Kerry McCarthy
MP for Bristol East · Labour · United Kingdom
“We see that in four main ways: physical risks, including floods, wildfires, droughts and storms; transition risks as economies move away from high-carbon industries; nature-related risks affecting food production and natural resources; and systemic risks, where shocks spread rapidly across sectors and markets.”
“The glaciers of the third pole function as Asia’s water tower, feeding major river systems that support nearly 2 billion people. When rising temperatures accelerate glacial melt, the consequences extend far beyond the mountains.”
“Following the heatwaves and wildfires across Europe this summer and the destruction caused by the glacier collapse and catastrophic flooding in Nepal and Tibet, the message is becoming impossible to ignore: the consequences of climate change and environmental degradation are real, not some distant future threat.”
“Personally, I cannot see that Rosebank is compatible with meeting our climate objectives, but I recognise that the process should be followed. Green Alliance has reported that the gas being wasted in the North sea would be enough to heat 570,000 homes.”
“I too worked in the financial markets, although I think I have done a better job of hiding it in my 21 years in Parliament. I was more on the debt market side. In fact, I am so old that I was part of the salvage operation for Barings bank when it went under. That brings me to the right hon. Gentleman’s point about regulation.”
“My hon. Friend will not be surprised to hear that I very much agree with the point that he just made. We have some excellent, innovative businesses in Bristol that came up through the Science Creates innovation hubs and attracted private capital.”
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“The glaciers of the third pole function as Asia’s water tower, feeding major river systems that support nearly 2 billion people. When rising temperatures accelerate glacial melt, the consequences extend far beyond the mountains. This is not simply an environmental catastrophe; it is about infrastructure resilience, water and energy security, as well as economic stability across the entire region. It is entirely the kind of systemic risk that modern resilience finance should help countries to anticipate and manage. I conclude by asking the Minister this: who will be attending COP17, and will we make sure we show leadership on global resilience there?”
“We see that in four main ways: physical risks, including floods, wildfires, droughts and storms; transition risks as economies move away from high-carbon industries; nature-related risks affecting food production and natural resources; and systemic risks, where shocks spread rapidly across sectors and markets. For many years, conversations about green finance primarily focused on corporate social responsibility. Today, they are equally about resilience and risk management. The UK is well placed to lead on that, but I fear that we are not doing as much as we could be. I am vice-chair of the all-party parliamentary group on Tibet. What is happening in the Himalayas and the Tibetan plateau is one of the clearest examples of climate risk unfolding today.”
“Following the heatwaves and wildfires across Europe this summer and the destruction caused by the glacier collapse and catastrophic flooding in Nepal and Tibet, the message is becoming impossible to ignore: the consequences of climate change and environmental degradation are real, not some distant future threat. As the national security risk assessment says, climate change, biodiversity loss and ecosystem disruption pose risks not just for the environment but for our economy, security and way of life. Climate and nature shocks are arriving faster, harder and more systematically than many of our economic systems were designed to handle.”
“Personally, I cannot see that Rosebank is compatible with meeting our climate objectives, but I recognise that the process should be followed. Green Alliance has reported that the gas being wasted in the North sea would be enough to heat 570,000 homes. It has been over a year since the Government issued a methane action plan—I think the Minister took it over from me. Methane is more than 80 times more powerful than CO 2 in the short term, so what are we doing to reduce venting and flaring in the North sea?”
“My hon. Friend will not be surprised to hear that I very much agree with the point that he just made. We have some excellent, innovative businesses in Bristol that came up through the Science Creates innovation hubs and attracted private capital. They are flourishing, but they need signals from the Government that we are sticking to our net zero agenda so that there will be a market for their products in due course. Does my hon. Friend agree that those signals are important?”
“I too worked in the financial markets, although I think I have done a better job of hiding it in my 21 years in Parliament. I was more on the debt market side. In fact, I am so old that I was part of the salvage operation for Barings bank when it went under. That brings me to the right hon. Gentleman’s point about regulation. The management of Barings did not have a clue what its traders were doing, and the regulators certainly did not have a clue what Barings was doing. I strike a note of caution. I worked for an American investment bank, so I saw the Securities and Exchange Commission as well as the UK regime. Where do we strike the balance between ensuring that there is not another collapse of a bank and light-touch regulation?”
