Why delivering on the Paris Agreement means transforming the whole economy

Madeleine Cuff
Why delivering on the Paris Agreement means transforming the whole economy

100 days on from COP 21, business and policy experts say more needs to be done to decarbonise all of the UK economy, not just the power sector

Last week, as we approached the 100-day anniversary of the Paris Agreement, the UK government made a rather extraordinary statement. To the delight of former Labour leader Ed Miliband, ranks of climate conscious MPs and swathes of the green economy, Energy Minister Andrea Leadsom told Parliament the government would enshrine the Paris goal of delivering a 'net-zero' emissions economy into UK law.

The move is perhaps the clearest signal the UK will, before the end of the century, become a fully decarbonised economy, reliant solely on zero- or low-carbon energy sources and a handful of carbon sink technologies to ensure its net-neutral impact on the atmosphere.

The announcement marks a crucial turning point in the UK's low-carbon transition. But according to some of the UK's most respected green economy experts, in order to deliver on the new goal there much more needs to be done to grind down emissions levels across the entire economy.

Late last week representatives from government, industry and academia gathered in London at an event hosted by the think tank IPPR to debate how the Paris Agreement is set to shape UK energy and climate policy in the future.

One of the most striking points of agreement across all camps - from policymakers in DECC to campaign organisations such as E3G - was the need for the UK to look beyond cutting emissions from the power sector and urgently begin to embrace a more holistic view of decarbonisation.

By the end of June the government is due to set out its plan for how it will meet the fifth carbon budget, which covers the period 2028 to 2032. It has also promised to release a new 'decarbonisation plan' by the end of the year explaining how it intends to get the UK back on track to meet its commitments under the fourth carbon budget - targets for the mid-2020s which it is currently on-track to miss by a wide margin.

Against this backdrop, Nick Mabey, chief executive of E3G, argued the UK should get away from counting blocks of carbon and adopt a cross-sector approach to decarbonisation. "It's not just a plan in terms of adding up tonnes of carbon; it should be a plan about transforming our economy," he said. "Because in this country we talk too little about the transformation and innovation and too much about constraints and blackouts and budgets. We need to reframe that debate and get away from tonnes of carbon."

Jerome Glass, deputy director for strategy at the Department for Energy and Climate Change (DECC), said the structure of the UK's carbon budget does in fact afford the government a lot of freedom when drawing up its decarbonisation plans. "One of the great things about the carbon budgets is that it allows you to think in a whole economy way and allows you to make trade-offs between different parts of the economy," he said.

But Mabey insisted that without a broader focus on the end goal of a net zero carbon economy, it will be increasingly difficult to get businesses to visualise full carbon neutrality. "I would love if the carbon plan this year brought people together in a consensus to talk about the integrated transition we are trying to do rather than adding up blocks of carbon," he said. "When I was in government I added up blocks of carbon, and it wasn't a very good way of planning an economy then. It's not very good now."

Part of the problem is that to date, much of the focus has been on developing solutions for decarbonising the power sector, argued Baroness Bryony Worthington. The Labour peer and recently appointed head of Environmental Defense Fund in Europe argued we need to start seriously addressing the carbon-intensive activities of other industries - particularly heavy industries, heat, and transport - if decarbonisation is going to spread to the entire economy. "You can see how in power we are already making great progress, there are lots of different technologies that can help us decarbonise, and by and large we are already doing many of them," she said. "When it comes to industrial sectors that is not the case. I don't think anyone actually knows how we fully decarbonise any of those sectors.

"Unless the 2030 package in Europe addresses that and unless the UK addresses that, we will be stuck in this horrible political bind where we will be building up hot air and really causing the rest of the world to think that it is more difficult than it really is."

She suggested market mechanisms such as carbon pricing may prove one of the most effective ways to pinpoint the areas of the economy where decarbonisation is not taking effect as quickly as planned. In transport and heat, for example, she said we should "harness" the power of the market to find the cheapest route to decarbonisation.

But first we need better data on these sectors, according to Glass. "In some sectors we really know what's going on, [while] in the power sector we understand why [carbon intensity is falling]," he said. "In other sectors, in business and households, our understanding actually isn't as good. And one of the things that I'm really keen that we do when we do think about this decarbonisation plan, is rather than just set out something with a bunch of stats and charts, is have something in there where we really do try to understand what's going on in households and business."

He added said that one of the reasons that Committee on Climate Change's current advice does not contain a strong focus on sectors like agriculture and forestry - notoriously some of the trickiest areas to decarbonise - is because the data for those sectors is "not that robust", although more work is taking place this year to improve the data from these sectors. 

While it may seem like the power sector is the big beast of the emissions reductions challenge, growing evidence suggests that post-Paris, the real challenges will come when we start addressing the less high profile sources of emissions. The government is already coming under mounting pressure to address its poor performance on heat and transport, but beyond that greater challenges await to reincarnate heavy industry, agriculture and a handful of other industries as zero-carbon economic sectors.

For Mabey, this momentous challenge starts with a change in mindset, the embrace of a new way of thinking that sets zero-carbon at the heart of any new infrastructure or economic project. "We're in the middle of that transition from the reduction focus to the fact that the majority of work we do every day is building that new economy," he said. "We really do have to realise that this is a creative task which is constantly going to change".

100 days on from Paris, it may be time for businesses and policy makers to start really envisioning what a zero-carbon economy might look like across all sectors. The countdown to the end of the century has already begun.

This article is part of BusinessGreen's Road to Paris hub, hosted in association with PwC.

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