What environmental issues does the next government need to address?

 

 

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What environmental issues does the next government need to address?

With representatives of the main parties set to outline their green agenda, this week we look at the key policies and areas the environmental community want them to look at.

Rob Comba spoke to Tom Burke from Third Generation Environmentalism (E3G) and Sandra Bernick from the New Economics Foundation to get their thoughts.

 

 

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What should be top of any government’s green agenda?

Tom says there are three things:

  • Being able to borrow enough to establish a low carbon, resource efficient economy
  • To restore the government’s ability to protect environment
  • It needs to get tough on the burden weak environment policy is having on the NHS

Sandra thinks a key area is energy and people should be able to generate energy locally.

What about concerns?

Sandra believes there needs to be an immediate focus on climate change, as well as on local issues.

From an environmental perspective, who would form the ideal government?

Tom would like to see a Labour-led coalition after May’s election, that’s because he says Cameron and the Tories haven’t kept their promise to be the ‘greenest government ever’

What about UKIP, is their rise a concern for environmentalists?

Both Tom and Sandra don’t think they will be powerful enough to have too much of a say in the next government.

 

 

 

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TROUBLE AHEAD

 

This piece first appeared in BusinessGreen

 

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The political argument for trade liberalisation has always been that it is good for the economy. This argument was losing traction even when what was good for the economy was good for your wallet. Now that rising incomes for most people have been detached from a better economy it has even less resonance with the public.

This adds edge to the increasingly rancorous debate about the Transatlantic Trade and Investment Partnership ( TTIP ). Trade policy debates used to be about lowering tariffs on goods. They were of limited interest to most people. They promised the public lower prices at a small cost to the public purse. Not surprisingly, only those whose interests were threatened by lower prices cared very much.

Tariff barriers to transatlantic trade have all but disappeared. So what is TTIP for? Its purpose is to stimulate investment and trade in services by reducing or eliminating non-tariff barriers to trade. Europe’s growth-less leaders are very keen. Europe’s wage-poor publics much less so.

The controversy to date has focussed on the proposed Investor State Disputes Settlement  ( ISDS ) provisions. These are intended to protect foreign investments from discrimination or expropriation. In  practise they have become a battleground for corporate lawyers seeking to globalise a uniquely American legal doctrine of ‘takings’. This famously led the Swedish utility Vatenfall to sue the German government for compensation for Germany’s decision to close its nuclear power stations.

The argument over why a secretive arbitration process is to be preferred over a transparent court process has been loud and long. It is not yet resolved. Nor is it clear why a company should be compensated for failing to properly assess the political risk to investments that might be vulnerable to public policy change. It is also difficult to see what is attractive to governments about putting themselves between the rock and a hard place of being constrained from adopting policies to protect health or the environment for fear some company would sue it for billions of dollars.

The loud noise over the ISDS provisions of TTIP has diverted attention from another innocuous sounding proposal that could be as effectively, if less visibly, a constraint on governments’ freedom of action. This is the idea of making European and American regulations compatible with each other. Proposing to reduce regulatory burdens has immediate appeal. It could reduce the costs of meeting high environment or health standards and thus make their achievement more likely.

This may even be what the drafters of TTIP intend. If so, they have failed to grasp just how differently the EU and US approach regulations. There are scholarly examinations of these differences. There will be more as the argument over TTIP continues. A blog is not the place for scholarship so let me just flash some warning lights about the problems ahead.

One of the ideas for achieving coherence is to have ‘early consultations on significant regulations’. What could possibly be wrong with this? Well, the structure of European policy making involves a considerable amount of pre-legislative consultation and consensus building. In America consultation takes place after legislation as regulators develop the rules for implementing the law. There is no obvious way for early consultations to cross this difference.

Partly as a consequence of this difference another big difference emerges. American regulatory practise involves considerable use of the courts to interpret the intent of Congress. Individual, businesses and civil society bodies have, and often use, access to the courts to challenge interpretations. The key decisions on regulations are thus often made in the courts. In Europe, regulators have far more discretion to interpret the law and access to the courts, especially at European level, is restricted and rarely used. Most key decisions are thus made by regulators.

It is very difficult to see the EU extending access to the courts to the level taken for granted in the US. Nor is it easy to see American stakeholders, including businesses, being willing to accept restrictions on their access to the courts. Nothing has yet been said publicly by the trade negotiators about how these differences are to be aligned.

A third problem arises from different approaches to impact assessment. US law mandates the use of cost-benefit analysis in assessing regulatory impact. To be lawful the economic benefits must exceed the economic costs. The EU uses a precautionary approach. Economic costs and benefits are among the factors to be considered but meeting the objectives of the regulation takes precedence. In the US the economic considerations outweigh the achievement of the objectives. In Europe the achievement of the outcomes outweighs the economic factors.

Neither of the problems I have picked out, or the many others, that stand in the way of making regulatory coherence a reality will be resolved in the negotiated text of TTIP. Rather they will be delegated for resolution to the proposed Regulatory Coherence Council. The prospects of significant decisions on the implementation of environmental law disappearing behind the traditional veil of trade secrecy does not inspire confidence. Regulatory coherence cannot be achieved in practise without trust, and trust cannot be achieved in private.

TTIP is extending the reach of trade policy in a way that could impinge damagingly on  environmental policy. Trade policy makers need to demonstrate that they are aware of and responsive to this risk. They could start by guaranteeing that the proposed Regulatory Coherence Council has equal access to business and civil society participation. They should also insist that the agendas and papers for all meetings of the Council and its subordinate bodies are published in real time. Since this is an administrative not a commercial arrangement there is no justification at all for secrecy.

 

Tom Burke

February 6th 2015

London

 

 

 

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Written evidence submitted to Environmental Audit Committee on Transatlantic Trade and Investment Partnership

 

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Written evidence submitted by Tom Burke, Chair of E3G

 

When we met the other week I offered to write to you and set out some of my concerns about the regulatory coherence provisions of the Transatlantic Trade and Investment Partnership.

There are clear benefits from  creating a better alignment between US and EU regulation. However, this goal may be more difficult to achieve than is widely recognised. As has become clear from large corporate mergers, it is one thing to align systems and another, more difficult and protracted matter, to align cultures. There are many examples of benefits from  aligning systems lost by failing to align cultures.

The European and American environmental regulatory systems are products of very different cultures. Public policy on the environment is developed very differently reflecting fundamental differences in the way public policy is translated into law. The role regulators play in implementation of the law also differs significantly not the least because of the different role of, and access to, the courts.

As a consequence simply aligning regulatory texts will not necessarily achieve the goal of regulatory coherence. This means that in practise coherence will be achieved through the operation of the proposed Regulatory Cooperation Council. This is to be composed of ‘senior level representatives from regulators and trade representatives’.

This raises an immediate question for the EU members of the Council as to whether they will be operating under an environment ( mixed competence) or trade ( sole competence ) legal base. There is a further complication in that the US members of the Council would be drawn from the Commerce or State Departments with no direct experience of environmental regulation. Retaining public confidence in regulatory coherence procedures within the EU will be much more difficult if decisions affecting environmental outcomes are seen to be entirely in the hands of trade officials.

The Commission has emphasised the provisions on the face of the agreement for maintaining existing levels of environmental protection and the right to regulate to achieve high levels of protection. However, these assurances miss the point. These rights have not been questioned.  The intent of the coherence provisions is to shape the way in which those rights are exercised and this may have an impact on the environmental outcomes it is possible to achieve in practise by their exercise.

The Commission proposals for achieving regulatory coherence include ‘early consultations on significant regulations, use of impact assessments, evaluations, periodic review of existing regulatory measures, and application of good regulatory practises’. The first and second of these provisions raise significant potential problems for achieving coherence which need more careful, and public, examination before they are agreed.

