet our wider climate change targets at the same time, with the right policies in place.

Gas, as the cleanest fossil fuel, is part of the answer to climate change, as a bridge in our transition to a green future, especially in our move away from coal.

Gas will buy us the time we need over the coming decades to get enough low carbon technology up and running so we can power the country and keep cutting emissions.

We have to face it: North Sea gas production is falling and we are become increasingly reliant on gas imports.

So UK shale gas could increase our energy security by cutting those imports.

Home-grown gas, just like home-grown renewables and new nuclear, also provides jobs for our people and tax revenues for our society.

Taking all this together shale gas could have significant benefits.

But – let me be equally clear – shale gas is no quick fix and no silver bullet.

First, we must make sure that the rigorous regulation we are putting in place is followed to the letter, to protect the local environment.

Second, we must pursue vigorously the development and deployment of mitigation and abatement technologies like carbon capture and storage, to protect the planet.

And, third, frankly, we are at the very early stages of onshore shale gas exploration in the UK.

We may have been fracking in Britain’s offshore waters for years.

The US may have been fracking onshore for years.

But in Britain, fracking for onshore gas in shale, at any significant scale, is something new.

Nobody can say, for sure, how much onshore UK shale gas resource exists.

Or how much of it can be commercially extracted.

So let’s be cautious about hyperbole on shale.

For it would likely be the 2020s before we might feel any benefits in full.

So we can’t bank on shale gas to solve all our energy challenges, today or this decade.

And in the next decade, shale, by itself, will not come close to solving even our basic energy resource security challenge.

But the promising news is that UK shale gas could be a key and valuable resource as part of a more diverse energy mix – especially as the production of North Sea gas declines in the future.

And it will do so alongside conventional gas, wind, wave, biomass, nuclear, carbon capture and storage – and all the other low carbon technologies that must contribute.

We won’t know any of this for sure until proper exploration takes place.

So it’s in the national interest to move on from the arguments of zealots and vested interests, and start a debate about how best to proceed safely with shale gas exploration, where we maximise the real positive benefits and minimise the inevitable negative impacts.

And today I want to start that debate beginning with that first objective I set out, powering the country.

And to do that, I have to tell the story of gas in Britain.

We need gas

Over the last 45 years, the extraction of both oil and gas from the North Sea has contributed around £300 billion in production taxes to the Treasury, with hundreds of thousands of jobs across the country.

Today, our society annually consumes around 70 billion cubic metres of gas.

Roughly a quarter of that is used to produce electricity.

And nearly all of the rest is used for cooking our food and heating our buildings.

And gas has advantages for those tasks: it is flexible and readily available.

Gas is much better for the environment than coal when generating electricity, with half the carbon footprint.

As our comprehensive 40 year Carbon Plan sets out – a plan that meets our ambitious climate change objectives – gas will continue to play a role right through to 2050.

And over the next two decades or more, gas in the power sector will support our ability to reduce carbon emissions while we develop low carbon alternatives for electricity.

For by 2030, none of Britain’s electricity must come from unabated coal – a dramatic shift.

Instead, it must come from some mixture of renewable generation, nuclear and gas.

In proportions decided in the world’s first low carbon electricity market this Coalition Government is establishing.

But with gas-fuelled electricity predicted to have a significant market share.

And if carbon capture and storage technology can be successfully deployed, gas will continue to play a major role in power generation into the 2030s and beyond.

So Britain will continue to need gas.

For power.

For heating.

And for cooking.

But North Sea gas reserves are diminishing.

We expect net North Sea gas production to fall from a peak of 108 billion cubic metres at the turn of the century to perhaps 19 billion cubic metres by 2030.

We will miss that gas – and the tax revenues it brings.

And the jobs – given the levels of employment supported today by offshore gas production.

And less North Sea gas means greater reliance on imports.

In 2003, we were a net exporter of gas.

But by 2025 we expect to be importing close to 70% of the gas we consume.

How we get gas matters.

Energy security

There is a big debate at the moment about Britain’s energy security.

And like the shale gas debate it is characterised by myth and misinformation.

Over the next 6 months, I intend to make a series of speeches that I hope will counter that – and reassure people that the problems the Coalition inherited on all aspects of energy security are being fully addressed.

But for today, it’s important to realise that energy security has several aspects – from having sufficient electricity generation capacity to having the networks for delivering gas, electricity and transport fuel reliably across the country.

The role of gas in the UK’s energy security story is in the energy resource piece.

Can Britain be sure of our raw fuel supplies?

And the good news is, our energy resource security is actually very robust.

There have been no major interruptions to gas supplies in recent history.

Partly, of course, because we have our own direct supplies currently – from the North Sea.

But also because we have reliable conventional piped gas supplies from our friends in Norway and the Netherlands.

And because the Liquefied Natural Gas (LNG) we import from Qatar and other suppliers has been dependable.

Indeed, our capacity to import gas has increased five-fold in the past decade.

So the UK has one of the largest and most liquid gas markets in Europe – giving us confidence about the short and medium term security of gas supply.

But we cannot afford to be complacent.

Global energy demand is already twice as high as it was 30 years ago.

And the International Energy Agency estimates that it is set to grow by a third again by 2035.

If we see rapid increases in global gas demand to which supply cannot react quickly. Or if we see disruptions in supply to which demand cannot react quickly, we will see price spikes and wider market instability.

In 2005/6 for instance, the spike in UK gas prices can be partly attributed to a reduction in Russian supplies to Europe.

Fears that a conflict in the Middle East would close the straits of Hormuz can also set the markets jittering.

You only have to look at the effect of recent crises in Libya or Syria to understand how global events can impact on the markets.

So our solutions to energy resource security have to be robust and lasting – looking out to 2050 and beyond – alongside our decarbonisation timescales in fact.

For key to delivering energy security in the long-term is making sure we have a diverse energy mix, not over-reliant on any one source or fuel.

And much, much less reliant on fossil fuels and imported fuels.

That’s one of the many reasons I put such a great emphasis on renewable energy and energy efficiency investments as central to my energy strategy.

By increasing indigenous, home-grown, energy production through renewables, new nuclear and lower carbon fossil fuels, and by using energy more wisely, we are seeking to cushion the country as far as possible from volatile global fuel prices.

And onshore UK shale gas could play an important part in that strategy of planning, long term, for more home grown diversity.

By advancing shale gas production in the UK we will achieve three things:

First – we will displace a proportion of gas imports – increasing resilience and energy security.

