Good COP, bad COP

Has the flagship climate conference of the parties (COP) lost its touch? 

One week after the closing of the annual COP conference,  we  examine the deals - or non-deals - that  came out of the two weeks of negotiations, and why the EU failed in its negotiations to deliver a  plan for the global transitioning away from fossil-fuels. 

Richard speaks to Lord Adair Turner about the pressure from petro-states on negotiations, the unusual alliances with developed countries, and why expectations surrounding COP's effectiveness as a mechanism for change are dwindling. 

Host: Richard Sverrisson - Editor-in-Chief, Montel News
Contributor: Cem Bektas - Carbon Reporter, Montel News

Guest: Lord Adair Turner - Chairman, Energy Transitions Commission

Editor: Oscar Birk
Producer: Sarah Knowles

Transcript

Richard Sverrisson - Editor-in-Chief, Montel News: 0:07

Hello listeners and welcome to Plugged In - The Energy News podcast from Montel, where we bring in the latest news issues and changes happening in the energy sector.

Simon Stiell - Executive Secretary of UN Climate Change: 0:17

The science is clear. We can and must bring temperatures back down to 1.5 degrees Celsius after any temporary overshoots. Lamenting is not a strategy. We need solutions. We have already agreed we will transition away from fossil fuels. Now's the time to focus on how we do it fairly and orderly.

Richard Sverrisson - Editor-in-Chief, Montel News: 0:45

That was Simon Stiell, executive Secretary of the United Nations Framework Convention on Climate Change or UNFCCC, speaking of the opening plenary of COP 30 in Brazil a few weeks ago. A hopeful start to COP, which set out the main points on the conference agenda to establish. A plan for transitioning away from fossil fuels. So if we fast forward three weeks later, how did the COP conclude without that plan? And what does this say about the effectiveness of the flagship climate conference? In this episode, we'll be answering these key questions and examining the state of the global carbon market. But first, I'm joined by our carbon reporter, Cem Bektaş. Welcome back to the podcast, Cem.

Cem Bektaş - Carbon Reporter, Montel News: 1:27

Thank you, Richard.

Richard Sverrisson - Editor-in-Chief, Montel News: 1:28

What were the main deals to come out of this year's COP? What did they include? Or more importantly, not include?

Cem Bektaş - Carbon Reporter, Montel News: 1:36

After two weeks of negotiations in Belém countries agreed on a sweeping package to scale up climate finance and speed up the implementation of the Paris agreements. They adopted tax calls for mobilizing at least $1.3 trillion dollars annually by 2035 for client action, as well as tripling adaptation finance to around $120 billion dollars by the same period. On the other hand. The adopted text did not include an explicit reference to phasing out fossil fuels. Over 80 countries had backed Brazil's proposal for a formal roadmap to phasing out fossil fuel production, and a draft text had actually included this. However, they adopted outcome refers only to take forward the United Arab Emirates consensus, which was a decision during COP 28 that called for transitioning away from fossil fuels.

Richard Sverrisson - Editor-in-Chief, Montel News: 2:26

Cem, who will be happy at the outcomes from COP 30 and who will be disappointed.

Cem Bektaş - Carbon Reporter, Montel News: 2:30

I think that Petrostates will be particularly happy about the water down reference to fossil fuel phase out. Others like the EU were less pleased with the outcome. The European parliament's delegation chair said the summit was disappointing and they're not matched the level of the block's ambition. However, it's important to note that certain climate victories were still achieved despite the absence of an official US delegation in Brazil. And despite the lack of a clear fossil fuel transition phase out plan, whatever you want to call it, the COP 30 President André Corrêa do Lago announced proposals to create two roadmaps. One was to hold in reverse deforestation and another was to transition away from fossil fuels in adjust orderly and equitable way.

Richard Sverrisson - Editor-in-Chief, Montel News: 3:13

We saw in the first week of COP that a coalition of countries was forming to establish a common carbon pricing framework. What would this look like in practice?