European environmental regulations are developed over a long period, typically a decade or more, with widespread consultation with member state governments, the European Parliament and a large array of business and civil society stakeholders throughout the process. The resulting political agreement is thus founded a carefully constructed consensus that is resistant to late alteration. There is little scope, or call for, a role for the courts and actions before them are rare. Access of individuals or non-state actors to the courts is very restricted.

American practise is very different. Federal legislation may originate in either House of the Congress and can be initiated by any individual member, at any time. There is no equivalent of the EU consultation processes and legislation passes whenever enough votes have been accumulated for it to succeed. Significant late interventions are frequently successful as part of the bargaining to accumulate sufficient votes.

In the EU regulatory culture grants the regulators considerable discretion over how the regulatory intent in to be applied in particular circumstances subject to the requirement to observe due process. The American regulatory culture severely constrains the discretion of regulators.

The appropriate agency is required to develop specific rules for the application of the legislation in each of the contexts to which it applies. These rules must be developed through widespread public consultation with interested parties. There are even rules as to how the agency must reason in its response to submissions. Any of the interested parties who feel that their interests have not been appropriately considered may, and often do, seek redress in the courts. Access to the courts for individuals, businesses and civil society is commonplace.

These considerations generate two problems for the achievement of regulatory coherence that need further examination prior to agreement. First, how is ‘early consultation’ to be achieved between two regimes in which public consultation in one is pre-legislative and in the other is post-legislative? Second, in the EU the key decisions on the implementation of a regulation is made by the regulators in the US  it is made in the courts. How will coherence on the role of the courts in environmental regulation be achieved? If it difficult to see either the EU extending access to the courts or the US restricting such access. This raises the difficult prospect of disaffected parties in either jurisdiction seeking extra-territorial redress in the US courts.

A further complication arises over the differing approach to impact assessment. US law mandates the use of cost-benefit analysis in assessing the impact of regulations. For a regulation to be lawful the economic benefits must exceed the economic costs. The EU uses a precautionary approach in which the economic costs or benefits are among the factors that are used in an assessment of the value of a regulation and the premise is that they take a subordinate place to achieving the objectives of the legislation. In other words, US regulatory practise demands that the economic costs of a measure are outweighed by the benefits. EU practise requires the achievement of the desired outcome to take precedence. The means of achieving coherence across these difference are not immediately obvious.

It is clear that much of the Commission’s thinking has been shaped by consumer protection considerations such as maintaining food and health standards. This can be achieved by technical means such as specifying the amount of unwanted materials permitted in a product and agreeing on the means used to measure the presence of such materials.

It is less obvious that sufficient thought has been given to the particular requirements of achieving environmental outcomes. For example, European climate legislation places an economy wide cap on greenhouse gas emissions. The Federal Government has no power to impose an economy wide cap on emissions but seeks to reduce emissions by point source controls. It is not very obvious how ‘regulatory harmonisation, equivalence, or mutual recognition,’ is to be accomplished in this case.

The Commission’s proposal recognises that TTIP will have to deal with these, and other,  complexities on a case by case basis over a long period. Hence the proposal for a Regulatory Coherence Council which may create a set of subordinate bodies dealing with sectoral or cross-cutting issues.

Lowering the burden of achieving better environmental outcomes through regulatory coherence is a shared objective. Fears that the processes to reach this goal could lead to a weakening of environmental standards or a chilling of environmental regulation are legitimate. Reaching beyond the traditional boundaries of trade liberalisation, as regulatory coherence does, requires also reaching beyond the traditional practises of trade negotiations.

The benefits of regulatory coherence can only be achieved if there is a high level of public trust in the institutions created to bring it about. This in turn will only be accomplished is there is a level of transparency and participation not common in trade negotiations. This has two important implications for the current negotiations:

The negotiating process itself should be transparent. Since the balance of commercial advantage is not at stake there is no reason why all interested and affected parties should not be able to monitor the progress of the discussions in real time;

The Regulatory Coherence Council and any subordinate bodies must consult with experts from all interested and affected parties. At any table where businesses are present, so, too, must be representatives of civil society. The agendas and papers for all meetings of the Council and its subordinate bodies should be published in real time.