Second – there will be a benefit in terms of jobs, tax revenues and growth mitigating some of the falling revenues from the North Sea.

Better those jobs and tax revenues are in the UK, rather than in the countries from which we import.

And third – we control the production, so we control the carbon emissions created by production.

Better those emissions are controlled within our rigorous carbon budgets system than in other countries where controls may be more lax.

So let me turn to those environmental issues.

Safe for the local environment

Your Royal Society report published last year with the Royal Academy of Engineering demonstrated, that if regulated properly and with investment in safeguards, hydraulic fracturing can take place quite safely, without hurting the local environment.

It will not contaminate water supplies.

It will not cause dangerous earth quakes.

We have a long, strong tradition of civil engineering and mineral and energy extraction.

From coal in the 18th and 19th century.

Oil and gas in the 20th.

And renewables in the 21st.

We are skilled, practised, and vastly experienced – with some of the tightest safety and environmental regulations in the world.

But onshore shale gas exploration and production could genuinely become a significant new industry for the UK.

So the same scientific rigour, methodical engineering, and stringent safeguards that have been applied elsewhere must be applied to shale.

We must make sure that the recommendations the Royal Society made in your report are in place and the regulations we have imposed are followed to the letter.

As you proposed, we have now set up the Office of Unconventional Gas and Oil to co-ordinate the cross-government work on shale gas:

Planning regulations under the Department of Communities and Local Government;

Environmental safeguarding carried out by the Environment Agency under DEFRA;

And of course the licencing and consents procedure carried out by my Department.

We have introduced the traffic light system you proposed to reduce the risk of seismic tremors.

Environmental Risk Assessment Guidance will be published this autumn.

And the Research Councils have agreed in principle to fund a joint responsible innovation study to consider further work.

These may be early days for onshore shale gas exploration – but I’m determined we have tough regulations in place, from the start.

The public rightly expect that.

And then we will still need to continue to develop our systems as the industry evolves.

The Environment Agency for example is considering the best way to ensure groundwater monitoring for when exploration takes off.

We are looking at ways to pilot methane emissions monitoring with industry.

And we are working to ensure there is a formal mechanism for operators to share information about any problems they are encountering and how they can be overcome.

My Department met with the Royal Society recently to look at progress and we will continue to seek your advice.

Meeting UK emissions targets

But there has remained a gap in our knowledge in relation to the impact of UK shale gas extraction on greenhouse gas emissions.

Today, I have published the report I commissioned in December last year from DECC’s Chief Scientist Professor David MacKay and Dr Timothy Stone into the carbon footprint of UK produced shale gas.

I want to thank them publicly for that report.

Their report concludes that with the right safeguards in place the net effect on national emission from UK shale gas production will be relatively small when compared to the use of other sources of gas.

Indeed emissions from the production and transport of UK shale gas would likely be lower than the imported Liquefied Natural Gas that it would replace.

The continued use of gas is perfectly consistent with our carbon budgets over the next couple of decades.

If shale gas production does reach significant levels we will need to make extra efforts in other areas.

Because by on-shoring production we will be on-shoring the emissions as well.

And, as this report recommends, we will still need to put in place a range of mitigation and abatement techniques.

I strongly welcome these very sensible recommendations and we will be responding positively and in detail shortly.

But the report from Professor MacKay and Dr Stone puts another piece of the puzzle in place.

It should help reassure environmentalists like myself, that we can safely pursue UK shale gas production and meet our national emissions reductions targets designed to help tackle climate change.

Global emissions

Of course, in terms of global emissions, the only way we are going to address the very real danger that rising global energy demand results in ever rising global carbon emissions is through a binding international agreement on how to tackle climate change.

This has to stand at the centre of any climate change strategy.

Climate change is the greatest long-term threat that humankind currently faces.

A threat that is proven, growing and already impacting on the way we live.

So it is right that we consider how the exploitation of new fossil fuel reserves will impact on this process.

Would the imported LNG that UK shale gas is likely to replace just create extra emissions elsewhere?

Or will it displace more damaging coal generation elsewhere?

One of the unfortunate side effects of US shale gas production has been the dumping of US coal on international markets.

But I believe that if we can encourage a global move from coal to gas, we will be doing the planet a favour.

China has overtaken the US as the world’s biggest polluter, mainly because of the massive amounts of coal they burn.

A Chinese switch from coal to gas – as is happening in the US – will make it easier to cut global emissions in the short and medium term, as the low-carbon revolution picks up pace.

If shale gas can contribute to weaning the world off more damaging coal; then we should not fear it; from an environmental point of view we should welcome it.

Let me be clear – here at home we must not and will not allow shale gas production to compromise our focus on boosting renewables, nuclear and other low carbon technologies.

UK shale gas production must not be at the expense of our wider environmental aims – indeed, if done properly, it will support them.

I am determined to make that happen.

With the market reforms enacted by the Energy Bill currently going through Parliament, we can attract the investment we require to develop technologies across the mix we need – from wind to nuclear, shale gas to carbon capture and storage.

As I have said, the future of gas in the long-term will rely on technology like carbon capture and storage.

The UK Government is committed to CCS head, heart and wallet.

We have selected the Peterhead project and the White Rose project chosen as preferred bidders under our £1bn commercialisation competition.

And the £125m research and development programme is supporting 100 different projects testing knowledge in all areas of the CCS pipeline from technology to transportation to the supply chain.

So I am excited by the prospect of Britain leading the world on carbon capture and storage, because cracking this technology and making it cost effective will open up a host of new options in tackling climate change.

That is why we need to plan properly for our future.

And that includes thinking about how we use the potential proceeds from shale gas.

When North Sea oil and gas production was at its height, tax revenues were used for current spending and not reinvested.

In contrast countries like Norway and countries in the Middle East have used oil and gas tax revenues to create sovereign wealth funds which invest for the future.

If onshore shale gas production takes off; If our country gets another major fossil fuel tax revenue boost; I want us to be a country that invests for the future.

A low carbon future.

Using shale gas revenues.

My party at its conference next Sunday will be discussing how we can best transition to a zero carbon Britain by 2050.

One policy proposal before our party conference is that a Low Carbon Transition Fund is established from some of the tax revenues from any future shale gas production.

I think that is absolutely the right thing to do.

Shale gas production can and must be used to transition to a low carbon future.

In this way the benefits of future shale gas production can be felt not just by this generation, but by future generations to.

So let me now turn to the third of my objectives as Secretary of State – making sure the whole of our society benefits from the exploitation of energy resources.

The future of UK Shale

Here in the UK we are at the very early stages of shale gas exploration.

