OEP, budget, COP26

From uncertainty to certainty in 2021

Follow the money, delayed legislation and critical global negotiations. As we leave a long low-carbon lockdown, a number of tricky building blocks must all fall in place to make this a successful year on the road to net-zero.

Most people love a thriller … providing it has if not exactly a happy then at least a satisfactory conclusion where the good people win and loose ends are tied up neatly.

The opening pages of 2021 have the makings of a gripping low-carbon plot. However, because this is real life, the final crucial chapter as the coming year draws to a close could have a cliff-hanger ending.

Budget, bills and bold commitments

First the money. The Chancellor delivered his annual budget for the year ahead in early March with only tweaks to the mechanics of a green recovery announced last autumn.

Instead, his current priority is to make sure the UK has a financially stable workforce and well-positioned companies to make the most of old and new jobs, skills and innovative technologies.

On legislation – or rather until time is available to pass the three-times delayed Environment Bill – England’s new post-Brexit environmental watchdog will start work on quasi-legal interim basis.

The Office for Environmental Protection (OEP) will check from July rather than January that businesses and local authorities are meeting long-term UK green policy goals. A new domestic emissions trading scheme (ETS) will be launch similarly on a non-statutory footing in May.

And finally, complex international climate change politics could bring 2021 to a dramatic close depending on whether nearly 200 nations agree a plan to cut their emissions to net-zero by 2050 at the critical COP26 world summit in Scotland in November.

Happy ever after?

Anxious readers can cheat in ordinary tales by flicking forward to the last page. But many chapters of this extraordinary story will be written in the next eight months. What is certain is that the future of humanity and the natural world could be at stake.

More on the causes of this huge environmental problem in a moment, plus how Lancashire and the Northwest are helping the UK to nudge the world toward a global climate solution at COP26.

However, the real end-game is not whether world leaders reach an agreement in Glasgow but how forcefully they implement it in the next few decades, explains Chamber CEO Miranda Barker.

This long-termer goal – and moving beyond net-zero emissions – will be the focus of the British Chambers of Commerce Climate Challenge Group which Miranda co-chairs. More on this later too.

More on the budget

The Chancellor has given the Bank of England fresh responsibilities for zero emissions goals. A new National Infrastructure Bank in Leeds will invest up to £22 billion in mainly green projects; a green savings bond scheme run by National Savings & Investments (NSI) will also support carbon cutting.

But the budget lacked the environmental edge many had hoped for. As an example, the Chancellor chose not to extend the £1.5bn Green Homes Grant (GHG) launched last year to help householders insulate their homes and install low-carbon heating systems like heat pumps.

This is important for many SMEs. But with only 6% of the funding spent, the Treasury has no plans to roll forward the remainder. The application deadline is still the end of this month (March) with improvements completed by March 2022.

The UK’s OEP ‘rottweiler’ gets its first green teeth

The young Interim OEP will produce independent assessments of progress on the UK’s 25-Year Environment Plan; the green watchdog will also develop its own future enforcement policy.

In parallel, it will accept public complaints about public authority environmental compliance failures while managing OEP internal issues, such as staff recruitment.

The interim OEP will also decide how the permanent OEP will eventually be formed and operate, establishing its character, setting its working methods, and creating its “voice”.

Dame Glenys Stacey, formerly of Ofqual, and Natalie Prosser, previously with the Gambling Commission, will be interim chief executives.

As Dame Glenys, who will be chair, explains, “The sooner we are up and running, the sooner we can deliver as intended, and so begin to make those tangible and positive differences to the environment that we so wish to see.”

Some green groups worry that Environment Bill delays will leave the OEP with insufficient “teeth” at a point where the UK needs to accelerate action on both the climate and associated natural crises.

Emissions trading

The Government wants the UK to have its own independent emissions trading scheme, although there are concerns whether this will be large enough to be influential.

Intercontinental Exchange (ICE) – the FTSE 500 firm operating the EU ETS – will oversee the new UK post-Brexit carbon market. Its 2021 allowances auction calendar has now been published.

ICE says its approach meets the UK 2050 net-zero goal, with carbon accounted for under the Climate Change Act. The first auction is on 19 May.

The aim, says Energy Minister Anne-Marie Trevelyan, is to “give businesses and operators clarity over this year’s supply of emissions allowances, enabling them to plan ahead, build back greener and better prepare for the transition to a low-carbon economy.”

The final chapter – travelling hopefully to net-zero carbon at COP26

The villain in the global drama set to reach its climax this year is carbon and other greenhouse gases. The answer to “who-dun-it?” is “we all dun-it”, and will keep on doing it without huge change.

It took 197 nations three decades to reach the Paris climate change agreement in December 2015 which was signed in 2016. This asked them to submit emission-reduction plans in line with their own economic and environmental circumstances.

These Nationally Determined Contributions (NDCs) must be sufficient in total to keep global temperature rises down to 20C, and preferably 1.50C, and prevent unacceptable climatic damage.

A bumpy half-decade

The Paris Agreement (known as COP21) falls within the UN Framework Convention on Climate Change (UNFCCC) created at the 1992 ‘Second Earth Summit’ in Rio de Janeiro. Conference of the Parties (COP) is the UNFCCC decision-making body.

Nations have had five years from 2015 to 2020 to create and submit their NDCs. Unfortunately, the total in early 2021 is much lower than that needed to keep warming down to safe limits.

COP meetings in the last five years have not provided the motivation or momentum needed. Faced with domestic pressures, many countries have let their NDC promises slide.

