Catalysing commitment on climate change – A paper for the International Climate Change Taskforce

The negotiation of the UN Framework Convention on Climate Change and the Kyoto Protocol constitutes a major political achievement, yet greenhouse gas emissions continue to rise. This paper by Simon Retallack and Tony Grayling identifies what a leadership coalition of countries could do to improve international willingness to address climate change. Through a set of recommendations under four priority areas for action, the paper (published by the Institute for Public Policy Research) examines how nations can promote climate protection and encourage other countries to adopt significant climate commitments in the future.

‘Catalysing commitment for climate change’ argues that climate objectives need to be integrated in key policy areas, since creating synergies with other priorities would increase the likelihood of climate targets being met. The four priority areas outlined in the paper are: decarbonising the global economy, reconciling climate policy with trade and competitiveness, making climate policy contribute to poverty eradication and establishing accountability for climate change. 

1. Decarbonising the global economy 

To decarbonise the global economy, efforts must be focused on delivering near-term changes in the energy mix by incentivising renewables that are commercial or close to market, reducing fossil fuel use, and demonstrating the benefits of decarbonisation. 

To create a robust regulatory framework to drive decarbonisation, governments should: 

• Agree a framework for rules to link emerging carbon markets with ones established under Kyoto’s absolute caps, encouraging early action by developing countries without undermining the integrity of emission caps under Kyoto. 

• Partner with public financial institutions to systematically identify and address barriers to changing the energy mix, generating intensive support for institutional capacity building and concessional finance that can reward countries for their engagement and accelerate the deployment of renewables. This will require the provisions of new support for clean technology transfer that is additional to existing bilateral and multilateral programmes. 

• Scale up and replicate successful models, and bolster demand creation efforts, such as the Renewable Energy and Energy Efficiency Partnership (REEEP). 

Governments should also encourage investment in the following ways: 

• Ask multilateral banks to require that energy audits are conducted on energy-intensive projects and that energy-saving measures are subsequently financed, following the lead of the European Bank for Reconstruction and Development. 

• Phase out domestic and international fossil fuel subsidies, to level the playing field between renewables and fossil fuels, and internalise the latter’s costs. 

• Ensure financial regulators enforce existing company reporting requirements. 

• Provide guidance for mandatory disclosure of climate change related risks (regulatory, competitive, legal and physical impacts). 

• Require institutional investors to take account of long-term risks in their investments by strengthening their fiduciary duty. 

• Review and increase the World Bank target to increase its investment in renewable energy, arising from the Extractive Industries Review (EIR), either by changing the base year to a more representative one, or by improving the target. 

• Improve the terms for renewable energy projects under the OECD Arrangement so that they are at least as favourable as those for fossil fuel and nuclear energy. 

• Require individual Export Credit Agencies to adopt minimum efficiency standards for the projects they support, or portfolio-wide carbon intensity standards. 

2. Reconciling climate policy with trade and competitiveness 

Preventing climate change and promoting trade and competitiveness are often put at odds with each other. To help overcome this in practice, governments should: 

• hold a discussion on trade and climate linkages on neutral ground, i.e. outside the World Trade Organisation and the UN climate process; 

• coordinate at international and regional levels policies and measures to reduce distortions created by different policy approaches and implementation; 

• investigate the potential role of trade measures to penalise free-riding. 

3. Making climate policy contribute to poverty eradication 

This related priority would both increase support for climate protection measures and reduce the vulnerability of poor communities. Accordingly, governments should: 

• Support the adoption of a resilience-driven approach to policy making. This requires the systematic application of vulnerability assessments to new policies in order to exclude anything that puts vulnerable communities at greater risk. 

• The impacts on and role of women should be integrated in climate policy. 

• Climate measures should be aligned with development priorities by focusing on those measures that deliver multiple benefits. 

4. Establishing accountability for climate change 

Instituting accountability for the impacts of climate change will highlight the costs of inaction and provide support to affected communities. Although climate litigation is in its infancy, the rapid evolution of climate science is making compensation claims increasingly feasible. However, over time, litigation is no substitute for preventive policy making. Therefore, governments should: 

• Accept accountability for climate change impacts by initiating the development of a compensation fund to support disaster mitigation and preparedness, disaster relief and relocation in consultation with affected countries and communities.

To read the full paper, please click here.