Major
movements to ratify the Paris agreement in the last ten days include the EU and
India. This gives us the prospect of the early entry of the agreement into
international law. And we are starting to see movement towards more effective policies
for the aviation sector. But 2016 is also likely to be the hottest year on
record, the prognosis of climate science is still very worrying, and there is
long way to go in making policies effective.
Ratification of the Paris
Agreement.
The last few days have seen
two major steps forward on climate policy. On Friday last EU environment ministers approved ratification of the
Paris Agreement. The EU ratification process now implies means that the agreement
is now likely to become international law in November. The
decision on behalf of the EU’s 28 member states, including the U.K., adds 12%
to the percentage of emissions covered by countries signed up to the agreement,
which becomes law when 55 countries and 55 % of emissions are signed on. Given
that the world’s fourth largest emitter, India, has also formally submitted
its instrument of ratification, this month can be seen as a major milestone in
the long journey to effective action on climate change.
A
more sombre note was struck by a new report from seven distinguished climate scientists led by Robert Watson,
former chairman of the IPCC,[1] asserting that the
opportunity to meet the 1.5 Celsius goal “has almost certainly already been
missed” and that even a 2oC objective would be infeasible without
heavier emissions cuts under the Paris Agreement. Separately, 2016 continues to
provide a string of monthly temperature record, and, barring a rapid dissipation
of the el Nino effect, is likely to again set a new annual temperature record.
As
I have noted previously the UK will continue to be bound by commitments made
while it was still a member of the EU, even if it leaves the EU. There will
however be serious climate policy questions to be addressed, both for the UK
and the residual EU. The UK will have to decide on whether it continues to
retain membership of the EU emissions trading scheme. Despite its flaws and
past failures, any regional trading scheme should in principle be capable of
delivering mutual economic benefits. The EU will have to face the fact that the
UK has promised more ambitious targets than the EU average. The UK’s departure
may mean that the residual EU will have to work harder to meet its commitments.
The
Aviation Deal.
This had
therefore already been a momentous week for climate policy. But this major
milestone on the road to giving legal force to the Paris agreement has not been
the only major event. The International Civil Aviation Organisation (ICAO) has promised
that, from 2020, any increase in
airline CO2 emissions will be offset by activities like tree planting, which
soak up CO2. Although aviation only
accounts for around 2% of current global emissions, it would still, if it were
a country, be the 7th largest emitter. More importantly it is one of
a small number of energy using activities where no clear route to a low or zero
carbon activity currently exists, and it is also one of the fastest growing. The
ICAO has previously predicted a threefold increase by 2050, at a time when
other sectors are drastically reducing or even eliminating emissions.
As a result of these two
factors, aviation is likely to be a rapidly increasing proportion of any viable
global carbon budget consistent with Paris aspirations, and will be one of our
major residual problems if and when other sectoral targets for low carbon are
achieved. So we should, as one
government minister has suggested, welcome this as “a clear message that
aviation will play its part in combating climate change”.
On the
other hand, the deal, while welcome, falls well short of what will ultimately
be required. It says nothing about continued growth until 2020. The scheme
remains a voluntary one after that. And the definition of how “offsetting” will
work and be measured is far from clear. But at least this is a start.
Resolving
the aviation and emissions conundrum will not be easy. We can hope for a
technical fix, such as a practical means of synthesising airline fuel, and
there is clearly scope to introduce regulations that encourage more progress in
energy efficiency, an area in which the industry has achieved significant
progress. But the likelihood is that we shall have to rely increasingly on a “market”
solution, and one that is effective in reflecting the very high climate costs
of GHG emissions.
One
approach is, it can be argued, implicit in the agreement that any growth after
2020 will be compensated by “offsetting”. De facto this may ultimately
correspond to the cost of removing CO2 from the atmosphere, carbon
sequestration. Current estimates of this cost suggest figures of several
hundred dollars per tonne of CO2. This may seem impractical, and is
in political terms probably a non-starter. But we should at least start to ask
the questions.
In many
countries, domestic taxes on road transport fuels, for example, are already at
much higher levels that are much closer to reflecting the costs of the climate
externality (although that has never been a primary motive for their
introduction). The parallels are close. Both forms of transport are highly
valued “premium” applications of energy. As transport modes they are to a
significant degree substitutes, and should be subject to similar taxation
regimes that do not distort consumer choices. In each case the price to the
ultimate consumer can have a significant choice on lifestyles, again with
implications for energy use. The difference of course is the international
nature of aviation, which makes the prospect of a common basis for taxation, or
common pricing principles, much more remote.
I expect
we shall hear more on these themes. In the meantime the ICAO agreement at least
provides a first step.
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