Session 3: The implications of an accelerated transition to #netzero:
This session will explore the implications of carbon pricing, the creation of a Carbon Club of Nations to accelerate transition, and the impact on global trade and investment in a #netzero era. Is a Carbon Club of Nations – a must-have or a distraction to delivering an ambitious outcome to COP26? As the world looks to build back better after the Covid pandemic, will carbon border adjustments and national or regional carbon pricing act as an accelerant or as an impediment to rebuilding global trade? What is the future of Global Trade in a carbon priced world?
1. We face a clear choice between climate policy success and climate policy failure. Success means staying below 2C and that means net zero by 2050. We are currently on course to fail.
2. The challenge for Glasgow is to reset the course from failure to success. This means: raising the ambition of reduction commitments by accelerating the transition to a carbon neutral energy system & making a credible increase in flow of public & private capital into the energy transition, especially into the emerging economies.
3. As the IEA has just confirmed, there are no insurmountable technological or economic barriers to success. The biggest barriers are the political obstacles between and within nations. This is a battle between fossil fuel incumbents and carbon free innovators. It cannot be won if we lose social cohesion in a transition that leaves large numbers of people behind.
4. Climate policy success requires 200 nations to align their energy policies something the EU has not yet been able to do despite creating a single market. It also requires certainty of outcome which means you cannot have certainty of price so it will take much more than a carbon tax to succeed, in any case harmonising tax policy is even more difficult than harmonising energy policy.
5. The UNFCCC is the only device we have for keeping 200 nations aligned in the effort to solve a global problem, which, like Covid, means that no-one is safe unless everyone is safe. Success in Glasgow is crucial to its role in driving the energy transition forward.
Speaking at the Dublin Climate Dialogues