“I appreciate the Government’s plans to upgrade the NHS estate, but the heatwaves are happening now, and staff and patients are enduring unbearable conditions: wards without air conditioning, temperatures of more than 30°, radiotherapy machines and MRI scanners failing, IT servers overheating, and so on. And that is all happening alongside many more hospital admissions. What are the Government currently doing to ensure that safe patient care can still be provided this summer and that staff are able to do their jobs properly, too?”
“I thank the Minister for including land use and food systems within this outline. It is so important that that is included as part of the triple challenge of climate, nature and food. We know that we can meet our climate and nature goals only if we catalyse and incentivise private sector investment. I point to the example of Bristol, where through our strategic energy partnership city leap we have mobilised finance for city decarbonisation, and where the West of England combined authority has just launched a £5 million nature fund to help kick-start nature markets. What more are we doing at a national level to support nature and carbon markets and to incentivise that private sector investment?”
“The Minister has touched on organised crime. As I am sure she is aware, modern slavery can be a real issue within the waste crime sector; we have had some powerful debates on that issue in the Chamber. The waste crime action plan sets out that people will be held to account and given community service, but we need to reach further up the chain, because often the people who are caught in the act are the ones being exploited or forced to carry out such activities. I am reassured by what she says, but does she agree that we need to go further up the chain?”
“Mr Speaker, I know that you are a great supporter of the Parliamentary Knowledge Foundation. Next Thursday, it will be bringing MPs to Empire Fighting Chance, a boxing gym in my constituency that has been involved in the Government and Idris Elba-led anti-knife crime coalition. Does the Minister agree that listening to youth perspectives is crucial in the battle to reduce knife crime and that we should be commending the young people at Empire Fighting Chance for their involvement in what is often a deeply personal issue for them? They have lost friends and family to knife crime, but they want to be part of the efforts to address it.”
“I am sure that I am not the only one who feels that they are not designed to withstand the current heat—and neither are many of our public buildings and infrastructure. May I urge the Minister to make sure, while also talking to colleagues in other Departments, that we factor in climate resilience when we plan future infrastructure and funding for housing, schools and hospitals?”
“About 90% of the reserves in the North sea have already been extracted. Has the hon. Gentleman looked at the analysis of how expensive it is to reach the rest of the reserves? One reason they are still there is that it is far more expensive to extract them. Has he seen whether there is an economic case for doing so?”
“Something that has been missing from this debate is the opportunity we have to be the leading exponents of offshore wind, including floating offshore wind, hybrid assets and energy connection. When I was a climate Minister, I held the international energy brief, and whether it was from talking to Azerbaijan about what it can do in the Caspian sea, to countries on the Black sea, to countries on the Baltic sea or to the governors of states on the west coast of America, I saw that everyone is interested in what we are doing and that there is huge potential. Does my hon. Friend agree?”
“Does the hon. Lady agree that we will never persuade other countries to take action to reduce their carbon emissions unless we show global leadership? Will she join me in congratulating the Prime Minister, who went to COP29 in Baku, announced an ambitious nationally determined contribution of reducing emissions by 81% by 2035? That was real climate leadership. Having been at that COP, I know that there was such disappointment among other countries about the fact that the previous Government had stepped away from showing that kind of leadership.”
“It was mostly about orangutans, which I will talk about at some length in a moment, but the people matter very much too.”
“While it does not currently account for a huge part of our trade, there is much potential. The UK-Indonesia economic partnership was launched earlier this year, and I gather that negotiations for a full trade deal are on the cards. So economically, it matters to us. Indonesia is also one of the most environmentally important countries in the world. It has vast tropical rainforests, deep peatlands, iconic species such as the orangutan, the Sumatran tiger, elephants and the Komodo dragon, and amazing biodiversity in the waters and reefs around its 17,000 islands. It absorbs more carbon dioxide from the atmosphere than the UK and USA emit combined. Healthy peat stores huge quantities of carbon but, if drained, it will start to release carbon, making it contribute negatively. Forest loss also leads to major CO 2 output annually.”
