The Paris Agreement and the Direction of Government Policy in the UK

In this blog, Stephen Cirell considers where the COP 21 Intergovernmental talks in Paris before Xmas leaves UK Energy Policy.


Steve Cirell

The dust is only just starting to settle on the COP 21 talks in Paris, which concluded just before Christmas. As is usual, those attending the event just wanted to go home and sleep, and for the rest of us, it has taken a while to find out exactly what was agreed.

The agreement has been described as historic and a clear starting point for effective action against global warming. In the past all the important countries had not been part of the deals: here 195 countries, including the US, China, India and the EU all agreed on a deal.

There are differing views on whether it is legally binding or not. Technically, it is not, but there are those who say that the language of the deal (shall, must etc) creates legal obligation. To me, I do not think that this is that important: the fact is that all of these countries agreed on the text and have agreed to be peer reviewed on their progress towards the targets. It therefore becomes much harder to dodge the obligations, as has been possible in the past.

Perhaps there is a turning of the tide in relation to global warming. We hear less about dissenting scientific voices these days. It seems that pretty much all of the world’s scientific community agrees that global warming is happening and that the problem has been created by human activity. It might just be that the message that we have to do something about this is finally sinking in. Weather patterns recently can only have helped with this.

It has also been suggested that this offers a clear signal to the markets as to where energy policy is ultimately going. The goal of achieving a 2 degree cap on emissions from pre industrial times (effectively boosted by an unexpected ambition to aim for 1.5 degrees) confirms beyond doubt that a low carbon future is in prospect. So it becomes a matter of how long it will take, rather than whether it will happen.

Whether this results in the flood of investment into renewable energy technologies remains to be seen. The International Energy Agency definitely saw it this way, commenting that: “The Paris agreement is nothing less than a historic milestone for the global energy sector. It will speed up the transformation of the energy sector by accelerating investments in cleaner technologies and energy efficiency.”

One of the key parts of the agreement is the acceptance that each country will submit its own plan for reducing emissions and that these plans will be part of a global stocktake, whereby progress towards those plans will be analysed independently to see if they are progressing towards the overall aims of COP 21. The first such stocktake is in 2023 and they will be five yearly thereafter.

In the past the attitude of some countries has been centred around the selfish thought that ‘we are not doing anything until everyone else does’. It seems that now all 195 countries have agreed to do something, with peer reviews of progress, that this will be less prevalent.

Another big issue is funding the work necessary to combat global warming. There is no doubt that the established economies – particularly the UK – created much of the problem, with industrial revolutions many decades ago. So, the argument goes, those established economies must pay for the clean up. COP 21 saw movement here with the developed countries agreeing to help finance mitigation and adaptation in developing countries. Developed countries must take the lead in mobilizing climate finance from different sources for this purpose and this will also be analysed and reported on in the stocktake process mentioned above.

So if it is accepted that climate change has actually turned a corner and that from here on in we might see much more effective action, the question arises as to where this leaves UK energy policy?

There can be no doubt that this has been travelling in the wrong direction since the General Election. The Coalition Government was a success for the green agenda and the absence of the Liberal Democrats as a brake on George Osbourne and his anti green policies can now be seen. Since they won power, the Conservative Party has moved the UK in a different direction, with further tax incentives for oil and gas in the North Sea, a definite encouragement of fracking (with gas seen as the baseload fuel) and the curtailing of many renewable energy incentives.

So the UK’s ability to comply with its own obligations, both under the intergovernmental areas, such as COP 21, and its EU obligations (assuming that membership continues) is starting to come into doubt.

For now, renewable electricity has made good progress and so can be allowed to freewheel for a while. Heat is a bigger problem, as is transport. However, it is likely that problems will only start to become apparent towards the end of this Parliament, which coincides with the key climate date of 2020. Towards the end of this period the Government may have to promote renewable energy and energy efficiency a little more to boost a flagging performance in the face of looming deadlines.

In the interim, the Government’s reticence to contribute financially to renewable energy should not (in the absence of onshore wind) be confused with a lack of support for it. What the Government really wants is more renewable energy without any impact on the central purse. So COP 21 might help here, because global investment in new energy solutions will surely wash over the UK too and lead to better ways of doing things.

Local authorities can play their part in this movement, by proving that some technologies can pay without Government subsidy. The obvious example is solar farms, where APSE Energy is working with a number of different authorities to develop business cases which allow such development, solely on the basis of the income derived from selling or using the generated power. If this can be made to work, perhaps the next five years will become a little more bearable that current trends suggest.

Stephen Cirell

Consultant

6 January 2015