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A Parochial View of Paris

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By ADE Director, Dr Tim Rotheray. Originally written for Good Energy as part of their COP21 industry expert opinion series available here.

 b2ap3_thumbnail_EiffelTower.jpgA negative decision in Paris could bring enormous changes to Britain’s political consensus, both on energy policy and its approach to the European Union, and investment certainty hangs in the balance.

We have seen quite a bit of uncertainty of late. Government changes to policies, each with its own three letter abbreviation (LECs, FITs, CCL, CCAs etc).

Some of these changes will have a major impact on UK firms but it is still, on the global stage, very parochial. After all, UK emissions are about 3% of the global total.

The one area where the UK has done something really internationally significant is passing the 2008 Climate Change Act. This law is the lynchpin of UK political consensus for acting on Climate Change at the UK level.

It is repeatedly cited by international commentators as a vanguard for climate politics.

 Why the outcome matters

So what does this Act have to do with Paris? After all it is a UK law. But the outcome of the Paris climate negotiations could upend the UK energy policy consensus.

ThLouvre Pyramide reason is that the Act has far more 'openers' than most people realise. The carbon budgets set by the Committee on Climate Change with the required emissions cuts, can be amended by the Secretary of State if there have been 'significant developments in.... European or international law or policy'.

Simply put, a weak deal or no deal in Paris would create the opportunity to change the carbon budgets. And that would be a disaster.

In all the weathering that energy policy has taken, the Climate Change Act has stood untouched. This signal is vital for investors indicating that, whatever the colour of government, the policies may change but the direction of travel is permanent.

The door is opened to that changing if world leaders are unsuccessful in Paris.

Sending a clear signal

So from my perspective, as someone working for a more local efficient and low carbon energy system in the UK, the international talks in Paris are still vitally important.

As the UK debates how to secure energy investment and a growing call for policy stability from across the sector, a strong Paris deal to anchor the UK's consensus for decarbonising the economy will send a  clear signal to the investor community.  

Of course, there is a clear moral and ethical case for acting on climate change. But, a strong deal in Paris also is the necessary global framework to enable local change; aligning the macro-economic case for action with individual investment decisions.


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Guest Monday, 18 February 2019