“I beg to move, That this House has considered UK-Indonesia collaboration on environmental sustainability. It is a pleasure to see you in the Chair, Sir Jeremy. I am also pleased to see the Minister for the Indo-Pacific in her place; I did want this to be an Foreign, Commonwealth and Development Office debate, even though the Department for Environment, Food and Rural Affairs was also answering questions this week, because, while my focus will be on environmental issues, this is also about our broader relationship with a country that is increasingly important to us. Indonesia is the fourth-largest country in the world by population, behind India, China and the US. It is the largest south-east Asian economy, and the only one in the G20. It has seen steady—rather than spectacular—economic growth in recent years.”
“I want to see a lot more done to use public money, and philanthropic money, as a catalyst to leverage in far more private sector funding, including through things such as the voluntary carbon and nature markets, so that we can get that finance into protecting our forests, our peatlands and, indeed, our marine environment, which I will touch on a bit later as well.”
“I certainly think that peatlands are incredibly important. It has been one of my frustrations that we put so much emphasis on forests, and on the UK on planting trees—like a race to how many millions of trees each party can pledge to plant—whereas, as the hon. Member says, the carbon sequestration impact of peatlands is greater. We need to do much more to protect them, including, I would say, banning horticultural peat, which I know she has campaigned long and hard for. I will come on to the question of climate finance later, but I will say that we are in a world in which public money is under severe constraints. The USA, for example, has pulled out of its commitments under COP.”
“I very much agree. We both spent the Easter recess wading through peatlands. I was going to say that we were wading up to our knees; I was wading up to my knees, but for everyone else there the peat came up to about mid-calf on them. I had very short wellies on, too—I was given children’s ones. There was an awful lot of squelching going on. Nevertheless, it was amazing to see the richness of the peatlands. We also took boats along the river. The water there is brown—apparently it is entirely drinkable—because of the peat in the water supply. I very much agree that stopping peatland fires and underground burning are as important as stopping the wildfires that destroy our forests.”
“We need to use opportunities such as those showcases at COPs to illustrate what we do, so that our companies can find buyers in the markets that need their products the most.”
“I direct the hon. Gentleman to the Minister, because she is the one with the power to put him in touch with the embassy, for example. However, I know exactly what the hon. Gentleman is saying. I was at the desertification COP in Riyadh in December 2024, which was all about land degradation and water scarcity. I went to the UK stand, which had a number of British investors. What really struck home with me there was a small company in my constituency called LettUs Grow, which grows salad vegetables through aeroponics, so no water is required and the company has a very low carbon footprint. It was brilliant to see out in Riyadh that countries such as Jordan and Iraq, which are managing extreme water scarcity, were aware that a company in Bristol might be of use to them in future.”
“Over recent decades, Indonesia has lost hundreds of thousands of hectares of forest each year. The main drivers of that loss are unsustainable agriculture, especially palm oil production, legal and illegal logging, mining, and rapid urbanisation.”
“The hon. Member makes a very important point. At Foreign Office questions last week, I had the first question on the Order Paper, which was very ably answered by my hon. Friend the Minister. My question was about the Tibetan plateau, the environmental degradation there and what China is doing to divert water sources. Obviously, Nepal is part of that situation, as it is in the Himalayas. I think that a fifth of the world’s population depends on the Tibetan plateau for water sources. If the hon. Gentleman seeks out the answer that the Minister gave me on that occasion, he will see that we have quite a few international initiatives that try to ensure that people get access to the water that they need. If Indonesia is under threat environmentally, that affects us all, as I think some interventions today have already illustrated.”
“I absolutely agree. I have just come from an event that Fairtrade is hosting in the Inter-Parliamentary Union room, at which people were talking, among other things, about the forest risk commodities legislation—I will come on to that later, because the Government have announced regulations today—and about the cost to smallholders and indigenous communities of complying with it. Of course, we want to ensure sustainability and stamp out deforestation in the supply chain, but we have to remember that there are small farmers and indigenous communities whose livelihoods depend on that. At Easter, a number of us went to Indonesia—Borneo, in particular—and met communities doing agroforestry projects. We were looking at how we could support them.”