The British Geological Survey is methodically investigating the geology.

This is beginning to give us some idea of the size of the resource.

The Bowland shale study suggests a large rock volume, potentially filled with some 37 trillion cubic metres of gas.

But the geology also makes for challenging extraction.

In some areas the shale is 10,000 feet thick.

There is just no way of knowing how much gas can be physically extracted and how it will flow.

And, crucially, there is no way of knowing how much can be extracted at a commercially viable rate.

That is why we have put in place the right incentives for exploration to take place and for a domestic industry to develop so that we can make those judgements more clearly.

But, let’s just look one possible scenario.

In May, the Institute of Directors produced a report based on available evidence.

They conclude that on a central estimate Britain’s shale gas production could potentially peak at around 32 billion cubic metres per year.

The industry could support around 70,000 jobs directly, in the supply chain, and in the wider economy.

Significant production could have a benign effect on wholesale prices.

And that production would of course provide a net benefit to the Treasury in terms of revenues.

It is plain common sense that we pursue the shale possibility if we can realise such benefits, without jeopardising our environment.

So – is onshore shale gas Britain’s new North Sea?

Well the 32 billion cubic metres a year of shale gas production estimated by the IOD would be less than a third of peak North Sea gas output.

In reality it could be much more, I hope so.

But it could also be much less.

Regardless it would still be valuable – especially if we can keep the North Sea running longer – perhaps with more offshore fracking.

Any shale gas tax revenues could offset some of the revenue reduction we are already seeing from our North Sea asset.

Shale gas could displace some gas imports.

But even with shale gas in full production, Britain is likely to remain significantly import dependent.

So there will be a very real and tangible benefit from shale gas – but let us not get carried away.

The basic fact is we just don’t know exactly what amounts of gas are under our feet and how much of that gas we can commercially and safely extract.

And this is why we can’t quantify precisely the effect that UK shale gas production will have on UK prices.

Prices

It’s far from clear that UK shale gas production could ever replicate the price effects seen in the US.

The situation is different here.

We don’t have the wide open landscapes of Texas or Dakota.

Just one of the areas producing shale gas in the United States – the so-called Marcellus Play – has a productive use of roughly 95,000 square miles.

That is the same size as the whole of the United Kingdom.

The Bowland Shale, the largest potential shale gas area in the UK, is just 500 square miles – almost 200 times smaller.

Of course this is just a two dimensional example, but it gives you a sense of scale.

And it’s not just the geology, or the population density, or the environmental regulations or the planning laws that are different.

The US has a closed gas market – massive increases in supply naturally affect prices.

We are part of the European market.

We source energy from far and wide.

And we compete against others for the supply.

And gas produced in the UK is sold into this market.

When UK gas production in the North Sea was at its highest earlier this decade, UK and continental gas prices were still closely linked and fairly similar.

North Sea Gas didn’t significantly move UK prices – so we can’t expect UK shale production alone to have any effect.

But given there are plenty of demand side upward pressures on gas prices, as we’ve seen so painfully in recent years, shale gas is well worth pursuing simply to have more supplyside downward pressures on prices.

For if Britain can lead in Europe and can show a lead on how shale can be done safely, and as part of a complete shift away from coal, shale gas production might take off not just in the UK but across Europe.

This would reduce the dependency of Europe as a whole on gas imports.

And with huge Europe-wide shale gas production boosting supply, markets might really be impressed.

Then we might see downward pressures on gas prices strong enough to offset fast rising demand.

And frankly after wholesale gas price rises of 50% in the last 5 years – the key and overriding reason behind today’s high energy bills in Britain – any downward pressure that can be exerted on prices will be welcomed by consumers and industry alike.

Conclusion

So, ladies and gentlemen,

The reality is shale gas has a role to play in meeting all the objectives I have set out – keeping the lights on, tackling climate change, and helping keep energy affordable and the economy moving.

On all these fronts – especially energy security – shale represents an exciting prospect.

Even if the potential benefits are some way off.

Even if shale gas is not the new North Sea.

It is a national opportunity.

An opportunity it would be foolish to turn away from.

An opportunity for a home-grown energy resource that boosts security.

An opportunity for investment, jobs and tax revenues.

The bottom line is we are going to need gas supplies for many decades to come as we move to the zero carbon Britain I’d like to see.

As a bridge to that future, shale gas can help the UK, and other countries, transition to the low carbon energy system that we need if we are to limit climate change.

On this crowded island, our communities matter, our environment matters.

Energy production of all types has to be safe and an accepted part of the landscape.

Exploration, development and production all need to be handled correctly.

And that is what we are doing.

Shale gas will be developed responsibly.

Britain can lead the way.

We have the skills and expertise to lead in Europe – showing others how it can be done – protecting the environment not wrecking it.

And you at the Royal Society have helped to show us the way.

Here at the Royal Society, in 1988, a seminal speech was made by a seminal British Prime Minister.

Even though action to tackle carbon emissions may involve up-front costs, she argued:

“I believe it to be money well and necessarily spent because the health of the economy and the health of our environment are totally dependent upon each other.”

By embracing the concept of green growth, Margaret Thatcher showed a lead not just to her party, not just to the country, but to the world.

This Coalition Government agrees.

And our approach to shale gas will meet these twin responsibilities – to the economy and to the environment.

Below is the text of the speech made by Ed Davey, the then Secretary of State for Climate and Energy Change, in the House of Commons, London on 23 January 2012.

Introduction

Ladies and Gentlemen, the Department of Energy and Climate Change which I represent tonight, is, of course, a relatively new Whitehall department.

But the role of Secretary of State on the energy side has long antecedents.

My predecessors in that role include, Secretaries for Mines, Secretaries for Petroleum, Secretaries for Energy, Ministers of Technology, Ministers of Fuel, and my personal favourite….the Minister for Power.

I could get used to that title….

‘A surfeit of riches’

On the 21st December 1965, the Minister for Power, the Rt Hon Frederick Lee, rose in the House to Commons, and announced that by 1967 it was estimated that fifty million cubic feet of gas would be delivered ashore every day from the North Sea.

Just months earlier, in the September that year, British Petroleum’s rig SEA GEM had made the first ever hydrocarbon discovery in the UK’s North Sea waters.

Having read the exchanges that followed in the House, I must admit to having some sympathy for the Minister of Power.

Because that was a good news story, but one MP rose to bemoan the discovery which he claimed would ‘naturally’ lead to pit closures in the coal industry.

And one Scottish MP came close to claiming the North Sea’s riches for Scotland alone.