 

3 February 2015

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ON TURNING GOOD NEWS INTO BAD

 

 

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When it comes to energy policy the Financial Times seems to be suffering the editorial equivalent of a nervous breakdown. Looking back through some of its recent stories I was struck by a headline from a Pilita Clark story in early October. ‘Germany energy market a disaster, says EDF chief’. What, I wondered, made the views of a French nuclear industry chief on his increasingly non-nuclear German colleagues so interesting.

Clark is one of the better informed and more meticulous journalists covering the environment anywhere. I have never found any reason to doubt the accuracy of her reporting. She has been a careful and consistent commentator on climate change. She does not normally cover energy stories.

The opening sentence of this particular story reminded us, as the FT often does, that Merkel accelerated a phase out of nuclear energy in Germany after Fukushima. Actually, to be rather more accurate, what Merkel really did was to restore a long standing phase out she had recently abandoned under pressure from German utilities.

The rest of the story reported the views of Henri Proglio, the Chairman of EDF, a French nationalised industry, on the German energy market. This he called ‘a disaster’. The FT clearly thought this intervention to be noteworthy. It had to dig quite deep to get the story.

It turns out that Mr Proglio’s remark was provoked by a question about the state of the French business environment. This in turn had arisen because of a singularly dumb comment from the head of John Lewis about France being ‘finished’. Mr Proglio clearly thought that Germany energy industry was too.

But, he went on, the picture in France and Germany was mixed. There were, he said with unarguable lucidity, ‘some very good and some very bad examples’. And that, more or less, was that. Hardly a story of overwhelming importance to the FT’s readers.

But not quite. There was one other point. Mr Proglio’s remark was prompted by the problems of Eon and RWE. ‘One’, he said, ‘is more or less dead, the other is in a very difficult situation.’ As the article pointed out, they had experienced a 20% and 62% fall in profits respectively.

So far, so sad. But the real kicker in story was the explanation the companies offered. In both cases this turns out to be renewable energy. For RWE it has left many of its power stations unable to cover their operating costs, and for Eon it had caused a decline in the price of baseload power.

So here we have it. The head of the French nuclear electricity industry is complaining about renewables destroying the value of German nuclear owning utilities. It is not hard to imagine why. The same gun is pointing his way.

Dissing renewables is an FT trope. So deeply is it twisting their editorial judgement that every opportunity to be negative, including one as trivial as this, must be taken. If this story had any value at all it was to celebrate the creative destruction of capitalism as nimbler rivals exposed the shared frailty and rigidity of both private and publicly owned existing utilities. Instead, the FT placed itself firmly on the side of the status quo.

Just over a month later, Mr Proglio had been sacked, the French Government has announced a 33% cut in its dependence on nuclear power; Eon had decided to spin out its traditional, less profitable, businesses into a separate entity and Citi had published a report forecasting a 28% fall in electricity market share for the UK Big 6 by 2020.

 

 

Tom Burke

Brussels

December 2nd 2014

 

 

 

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OF NIGHTMARES AND PARROTS

 

This piece was first published in BusinessGreen

 

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Let me introduce you to the mysterious world of triads. This is not, however, an article about the exotic world of Hong Kong’s ill-famed criminal gangs. This is about the much more prosaic world of managing electricity bills.

Triads are the three half hour periods when electricity demand is at its highest in Britain. They occur in winter. Between November and February businesses are charged significantly more for their electricity during these 30 minute periods.

This is a perfectly sensible measure to encourage those who can to use less power when demand is highest. It is exactly what you would expect to happen in an efficient market obeying the laws of supply and demand.