“Indonesia had been co-chair of the dialogue with the UK, but was handing over to Malaysia, so my visit took in both countries. The discussion mostly focused on palm oil, as hon. Members would expect, and the theme of the dialogue was smallholders. I think I am right in saying that, in both countries, about 50% of palm oil production comes from smallholders. Although it is easy for the larger agricultural concerns to monitor regulations, comply with the certification and do all the bureaucracy that is involved in that, it is much more difficult for smallholders. As we have said, we need to bear their needs and livelihoods in mind.”
“The UK partnered with Jakarta and funded the Nature Transition Support programme for biodiversity protection in key national parks and pioneer carbon and biodiversity credit markets. The Climate and Ocean Adaptation and Sustainable Transition programme is funded by the UK’s Blue Planet fund. I have several more things on my list, but I am slightly worried that I will steal the Minister’s thunder. I suspect that she will tell us a bit about what the UK has done, so I will save them for her. As I say, good things have happened, but I will now focus on the challenges. I have been fortunate enough to visit Indonesia twice in the last couple of years. In April 2025, as the then Climate Minister, I represented the UK at the Forest, Agriculture and Commodity Trade dialogue meeting in Malaysia.”
“At COP29 in Baku in 2024, we pledged £239 million to halt and reverse deforestation in forest-rich nations that act as critical carbon sinks, including Indonesia. The measures included £188 million for high-integrity forest carbon markets, £48 million for blended finance for forest programmes to attract private investment and £3 million for the United Nations framework convention on climate change to support communities to benefit from forest restoration. We have also funded some specific Indonesia programmes, including UK Partnering for Accelerated Climate Transitions, which covers low-carbon transportation and energy efficiency. Phase 5 of a 20-year forestry programme looking at timber governance, legislation and regulation has had £12 million from us.”
“I could not agree more. I really appreciate all the interventions, which are a very good way of getting the debate flowing, but it is quite easy for me to lose my place. I was talking about the impact of mining, logging and urbanisation, and about the fact that forest and peatlands have been damaged by wild fires. I will come on to the marine environment later. The UK has been at the forefront of efforts to help reverse these problems. In a joint statement in November 2024, our Prime Minister and the President of Indonesia agreed a new strategic partnership, underpinned by people, planet, prosperity and peace. It included a commitment to address illegal, unregulated and unreported fishing, conservation of ocean species, sustainable supply chains and food security.”
“UK businesses that trade in internationally sourced commodities such as palm oil will be legally required to check that their supply chains are free from products linked to illegal land clearances and the destruction of the world’s rainforests.”
“What should not have been up for debate was whether we would act at all, yet some parts of Government were arguing that this represented another burden on business, which we could not impose. Businesses such as Ferrero, which I met, were calling for regulation, as were supermarkets. The opposition within Government was a straw man to argue for delay or, in fact, for dropping the proposal altogether. As I said, I came here prepared to vent my frustration at the delay, but I was pleased to get a heads-up from the Nature Minister last night that the Government are announcing today, at London Climate Action Week, that they are moving ahead with the regulations.”
“During my time as Climate Minister, I spoke often to the Minister for Nature and the FCDO Minister responsible for international development, as well as to our two excellent envoys for climate and nature—Rachel Kyte and Ruth Davis—about this issue. I also pay tribute to the team in the international forest unit, which spans the Department for Energy Security and Net Zero and the FCDO, who were great to work with. Our conversations went back and forth on the pros and cons of going down the EU route on regulation, which was focused on the concept of sustainability, or the route proposed by the previous UK Government under the Environment Act 2021, which was based on legality. There was a valid discussion to be had about which approach was best, complicated by the fact that the EU approach would apply in Northern Ireland.”
“That is an area two and a half times the size of Manchester—we normally say the size of Wales, but perhaps Manchester is where it is at these days. This was going to be the point at which I called out the Government for not making more progress with our legislation on forest risk commodities. I was going to say that we cannot have any credibility on the global stage in co-chairing initiatives such as the FACT—forest, agriculture and commodity trade—dialogue or the Forest and Climate Leaders’ Partnership, which we co-chair with Guyana, if we are not prepared to take steps to stamp out deforestation in our own supply chains.”