Some things, it seems, never change.

In exasperation, the Minister of Power said retorted that he hoped the House was not afraid of a ‘surfeit of riches’.

“We are making” he said, “a most remarkable indigenous fuel available to the British people”.

And so it has proven.

With the discovery of oil as well as gas in the North Sea, over the last 45 years: 41 billion barrels of oil and gas have been produced; contributing around £300bn in production taxes to the Treasury; benefiting both Scotland and the whole of the United Kingdom; seeing a renaissance in Aberdeen; hundreds of thousands of jobs across the country; the UK’s largest industrial investor for many decades.

“A surfeit of riches” indeed and testament to the drive, determination, and in some cases, sheer bloody doggedness of those working to unlock the riches beneath the sea.

So I want to pay tribute to all those who came before us.

But today, I don’t really want to talk about the past.

I want to address the future and the realities we face.

The future of the further exploration of North Sea resources.

The reality of what that means for the industry, the country, and indeed the planet.

Realities

Let me set out a few as I see them.

Reality number one:

Oil and gas will form an integral part of UK energy mix for decades to come.

Over 70% of the UK’s primary energy demand may still be filled by oil and gas into the 2040s.

With 20 billion barrels or more still to be drawn from the UK’s North Sea fields, having an indigenous source helps prevent over-reliance to imports from more volatile parts of the world.

So the UK Oil and Gas Industry is a vitally important strategic resource now and over the next half century at least – to help fulfil our energy needs – and as a contribution to the UK’s energy security.

Reality number two:

North Sea oil and gas production is crucial to the economy of the whole of the United Kingdom.

We are not a petro-state and we cannot afford for our economy to become over-reliant on any one sector.

But the truth remains that the UK’s oil and gas resources are one of the country’s greatest assets.

The Offshore Oil and Gas Industry is the largest corporate tax payer to the exchequer paying around 20% of total corporate taxes.

Although the exact amount fluctuates, this typically represents around £8 billion a year.

And particularly during this tough time, the contribution of the North Sea industries to helping dig Britain out of fiscal difficulty is essential.

These two realities add up to one thing.

The Government must aim to maximise the economically viable recovery of resources from the North Sea – and where they exists on land too.

Because this will contribute to growth, jobs, the balance of payments, and to energy security.

So the Government has been acting:

Providing a regime that encourages investment and innovation;

Introducing, for example, new field allowances West of Shetland;

Extending the small fields allowance;

And putting in place new allowances for shallow-water gas fields.

The level of investment in new oil and gas projects sanctioned in 2011 was over ten times the amount of 2009.

18 projects with a total value of around £13bn were approved.

In 2012, 29 projects approved with capital expenditure over £11 billion.

In 2013, we are already expecting around 28 new fields to get approval.

So this is really good news – good news that both the Government, and you, the industry can be proud of, and everybody who has been involved in that.

Climate change

But there is another reality – reality number three:

Climate Change.

The draft US National Climate Assessment released this month doesn’t mince its words:

“Sea level is rising, oceans are becoming more acidic, and glaciers and arctic sea ice are melting. These changes are part of the pattern of global climate change, which is primarily driven by human activity.”

As a planet we cannot go on using unabated fossil fuels at the rate we are now and keep climate change below 2°C.

And as our understanding of the changing climate grows, so does our understanding of what those risks might mean for our people.

An Earth which is hotter, more disaster-prone and more dangerous in the years to come means a more brutal environment for our citizens.

Just as it is this generation’s responsibility to pass on a healthy economy to the next, so it is this generation’s responsibility to pass on a healthy environment to the next.

I see both of these as moral responsibilities – responsibilities we owe to our children and our grand children.

So this Government, like the last, is committed to reducing harmful greenhouse gas emissions.

And part of that drive means a major shift to low-carbon energy supply.

Diversifying our energy mix.

Exploiting every energy source and every technology available to do so.

From renewables, to nuclear, to carbon capture and storage.

So I hope we can work together, particularly on the latter.

The third reality, the reality of climate change, means that this Government will support a fiscal regime that encourages investment and innovation in Offshore Oil and Gas:

That ensures a fair return for shareholders and the tax-payer;

That contributes to energy security;

That will keep the turbine turning and the lights on.

But, that fiscal regime must be compatible with our long-term aims for diversifying our energy mix, reducing our emissions, and building a low-carbon future.

And that is what the Energy Bill is all about.

The work ahead

So there is are significant challenges ahead of us.

In terms of the industry itself, there is important work being done by the PILOT work groups, looking at everything from exploration to infrastructure to technology to workforce issues.

The industry is working collaboratively to tackle these issues and I pay tribute to that.

Extracting the natural resources of the North Sea must be seen as a collective endeavour.

So I have been very impressed in the way these working groups have been operating.

Work is also being done across Government to produce an Oil and Gas Industrial Strategy which will assess where we are now and determine what overarching work needs to be done to address the pressing issues that your industry faces.

This will allow us, together, to set out a plan for the future.

This work has to be a collaboration to be successful.

Collaboration between DECC, BIS, HMT and Industry and also through talks with all the regional and sectoral trade associations, as well as the Scottish Government.

So I would like to thank all those who have contributed to this report and Oil & Gas UK for their help in that process.

It will be consulted on over the next few months and will be finally published for everyone to see at the end of March.

But it should be a living document, not just an event.

It should be reviewed and refreshed regularly to reflect the extremely complex and changing landscape we are operating in.

Conclusion

So in conclusion ladies and gentlemen, with so many projects in the pipeline, the future of the UK’s Offshore Oil And Gas industry is a very bright one.

Oil and gas will be fundamental to our energy policy for decades to come.

The health of the industry is crucial; crucial to Britain’s power needs and economic needs.

And that is why we have created a positive investment environment and continue to nurture the environment to exploit the talents and expertise of the North Sea industries.

The Department I represent has been charged with these two crucial missions, powering the country and protecting the planet.

In the long-term, we will only succeed in achieving our mission, if we demonstrate the pioneering spirit of those who spudded the first wells in the North Sea.

The investors, the risk-takers, the innovators.

This has to be a joint endeavour.

Government and industry working together to exploit the resources the earth has to offer, powering the country, providing prosperity, while protecting the planet for future generations.

So in that spirit, I want to thank the All Party Parliamentary Group and Oil & Gas UK for all your hard work over the last year.

And I want to thank all of you in the Offshore Oil and Gas Industry for the invaluable contribution you make to British society, now and in the years to come.