Britain’s energy intensive industries are not stupid. They try to guess when the triads will occur and then reduce production for those half-hours to cut their costs. This is a perfectly sensible response by those businesses. They do it if the marginal production losses during those three half hours are less than the extra cost of the electricity.

This is a routine business operation to cut costs which has gone unnoticed for years. The arcane skill of guessing the triad has not warranted much attention from the media and its best practitioners have preserved their anonymity.

This era of quiet professionalism may now be over. That is, if a recent headline in the Financial Times is to be believed. “UK manufacturers warn of shutdowns amid energy measures” it bellowed. This sits the story squarely in the media’s running nightmare that Britain’s lights are about to go out. Triads, it seems, are now critical to the health of Britain’s economy.

So, what is the source of this dire threat? This turns out to be the National Grid which has launched a Demand Side Balancing Reserve (DSBR) scheme. This is one of a number of measures it is deploying to increase security of electricity supply.

These measures are necessary because of the uncertainties created by unplanned outages from ageing nuclear reactors, the closing of uneconomic gas fired generators, old coal-fired power stations coming offline for air pollution reasons and the growing proportion of wind and solar generation in the system. They underpin National Grid’s confidence that it will keep the lights on this winter, as it does every winter.

The DSBR scheme will invite companies to reduce their demand during peak winter evenings. Those companies that do so will be paid. So, why would anyone object to being paid reliably to do something they used to have to guess about? After all the invitation is open to exactly those companies whose production is already sufficiently flexible to play triad roulette.

Furthermore, triads have been becoming more difficult to predict anyway. Electricity demand has been falling for nearly a decade. Rising bills have stimulated more companies to get into this game. You would have thought that the predictability of a contract would have been preferable to the current guessing gamble.

Not so according to the energy intensive businesses. Npower, Sheffield Forgemasters, the EEF have all sucked their teeth and complained to the FT that this will be very bad – ‘ a very real concern’, ‘disrupting production’, ‘more….shutdowns’ they told the FT.

How so? This scheme simply adds a belt to the many braces the National Grid already employs to keep the lights on. Energy intensive industries are not being asked to do anything they are not already doing. It is their electricity suppliers not the companies themselves which are being invited to sign up to the scheme.

The ability this scheme gives to National Grid to reduce demand is good for the security of the system as a whole. This is a useful benefit to every other business and domestic consumer. All it means for the energy intensive industries is that it will be a little more difficult to guess exactly when the triads will occur.

Hardly surprising therefore that National Grid dismissed the complaints. As it pointed out, this is not a scheme they are likely to use very often. It would only represent a fraction of the amount of demand reduction provided by triad avoidance with which the companies already cope well.

So nothing to worry about in Tanya Pawley’s story with its alarming headline? Not quite. The story accidentally reveals two things that do matter: the penchant for Britain’s energy intensive industries to whinge at all times and declining editorial standards of the FT.

If a possible increase in the price of electricity on three half hours a few days a year is ‘a very real concern’ you have got lot more to worry about than guessing wrong on triads. If these industries really are balancing their viability on such a thin edge we would we better off thinking hard about how best to close them.

In reality, of course, they are not that fragile.

The FT has taken an ill-informed and increasingly hysterical stand against the effort to decarbonise the British economy. A frequent riff of the campaign has been that this threatens our energy security. Last winter and the winter before the FT joined the rest of the media in noisy warnings that the lights would go out. They didn’t.

So what is the point of running a dead parrot of a story about a measure that would actually help to keep the lights on? Ah, well that is because this is ‘an emergency measure’ which will ‘force’ businesses to ‘shut down’. The editorial intent is clear if unstated. These disruptive measures are needed because decarbonisation is damaging Britain’s energy security.

The only point of this parrot is to populate the FT’s nightmare that dealing with climate change is ruining the economy. It is time its editors woke up to the dangers of failing to deal with climate change so cogently provided by one of its own most distinguished columnists.

