The Climate Agenda – time for a reset

Nick Butler

Just when most needed the heat has gone out of the climate change debate. If you doubt that, read the elegiac interview with John Kerry published in the New York Times to coincide with his retirement at the age of 80 from his role as US climate envoy.

“If we did the things we could do – that we know how to do and that we have the technologies for – we could [keep the 1.5 degree target alive]. We’re just not. We’re not doing it on a global basis. Emissions are going up in too many countries…. I don’t understand how average folks all around the world are letting people get away with all this business as usual. I’ve likened it to a kind of de facto signature on a suicide pact.”

Throughout the interview and in many recent speeches, Kerry’s frustration at the lack of urgency and the slow pace of change are palpable. The hard numbers confirm the message.  As the International Energy Agency reported at the beginning of March, emissions last year were higher than ever before at 37 GT. Data from the Berkeley Earth research institute shows that for the first time we have passed the threshold of a 1.5 degree increase in the average global temperature.

A majority of public opinion, as measured by our surveys and many others recognises the risks involved and consistently supports action to mitigate those risks.

But despite decades of debate the fundamental facts of the energy market have barely changed since the issue of climate change gained public prominence thirty years ago.  Fossil fuels – oil, natural gas and coal – still account for over 80 per cent of final demand consumption – globally and in the US and in Europe.  As a result, emissions from the use of fossil fuels are up by 70 per cent since 1990.  There were some 14 million new electric vehicles on the world’s roads in 2023  but sales of SUVs were far higher.  Chinese drivers own more than half of the world’s EVs but the bulk of the electricity which powers them is produced from coal.

Rhetorical commitments to net zero – from Governments and companies – remain in place but the last two years have seen a creeping withdrawal from many of the necessary plans to deliver on those commitments.  European countries including Germany and Britain are constrained by financial circumstances from investing in the move to low carbon to which they are supposed to be committed.  Even President Biden, whose Inflation Reduction Act has provided a landmark step forward on the climate agenda providing hundreds of billions of support over the next decade for private investment in the transition, appears reluctant to make the subject a central campaign issue.  The issue was given only two brief paragraphs in the State of the Union address.

There are some obvious reasons for the loss of focus.  For politicians and policymakers, the short term always tends to be given preference over longer term issues.  The same is true for media coverage.   The cost of living, immigration and the impact of war in the Middle East have all absorbed attention and look set to dominate the many elections due to take place around the world this year.  Political leaders, media editors and the wider public are aware of the climate challenge but do not have the bandwidth necessary to cope with what are seen as the challenges of 2050.But that is not the full explanation.  There have also been mistakes on the part of those campaigning for climate action.  Claims that the transition will be easy or cheap lack credibility.  The existing pattern of energy use is embedded in almost every aspect of the modern economy – from transport to industry to domestic appliances.   Many cannot afford the capital investment in new cars, new heating systems and new factories which the transition requires. That is true in the developed world – on both sides of the Atlantic – but even more true in the emerging economies.  Coal accounts for a significant proportion of the economy in China, India and Indonesia – providing jobs as well as low-cost energy.

If Germany cannot eliminate the use of coal, which still accounts for 30 per cent of electricity production, how can we expect those who have just escaped from poverty to do so?  Low carbon supplies are not all cheaper and their supplies are not secure.  Hinkley Point – the jinxed new nuclear plant being built in Britain is years behind schedule and billions over budget.  The current estimate of the total cost which consumers will have to pay if the plant is ever finished is between £31 and 34 bn ($ 43 bn).

The other mistake has been the belief that the issue could be resolved by a “global deal”.   After 28 COP meetings – the latest attended by 65,000 thousand lobbyists and hangers-on.   Their flights to Dubai undoubtedly added to last year’s increase in emissions but the results of the meeting itself were very limited.  Kerry claims that COP28 made a great step forward by agreeing to a “transition away from fossil fuels in a just, orderly and equitable manner”. Fine words but in the absence of a firm timetable or any definition of “just” or “orderly” or “equitable” what does the statement mean?

This is not to denigrate the heroic efforts made by John Kerry and others. They have tried to deliver international agreements, but it is time to recognise that the COP process bears an embarrassingly close resemblance to the League of Nations – inexpressibly worthy but ultimately ineffective.  Change will not come through the creation of a world Government but through coalitions of the willing which can push ahead without waiting for the slowest participant to come on board.  It will also come through competition.  The Inflation Reduction Act is a positive force for change because it aligns the economic interests of the USA with the cause of climate change.  The Act changes the economic calculations of American business and simultaneously challenges other countries to respond.

World War Two was not won through negotiations in Geneva but by a powerful coalition of countries which had both individual and common interests in securing the outcome.  The same has been true of the advances which have been made on climate change over the last 20 years. The advances which have made solar and wind competitive sources of electricity were the result not of any global treaty but of regulatory change – starting in Germany- and the rapid response of Chinese companies able to produce low-cost panels and turbines.   The combination of regulation and technical progress has also made vehicles more efficient and less polluting and is now set to reduce methane emissions.

The latest figures on emissions from the International Energy Agency should force a reset. Climate Change will not be solved by negotiation but through the application of science, developed by different countries or groups of willing collaborators.  Their work should be focused to one end – the development of low cost, low carbon solutions which can be taken up not just in the developed world of Europe and America but also in the emerging economies which do not have the luxury of wealth to cushion an expensive shift away from fossil fuels.  The alternatives to coal use in Asia and Africa, which as Kerry makes clear is the greatest challenge, must be economically accessible to those with minimal incomes.  The alternatives will spread because they are cheap and represent the logical economic choice for consumers.

Mr Kerry, like Woodrow Wilson, sees the world in moral terms.  That is admirable and we could wish the world turned on a moral axis.  The reality, however, is that economics rule.  For those who care about the climate, the alignment of environmental goals with the economic realities facing the world’s eight billion citizens is the crucial challenge.