Below is the text of the speech made by Ed Davey, the then Secretary of State for Energy, at Chatham House in London on 11 July 2012.

Thanks very much Bernice, and thanks to Chatham House for hosting this event.

There are few think tanks that are global in both outlook and recognition. This is one of them. So I’m very pleased to be here to talk about a subject of global importance.

When I first got interested in the green agenda – as an idealistic student – climate change was just crossing over into the public consciousness.

For people concerned about the environment, climate change seemed to wrap up all of our worries – pollution, resource scarcity, sustainability – yet add another layer of complexity.

Thinking about local impacts wasn’t enough. Global climate change raised global questions – like justice and equity, diplomacy and development.

And so the path to getting international agreements on climate change has been a long one.

Agreeing responsibility for action on emissions is hard enough. And in a global economy built on fossil fuels, it can seem an impossible ask. For twenty years, the world has been working on the answer.

Today, we are closer than ever. Countries have agreed that in 2015 we will aim to sign a global deal to limit emissions and curb climate change. This commitment is the primary achievement of the Durban meeting last year, which Christiana Figueres described as the ‘most encompassing and furthest reaching conference in the history of the climate change negotiations’.

In a little over three years, we must set in train a change to the whole structure of the world economy; breaking the bond between carbon and growth. Building the systems to support low-carbon economies in the most advanced countries, and low-emissions development in poorer countries.

History

Today, I want to talk about how we can do that. I will make three points:

Firstly, that the economic case for climate action is clear – and pressing. Green growth is real, and is already making a compelling contribution to our economy.

Second, that political leadership in Europe can unlock more green growth – and drive global ambition to tackle climate change.

And third, that multilateralism works. That at the UN climate negotiations in Doha and beyond, we can plot out the path towards a safer future.

I’m under no illusions: it will not be easy. But we have the technology to live sustainably; every year, renewable energy use rises. And we have the economic incentive.

The problem is political. And it is complicated by the fact that we are living in a distracted world.

Distractions

Because although evidence of climate change grows stronger by the day, the pressures on the world economy are equally unrelenting.

The financial crisis that began in 2008 has not yet run its course. The global recovery is still fragile; what happens in the eurozone could shatter it again.

Economic problems have driven political change: in Europe alone, nine governments have fallen since the crisis struck. People are losing faith in our ability to work together to solve the big problems.

This really matters for climate change, because unless we can show that multilateralism works, we cannot get the global agreement that we so badly need.

It matters because when householders – and businesses – are concentrating on cutting costs, we have to remind them why going low-carbon is a priority now.

And it matters because with financial instability pushing up the cost of capital, investors need certainty to invest in clean energy.

So how can we focus minds on a problem that for many seems far-off – and far away?

Economics

I believe we have to start with the economic case for action on climate change. Right now, everyone is focused on stability and growth. So my first point is this: the green economy can be good for both.

I’m hardly the first person to say that – a fair few politicians got there first.

But businesses are saying it too. Take the Director General of the CBI – John Cridland. Just last week, he said, green and growth are inextricably linked.

Reducing our reliance on fossil fuels can help insulate businesses and consumers from volatile fossil fuel prices. Research shows climate change policies could halve the effect of global fossil fuel price spikes on the UK economy by 2050.

And energy efficiency is unambiguously good for growth. If the EU can hit its 2020 energy efficiency target, it could save 34 billion euros – and add 400,000 jobs. UK businesses alone could save up to £4 billion a year by using energy more efficiently.

But the real engine of sustainable growth is green business. Over a third of the UK’s economic growth in 2011/12 is likely to have come from green business, which accounts for 8% of UK GDP.

The UK’s green economy grew by £5.4 billion last year – that’s 4.7% growth, even as the rest of the economy was struggling. It created more than 25,000 jobs last year, and now employs nearly one million people.

Globally, the clean energy market is increasingly competitive and fizzing with opportunities. Not just for our companies, who are competing in a £3.3 trillion global market, growing at 3.7% per year, but for our economies, too.

The UK is 6th in the world in the low-carbon sector, with an industry worth £122 billion. I want us to secure a greater share of this vibrant and growing sector. Not because I’m a hair-shirted hippy, or bound by ideology; but because I believe in following the evidence.

Green business generated a trade surplus for the UK of £5 billion last year; if we play it right, it could halve our trade deficit before the next election.

Too often, we are told that those who go low-carbon first will sacrifice their competitiveness.

This is misleading and dangerous.

The real danger is not going green, but being outpaced by our competitors.

Around the world, the countries who are most competitive are the ones who are investing the most in low-carbon.

Korea, spending 2% of GDP on green growth. Germany, whose development bank is leveraging 100 billion euros for renewable energy.

China, putting green industries at the heart of its 12th five year plan. Investing more than anyone else in renewables, developing pilot emissions trading schemes in seven provinces – including Beijing and Shanghai.

And India, which taxes coal and uses the proceeds to fund renewable energy; which has incentives for wind and solar power, and far-reaching energy efficiency plans.

Investment in low-carbon – and policies to support it – reach right across the globe.

And at last month’s summit, all the G20 countries recognised the important of putting green growth at the heart of their structural reform policies. By this time next year, there will be 33 countries with national emissions trading schemes. More than half the world’s countries have renewable energy targets.

This ambition is not just matched by businesses: it is surpassed. When it comes to pursuing sustainable growth, businesses are way ahead of governments. They are looking to Ministers in Governments across the world to give them the certainty they need to invest in a clean energy future: to provide clear and predictable policies that can unlock investment at scale.

So we cannot be drawn into some false choice between economy and environment. Instead, we must make the clear-eyed – the hard-nosed case for green growth.

Time horizons

And that means making a better argument about time horizons. For if I’ve learnt anything in the last few months about energy and climate change policy, it’s that time horizons have to be long – decades not days. Yet in a distracted world, it is easy to focus on the urgent at the expense of the important. But action on climate change is about both. We cannot let the search for short term solutions threatens our long-term goals. An economic recovery that exposes us to greater climate risk is by definition unsustainable.

Partly this is about looking to a different horizon: making sure that our efforts to build a more sustainable economy, in the UK and in Europe, lead to a financial sector, for example, that looks beyond the next quarter and invests in long-term growth.

Partly this is about doing everything we can to ensure the government takes the right decisions for the long term, too. This desire – to do what’s right for the future, not just the near-term – is one of the principles on which the coalition government was founded.

And from the Green Investment Bank to the Fourth Carbon Budget, I think we’re doing just that.

