COP26 certainly wasn’t a flop. It didn’t take us to where we need to get to, but it did take us a step forward into the really hard work of delivering on the Paris Agreement. So, I think that it took us somewhere. I think what surprised people was the way in which there was such a diverse response, it wasn’t just governments doing things, it was also a whole range of other actors, businesses, and the financial community who signed up to a whole series of side agreements that will drive forward investment in the low-carbon economy. So, I think that we saw quite a lot of positive signs, but none of it adds up to a solution to the problem.
If I gave it a mark out of ten, I would give it a five, because what people fail to understand is just how difficult a task this is. We are trying to get 200 nations to align their energy policies, that is what solving climate change involves. The EU has had a single market for almost 50 years and has not managed to come up with a common energy policy, because it is so politically difficult, so one shouldn’t set wild expectations for what we are going to get out of an international agreement on a topic as difficult as this.
I don’t think that the difference in the wording ‘phase down’ rather than ‘phase out’ coal is all that significant. The signal that has come out of COP is that coal is on its way out, and that is the important thing to focus on. It is not going to go out over-night. So, I am not surprised at the reaction from India or from China, and they have got to deal with strong domestic constituencies. The Reality is, in India in particular, it is already cheaper to deploy solar, especially in the villages where people are remote from grid anyway in a lot of southern India. So, it is already cheaper to do that now, and it will be even cheaper in the future as the cost of solar continues to fall. It is going to be very hard to finance new coal, so the cost of new coal is going to go up, simply because the markets have made up their minds already that coal is on its way out, so the risk of financing coal is greater. So, we are going to see that transition take place.
You can’t have a technology transition without a social transition, and we don’t talk very much about the fact that there are going to be lots of jobs in the green economy, but they are not going to be the same jobs, in the same places, for the same people, with the same skills. And we hear less than we should about the need to accompany the energy transition with a social transition.
I am not as interested as some people are in the issue of what lifestyle choices individuals make. What people do matters. What people are willing to do will be driven by two things: Firstly, it will be driven by events, and that is why we have got such a high level of public anxiety around the world. Because it is quite clear that what is actually happening with the climate, and in people lives, has now validated the science. So there is a sense in which the public expects governments to do something to address the problem in a way that they haven’t done before. And that pressure is going to go on because we haven’t done enough in Glasgow. So, events are going to make a difference. Secondly, what is going to make a difference is the quality of leadership. Something we saw clearly with covid was that the better the leaders behaved, the better the public behaved. And I think that will be equally true in relation to climate change. So, if political leaders take on their responsibility as role models, I think that it will be much easier for people to make the sort of changes in lifestyle that we need to make. What changes will be made by who and where is going to vary quite a lot. But I don’t have any doubt that if there is good political leadership then the combination of events and leadership will take us to where we need to be in terms of personal lifestyle choices.
Neither the EU nor the UK have the right leadership, but for very different reasons. I think that the UK has chosen to have particularly weak political leadership at the moment. There is very strong leadership institutionally in all sorts of areas, but it does not have strong political leadership. The EU doesn’t have strong political leadership because there isn’t a single focal point for a voice that leads Europe. So, the commission proposes, but it is not the political proposer. The politicians dispose. So, there isn’t a strong political leadership, and that was very evident in Glasgow. You didn’t really see the EU leaders stepping up visibly in the same way that you saw from other leaders from around the word, and that weakens the impact. That is not to say that Europe isn’t making an enormous difference, it really is. With the largest single market it is shaping the way in which other countries need to adapt their policies in order to accommodate the things that go on in Europe. But as Europeans, we are not giving a voice to what I think is actually the authentic voice of the people of Europe.
One of the most important things that became very clear at COP is that the financial community is going to play a very large part in shifting the trillions into low-carbon energy. The private sector is going to need the public sector to provide the right sort of framework, but a lot of the actual money that needs to be spent to make the difference is going to come from the private sector. And in that case the EU and the UK are closely aligned in that respect. Where the rubber is going to hit the road on that is on the issue of the taxonomy, which is the classification process by which you decide what a green investment is or is not. That is a major tool that Europe is developing, that will shape not just policy in Europe but also policy around the world as markets respond to the pressure to invest in low-carbon, and that case it is the divisions inside the EU that are going to be very crucial. For example, the French want to include nuclear power and the Germans don’t. The important point is that for the taxonomy to have the effect that it needs to have on private investment, it needs to be science based. If it looks like politics is intervening, and it is not just on nuclear it is also on gas, if the EU is prepared to deform the taxonomy’s science base, in order to accommodate particular countries, then it weakens the whole significant impact of the taxonomy in driving private investment. Not just in Europe and the UK, but also around the world.
I certainly think it is the ambition of the current government that the taxonomy of the UK should include nuclear, that will to some extent be shaped by how this debate is resolved in Europe. The fact of the matter is that you can’t build enough nuclear power stations to make any difference on climate change anyway. So, it is a huge distraction, not just in terms of the way that it might corrupt the whole idea of the taxonomy, but indeed how it would divert very large amounts of public money as well as private money into doing something that can’t help very much.
The EU as an institution has shown an ability, even if it sometimes takes a frustratingly long time, to get to where it sets out to get to, and I think that this policy is broadly supported in Europe by the public, not always by governments, but certainly by the public. I think what is important to bear in mind is that the consequences of climate policy failure will be very bad for the EU. Basically, if climate policy fails, we are going to see southern Europe being exposed to impacts from climate policy that people in Northern Europe are not exposed to. That is really going to put pressure on the unity of the European Union. So, there is a real incentive at a higher political level for Europe to hang together and solve the problem together. Climate policy failure doesn’t only mean that you won’t have anyone from northern Europe wanting to holiday in Southern Europe in 50-degree temperatures. It also means that Southern Europe will be exposed to massive influxes of migrants from parts of North Africa and the Middle East, and that will create real problems for Europe. So, we have to get the political lead from Europe about how important climate policy success is for keeping the EU together as an integrated whole.
I really think that border adjustment mechanisms are a triumph of theory over experience, I don’t think that they are going to add anything. That is a problem that the commission tends to suffer from. The idea of extending the ETS to cover buildings and movement, strikes me as an equally bad idea because again it is a triumph of theory over experience. The fact of the matter is that we don’t have global trade in a lot of the things that you would apply these adjustments to. Steel possibly. There isn’t a global trade in concrete, so why would you do that? It seems that there is a real sense of opportunism going on here for people to try to impose things that may sound popular because they appear to punish bad behavior, but it would be very counter-productive. I think that there is quite a debate going to go on over sea bounds.
I think that the EU UK relationship when it comes to dealing with climate change on the whole has been workman like and has not been subject to the kind of tensions that there have been elsewhere between the EU and the UK. I think the real advantage to getting interconnect is in making a pan European electricity grid work, because that has advantages for the UK and for the EU. That means aligning the regulation as well as the investment, so that we can have a very effective low-carbon electricity supply, that is very much more secure and reliable than it would be for either the UK or the EU without that alignment.
These are excerpts of a podcast discussion for Delegation of the European Union to the United Kingdom Delegation of the European Union to the United Kingdom. The full discussion can be listened to here: