COP26, the global climate summit in Glasgow is officially over. Hyped as the most important climate change summit to date to take drastic action to deal with our man-made warming world, did it deliver or have we ‘kicked the can down the road’ once more…
Let’s start by looking at some background context…
As part of the Paris Agreement in 2015 – world leaders agreed to limit global temp rises to below 2 degrees, ideally 1.5 degrees by 2100. Co2 is by far the primary greenhouse gas contributor by volume and therefore the focus of our emissions reduction efforts and ‘Net Zero 2050’ is seen as the key milestone here.
Every 5 years, UN recognized Governments around the world agree to reaffirm their individual commitments to achieving this goal with their own targets – which is why COP26 was so important as it was the first real test of global commitment since the Paris agreement…
In essence in the UK and globally, and in order hit ‘Net Zero 2050’, we need to commit to reducing our Co2 emissions by half this decade i.e. by 2030 and then again in the following two decades – hence the ‘race to zero’.
In the UK, we emit roughly 450 million tons of Co2 annually – or 1% of the global total. Globally therefore it’s around 45 billion tons – with the 5 largest emitters being China 25%, US 12%, India 8%, followed by Russia and Indonesia and a combined total of approximately 50%.
Some argue therefore that the UK isn’t important and that we shouldn’t spend time and money addressing our own emissions. Our course if all the other nations of the world took this view, then clearly nothing would get done – in other words we are all ‘stakeholders’ and in this together whether as nations, as individuals and as businesses.
BTW, we also need to remove carbon from the atmosphere each year to avoid global warming – anywhere between 10-20 billion tons globally needs to be sequestered by 2030 and every decade thereafter to the end of the century. The UK govt is targeting 20-30 million tons of Co2 removal here by 2030.
So what have we learned from COP26?
Let’s look at ‘Global Net Zero 2050’ as an objective…
Clearly we’ve come up short here. China won’t reach their peak Co2 emissions until 2030 at the earliest and are aiming for ‘carbon neutrality’ by 2060. India have said 2070 is a more realistic timeframe for ‘net zero’ – but they are committing to meet 50 per cent of their energy requirements from renewable energy by 2030.
In the UK we are targeting a 50% reduction in emissions by 2030 to stay on track with 1.5 degrees and the US have also made a similar commitment.
There was no global agreement on the phasing out of coal fired power stations by 2030 as had been hoped, though the US/China govt’s have agreed to work more closely together…
So there is hope, but we now know that Global Net Zero 2050 isn’t going to happen – which means we will all need to prepare for life beyond +1.5 degrees celsius global warming in the second half of the century and quite possibly 2+ degrees in the next 80 years…
100 countries, including Brazil, are now committed to end de-forestation by 2030 which is an important step in securing our future ability to sequester carbon and in preserving eco systems.
104 countries have also committed to a 30% reduction in their methane emissions (which is 8 times more damaging than Co2) by 2030.
Crucially, COP26 also aimed to raise $US100BN/YEAR of vital money to assist developing nations in de-carbonising their economies. Sadly it came up some way short on this. Originally a 2020 target, this has now pushed back again to 2023!
So, on the face of it and on a global stage, it sounds like COP26 has frankly been – well – a bit of a ‘Cop-out’!
But let’s take a look at what’s actually been going on in the UK and in the background around COP26…
In October – just before COP – and as part of the ‘Build Back Greener’ Strategy and 10 point plan published a year ago, the GOVT issued a policy update…
Remember also that only in April this year, the UK further committed to achieving a 78% reduction in our Co2 emissions (compared with 1990) by 2035, effectively bringing ‘net zero’ forward by 15 years in the UK!
So let’s talk about energy…
Energy production and consumption make up about 80% of global Co2 emissions! All UK energy production is to come from renewable sources by 2035. This actual figure was 43% in 2020 – though overall energy consumption was also down by 13% due to lockdown!
Wind generation accounted for 24 per cent here BUT is dependent on – well wind so it’s not guaranteed! The Govt wants every home in the UK to be powered by wind energy by 2030, that’s 40GW of wind energy! (currently 20GW).
There is a similar call from the Climate Change Committee to generate 40GW of solar energy by 2030…
The UK Govt is also committed to investing in new Hydrogen tech with £140 million in new grant support here – and to taking a go/no go decision on a new nuclear power station this parliament by 2024.
As we place more and more demands on our infrastructure, powered by electricity generated from renewable sources, rapid expansion across the board for renewables is going to be paramount but demand will still likely outstrip supply. Electricity demand for example is expected to be 50% higher than today by 2050 for example…
So in addition…
Energy efficiency measures are also going to be vital – we’re all going to have to balance our increasing demand from electricity to power our businesses, heat our homes and run our cars, with much more efficient usage here.
There simply isn’t and won’t be a limitless supply of ‘clean energy’ this side of 2050 for us to be able to waste it on thermally inefficient buildings and infrastructure for example.
Natural gas is still forecast to be a major energy source in the UK well into the 2040’s and will provide our back-up for any renewables shortfall here.
What about Cars, Vans and HGV’s?
No new non-electric cars are to be sold after 2030! Just 10% of new car sales in 2020 were electric. Of course this will add further pressure to the renewable energy sector.
New diesel and petrol van sales up to 3.5t will also be banned from 2030 and commercial haulage and HGV vehicles are now earmarked for electric by 2040.
‘Net Zero’ public transport is also being supported with direct investment at Local Authority level and local Hydrogen production plants to power the next generation of ‘green hydrogen’ buses.
How will we Heat our Homes and Businesses?
Well the Govt is on record as having said that no gas/oil fired central heating systems are to be installed in new housing after 2025 and no new replacement gas boilers sold after 2035.
A new ‘Boiler Upgrade’ scheme was announced in the Autumn Budget with £5K grants for homeowners for air source heat pumps, £6K ground source.
There are sufficient funds for only 30K subsidised installations over the 3 years of the grant however, with a target of 600K/year by 2028 – from around only 35K last year!
There is no mention of insulation and addressing building fabric here to make homes more thermally efficient and able to run a heat pump in the first place or of the potential additional electricity costs for the homeowner in doing so…
Commercial properties are not currently mentioned with specific reference to renewables, but the Govt is making £1.5BN available to local authorities to help de-carbonise public buildings.
Single year business rate increase exemptions however were announced in the budget for investment in solar installations from 2022 where they increase the ratable value of a property.
What about the Environment…
Just last week we also had the passing into law of the new ‘Environment Act’ setting out a new regulatory framework to help manage our;
-WASTE & RECYCLING
-CLEAN AIR and Water
-and NATURE conservation
All of which will significantly impact the responsibility of businesses and local authorities to manage their environmental footprint in the future – from the production of single use plastics and future waste exports, to Biodiversity net gain to ensure construction developments deliver at least a 10% uplift here for example…
Turning Specifically to Businesses now, what do we know about ‘Business Regulation’ in the context of ‘Net Zero…
All companies bidding for government contracts worth more than £5million a year must commit to achieving Net Zero emissions by 2050.
It follows therefore that Local Authorities are also likely to implement this in their public procurement e.g. new buildings like schools in addition to the building itself complying with a ‘net zero’ standard.
Since 1 October 2013 company law has required all UK publicly quoted companies to report on their greenhouse gas emissions as part of their annual Directors’ Report. From 1 April 2019, quoted companies must also report their global energy use and large businesses must disclose their UK annual energy use and greenhouse gas emissions.
Under COP26, large UK firms – those publicly listed and high energy consuming businesses – will also be required to show how they will hit net zero. Under the new Treasury rules, financial institutions and companies with shares listed on the London Stock Exchange must come up with net-zero transition plans, which will be published from 2023.
The strategies will need to include targets to reduce greenhouse gas emissions, and steps which firms intend to take to get there. And although the plans will need to be published, the government said “the aim is to increase transparency and accountability” and the UK was not “making firm-level net-zero commitments mandatory”.
Let’s look at Green Apprenticeships…
The green apprenticeships advisory panel (GAAP) is working towards enhancing our current apprenticeships to ensure that they meet the needs of the employers within the growing green economy.
They are looking at creating new apprenticeships to reflect new occupations to meet the challenge to reach net zero carbon and support the drive for 2 million new green jobs by 2030.
So, what does the future hold for SME’s in the context of ‘The Race to Zero’?
Greater likelihood of individual business accountability here with;
– Commitment to own emissions targets/’Net Zero’ e.g. through the UK SME Climate Hub pledge and resource library https://smeclimatehub.org/uk/
-Increased Compliance ‘Burden’. Will the mandatory reporting of carbon footprint and route map to net zero also likely filter down to smaller businesses – 10+ employees for example?
-Carbon tax budget limit/credits – aviation, energy, heavy industry currently, – will this also be applied to businesses more generally, for example whose emissions remain consistently high
-Will we put a price on carbon as an incentive to save on emissions here? It’s worked well elsewhere in Costa Rica for example?
-Will emissions targets be legally enforceable in the future?
-There certainly won’t be a choice when it comes to the future adoption of green energy and transport solutions…
What about the Construction Sector?
The UK Green Building Council published their ‘Whole Life Carbon Roadmap for the Built Environment’ to coincide with COP26 last week. It included;
-Retro fitting of existing homes
-Energy performance measurement for non-domestic buildings
-Design for Performance; including a 2025 update for building regs focused around Kw/h per sqm/year energy performance
-Embodied carbon measurement and target limit setting
-National infrastructure investment to help de-carbonise supply chains like cement production for example…
So, in summary…
COP26 and the annual UN global climate change conference is in many ways ‘set up to fail’ – with politics often getting in the way of policy!
Nevertheless, and as we have seen in the UK, by virtue of the fact that COP does take place, and now falls under such scrutiny, govt’s like ours simply cannot afford to ignore the climate change agenda and the groundswell of public opinion and press attention that now surrounds it.
Whether policy is set at the actual COP conference table or decided outside at the weekly cabinet meetings, it doesn’t matter – as long as action is being taken, which it is. Much clearly remains to be done to bring about a global alignment on how to tackle climate change – but was COP26 a ‘Hit or Cop-out’ – you decide…
Martin White is the Founder of GreenBusinessHub.eco.