Will cheaper renewables outweigh lack of predicted cost falls in nuclear and slow progress in carbon markets? With the UK Committee on Climate Change’s climate report due out in May, Dave Elliott looks at Chris Stark’s recent speech
Chris Stark, chief executive of the UK government’s advisory Committee on Climate Change (CCC), recently outlined the CCC story so far. “In 2008, the first action of the newly independent Committee on Climate Change was to advise on the appropriate 2050 target for emissions,” he says. “At the time, there was no globally agreed temperature goal. So we judged, based on the available climate science, that an appropriate global climate objective would be 2 °C, and to avoid an extreme danger threshold of 4 °C. An 80% reduction in greenhouse gases by 2050, from their 1990 level, was our best estimate of the appropriate UK contribution to that goal. We said it was ‘challenging but feasible’ and that it carried a cost — of 1–2% of GDP — which was affordable to avoid a much greater economic cost in the future.”
The costs of decarbonization
Progress since then has been quite good. Indeed, Stark notes, it was often said that the UK is a global leader on climate change, with a 42% fall in production emissions from 1990 levels, while growing the economy by 70%. However, there was much more to do, he says, and to some extent so far we had only focused on the easy stuff — decarbonization of electricity supply: “we will shortly run out of coal-fired power plants to close”. What’s more, that phased, sector by sector approach was no longer viable. “If there was ever an idea that we could approach this as a ‘sequential’ transition — moving from power, to transport, to heat, to industry and agriculture — then that thought needs to be re-examined,” he says. “Tougher targets imply a different kind of sectoral strategy. Bluntly, we will need to move quickly to decarbonize every sector in unison.”
We can increasingly consider policy’s role as enabling investment rather than subsidizing – and that makes me more optimistic about achieving deep emissions reductions than I have been before
Chris Stark
Technology to the rescue
Fortunately, green energy technology has come to the rescue, bringing lower costs. “The key technologies – wind, solar, batteries – globally have fallen in price, to become cost competitive in some cases with fossil-fuelled systems,” says Stark. “That means that innovation has been the key – driven by policy – in ways that we did not fully expect ten years ago. Globally, a clear goal to decarbonize, with co-benefits of improved air quality in cities, has stimulated commercial innovation. And here in the UK, we have successfully specialized in those areas where it is possible for the UK to move at a different pace — where UK policy can drive innovation at a different pace. Learning by doing. That is the offshore wind story — and I believe the conditions are there for the UK to drive innovative, rapid transitions and cost falls in other sectors too. But it is equally true that ten years ago, the CCC was overly optimistic about cost falls in some other technologies – nuclear for example”. That is quite an admission and suggests that a new approach may now emerge.
Remarkably, if we put the right steps in place, we can look forward to the transition in some sectors carrying negative GDP impact – that is, it will be cheaper to decarbonize them than not
Chris Stark
Stark certainly admits to a change of view. “In our retrospective on the last ten years, it’s now clear that the costs of some of the key transition technologies are much lower than we thought they would be in 2008,” he says. “Remarkably, if we put the right steps in place, we can look forward to the transition in some sectors carrying negative GDP impact – that is, it will be cheaper to decarbonize them than not.”
By contrast, Stark seemed to admit that the carbon market has not been as effective as hoped. “Twenty years ago, we might have had the luxury of allowing prices and carbon pricing to do the heavy lifting required, but we have been too slow globally to respond to climate change — and we are now up against hard, scientific deadlines,” he says. “So, it is vital to consider how regulation can be deployed to drive more rapid change — often by providing a firm backstop date for a transition for example, to encourage a swifter market response.”
What next?
The CCC’s new climate policy report is due out in May. It has to come to terms with the government’s admission that the UK is likely to miss its next two emission reduction targets (for 2013–27 and 2028–32). But in this preliminary overview Stark seems confident that “a transition to a near zero carbon economy is now technically achievable – credible scenarios now exist to achieve near-full decarbonization in most sectors. This is genuine progress. Electrification with zero carbon supply takes us much of the way – and there are now credible alternatives, like hydrogen, for those applications where that strategy won’t work. And even in those sectors where emissions look set to continue, we can match emissions with greenhouse gas removals. So it is possible. But that does not mean it is feasible. The scale of the change is enormous, and this transition must take place at remarkable (although not unprecedented) speed.”
Can we get to net zero emissions?
In terms of a socially equitable “just transition”, Stark says “while the economic costs of decarbonization overall may be smaller than we thought – potentially allowing the UK to go further for the same cost envelope, I doubt we will make further progress without a thorough review of how these costs are distributed – and the appropriate strategic policy levers”. It follows, he explains, that we must consider the appropriate balance of cost for the Exchequer, costs on the consumer, and economy-wide costs. “And we must make use of the right tools – carbon pricing, tax, financial incentives, information or regulation. But I think we can also say that for many of the key technologies we can increasingly consider policy’s role as enabling investment rather than subsidizing – and that makes me more optimistic about achieving deep emissions reductions than I have been before.”
Although the transport and heat side have to be addressed much more effectively, overall a quite positive review, with the CCC evidently trying hard to keep costs down while ramping up carbon reduction, aided by the falling cost of renewable energy technology. It is certainly a lot more optimistic than the recent report from the World Economic Forum. Gloomily, this says that, although some progress has been made in some countries, including the UK, the world’s energy systems overall have become less affordable and are no more environmentally sustainable than they were five years ago with, in some cases, emissions still rising. The CCC’s line is much more in tune with the “Clean Planet for All” Net Zero Carbon 2050 vision outlined by the European Commission, and even with some aspects of IRENA’s latest optimistic projection, which sees renewables taking an 80%+ global energy share by 2050. Inevitably, some will query whether that can happen, or even whether it would be enough. Certainly, there is no shortage of pessimism about the future, but the CCC does seem to be trying hard to keep things moving in the UK. In my next post I will look at the situation in the US, where the Green New Deal idea has been pushed hard.
