This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Check against delivery Thank you very much. I’m delighted to be here, at the spiritual home of climate realism. The invitation to today’s…
Check against delivery
Thank you very much. I’m delighted to be here, at the spiritual home of climate realism.
The invitation to today’s event says the Fourth Carbon Budget will be ‘a defining issue for British industry in the medium term’.
Strong stuff. And I agree, with one caveat: cutting carbon out of our economy won’t just affect industry. It will be much bigger than that.
Fourth Carbon Budget
Halving our emissions to hit the Fourth Carbon Budget will mean changing the very fabric of our economy.
As the Grantham Research Institute said recently, if the Government sticks to its plan - and I quote - ‘the UK is poised for two decades of aggressive decarbonisation in the power sector and elsewhere’.
In transport, heating, and industry, in generation and efficiency, we must renegotiate the terms of our relationship with energy. If we succeed, our climate will be safer, and our economy more competitive.
Change on this scale cannot be achieved by Government alone.
Yes, we have a role to play: we must set a clear policy direction, using the right combination of incentives and regulation to drive down emissions, build investor certainty, and encourage green growth.
But businesses must also respond. Only the private sector can provide investment and innovation at the scale we need. New products and technologies must make their way to market.
Individuals have a responsibility too. We must all think again about the energy we use - and the energy we waste. Patterns of behaviour and consumption which underpinned our prosperity in the past may not be able to sustain a low-carbon future.
Each part of this energy equation must be balanced: otherwise, we cannot hit our carbon targets cost-effectively.
That is what our Carbon Plan is for. It will set out our plans to meet the Fourth Carbon Budget, and how we will get on a realistic pathway to 2050. The Carbon Budget is how we set our objectives. And the Carbon Plan describes how we will meet them.
It builds on the draft Carbon Plan we published earlier this year, and the Government’s response to the Committee on Climate Change’s renewables report. We will publish it next week, in time for the Ministerial part of the United Nations climate change talks in Durban.
This connection - between our carbon budgets, and the climate change negotiations - is strong. Not just because cutting our emissions in the UK is the best way to show other countries that we mean what we say; but because both share common aims. That is what I want to talk about today.
Risk and responsibility
Let me expand.
We have set our carbon ambitions in law, further ahead than almost any other nation.
Not out of naked self-interest, although the economic case for green leadership is clear.
No, we have also made this commitment because of our belief in a simple principle. It stems from a much-reported observation made by Lord Stern: that climate change is the biggest market failure the world has ever seen.
As we have seen in the financial and housing sectors, when markets fail and the public is exposed to risk, the state is not just licensed but obliged to correct them. Future risk must be hedged: it is out of fear for British pension pots and British jobs that we support smarter regulation of casino capitalism.
When faced with systemic risk that cannot be contained, only clear objectives supported by a comprehensive framework can provide certainty and security.
That is the principle on which our domestic policy rests. It is also the argument we will be making in Durban next week, when we can tackle a fundamental question: where are the international talks heading?
Are we moving towards a legal agreement committing major economies to binding emission targets? Or are we relying on countries voluntarily pledging action?
This is merely an old question cut from new cloth: intervention, or laissez-faire?
We already know our destination. Do we wish to choose a path together, or leave it to each to find their own way?
My answer is simple: a global deal covering all major economies is not a luxury. It is not an optional extra. It is an absolute necessity.
The UK has always been an advocate of a legally binding agreement under the United Nations. Why? No pressing international problem has been solved without one.
Not chlorofluorocarbons. Not banks lack of capital. Not the arms race.
This commitment to a global deal is woven deep into our political DNA: all the major parties agree. Indeed, it is so important to both coalition partners that it was in the Coalition Agreement.
But for many of those gathered around the negotiating tables in Durban, times could not be tougher.
Europe is gripped by a currency crisis of constitutional proportions. The United States is preoccupied with jobs, growth, and a looming Presidential election. And the Middle East and North Africa are consumed by questions of political reform.
In these circumstances, we cannot hope for too much. That risks perpetuating the myth that each year will be either the making or the breaking of a global climate treaty.
Yes, a global deal may be out of reach today. But we can -and must - provide a clear signal that it is our objective. For time is running short. We are walking down a dangerous path.
Energy assets have long lifespans: the world’s first commercial nuclear power station, in Cumbria, was operational for 47 years. Blyth coal-fired power station, on the other side of the country, ran for 43 years, nearly double its projected lifespan.
