Day four was Finance Day in Glasgow, and the star turn was from UK Chancellor of the Exchequer, Rishi Sunak. Wearing a mask and toting a special, green ministerial box, Sunak announced that the government (a Tory government, mind you) will require all UK-listed companies to set out maps to ‘transition’ to Net Zero in the coming decades, with firms assessed annually.
Bankers from the City (London’s financial centre) revealed that their executives had been told they need to hit ‘green targets’ in future to get their bonuses, and the Treasury said the government’s plan would make the City ‘the world’s first net zero-aligned financial centre’.
This, of course, is the same City that promised investment in the Russian gas sector in 2003 so that Russia would trigger the entry into force of the Kyoto Protocol. That manoeuvre secured the establishment of the lucrative carbon trading market which was good for their business, while enhancing the Western European dependence on Russian gas for which consumers and industry are paying a price in the current energy crisis.
At the time productivity in coal mining in Europe in the 1990s was about a quarter that of Australia and in both the UK and Germany was very heavily subsidised. With the ‘dash for gas’, gas-fired generation increased from 2% to 38% from 1990 to 2003. In the UK the share of coal-fired generation decreased from 65% to 35% and its average efficiency increased as older plant was retired. Now Europe has exhausted its cheap coal, and climate change represents a useful reason for attempting to deprive the rest of the world of access to coal and closing markets to exporting countries such as Australia.
An Australian negotiator once told me that climate negotiations were best thought of as a traditional negotiation, with power and interest to the fore. But it is different in that one bloc has its power amplified by deploying what appears to be a moral argument. This is a global example of what Bruce Yandle famously labelled a ‘bootlegger and Baptist’ coalition – the green zealots standing in for the Baptists and those profiting from artificial carbon markets and other green boondoggles playing the part of the bootleggers. [In the classic formulation bootleggers of whiskey during prohibition were aligned with the Baptists because defining something as sinful and making it illegal offers up all sorts of opportunities for profit].
This context is essential for understanding why eradication of coal as a source of power is reported to be one of Boris Johnson’s main ambitions for COP-26. Thus the UK was proud to foreshadow Thursday’s proceedings by announcing that 150 countries and organisations had signed on to a Global Coal to Clean Power Transition Statement. Back in Australia, the Climate Council and Renew Economy seized on the statement and criticised the Morrison government for not taking the pledge, but it was a hollow argument as only about 40 countries had endorsed it, and the rest were sub-national governments (including the cities of Sydney and Melbourne) and organisations.
In fact, it turned out to be simply an extension of the Powering Past Coal Alliance that was formed in 2017 by Canada and the UK and is funded by the government of Canada. Canada’s performance in actually reducing GHG emissions has been poor, like that of New Zealand, but in my study of Canadian electricity planning 25 years ago, I noted they were only too happy to take action against coal as that advantaged their immense hydro resources and their CANDU nuclear technology. In the 1980s, the acid rain alarm was useful; now climate change has taken over.
In a classic example of forum shopping, the concept was developed further at the UN High Level Dialogue on 24 September, in a process that helped build momentum. But it remains nothing more than a statement. Australia, China, India and Russia declined to sign on, so it is endorsed primarily by those countries that either have no coal resources, or have a strong interest-based reason to phase out coal.
The statement promises an end to financing ‘unabated’ coal power, which the parties interpret as a requirement for Carbon Capture and Storage (CCS), a technology which has been accorded limited space on the agenda at Glasgow. Just 45 minutes will be devoted to ‘Carbon Capture and Storage – Decarbonisation of Industries in Non-Annex 1 and Annex-1 Countries’ in a mere ‘side-event’ organised by the International Energy Agency Greenhouse Gas R&D Program.
How scarce resources are allocated is revealing, and since time is limited in Glasgow, the allocation of time tells us something of the priorities of the organisers. The 45 minutes allocated to CCS is in contrast to the 90 minutes devoted to ‘Girls Education and Climate Action’ and another 90 minutes to ‘Sports for Climate Action’ both in the stream for ‘Global Climate Action events’.
As John McEnroe used to say, ‘You cannot be serious.’