Climate action after Paris: Tailwinds, headwinds and wild cards

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

COP21 plenary, 12 December, 2015. [COP PARIS / Flickr]

As the Paris Climate Agreement enters into force, it is time to reflect on how the politics of climate change are evolving, writes Nick Mabey.

Nick Mabey is Chief Executive of E3G, a European think tank promoting ‘Third Generation Environmentalism’.

The Paris Agreement marks a break from the past. Argument over rules is largely over even though there are still important details to agree. Although it was the best deal available, the regime is far from perfect. Country commitments do not match the agreed goal of staying well below 2C, let alone the “stretch goal” of 1.5C.

The ultimate success of the Paris regime will depend on whether its “ambition mechanism” works in practice. This is a five year political cycle where each country must simultaneously put forward increasingly ambitious emission reductions so we can collectively reach the Paris goals.

The focus of global climate politics has shifted from agreeing rules to increasing ambition. From how to share out the global carbon budget to influencing how fast countries believe they can shift to a zero-carbon economy.

The politics of ambition will not be decided at the negotiating table. It will be determined by national debates driven by economic events rather than scientific knowledge.

Traditionally rising greenhouse gas emissions were seen as being irrevocably linked to economic growth. Climate policy was a Sisyphean task of pushing a boulder up an ever steeper political and economic hill using ever more shocking scientific evidence.

But decades of climate policy have produced a virtuous economic circle where delivering climate action shifts the balance of national interests towards more ambition. Going forward these drivers will provide the “tailwinds” which increase the space for ambitious climate action.

Three tailwinds

The first tailwind is the amazing cost reductions in clean technology; from renewable energy to battery storage to LED lighting. Costs have fallen 15 years faster than expected. Ironically it was the Copenhagen Summit which led to the pulse of EU clean technology investment which kickstarted cost-reduction though global supply chains.  Perceptions of falling costs of climate action were vital to open the political space for the Paris Agreement only six years after the failure of Copenhagen. Expectations that technology prices will fall further are now encouraging greater investment in climate ambition and further price reductions.

Cost reductions have been complemented by recognition of the multiple benefits of clean technologies; such as tackling air pollution, reducing fuel poverty, and increasing energy security. Cities are investing in clean energy for local and climate change benefits; delivering a bottom-up accelerator of climate action. Use of electric cars will be driven as much by a need to tackle air pollution as by climate concerns.

The second tailwind is the mainstreaming of climate change into financial decision making. This has been driven by a pincer movement of NGO climate activism directed at large investors, and the destructive impact of clean technology on share values in high carbon sectors. Finance is notoriously risk averse. Before Paris most investors were ignoring the risks of an early move to a low carbon economy; now the burden of proof has shifted. Countries looking to attract private capital will increasingly need to ensure their infrastructure projects are aligned with a zero-carbon future.

The third tailwind for climate ambition is the impact of climatic change itself on national debates. Major weather events are shifting politics in many countries. This is happening slower than expected because fossil fuel interests are still more politically powerful than climate impacted industries. Many richer countries also still think they are not themselves at risk. These dynamics are changing with the public in vulnerable developed countries like Spain and Greece now rating climate change as a more important threat than people in traditional “green” champions like Germany and Sweden.

Three headwinds

But these tailwinds are not the only forces at play. Denial of climate science is no longer a major force globally, except where aligned with broader populist movements. The real “headwinds” threatening faster climate action come from reactions to the very success of climate policy in shifting investment, markets and economic risk.

The first headwind results from the poor management of inevitable impacts on jobs, communities, taxes and pension dividends as countries disentangle themselves from fossil-fuels. Those ideologically opposed to climate action will try and form coalitions with affected groups in order to slow the transition. A tactic already used by the National Front in France and UKIP in the UK.

History shows that most industrial transitions are handled badly and public support mainly benefits companies not people. Better just transition policies are needed to avoid a social backlash.

The second headwind is institutional inertia in existing market and regulatory systems. As clean technologies significantly penetrate markets they fundamentally disrupt exiting regulatory and business models. Major reforms will be needed to electricity and gas markets, infrastructure regulation, and public financial management in order to maintain services and investment.

Incumbent interests are adept at inflating the risks of reform and suggesting incremental “patches” which actually support existing dirty assets. For example, subsidising old fossil plants to balance power systems rather than creating new markets for energy storage, smart controls and flexibility.

The final and most difficult headwind to tackle is where fossil-based industries are critical to politicians’ core Party or individual interests. Repressive political action, even escalating into state violence, has already marked protests against the coal sector in many countries. Environmental repression and corruption will become more common as the low carbon transition accelerates.

A wild card

No matter how strong the headwinds in driving greater climate action they are still at risk from wider forces. The true wild card in climate politics is the broader geopolitical context for cooperation over the next decade. In Paris, the geopolitical stars aligned and the US and China used climate change cooperation to balance their other political differences. Whether similar luck will hold over the coming decade is unclear but much worse scenarios are plausible. Climate cooperation must be designed to ensure the resilience of the Paris regime through good political times and bad.

The Paris Agreement was a success, but is not an outcome in itself. The next decade is the most fragile period for the new regime. We have built the scientific, economic, technological and financial foundations for maintaining a safe climate. We now need to build the politics.

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