But it’s also about understanding where responsibility really lies. When people talk about climate change, there’s a tendency to talk about children and our grandchildren. About how future generations will feel the worst impacts of a changing climate.
That’s understandable: I think most people view the future differently when they have children. You can’t help but think about the kind of world you want them to grow up in. And the kind of complicated feedbacks in the global climate can take time to reveal themselves.

But there’s a risk that by locating the problem far away in the future, we forget that it is this generation who must act to solve it. It is those in power now who must find the political will – and show the political leadership – that will deliver results.

EU30

I believe Europe has a chance to show that leadership.

At a time when Europe is asking itself searching questions – when the European project itself seems to be on trial, shaken by problems in monetary union – it is worth reminding ourselves of the leading role this continent has played in the global climate fight.
Europe has already cut emissions by around 17% on 1990 levels – outstripping its Kyoto Protocol obligations. We have just agreed an energy efficiency directive which could deliver savings equivalent to a 25% cut. And for all its shortcomings, we have the largest emissions trading system in the world.

For all its problems, the EU is the world’s largest integrated economy. And when it comes to climate change, this union has served us well: Europe negotiates as a bloc at the UN, one with more authority than we could muster individually.

By working together, we have been able to achieve so much more than we could alone. A gathering of individual agents, each fighting for different national priorities, could not have secured the Kyoto Protocol, or its extension.

We should draw strength from this legacy. Rather than letting ambition slip, we should pay tribute to our past achievements by raising our sights still higher.

Europe must do more to complete the single energy market. More on interconnection. More on a continental-scale supergrid. More on energy efficiency standards. More on renewable energy deployment. More on climate finance.

And – crucially – I believe we must do more on greenhouse gas emissions. So my second point today is this: a more ambitious EU carbon target is in everyone’s interests – and I as Secretary of State am working hard to secure that.

The arguments for moving to a 30% cut in emissions by 2020 are well-rehearsed.

It is the most cost-effective way of cutting carbon. It will help us secure the investment in clean energy we need to stay competitive. It will help grow our low-carbon industries, ensuring Europe’s competitiveness. It will limit our exposure to volatile fossil fuel prices.

And – critically – it shows the world what Europe stands for.
I believe that moving to 30% is the clearest statement of ambition and leadership that we can make. It is a key coalition government commitment, and I am doing everything I can to deliver it.

My strategy is to approach this from both the top down and the bottom up. Not just trying to secure Council conclusions on the 2050 low carbon roadmap or a 30% target, but also delivering the measures that will help to move us towards 30%.

Leadership in Europe is about building coalitions and working to deliver compromise deals.

Take the Energy Efficiency Directive, which the UK played a pivotal role in securing.

It is not as ambitious as we would have liked. But it was the very best outcome we could secure, given the negative voices in the Council, and it will help us to go beyond 20%.

The UK is also leading calls for the Commission to present strong and ambitious proposals to strengthen the EU Emissions Trading Scheme.

I’m working closely with the Deputy Prime Minister, NGOs and business leaders to build a coalition for change.

And my German counterpart and I are working particularly hard to find a way to help bring Poland into that coalition.

Their support mustn’t be at any price, but looking a little further ahead, it’s better if Europe moves together. In the next few years we need to start discussing 2030 emissions targets, and longer term reform of the ETS. If Poland remain where they are it will be a struggle.

They’ve set out their concerns to us; now we need to work together find ways to address them. That’s why I am meeting the Polish Minister in London. And actually, the message for Poland is the same as for the rest of the EU: 30% is doable, it’s desirable; so let’s find a way to make it work for everyone.

Moving to 30% will be an act of climate statesmanship, one that speaks to Europe’s reason for being: collective action for the betterment of our citizens.

And – by ensuring we enter the negotiating room from a position of strength, commitment and leadership – it can help secure a better future for all the world’s citizens, too.

UNFCCC

And European leadership can help deliver on my third priority tonight – preparing properly for this year’s climate change talks in Doha at the end of the year.

For the next objective in the UN climate negotiations must be to take forward the important achievements made in Durban last year – and to prevent the attempts to block further progress we are already seeing.

Doha is unlikely to be an epoch-making event – but it needs to be a significant step in taking the Durbna platform forward. Some are calling it an ‘implementation’ meeting. It certainly is that.

But we can also agree some major steps, if we fully lay the groundwork.

It should be the meeting that produces a second commitment period of the Kyoto Protocol.

It should be the meeting that sets us on the way to the new legally binding Protocol. That makes the negotiation process clearer, showing us not just the destination – but the route to a global deal.

It should be the meeting where more countries make 2020 pledges under the Copenhagen

Accord, to keep real momentum and progress. More national policies and actions to support carbon cuts.

It should be the meeting where we make further progress on climate finance. And it could be the meeting where we see big pushes on key technologies, such as carbon capture and storage and renewables.

Given the world is simply not making fast enough progress to keep us below the 2 degree limit, we need to use every occasion like Doha to push further. Whatever the political and economic challenges countries face.

Outside

And we should work hard outside the negotiating room too.

Yes, getting the global architecture right matters. Without it, we cannot get a meaningful and cost-effective agreement, and we cannot be certain that emissions will fall. We need the multilateral, rules-based and top-down approach to deliver – with everyone making commitments. That is why a comprehensive, legally binding global deal is such a cornerstone of our climate policy.

But we need to do more to get things going on the ground. Bottom up, not just top down.

There is absolutely no doubt in my mind: negotiating summitry must not get in the way of actually doing things that close the gap between our climate goals and our actual emissions.

Action to reduce deforestation, for example. With funds pledged and ready, we need more action to save the forests and our plant’s own ecosystem’s ability to absorb carbon.

Action to encouraging more countries to make emissions pledges, and action to encourage those who have made pledges actually to deliver on them;

Action to bring powerful greenhouse gases like hydrofluorocarbons into the Montreal Protocol;

And one area I want the UK to lead even more is on taking positive steps on climate finance. Many developing countries are committing serious resources to climate change; and we are supporting them both because it is right, and because it is in our interest to do so.

We are on track to meet our Fast Start Finance pledge, with more than £1 billion spent or committed. We’re working to leverage private finance through our Capital Markets Climate Initiative. And we’ve set up the £2.9 billion International Climate Fund to help developing countries tackle climate change and reduce poverty.

We want to focus our climate finance where it will get results. So the Fund will make at least 15 million poor people more resilient to the impacts of climate change and natural disasters in Bangladesh by 2014, protect 39 million hectares of forests, and help over 2 million poor people access clean energy.

