What does the Paris agreement mean for the UK?
Few political deals deserve to be called historic but, as President Obama tweeted a few minutes after the gavel came down in Paris, “this is huge”. It’s huge because it’s a global agreement which means every country has to review its effort every five years. Historic because it’s a one way street to net zero emissions, and it will accelerate the low carbon technology shift we are already seeing in the global energy economy.
The French deserve credit for the masterful diplomacy with which they steered the negotiation, but the UK also deserves plaudits. It was the British that invented climate diplomacy. The UK’s influence was pivotal in the creation of the EU’s groundbreaking 2020 and 2030 climate packages, which gave Europe such high standing in the negotiation. It was the UK’s cross party Climate Change Act which was the inspiration for both the five year ratchet and the long term goal in the Paris Agreement.
So, having played our part in securing the deal, what does it mean for UK policy and politics? Here are some early conclusions:
The UK has run out of excuses for its own emissions reduction gap and needs to act fast
The Conservative leadership thought the UK was ahead of the pack, which is why it has been so cavalier about dismantling policies like Zero Carbon Homes. But Paris demonstrated unequivocally that the UK’s positon in the world has changed. We chose the months before Paris, right when our global competitors were raising their domestic ambitions, to very publicly reduce ours. We’re now the bright kid in the class who’s gone off the rails. A source of private gossip and public concern.
Happily, there are three easy ways out of this, to stop tongues wagging and fill the emissions gap in 2016: 1) the next Levy Control Framework, to be agreed by the Treasury by the March Budget, can unleash the next wave of investment in low carbon energy infrastructure; having killed CCS, the government now has to double down on renewable energy to make up for lost low carbon generation, since the nuclear industry’s optimistic new build projections will only replace existing capacity due to retire by 2030; 2) by June, parliament has to vote on the 5th Carbon Budget and, as the Committee on Climate Change has left the government no wriggle room to set the budget higher, legal action beckons if its advice is not accepted; and finally, 3) the most important negotiation will be the government’s ‘carbon plan’, to be agreed by the end of 2016, when David Cameron can broker substantial new policy across government on buildings and transport and help DECC secretary of state Amber Rudd to deliver a step change in energy efficiency and renewables.
George Osborne should think twice before disrupting the UK’s low carbon progress
The Chancellor has the power to prevent Rudd and the PM bringing coherence to the UK’s carbon strategy, since the Treasury now drives energy, transport and house building policy. However, unlike Budget announcements, successful infrastructure policy can’t be made tactically; if he does eventually become PM, he risks inheriting an energy policy mess he has created, and will find that the remaining policy levers in his hands don’t produce quick results. Obama and Xi Jinping have shown that, to be a heavyweight statesman in the 21st century, you have to have a clear narrative on climate risk. Although climate and energy are still unlikely to be electoral issues, competence on them is a hygiene factor by which the public will judge whether politicians can manage in an uncertain world on their behalf. Osborne may be a state sceptic, but he is not a climate denier, and he should be able to see that the tectonic plates have shifted. He’d better not leave it too late to get on the right side of the argument.
UK economic policy has to be smarter to succeed in growing low carbon markets
The speed that global technology and infrastructure markets will now shift will be astonishing following the Paris deal. It was laid bare in a recent report by Goldman Sachs. Unlike most carbon policy debates, which focus on 2030 or beyond, it expects the greatest market dislocation to occur between 2015 and 2025. It forecasts that solar PV and wind power deployment, from 2015 to 2020, will deliver more energy supply than the history shaping US shale boom between 2010 and 2015. It predicts that LEDs will be 70 per cent of light bulb sales by 2020, and that electric and plug-in hybrids will have grabbed over a fifth of the car market by 2025.
The UK currently has competitive strengths in low carbon vehicle manufacture and renewable energy services but, with a volatile domestic market, it is likely exporters will only be able to exploit technology and service learning derived from previous, more positive, policy phases. So far, business secretary Sajid Javid has shown no interest in these new opportunities for UK plc, whilst our competitors: Germany, the US, Korea and China, have stepped up their support and are moving ahead. Smart economic policy would help our strongest renewable energy and low carbon vehicle suppliers to scale up both at home and abroad. It would involve not selling the Green Investment Bank, in the era where patient low carbon capital will be critical to successful business innovation.
We still need to plan for three degrees
Paris does not yet get us out of danger, even if the ratchet mechanism gives us a chance to stay within two degrees of warming. We should hope for the best, but plan for the worst. For the time being, we’re on track for three degrees: a horrible and changed world in which the Amazon collapses, dried out and burnt, tundra soils melt and very significant sea level rises will occur, swamping island and coastal communities around the world. We won’t be able to build flood defences high enough. We will need to plan for a step change in our resilience. The unsung work of the Climate Change Adaptation Sub-Committee should be required reading for government, councils and landowners. The committee has carefully identified the flaws in our response and the solutions. For instance, we are, unbelievably, still building on floodplains and should stop, our peat uplands are degrading, but can be restored, and we are still trying to defend coasts, when we’d be better off managing their retreat.
One of the best things about the Paris accord is that it challenges widespread scepticism about the effectiveness of democratic politics. It just made a pretty good fist of addressing one of the biggest challenges to society, and it took many, many politicians, officials, NGOs, citizens, and business advocates to get the political process this far.
It doesn’t resolve the climate problem, but it definitely does take us forward. And, unless you fantasise about benign dictatorship, this sort of partial progress is as good as it gets. To rebuild confidence in UK low carbon policy, we will need our own cross sectoral coalition for high ambition, and all the charm, guile and perseverance of the French diplomatic service.