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Could the Covid crisis in Africa derail COP26?
And could tax cuts usher in the era of clean heating?
Could the Covid crisis in Africa derail COP26?
A row about overseas aid risks stalling global climate momentum and is now the biggest threat to chances of a breakthrough at COP26.
Hopes are running high for the UN climate summit in Glasgow this autumn. PWC reports almost two thirds of the global economy is now covered by laws and targets aimed at getting to net zero emissions. Even Australia's long-time sceptical Prime Minister, Scott Morisson, is finally moving in this direction.
If national governments meet these pledges, scientists say climate safety could be in striking distance. As the BBC's global environment chief, Justin Rowlatt, divined - even before the election of President Biden - "there are powerful new reasons for optimism”.
But, despite these rightly celebrated developments, there is a mighty gap between what governments say they’ll do and what they’re actually on track to achieve. And keeping the prospect of limiting dangerous global warming to 1.5C alive will require commitments from more countries.
Over a hundred developing countries have yet to submit their climate plans to the UN. Some are waiting for clarity on what financial support they can expect from richer countries (over and above private investment) to allow them to give up using their fossil fuel reserves and forests in favour of cleaner technologies, and to protect their infrastructure against worsening weather impacts. Others, like Rwanda, have set out how much financial support they expect to receive in return for their climate contribution.
As Pete Betts, lead negotiator for Britain and the EU in the talks that led to the Paris Agreement, explained in a briefing to MPs last year:
"Vulnerable countries, including small islands, least developed countries and those in Africa have a major moral voice in the climate talks… These countries generally want high ambition so they are aligned with us; but they also want action on adaptation and financial support. Although the UK’s record is better than most, they feel short-changed by developed countries collectively."
With rocketing levels of extreme poverty and reversals in child health exacerbated by debt repayments to China and the West, the savage impact of Covid-19 on developing countries is hammering home the urgent need to address this issue. The virus means these countries are set to lose a trillion dollars every year for many to come. The expected fall in investment, tourism and other revenues is already more than all the overseas aid to the least developed countries combined.
It's been a decade since world leaders promised to get $100bn a year to developing countries by 2020. OECD analysis last year put the total at less than $80 billion, but even that is disputed.
At the same time, countries like Britain, faced with mounting Covid costs of our own, are reducing, not increasing, budgets for overseas aid. Downing Street may have been careful to ring-fence the climate-related elements, but the overall cut is likely to have a magnified impact on Africa in particular.
Meanwhile, other developed countries give far less, with the United States failing to fulfill promises made at the Paris Summit to raise its contribution to the UN Green Climate Fund (thanks to Trump’s veto). Although Biden's climate chief, John Kerry, says America will now rectify this, it remains to be seen what Congress will let the new administration put in the pot.
Unless the G7, chaired by Boris Johnson and Rishi Sunak this summer, can put together a substantial package of financial relief for vulnerable countries, there is a very real risk to progress at the climate negotiations, as anybody who remembers the Copenhagen Summit will know. That landmark UN conference in 2009 went down in history as a massive failure because that was the verdict given by vulnerable countries and NGOs, despite the combined efforts of US and European governments to spin it otherwise.
Encouragingly, the risk of a row over money creating a similar dynamic at the Glasgow Summit hasn’t escaped the British Presidency, with a summit on climate and development aid called for next month. This isn't expected to solve the problem, but it does offer the chance for donors to demonstrate that efforts are underway and mitigate the risk of losing influence over these countries to China.
Perhaps the Conservative backbench rebels fighting the aid budget cut could yet win their argument with Downing Street, if the Prime Minister is persuaded that success at COP26, and with it the reputation of "Global Britain," is now on the line. A commitment that the cut will only apply for one year might make a difference. Or maybe Boris Johnson is gambling that Britain's generosity over vaccine supplies will be enough, or that the US can put sufficient pressure on China to deliver debt cancellation or restructuring to ease the pressure. High stakes.
Could tax cuts finally usher in the era of clean heating?
We now have some of the greenest electricity in the world, as renewables power past fossil fuels for the first time. We're on our way to cleaning up cars, too, with diesel sales continuing to plummet in the face of the 2030 ban on new petrol and diesel sales and increasing pressure to set new clean air laws and zones in cities. New policies have been promised to help deliver this transition. So, what about the other big culprit: gas boilers?
This week The Express and The Sun launched climate campaigns focused on the idea of cutting taxes on environmentally-friendly products and services, an idea partially made possible by Brexit. Could this idea finally tip the scales on clean heating?
Over a million gas boilers were installed last year, as the target to stop new houses being fitted up to the gas grid was weakened and pushed back from 2023 to 2025 in the teeth of opposition from housing developers, gas firms and the gas workers union. For now, Ministers are looking in different directions for solutions. As The Times put it:
"So far the government is hedging its bets: in a green strategy last month it set an aim of 600,000 heat pump installations per year by 2028, up from only 30,000 last year, and also to heat tens of thousands of homes in a ‘hydrogen town’ by 2030. It said it was leaving open ‘the choice as to whether we pursue hydrogen heating, an electrified heating system, or a mixture of both’."
Downing Street is hesitating over a full gas boiler phase-out, understandably worried that the upfront cost of heat pumps is still too high for most people. Meanwhile, hydrogen doesn't look like a practical or affordable option and could be wasted on heating when it's needed for other things like greening steel production and shipping. Major investment in home insulation was announced but has now largely been withdrawn after the design of the scheme was botched (again).
A tax cut could begin to make the difference.
It's perverse that green electric heating is taxed at a much higher level than fossil gas heating. As Committee on Climate Change chief executive Chris Stark told Paul Johnson at the Institute for Fiscal Studies, this shouldn't continue. Forthcoming modelling by Jan Rosenow, a researcher at Oxford University, will show that electric heat pumps can already be cheaper to run than gas boilers and that they could also be cheaper overall if levies are shifted off power and onto gas and accompanied either by a big increase in volume sales (something BNEF, Centrica, Octopus and Ovo all expect) or by a carbon tax on gas (along the lines of what Downing Street is already considering).
This idea of using tax incentives to bring the era of gas boilers to an end is already backed by other independent experts like the Energy Systems Catapult. Now Octopus Energy is campaigning for the change, too. Weighing in with these allies, The Sun and The Express could be an astute focus for campaigners in the months ahead.
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