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Back the Evidence and the Market!  Can the UN’s COP28 rise to the real challenge?

As the world’s leaders and media boast their green credentials at the UN’s conference on climate change, Syed Kamall warns against wrong policies, bad economics and the danger of unintended consequences.

As COP 28, the UN’s annual climate summit, takes place in Dubai, the irony, some would say hypocrisy, of environmentalists and other delegates jetting in from across the world to a major oil producing nation, hasn’t been lost on its critics.

Even some of the 70,000 attendees, hoping for a global agreement on phasing out fossil fuels, are concerned that COP 28’s President Sultan Al Jaber is CEO of the Abu Dhabi, National Oil Company. The BBC claims to have proof that the UAE government plans to discuss fossil fuel deals during the summit. In his defence, Mr Jaber points out he also chairman of Masdar, one of the world’s largest renewable energy companies, so understands the challenges of phasing out fossil fuels in favour of the cleaner alternative energy of the future.

Even though the presidents of the world’s two largest polluters, China and the USA have skipped the summit, governments have so far reached agreements on two issues, the first on a loss and damage fund to compensate countries considered vulnerable to climate change, the second to include emissions related to producing, consuming and wasting food in national plans on climate.

After governments attending COP21 signed up to the 2015 Paris agreement to limit long-term temperature rises to 1.5°C, the UK, US and EU set a target date of 2050 to achieve net zero emissions. China has set a later target date of 2060, with India aiming for 2070. While wealthier countries criticise China’s and India’s foot-dragging, developing countries believe it unfair for developed countries to deny them the path to industrialisation and economic growth. For some, environmentalism has become the new imperialism where rich white western countries try to keep developing countries poor.  One example is the EU’s Carbon Border Adjustment Measures (CBAMs) which will tax imports based on their carbon content. This is partly in response to concerns that green policies such as the Emissions Trading Scheme (ETS) have led companies to outsource production to less environmentally friendly countries, possibly resulting in global carbon production increasing.

Even though there are net zero target dates, there remain three major concerns: first how to transition to secure and cleaner and energy without damaging our economies and while keeping the lights on; second. how to achieve a cleaner environment that is affordable to the poorest in our societies; and third, the feasibility of meeting net zero targets.

In common with other governments, the UK’s approach is based on a combination of regulation, tax and subsidy, but are there more effective or efficient ways?  In Politeia’s forthcoming publication ‘Powering Britain: The UK’s future energy mix, the authors examine these challenges and possible solutions and consider a number of key questions.

Given that politicians and officials do not always possess the knowledge to take account of developments in new technologies, are market mechanisms more likely to lead to the realisation of sensible goals than current government policies? Would a Pigouvian tax, treating carbon as a negative externality, be a simpler and more effective policy?  Have recent UK governments’ interventions focused too much on decarbonising electricity and gas to the detriment of transport and heat? Can drivers of internal combustion vehicles be incentivised to switch to biofuels and in future to synthetic fuels as a cleaner alternative in the short and medium term?

There is also the question of unintended consequences. One of many examples of this was the UK’s dash to diesel which, despite concerns from some scientists, incentivised vehicle owners to switch to lower carbon diesel, only to realise that diesel engines emitted larger quantities of harmful pollutants such as nitrogen oxides and particulates.

The UK government’s website states that it ‘is proud to be a world leader’ in reaching Net Zero by 2050’ but the proposals from government and the lobbyists on environmental policies may not always foresee unintended consequences or may be selective in the scientific and engineering research that informs their views. Let us hope that delegates to this year’s COP28 place more emphasis on market mechanisms, adopt evidence-led approaches and consider safeguards to change policy quickly once negative unintended consequences become apparent.

Professor Lord Kamall is the editor and a co-author of Politeia’s forthcoming publication, Powering Britain: The UK’s future energy mix.

Professor Syed Kamall

Lord Kamall is a Professor of Politics and International Relations at St Mary’s University, Twickenham. He became a life peer in 2021, serving as minister for Technology, Innovation and Life Sciences at the Department of Health and Social Care (Sept 2021- Sept 2022 ) and minister at the Department for Digital, Culture, Media and Sport (Sept-Oct 2022). Previously, he represented London in the European Parliament (2005-2019) where he served as leader of the European Conservatives & Reformists (ECR) group. He has been Academic and Research Director at the IEA.
For Politeia he is co-author of Banking on Recovery: Towards an accountable, stable financial sector (2016).

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