So our commitment should be clear: we will meet our fair share of the $100bn of public and private international finance per year the world has pledged to provide from 2020.

So we must not see a gap in financing after the Fast Start period ends: I want to encourage other countries to pledge funding beyond 2012.

Action on finance, forests and HFCs; these are some of the things we must now focus on if we are to come close to closing the emissions gap. And there is no reason why we should not do them in parallel with negotiations on a climate treaty.

So my final message today is this: I believe that top-down and bottom-up approaches are not mutually exclusive, but mutually reinforcing. They are different halves of one whole: action to cut emissions and protect the planet.

Conclusion

On Sunday I’m travelling to Berlin to meet 45 of my counterparts to discuss how we prepare for Doha and how we raise our ambition levels. The case I will put there is the same I have put to you here today.

Research published this week shows that recent climate change made the 2011 Texas heat wave twenty times more likely than 50 years ago. Here in the UK, extreme flooding – like we saw in 2000 – is twice as likely thanks to man-made climate change. Extreme weather events caused by climate change are not a distant worry: they are already happening.

The call to arms on climate change is growing ever louder. But it risks being lost in the noise of the world’s business as usual concerns.

But it must be heard. At my first international meeting on climate change three months ago, I was struck by an impassioned speech by a Minister from a small Pacific Island – when he argued that some countries’ right to develop were in conflict with his people’s right to survive.

That’s our challenge.

So we must reject those who argue that action on climate change and economic growth are incompatible. Those who claim that the EU is ineffective. Those who pretend that multilateralism cannot deliver.

And I’m determined that my Department and our Coalition Government is front and centre in those arguments. Thank you.

Below is the text of the speech made by Ed Davey, the then Secretary of State for Energy, on 23 July 2012.

Thanks very much – it’s absolutely fantastic to be here at the Eden Project, whose low-carbon credentials are impeccable.

The world’s first eco car show. Plans for an 80% cut in emissions by 2020. And a new deep geothermal energy system, drawing heat from Cornish stone to warm the biomes and feed into the grid.

These are all real achievements. But what I find most impressive is the work Tim and the team here have done to bring environmental issues into the national consciousness.

The Eden Project is the one of the most recognisable green ‘brands’ in the world. Everyone knows what it stands for: sustainability, not just in environmental terms, but in a social context, too.

The scheme we are here to launch today speaks to the same agenda. Helping people save money. Helping communities benefit from energy projects. And hopefully saving carbon, too.

I’ve been a consumer advocate for many years. As an MP, and as a Minister at the Department for Business, where consumer affairs and competition was a big part of my brief. I even launched a Consumer Empowerment Strategy, to help people realise the power they have to get a better deal.

So I know the consumer landscape well. And I’m absolutely clear that getting more competition in our energy markets, and helping people take advantage of it, is vital.

That’s why one of my top priorities after taking this job was to focus on collective switching and collective purchasing.

Everyone here today knows that the way people buy energy – and who they buy it from – can make a real difference. But that message isn’t making out to the wider world.

In 2010, we saw significant energy price rises. Wholesale energy costs soared, driving up consumer bills. Yet consumer switching rates fell.

In 2010, just 15% of us switched gas suppliers, down from 19% in 2006. For electricity, it was even worse: 17% of consumers switched, down from 22%.

We need to better understand why – and what we can do to turn that around. And I believe the first thing to do is to give people better information.

We want to see fewer tariffs and much clearer pricing, so that customers can find the best deal more easily. We want people to have access to better information about their energy consumption, with smart meters to help consumers monitor and manage their energy use.

But better information isn’t enough. We also need to give people more power in the energy markets, which is where collective switching can really come into its own.

We’ve seen a few partnerships starting up, with Which? and the campaigning group 38 degrees coming together for the Big Switch, successfully carrying out a reverse auction that was won by Co-operative Energy.

At a time when householders everywhere are looking to cut their bills wherever they can, such schemes have grabbed media attention.

And I’ve been clear from the start that this is about more than commercial opportunities.

It’s about more than helping those who are already clued up. I want to see new providers – not just the usual suspects, not just the private sector, but charities and the public sector too – coming up with schemes that can reach the most vulnerable consumers. I want the benefits of collective switching to be open to all communities.

That’s why Cornwall Together is such a fantastic initiative.

Not just because this is the first time a county has joined together to help people save. Not just because it’s coming from a new angle, by working with big employers in Cornwall, across sectors. Not just because it encourages people to think about more sustainable energy options.

But also because this is the first collective switching scheme I’ve heard of that will actively target the hard-to-reach the households who most need help. And 1 pound out of every 10 generated will go into a fund for Cornish communities.

This scheme really is the first of its kind. And I sincerely hope it’s the first of many.

I want to congratulate everyone who has put the work in to get this far. Thanks to your efforts, Cornish households could save up to 20% on their energy bills. For the most vulnerable, who spend a greater proportion of their income on energy, that can make a huge difference.

Everyone here today knows that fuel poverty is a difficult and pernicious problem. Cold homes harm the health of those least able to cope. Children. The elderly. People with disabilities or long-term illnesses.

For those who are already struggling to get by, worrying about keeping warm adds another layer of stress.

Being able to heat your home adequately and affordably ought not to be a luxury, but a basic right.

High energy prices, low household incomes, and energy inefficient homes are the main drivers of fuel poverty. And like other types of inequality in our society, there are few simple solutions.

We’re doing what we can to help. We’re working with energy suppliers. We provide direct support to households who are vulnerable and in fuel poverty. And – in the long term – we’re trying to limit our exposure to volatile global energy markets.

But we have to be realistic: income and prices are the two parts of this equation that we have the least control over. For government, it makes sense to really focus our efforts on energy efficiency.

That’s why the Green Deal and the Energy Company Obligation are so important.

I want every household in Britain to benefit from energy savings; it’s good for consumers, good for the climate, and good for growth.

But it’s the poorest and most vulnerable who need the most help, and that’s what the Affordable Warmth and Carbon Saving Communities parts of the ECO are designed to provide.

Every year, they will help around 230,000 households to install energy efficiency measures worth £540 million.

I believe that’s going to make a real difference. But it’s not enough. Because when it comes to fuel poverty, we face a problem which – on the current measure – affect 4 million households.

That’s why I’m so passionate about encouraging collective purchasing and switching. Particularly when it’s done by genuine partnerships, who are working to help whole communities.

Just like Cornwall Together.

Once again, I want to congratulate everyone involved in this groundbreaking project; and wish you all the very best in the months and years to come. Thank you.

