Katie Kouchakji Policy - 02/September/2019

The transition jigsaw: Part 1 – The role of government

Enshrine stability and predictability in law to ramp up investment

The transition from a fossil fuel-based economy to one powered by renewable energy fast enough to stop runaway climate change can only be achieved by action from everybody. In a three-part series we examine the roles to be played by governments, business and investors, and civil society. This week, we focus on the urgent need for administrations around the world to step up and implement the right policies in ambitious legislation that offers market stability

Action: Governments must show leadership, introduce legislation that honours commitments under the Paris climate agreement and pull others along with them. Lawmaking needs to be ambitious, timely and offer stability to businesses and financial markets

Support: Lawmaking should also offer the necessary backing to the technologies needed for the clean energy transition

Key quote: The core element is stability, durability and predictability. Governments around the world have a great opportunity in the next two years to set frameworks for policies that can provide that predictability

Lauded for its historic nature, the Paris climate agreement is just the beginning of the next chapter of global climate lawmaking. The accord is “an international success and vital to drive action forward in the future”, says Nat Keohane, Washington, DC-based senior vice-president at the Environmental Defense Fund, a not-for-profit organisation. But, he adds: “It can only be given life if governments really start leaning in to this. We need to get major emitters not just doing more than they have said they will do, but also leading others.” He cites China’s decisions to introduce emissions trading, reduce emissions intensity (emissions per unit of GDP) and increase its uptake of renewables, plus India’s investments in solar and wind power as “bright spots”. But insists: “Overall the pace is not fast enough.”

Some governments have opted to enshrine their climate goals in law. The UK was the first nation to pass a climate bill with its 2008 Climate Change Act. It set a goal to reduce the six greenhouse gases identified under the 1997 Kyoto climate protocol (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, sulphur hexafluoride and perfluorocarbons) to 80% below 1990 levels by 2050. The original UK act was superseded in June 2019 by the signing into law of the goal to reach net zero emissions by 2050. Turning this into reality will require sweeping changes across the economy.

The UK’s advisory Climate Change Committee warned in early July 2019, however, that efforts to transition from a fossil fuel to a clean energy economy are lagging and deemed the next 18 months as critical. In a parliamentary report, the committee says that meeting the net zero goal “is contingent on early and decisive action to strengthen policy”. It adds: “Actions to date have fallen short of what is needed for the previous targets and well short of those required for the net zero target.”

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