“Indonesia’s efforts are now focused on scaling up certification, strengthening enforcement and ensuring that future growth in palm oil production does not come at the expense of remaining forests, but this is a global issue, and we cannot expect Indonesia to act alone. We know that 90% of all global deforestation is driven by agricultural expansion to meet international demand for traded commodities. What we consume in this country is contributing to the destruction of forests and peatlands across the globe. The Government’s figures show that, in 2023, British consumption of everyday goods, such as palm oil, cocoa, rubber and soy, was linked to the clearing of around 29,000 hectares of forests worldwide.”
“A palm oil moratorium was introduced in 2018, halting new plantation permits and revoking some non-compliant concessions, and many private sector companies have adopted NDPE, or “No Deforestation, No Peat, No Exploitation” policies. Indonesia has also acted more widely to protect its forests and peatlands. Forest and peatland moratoriums were introduced in 2011 and made permanent in 2019. New permits to clear primary forests and peatlands were suspended, and that was complemented by peatland restoration programmes and stronger protection against wildfires. Secondary forests are still vulnerable, however, and many forests remain exposed within existing concessions.”
“Palm oil accounts for around 4.5% of GDP and supports 16 million jobs, with many of those involved being smallholders, as I said. This is a dilemma that many emerging economies face: going for growth, exploiting abundant natural resources to the max and boosting the livelihoods of people who might otherwise be living in poverty, or protecting their environment. However, I do not think those two things need to be at odds with each other. It is true that palm oil has historically been linked to deforestation, peatland drainage and biodiversity loss, but Indonesia has been taking steps to address that. A mandatory national certification scheme for Indonesian sustainable palm oil, known as ISPO, was introduced in 2011.”
“That is probably the subject for another long debate, because it gets into the inequities in global food supply chains and making sure that farmers—whether in the hon. Gentleman’s constituency or the heart of the Indonesian rainforest—get fairly rewarded for what they do. I would say that a lot of products with palm oil in them are probably not the best elements of a healthy diet, such as the ultra-processed foods we should be stamping out. However, palm oil can be sustainable, and I will come on to talk about how we ensure that it is. Even if some palm oil products someone ends up consuming are not particularly great, there are others where palm oil is an important part of our food systems. Indonesia is the world’s largest producer of palm oil, supplying more than half of global exports.”
“I was going to wind my hon. Friend up by saying that I have no idea how big Leeds is—slightly bigger than Bristol, I think—but he is right that delay has consequences. I gather that the Government have announced a consultation now, but we do not want that to drag on. We must ensure that it is a genuine consultation, but that it is time-limited and that action follows as swiftly as possible.”
“As a lawyer, I am pretty sure they can find the words to deal with these things, even if it is just where animals are forced to perform unnatural acts or where they are drugged or declawed. They do not have to catch every type of animal abuse and exploitation; it would be a start to bring in regulations that catch at least some of it.”
“It has been three years since the UK passed the Animals (Low-Welfare Activities Abroad) Act 2023, which will ban the promotion by UK companies of tourist attractions abroad that involve animal cruelty and exploitation—for example, those where tigers are drugged and declawed, elephants are forced to perform or, as we saw on film in Borneo, orangutans are forced to take part in boxing matches. Yet we are still waiting for the Act to come into force, because the lawyers at DEFRA need to draft regulations. I am told that they are struggling to find the right words to put in the definitions to catch that type of cruelty and exploitation. My next note just says, “Get on with it.” They need to get on with it. There is no excuse for three years’ delay.”
“There are going to be about 15 little islands where groups of infected orangutans—one male, a couple of females and the younger ones—will be able to experience freedom together without passing their diseases on to healthy animals. I look forward to seeing that come into play. A sizeable number of the orangutans that BOS rescues have been trafficked—for example, stolen as babies to be pets or for private zoos. BOS has rescued around 50 from tourist attractions in Thailand.”
“Many orangutans like Peanuts and Lanting have been displaced by development as Indonesia’s population and urbanisation grow. They are also very susceptible to human diseases such as tuberculosis, which they catch when humans start encroaching on their territory. I think all of us who went would agree that the saddest thing we saw at the forest school was the orangutans that could not be released from their cages because they carried diseases—particularly TB. They were clearly really unhappy animals and it was heartbreaking to see them. Under the law in Indonesia, they cannot be euthanised, because they are a protected species. However, there is some hope, because BOS is fundraising to create new habitats.”