 

 

Tom Burke

November 26th 2014

London

 

 

 

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Tom Burke talks to Comment Visions about the costs and opportunities of climate change

 

Talking to Comment Visions about the opportunities and costs of climate change.

 

 

 

 

Two important things about businesses; first of all for the energy businesses, the high carbon businesses are starting to get increasingly nervous about governments actually being willing to do more as the cost of renewables come down, and the low-carbon businesses are seeing an expanding realm of opportunity. So I think those businesses are going to see a change of focus from worrying about what happens to the high carbon businesses, to looking at all the opportunities for the low-carbon businesses.

Up until now we’ve only really heard from what I think of as the climate makers; the fossil fuel industries and their allies, increasingly what’s becoming clear is that the rest of the business community is going to have to pay for a changing climate in terms of lost opportunities, increased costs and damage to their facilities. So I think over the next few years I think we are going to hear many more voices being expressed from businesses like tourism, agriculture and property who will pay for a changing climate.

 

 

 

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US and China emissions agreement – BBC World Service – 12 November 2014

 

 

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Here is an interview I did recently for  the BBC World Service discussing why the emissions agreement between the US and China is so important.

 

“This is really important because the real problem with climate change is not so much technology or economics, it’s politics. It’s actually getting politicians to do what we know we can do. And I think that this is a pretty big signal, when you have both China and the US agreeing really to do a lot more than people have expected them to do. Will it be enough? I don’t think where they have got to today is going to be enough to really solve the problem, but it does take us a big step down the right road.”

 

“If you think of China as one of the biggest investors in one of the biggest periods of growth, what it is actually saying is after 2030 all the investment in energy in China will be low-carbon or carbon-neutral, and that is a pretty big statement for a country that is still developing. So what China has actually signalled is that there is no conflict between dealing with climate change and having rapid growth and development for poorer people.”

 

“There has always been this idea that somehow China is doing nothing, and you regularly hear that from the climate sceptics in this country, but the fact is that China’s has been doing a lot for a very long time.  What they haven’t ever done before is said when emissions will peak, and that of course means that they will now shift basically to renewables, energy efficiency and nuclear as a way of delivering all the energy they need for their people’s prosperity but without destroying the climate.”

 

 

You can listen to the whole discussion here

 

 

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If there is the will, there is a way – Sky News – 02 November 14

 

 

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Here is an interview I did for Sky News discussing the draft IPCC ‘synthesis’ report, why this report is different, and what difference it could make.

 

“I think there are two things that are different about this report, first of all this report is not just for scientists, this was agreed line by line by government officials, so this is what the scientists and all the governments are saying is the nature of the problem. And secondly, when you read the report it’s all about what the impacts of climate change will be on human beings. So it’s not so much now about what will happen to polar bears or ice sheets or glaciers, it’s really about what it will do to agriculture, what it will do to forestry, and what it will do to the lives of people living in cities around the world, and that really does make it much more significant politically.”

 

“There’s no question that we have the technology and the engineering skills to do it, and also it’s now pretty clear that we won’t wreck our economy by doing it, but it will change the pattern of winners and losers, and that makes a big difference politically. So the real question is not so much whether there is a way, but whether there is the will to do what we know we can do”

 

Watch the full interview here

 

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THE FOSSIL FUEL PARADOX

 

This blog  was first published by BusinessGreen

 

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A debate over the real value of investment in fossil fuels has raged all summer. September’s climate summit in New York brought it into sharp focus. There, Anthony Hobley of the Carbon Tracker Initiative told the assembled global leaders that tackling climate change put a trillion dollars worth of fossil fuel investments at risk.

This debate has provoked the oil majors into an unprecedented public defence of their assets’ value led by Exxon and Shell. Stripped of its detail, their argument turns on whether or not you believe governments will meet their obligation under the climate treaty to keep the rise in global temperatures below 2°C.

If they do, there will indeed be a lot of stranded assets. If they do not then further investment in fossil fuels is safe. The consensus within the fossil industries is that governments will not only fail, they will not even try very hard. Hence their conviction that none of their assets will be stranded.

