Priorities

• Permanently phase out all North Sea oil and gas exploration
• Prioritize two sectors with stagnant emissions: transport and housing
• Reduce so-called “embodied emissions” from major polluters such as steel and cement
• Reduce embodied emissions in imported goods by establishing carbon border adjustments
• The UK should increase financing to third party organizations overseeing the follow through, monitoring, report publication and best practice exchange of the Race to Zero initiatives. 

 

Narrative

The UK touts that under its COP26 and G7 presidencies, G7 countries have committed new finance towards the $100bn in climate finance goal, including more funding for adaptation.

When it comes to COP26 commitments, the UK has shown integrity as host nation of the climate conference by signing up to every major multilateral agreement save for Beyond Oil and Gas Alliance: the Global Methane Pledge, Global Coal to Clean Power Transition Statement, Green Grids Initiative, the Powering Past Coal Alliance, and so on.

The UK 2030 NDC for a 68% reduction in emissions from 1990 to 2030 is one of the most ambitious NDCs tabled ahead of COP26. However, the UK still has a long way to go to reach its goal of reducing emissions by 50% by the year 2030. At current rates, the UK will be contributing to a disastrous temperature rise of 2.7C by 2100.

There are five critical areas of improvement that the UK must focus on to take responsibility as a global climate action leader and fulfil its NDC pledge.

1. The UK’s reliance on natural gas and oil is still substantial (between 30-40% each for total final consumption). It should permanently phase out all North Sea oil and gas exploration by:

• Building on commitments outlined in the March 2021 North Sea Transition Deal in the form of establishing more ambitious greenhouse gas emissions reduction targets, increasing investments above the £14-16 billion target by 2030 in emerging energy technologies, focusing on a broader array of clean energy (beyond carbon capture, usage and storage and hydrogen), and aiming for supporting more than just 40,000 direct and indirect supply chain jobs;
• Joining the Beyond Oil and Gas Alliance (BOGA), a coalition of countries (including Wales) formed during COP26 committing to ending new licensing rounds for oil and gas production; and
• Working with Chambers of Commerce to safeguard jobs at risk from the energy transition. One example of a divestment from oil and gas exploration where workforce development is needed is the reversal from Shell and its 30% stake in the Cambo oil field development, which is estimated to deliver 170 million barrels of oil over 25 years, and 53.5 billion cubic feet of gas.

2. Prioritize two sectors with stagnant emissions: transport and housing.

• On the former, the UK has committed to end the sale of new petrol and diesel cars from 2030, and hybrids from 2035. To enable the transition, it plans to introduce a Zero-emission vehicle mandate from 2024 and has consulted on phasing out new non-zero-emission heavy goods vehicles (HGVs) by 2040 (2035 for smaller HGVs).
• For the latter, the UK should stop connecting new homes to the gas grid and encourage existing homeowners to move to energy efficient alternatives such as hydrogen boilers, where hydrogen is directly blended into the national grid as a replacement to gas, without people needing to buy new heating or cooking appliances. The UK is planning to introduce a sweeping policy replacing all gas boilers with low-carbon options in 2025. Heating will have to come through heat pumps that absorb or extract heat from outside or in the ground and run-on electricity. Furthermore, policies such as the United Kingdom Climate Change Act can mandate the adoption of hydrogen technologies in new applications, and hydrogen production to help stimulate this shift.

3. Reduce so-called “embodied emissions” from major polluters such as steel and cement. These industries produce 16% of UK emissions and rely on processes that are among the most difficult and expensive to decarbonize. The UK put out its Industrial Decarbonisation Strategy earlier this year however it does not include targets for cement. At COP26, the UK, Canada, Germany, and UAE agreed to work together to create new markets for low-carbon steel and concrete through pledging to achieve Net Zero in public construction usage by 2050. The UK has many options to roll-out clean steel production, including using electric arc furnaces, using recycled scrap metal and CCS and hydrogen. The government’s announcement of a £250m Clean Steel Fund will only come into effect in 2023.
4. Reduce embodied emissions in imported goods by establishing carbon border adjustments. Over half of the real carbon footprint of the UK comes from the ‘invisible’ cost of goods made overseas. From August 2021 UK Climate Scorecard: the UK doesn’t count the carbon footprint of international travel and imported goods. The UK should keep track of emissions based on the consumption of goods from overseas and establish carbon border adjustments (carbon taxes on imports – to take into account the carbon generated by their manufacture) and introduce border requirements on the efficiency, recyclability and sustainability of imported goods. This recommendation is in line with the Key outcomes and next steps for the UK following COP26 outlined by the CCC. The UK emissions trading system (UK ETS) is still largely undefined following the UK’s departure from the EU, which is rolling out its own carbon border adjustment mechanism: to reduce the risk of carbon leakage, the mechanisms will put a carbon price on imports of certain goods coming from outside the EU.
5. As the COP26 president, the UK has the duty to ensure it follows through with commitments made at the conference. A recent report by the Climate Change Committee states “how far Glasgow can be considered a success can only be assessed by the actions that follow over the coming year and beyond”. Indeed, there were many signed joint agreements (dubbed ‘COP26 Outcomes’) whose legitimacy depend on follow-through and on the ground results. One of the main mechanisms drawing pledges for emissions reduction and the just transition is the Race to Zero campaign, which has over 5,000 businesses committed to reaching Net Zero GHG emissions by, or before 2050. Around half of these were UK businesses, including a little over half of the FTSE100. The UK should increase financing to third party organizations overseeing the follow through, monitoring, report publication and best practice exchange of the Race to Zero initiatives.

Governmental bodies that will play a key role in determining whether these strategies are adopted include:

1. The UK’s Department for Business, Energy and Industrial Strategy as well as the UK’s Department for Transport are responsible for following-through and updating pledges made in their respective decarbonization strategies.
2. HM Treasury can perform a systematic review of taxation and carbon pricing including consideration of post-tax subsidies.
3. The COP26 “all-star” team consisting of COP26 President Alok Sharma, UN High Level Climate Action Champion Nigel Topping and the High-level Champions, as well as COP26 Climate Envoy John Murton and Foreign Secretary’s Special Representative for Climate Change Nick Bridge has a key part to play in maintaining strong, high-level leadership through at least the duration of the Presidency (until COP27). Each of these leaders have done extraordinary diplomatic work in the lead-up to COP26 and should now take full advantage of the relationships built and commitments promised with heads of state and the broad array of subnational actors from regions, states, cities, businesses, non-profit sector, civil society, academic and indigenous communities.

This Post was submitted by Climate Scorecard UK Country Manager Thomas Christensen