With renewable energy just breaking through the cost barrier, companies and countries face a choice: do we lock in a generation of high-carbon infrastructure, leaving a fossil-fuel imprint deep into this century?
Current investment trajectories make uneasy reading. As the International Energy Agency noted rather despondently in this year’s World Energy Outlook, the time in which to secure meaningful action on climate change is now measured in years, not decades.
The latest science brings little comfort.
Emissions from fossil fuels rose by a record amount last year. The Berkeley Earth Surface Temperature project found that global land temperature has increased by nearly a full degree since the 1950s. The IPCC’s recent report on extreme weather said it was ‘very likely’ that increased emissions led to higher temperatures. If they continue to rise, the number of hot days will increase by a factor of 10 in most parts of the world.
If we do not limit global emissions soon, we face very real consequences. With time running out if we are to meet our 2°C objective, and countries seemingly united only in their troubles, the pessimistic storyline is a tempting one for commentators.
Few people expect a binding deal on climate change in Durban. A recent survey of large global firms found that 83% of business leaders want a multilateral agreement to tackle climate change; yet only 18% thought a deal would come this year.
But history suggests an agreement is worth the wait.
Twenty-four years ago, a US president commended an international environmental treaty to the Senate. ‘In this historic agreement’, he wrote, ‘the international community undertakes cooperative measures to protect a vital global resource’.
The President was Ronald Reagan. The resource was the ozone layer. And the agreement was the Montreal Protocol, described by Kofi Annan as ‘perhaps the single most successful international agreement to date’.
Work did not stop when the agreement was signed. On funding, technology and information, the UN is still helping developing countries reach their targets under the Protocol. The initial text provided a basic platform for early action. Subsequent revisions added new chemicals and tightened up phase-out targets.
The Montreal Protocol is the only international agreement that every country in the world has joined. And it is working.
The concentration of ozone-depleting substances is declining, and there are early signs that the ozone layer is recovering.
The international community has already come together in support of an international deal to protect our planet from pollution.
It has done so in spite of developmental and economic differences between nations - and despite concerted campaigns by organised opponents.
It will do so again. And in Durban, we have the opportunity to take an important step closer.
Hopes for Durban
Of course, we are not starting from scratch. There is already a legally binding deal in place: the Kyoto Protocol. 37 major economies are formally committed to cutting emissions under Kyoto - including Japan, Russia, Canada and the European Union.
But the first Kyoto Protocol commitment period comes to an end next year, and Japan, Russia and Canada have said categorically that they will not enter another.
Let me set out what we wish to achieve in Durban.
The UK and the European Union wants a second commitment period. We do not believe that letting Kyoto run down will help the planet - or our green economies. But the EU has already surpassed its Kyoto target. If it signs up alone, without commitments from the other major players - the other big emitters and emerging economies - then we will not have moved very far forward.
At Durban, we need major economies to commit to a global legally binding framework - building on what Kyoto started, but going much broader. And we need negotiations on this new agreement to complete as soon as possible, and by 2015 at the latest.
That is not just what Britain wants: it is what much of the developing world wants, especially vulnerable islands and the poorest countries. We are ready take a clear step forward: but at the same time we need others to be ready to move too.
This does not mean that everyone will have the same type of commitments in 5 or 10 years time; just that all will be in the same legal framework. There will still be huge differences between countries then, just as there are now. China is not, and will not be, the same as Chad, or India.
We need to move to a system that reflects the genuine diversity of responsibility and capacity, rather than a binary one which says you are “developed” if you happened to be in the OECD in 1992. On this view of frozen history, rich Singapore is developing. Poor Bulgaria is developed.
By itself, a second commitment period is not enough.
Some have criticised the UK and the EU for pursuing this commitment to a parallel agreement, arguing we are deferring a global deal to as late as 2020. Let me be clear: our clear preference is a Treaty framework covering everyone now.
But some say it is premature.
Some big developing countries are saying we should not even begin the talks on the new Treaty framework until after 2015. So the call just for a mandate at Durban is not our ideal outcome, but it would be a significant step forward.
This does not mean we are locking in low ambition until 2020. The UK stands for more ambition now.
We have led on the EU to move to a 30% commitment. We will push hard on this early next year.
We are also pressing in Durban for a decision that recognizes the scale of the emission gap, and identifies actions to narrow it. We want to ratchet up pressure towards the 2013-15 review of future ambition.