One of the Paris Agreement’s weaknesses is its “bottom-up” structure which is largely voluntary and unenforceable. Admonishment is by “naming and shaming” – or “naming and encouraging”.

Time to talk turkey

Five years have now gone by – with a one year delay caused by Covid-19. The 197 nations will come together at COP26 this year to see what they have jointly achieved … and plug a massive gap.

It was already known in 2015 that Paris measures were not ambitious enough. Climate science now suggests the warming problem is greater than first thought. Carbon-cutting has to be much tougher.

COP26 (https://ukcop26.org/) from 1st to 12th will see governments, environmentalists, business leaders, NGOs – and possibly the Pope – meet to put updated flesh on five-year old strategies.

The UK is co-hosting the summit with Italy. Success in Glasgow is crucial to Britain’s environmental and commercial reputation. Which is why the regions are actively supporting COP26.

Business support

But, as Miranda explains, the net-zero target is too narrow a target to meet the world’s full climate safety needs. The aim of the British Chambers of Commerce Climate Challenge Group goes much further, a view shared by Environment Agency CEO Sir James Bevan who in March called for ‘net-zero plus’.

The primary focus of the group, she says, is to positively influence the UK’s national policy agenda and legislative framework on net-zero transition and affirmative climate action.

Specifically, it wants to see both awareness raising and appropriate fiscal support for members and the business community, plus the stimulation and facilitation of net zero/low carbon sector growth opportunities, she adds.

In April, we will show how there is also a key COP26 role for the East Lancashire Chamber of Commerce’s RedCAT – the Lancashire Centre for Alternative Technologies – which with the Chamber Low Carbon Programme offers low carbon technology innovation and commercialisation globally.

We will also keep a ‘COP-Watch’ on important COP26 developments in the next eight months.

How bad is the problem?

UN Framework Convention on Climate Change set the scene in February with a warning that emissions are set to fall by less than 1% before 2030. To reach the relatively ‘safe’ 1.50C limit, a 45% decrease is needed.

Its ‘synthesis report’ looks at how effective 48 new and updated national greenhouse gas (GHG) reductions plans will be (https://unfccc.int/process-and-meetings/the-paris-agreement/nationally-determined-contributions-ndcs/nationally-determined-contributions-ndcs/ndc-synthesis-report).

The report says emissions by 2030 will be only 3% lower than promised in 2015 – an order of magnitude below the 45% world scientists calculate is needed to keep warming below 1.50C.

Only 75 countries out of 197 – covering 29% of global emissions – managed to meet the submissions deadline. The US and China, responsible for more than 50% of emissions, have still to submit plans.

With a new President in the White House, and China’s new five-year economic plan vague on promised green plans, it is not clear how large their contributions will be during 2021.

Remotely online or eye-to-eye in the flesh?

The onus will be on the UK at COP26 to orchestrate the world’s climatic salvation from itself. The Government’s “Ten Point Plan for a Green Industrial Revolution” (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/936567/10_POINT_PLAN_BOOKLET.pdf) has impressed many countries.

However, there is a worry that Covid-19, having already pushed COP26 from 2020 to 2021, could stop a face-to-face gathering in Glasgow. Online contingency plans have been made.

This could throw carefully-choreographed political decisions, efforts to press reluctant nations into making larger NDCs, and potentially the whole UN climate process into disarray at a critical moment.

In fact, there is a concern that if key discussions do take place online during 2021, the physical summit in Glasgow could be reduced to a pre-empted rubberstamping exercise.

What can the UK do?

As COP26 president, Alok Sharma announced five priorities last year which the Government hopes will bring the low-carbon agenda back on course. Specially, these are: – adaptation and resilience; nature; energy transition; clean transport and unleashing zero-carbon economy finance.

To close the emissions gap, the UK is being urged to encourage all 197 COP countries to unite in a common multilateral climate solution, rather than the unilateral NDC-approach which is off track.

Prime Minister Johnson is also being pressed to use his presidency of June’s G7 meeting in Cornwall to make reforms that will support ‘green global finance’.

A successful ending to a busy 2021 may depend on many pieces of the kaleidoscope coming together constructively in highly unusual times.

And everything agreed will then have to be implemented in full.

Local solutions

Many solutions are global. Others extremely local. Kate Gilmartin of the Rural Communities Energy Fund North West explained how local people can actively support the zero-carbon agenda in our Live Lunch & Learn webinar “Moving towards zero-carbon in Lancashire” on 18 March.

Bottom-up community action creates vital renewable resources and valuable local assets, she says. Some 50% emission cuts must come from people, communities and individual consumer decisions. This is in addition to big top-down changes in areas such as transport.

Not-for-profit Community Benefit Societies – uniquely allowed by the FCA – raise finance for local low-carbon projects. There is no one “big solution”, she adds. Community Energy is crucial.

If you missed Kate’ presentation, it can be seen online at https://www.youtube.com/watch?v=PkqS2VgSVB4.

Energy from oranges

The UN Environment Programme’s Food Waste Index shows that 17% – 900 million tonnes or 23 million truck loads – regularly goes into the bin.

Food waste creates some 8% to 10% of GHG emissions; the UN wants the world to change its habits. Some 60% is thrown away in our homes.

However, positive recycling news comes from Seville in Spain where 5.7 million kilograms of oranges grow on 48,000 trees, far too much for human consumption.

Methane gas generated from an initial 35 tonnes of fermenting fruit will soon be used to power one of the city’s water purification plants.

Could we look forward to similar golden harvests in a gently warmer Lancashire?