Below is the text of the speech made by Ed Davey, the then Secretary of State for Energy, on 6 August 2012.

Introduction

Thanks very much. This has long been one of the great business cities. For fifteen centuries, it has welcomed traders and merchants from around the world.

In fact, its Old English name directly translates as ‘London trading town’. And that’s as appropriate today as it was a thousand years ago.

We are part of Europe, but have strong ties to much of the world. Our working day bridges the Asian and American markets. English is the lingua franca of business; most international contracts are based on English law.

So London remains a fantastic place to do business, including energy business – which is of course what today’s session is all about.

I’m sure the panel will generate some sparkling discussion. But before the day gets underway, I thought I’d take this chance to fill in some of the detail about the UK’s energy policy – and the opportunities it provides for investors.

Opportunities

Over the next decade, the UK energy sector is going to change radically: as more and more low-carbon energy comes online, and existing infrastructure is upgraded.

We’re going to see significant changes in the way we make, save and use electricity. Our ambition, as you’ve just heard, is to rebalance our economy, and put green growth at the heart of our policy.

These changes aren’t unique to Britain. At the G20 in June, all members recognised the importance of putting green growth at the heart of their structural reform policies.

But the UK’s investment need is particularly strong. Thanks to a combination of legally binding climate targets, ageing infrastructure, and rising demand, we need double the normal rate of investment between now and 2020.

Numbers

In less than ten years, we have to find 20 gigawatts of generating capacity – and £110 billion of investment in electricity generation.

Even if we go full-speed ahead on energy efficiency, we still expect demand for electricity to rise. We’re talking about building as much as 18GW of offshore wind by 2020, if costs come down; and 16GW of new nuclear power by 2025.

Creating a cost-competitive Carbon Capture and Storage industry in the 2020s, and seeing new gas come online to ensure we can meet demand as we decarbonise.

This is the biggest overhaul of our energy infrastructure for decades. It brings huge opportunities right across the supply chain. And it’s driven not just by need – a fifth of our power plants will close by 2020 – but also by our climate commitments.

We have legally binding renewable energy targets for 2020; carbon budgets setting the level of emissions out to 2027; and a 2050 target under the Climate Change Act.

No other country has set carbon targets in that much detail, that far ahead. So the overall position is clear: It is government policy, enacted with wide cross-party support, to move to a low-carbon economy.

This change brings real opportunities for the energy sector – and for new investors.

Investors

Existing players don’t have the capacity to invest at that kind of scale. We need new players, including institutional investors, who have the muscle to make big investments in technologies with high capital costs.

That means doing everything we can to take the risk out of investing in the UK’s energy markets. From a government perspective, that means making sure we keep political risk to a minimum.

And here I want to pick up on one thing in particular which Nick mentioned: predictability.

Our priority is to set a clear policy direction. To reassure investors and entrepreneurs alike that the UK will remain a great place to do low-carbon business.

So we will make sure our policy positions are predictable, transparent, and based on the evidence. And if you look at what we’ve done so far, I think you can see that we’re holding fast to that aim.

We’re opening up markets, providing long-term certainty for investors, and removing barriers to entry – three things that are vital to bringing forward new investment.

Markets

Take the Green Deal, the nationwide energy efficiency programme for homes and businesses.

We want to establish a vibrant new market in energy efficiency, one that could attract capital of up to £15bn for installation of energy efficiency measures in the residential sector over next decade.

Or take the reform of the electricity market, the biggest news in the UK utility sector. It’s designed to give investors the certainty they need to raise capital to build our clean energy future.

The overall aim of the reform is clear: we want to encourage competition on cost between low-carbon electricity sources -including renewables, carbon capture and storage, and new nuclear – while ensuring our long-term supplies are secure and affordable.

So we’re setting up a framework that will offer reliable contracts, delivered in ways that are trusted by investors.

To unlock low-carbon investment, we’ve chosen a feed-in tariff with contracts for difference, providing a guaranteed price.

From an investor perspective, this delivers clear & predictable revenue streams – making sure we have an active and liquid wholesale market, and giving new investors enough certainty to enter.

As a package, this reform will enable large-scale investment in low-carbon generation capacity in the UK in a cost-effective way.

The Rating Agency Standard & Poor’s now takes the affordability of the regulatory system into account when they assess projects, so the affordability of the EMR framework should provide additional comfort to the investor.

And the important thing is that it’s a staged process, designed to minimise risk.

The idea is to move gradually from administrative price setting to full market price discovery over the next decade, as different technologies mature at different rates.

To make sure existing investors aren’t left in the dark, transitional measures will ensure that investments made under the current regime – the Renewables Obligation – remain predictable.

When it comes to cost-effectiveness, we are absolutely determined to follow the evidence – even if it means taking a little bit more time to get the details absolutely right.

We’ve just announced the level of subsidies for renewable electricity for the next five years, unlocking between £20 billion and £25 billion of new investment in the next four years, and bringing down costs to consumers.

We’re also committed to cleaner fossil fuels, which is why we’re working with industry to create a new cost-competitive carbon capture and storage industry in the 2020s.

We’ve got a £1bn competition, a £125m Research and Development programme and a well developed regulatory framework to help bring this pivotal technology to commercial fruition.

As our energy mix changes, our network will also need to evolve. So we have a £500m Low Carbon Networks Fund, to encourage innovation in smarter electricity networks.

Barriers

We’re also working to break through some of the non-financial barriers holding up investment.

The new National Policy Statements on energy will make our planning system faster, more predictable, and more accountable.

To help get more renewables online, we’ve published a Renewable Energy Roadmap, which focuses on the eight key technologies which have greatest potential – identifying the non-financial barriers to deployment.

And we’re working with industry and the regulator to deliver a more liquid and competitive power market, so that all investors can manage risks and have fair routes to market.

Conclusion

I hope I’ve given you a sense of the opportunities in UK energy markets, and the two big themes which run through UK energy policy: predictability, and evidence.

As we look to build a diverse, secure energy system – one that can meet the UK’s future energy needs at the lowest environmental cost – we will need significant new investment.

Unlocking that investment, and reducing our political risk profile, means making sure our policy positions are predictable, and based on the evidence.

If we get it right, the prizes on offer are alluring. For Britain, secure supplies of affordable low-carbon energy. For businesses, the opportunity to build and operate the energy system of the future.

And for investors, the chance to be part of an historic, unprecedented replacement cycle – with opportunities stretching out for decades to come.

Thank you very much.