Only a comprehensive, legally binding agreement for all can provide the clarity we need. Businesses want certainty; people want action. Only the politics lags behind.
This is starting to change. Compared to world trade agreements, or non-proliferation talks, we are actually making good progress.
The latest GLOBE study showed that all of the major economies are legislating to improve energy security, resource efficiency and cleaner, lower carbon economic growth.
And recent movements from some of the big players have been positive. This would not have happened without the impetus provided by the global negotiations
Take China: their leadership is already planning for green growth. They have 6 of the world’s biggest renewable companies, and cover a quarter of their population in low-carbon zones. Their domestic emissions targets are ambitious, their renewable programme strong.
They lead the world in renewables investment and solar panel production, and can organise their economy around key strategic aims. Clean energy is already big business; and big business needs certainty to plan.
A commitment to commit will provide that certainty. But we need action now, too.
Yesterday, the United Nations Environment Programme looked at the gap between current emissions pledges - what we have promised to do - and where we need to be in 2020 to meet our 2 degree target.
The bad news is that the gap is growing. The good news is that we can still close it. In Durban, we should agree that we must.
We should also build confidence in the way carbon emissions are measured. All major economies have pledged to tackle their emissions: an effective measurement, reporting and verification system will give confidence that action is being taken and common accounting rules will ensure that a tonne of CO2 weighs the same wherever it is measured. Establishing the guidelines for developed and developing country reporting and verification arrangements would be a significant prize from Durban. And we should continue the good work already under way to reduce emissions from deforestation.
We must also do more on long term financial support for developing countries, and establish the Green Climate Fund.
It would be premature to pledge finance to the Green Fund in Durban, as the detailed rules will not have been agreed. But it is very much the UK’s intention that the Green Fund will be a key part of the finance delivery landscape, in which we will aim to put substantial parts of our climate finance if we can get the rules right over the next year or so.
The UK is already living up to its climate finance commitments. We have allocated more than half of our Fast Start finance, and are on track to deliver our £1.5bn pledge.
We are one of the first countries to budget for climate finance beyond the Fast Start period.
Our £2.9 billion International Climate Fund will provide scaled up climate finance out to March 2015. We are strongly committed to bringing the Green Climate Fund to life. In doing so, we are working to deliver a new, scaled-up multilateral architecture to deliver climate finance.
We have allocated fast start finance to efforts to adapt to climate change, and support lower carbon development paths, in countries in Asia, South America and in small island developing states.
At Durban, the focus of much attention will be on Africa, where many countries stand on the front line of the impacts of climate change. I will be announcing there a package for Africa, with new programmes we will fund through Fast Start and our International Climate Fund. Our package for Africa will deliver very significant UK funding. But this isn’t just about climate finance for adaptation.
I can trace my own environmentalism back to a visit to East Africa as a journalist, seeing the impact of desertification on cherished development goals.
And I have seen for myself the ingenuity and resourcefulness with which local people can overcome infrastructure problems.
Just as many African communities have bypassed telephone landlines altogether, using mobiles instead, so the new energy challenge presents real opportunities to leapfrog a technological generation. To electrify villages using solar power, not the grid.
We will also do what we can we help Africa find a path that leads to strong low carbon growth.
Our funding will help improve access to low carbon energy for more than 7,000 rural households. Enable an estimated 250,000 small scale farmers to use climate resilient agriculture practices. Expand sustainable transport systems. Support national climate strategies. And leverage hundreds of millions of pounds of private finance for adaptation and mitigation.
The Africa package reflects our commitment to the principle of climate finance. We will deliver - we are delivering - our fair share.
We are building towards the $100bn of climate finance that the developed world has promised to mobilise by the end of this decade.
And every step toward an equitable climate finance system is a step towards a workable global climate regime.
That remains our final aim.
And as we look to two difficult but essential weeks of negotiation in Durban, we would do well to heed some local wisdom.
There is a saying common amongst the Xhosa and Zulu people of South Africa: the elephant’s trunk doesn’t weigh it down. In other words, we must all carry our own burden.
Each nation comes to the table in Durban with its own burdens, its own pressures. We must not let them weigh us down. If we can match our vision with commitment, our words with deeds, we can take a strong step towards a binding global deal.
That will secure our climate, our economy, and our future.
Thank you very much.