Who is right is anybody’s guess. Even the governments don’t know yet. Geopolitics and capex constraints could combine to drive oil prices dramatically up. Disruptive technologies could collapse the price of low carbon alternatives further. Either would prompt a recalculation of the political risks of climate change policy.

The fossil industries’ confidence is based on their modelling of the energy future. This foresees global energy demand growing about 50% by 2050 with fossil fuels meeting over 60% of that demand. The companies draw reassurance from the broad endorsement of their view by the International Energy Agency.

This soothing analysis overlooks two problems. The first is methodological. None of the models used by the companies or the IEA incorporate any impact from a changing climate on their growth assumptions. Growth goes up, demand goes up, production goes up and the temperature goes up. All is well.

Except that the current rise in temperature of less than 1°C is already dislocating economies. Further rises will dislocate them more as both the World Bank and two former US Treasury Secretaries have recently warned.

The growth to fuel the energy demand the fossil companies expect is driven by rising incomes in the aspiring urban populations of the emerging economies. But those are precisely the incomes that will be hardest hit by climate driven spikes in food and water prices and the costs of extreme weather events. The growth will disappear as the temperature rises.

The second is political. Governments are fickle. They blow with the wind. The fossil industries are not just on a collision course with governments committed to a 2°C world they are also on a collision course with all the businesses whose value will be damaged as the planet warms.

So far the latter have been silent in the climate debate. But that is beginning to change. Some industries are already feeling the pinch – wine and winter sports for instance. A significant proportion of the small businesses affected by floods never recover.

As temperature rise they will be joined by other, larger industries – property, tourism, forestry, agriculture. Growth for the big consumer brands, Unilever or Nestle, depends on precisely the rising urban incomes that will be hit soonest.

The value of the businesses for which a changing climate is a threat far exceeds the value of the fossil fuel industries. The business voice in the climate debate is currently asymmetric, dominated by the fossil fuel industries and their allies – the climate makers. It will become more balanced as the climate takers – the rest of the business community – finds a voice.

This will alter the political risk equation for governments. They constantly juggle competing urgencies. What is pressing today can be ignored tomorrow. The analytic and political foundations on which the fossil industries confidence is based may not be as robust as they think.

These industries face a paradox. They make high risk investments in large projects. Typically there is more than a decade between initial investment and first revenues. Then they must earn a return. This puts a premium on economic and political stability. But that is precisely what will be undermined as those investments create a world 2°C or more warmer.

In reality the transition to a low carbon economy is already well underway. The capital markets are looking ever more favourably on low carbon investments and are increasingly disappointed by the fossil industries’ returns on their $600 billion/year capex.

What matters now is whether this is an orderly or disorderly transition. If it is driven by events and climate policy failure it will be disorderly. The fossil industries will destroy value for their own and other businesses. For it to be an orderly transition governments will have to act with more ambition and consistency than hitherto. Above all, they will need to enshrine their commitment to building a carbon neutral global energy system by 2050 into next year’s big climate meeting in Paris.

 

 

Tom Burke

October 12th 2014

London

 

Tom Burke is Chairman of the environmental organisation E3G

 

 

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CCC’s response to Owen Paterson’s speech to the GWPF

 

The BBC and the right wing press have been making much of Owen Paterson’s anti-climate speech this week. It is a farrago of nonsense. The Climate Change Committee has produced an excellent briefing detailing why it is so wrong. It includes a number of important points that Adair Turner forgot to mention on the Today programme.

 

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The front page of the Sunday Telegraph this week (13.10.14) suggested that we should ‘rip up the Climate Change Act’. The Telegraph, Daily Mail and others have included a preview of arguments that former Environment Secretary Owen Paterson will put to the Global Warming Policy Foundation. In this note we examine the claims that were made and the solution proposed. We assess these against the evidence and against actions being taken by the Government. Our assessment strongly rejects the claims.

 

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