“They are the most arboreal of all apes, spending around 80% of their lives in the rainforest canopy. Normally, their mothers teach them forest skills and how to survive in that way up to about the age of eight, but when they are orphaned, they go to forest school for about the same length of time. Then they go to university, where they practise semi-independent living. My hon. Friend the Member for Brent West and I each had the amazing privilege of releasing an orangutan—his was called Peanuts; mine was called Lanting—into their university island, where I hope they are thriving. BOS is doing great work, but we need to do more to tackle the underlying reasons why so many orangutans need its help. I have already spoken at length about forest risk commodities and the destruction of habitats, but those are not the only factors.”
“My second visit to Indonesia was in April this year with the all-party parliamentary group on international conservation and Borneo Orangutan Survival UK. Three Members present today were on that visit, and I think it made a lasting impression on us. We took a very long and slow boat journey into East Kalimantan in the heart of Borneo and trekked through very rich, deep and, as I said, squelchy peatlands to see the work being done to restore primary rainforests. We also met people from the indigenous communities to see sustainable agroforestry in action. The best part was that we spent a day at a forest school for orangutans, where they teach orphaned orangutans how to survive in the wild. Indonesia is home to three species of orangutans and they are all endangered.”
“Friend the Member for Leeds Central and Headingley (Alex Sobel) will speak on it: the controversial plans for a food estate in West Papua. I have had some reassurances that that will not involve the destruction of healthy forests and that it is part of an important strategy to increase Indonesia’s food security—I can tell by the look on my hon. Friend’s face that that is not the account he has been given. However, as I said, I knew he was coming here to speak about that, and I know I can rely on him to speak about it with great expertise. The other assurance I have had recently is that Indonesia wants to move away from such a high dependence on the palm oil sector, diversify what it grows and increase its food security, but I will leave that to my hon. Friend to cover. I want to talk instead about orangutans.”
“At COP29, I was proud to launch our six principles for voluntary carbon and nature market integrity, and last year we used London Climate Action Week to launch the Coalition to Grow Carbon Markets, which we co-chair alongside Kenya and Singapore. However, I am somewhat concerned by the lack of progress since then. There was a Department for Energy Security and Net Zero consultation that closed nearly a year ago on 10 July. I have been trying to chase that up, and I gather that around 200 responses have been published, but the recommendations have yet to come forward. Maybe that is being saved up for London Climate Action Week; I very much hope it is, because I think the eyes of the world are on us to make this blended finance happen. There is one issue that I will touch on only briefly, as I know that my hon.”
“Indonesia is already benefiting from REDD+, or reducing emissions from deforestation and forest degradation, funding, which is a mixture of public and private finance, but we could do much more to scale that up. Indonesia has a huge amount to offer investors, and I know they are looking to the UK to help them; in fact, just after I was in the country last year, the climate envoy arrived at the embassy to run some workshops on voluntary carbon and nature markets and how Indonesia could work with the UK on those. We are rightly seen as leaders, not least because London is one of the global financial capitals of the world.”
“That is the end goal; the EUDR has run into some problems and its implementation was delayed—it should have been at the end of last year, and now it may be at the end of this year—so the idea is that we move ahead with what we have already drafted under the Environment Act, and then better will follow. The British Retail Consortium today welcomed the announcement, which is another indication that business does want this change. While regulation will help to prevent further destruction, we also need to mobilise finance to protect standing forests and restore what we have lost. Public funding from donor countries and philanthropy both have an important role but, as I said to the hon. Member for Strangford, we must look to the private sector if we are to close the forest finance gap.”
“My hon. Friend is right. One of my concerns was that Bolsonaro was making legal what should clearly have been illegal. The counter-argument was that there was something slightly colonialist about dictating how a country should decide on what was sustainable for its own purposes, and there were some voices on that side. As I understand it, the UK will start on the basis of what is illegal in the country from which we are sourcing the products, but the intention will be eventually to align with the EU regulation on deforestation-free products over time, and the ultimate goal is a blanket deforestation-free standard that would legally require products to be produced without any forest loss or land conversion whatever.”
“The Minister is leading on that, so perhaps she can tell us a bit about it in her reply. Indonesia is vital to us, and will become ever more so. Its economic success is important to us, as is its environment. I look forward to hearing what the Minister and other colleagues have to say.”