Cem Bektaş - Carbon Reporter, Montel News: 3:23

The Open Coalition on Compliance Carbon Markets was launched during the Climate summit in Belém on the 7th of November with members including the EU, China, and Norway. Essentially aims to agree on a common carbon price and framework, and eventually connect different carbon credit trading systems, ETSs to create liquidity, predictability, and transparency. And the coalition would. Essentially enable its members to collaborate in defining best practices for monitoring, reporting, and verifying emissions, as well as agreeing on common accounting standards and ensuring the integrity of carbon offset credit mechanisms.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:00

Cem, thanks very much.

Cem Bektaş - Carbon Reporter, Montel News: 4:02

Pleasure. Thank you.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:03

Now let's hear from someone who I'm sure has much to say about this year's COP. Lord Adair Turner is the chairman of the Energy Transitions Commission. He was on our podcast back in August to talk about the challenges facing the global energy transition, and we're very pleased to have him back with us this week. A warm welcome back to the Plugged In Podcast Adair. It's great to have you back on.

Lord Adair Turner - Chairman, Energy Transitions Commission: 4:24

Thank you. Glad to be here.

Richard Sverrisson - Editor-in-Chief, Montel News: 4:26

We're here to talk about the COP that recently finished in Belém, Adair. What are your thoughts? Was it a fair COP? Pardon the pun.

Lord Adair Turner - Chairman, Energy Transitions Commission: 4:32

Would have to say that I don't think that the formal negotiating process achieved all that much. And I fear that actually it achieves slightly less than we anticipated, and I don't think expectations were very high. I think the crucial thing is that there is still a sense of momentum and that is despite the US deliberately having an empty chair strategy of just not being there. And I think the Americans, Trump administration probably hoped that without them there the whole thing would just collapse. And there was a sense of, no, we are still committed to limiting global warming to well below two degrees centigrade. That is the determination. But in terms of the specifics, there was talk of having a clear roadmap beyond fossil fuels, some sense of how we would get there. But there wasn't a clear plan to do that. There were initiatives, for instance, on tropical forests, but I think the amount of money which was pledged was less than a hoped for. And I think overall, I think the one has to be realistic. It has kept a sense of momentum, but it certainly hasn't reinforced it.

Richard Sverrisson - Editor-in-Chief, Montel News: 5:45

So it'd be too strong to say it was a failure.

Lord Adair Turner - Chairman, Energy Transitions Commission: 5:47

I don't think it was a failure. I don't think it was a clear success.

Richard Sverrisson - Editor-in-Chief, Montel News: 5:51

Okay. Somewhere in the middle. Fair enough. Let's talk a little bit generally about COP. It's been running for about 30 years. Do you still think it's effective or fit for purpose, this system?

Lord Adair Turner - Chairman, Energy Transitions Commission: 6:00

That's a very interesting issue and at least two different things happen at COP. There is an official COP at the core of which is. A set of negotiations on particular things to do with the rule book, for instance, on carbon trading and negotiations about what the final communicate, the final statement at the end of COP is going to be. And then there's a COP, which is a meeting of institutions of companies of NGOs, a discussion of technologies, an ability of people to share ideas. And the first COP, the official COP, there is a danger that it has a life of its own, that people are negotiating for the sake of negotiating. And the system doesn't really have the ability to say, this year we don't have all that much of importance to negotiate. So we are gonna scale down this official COP for this year. Everybody turns up the same number of negotiators turn up. They turn, they go into the rooms and get told to negotiate. But sometimes it's not clear why they have to negotiate. And I think what one's gotta do it's difficult because, it's not clear who's really in charge of the COP process. There's the UNFCCC the excellent secretary out of the process have a role, but they're not in charge of chairing the COP and it requires, I think, now some real thinking at the next COP of to how to change the nature of that official process to make it more effective.

Richard Sverrisson - Editor-in-Chief, Montel News: 7:34

What kind of changes would you like to see Adair?

Lord Adair Turner - Chairman, Energy Transitions Commission: 7:36

I think the crucial thing is to focus it on some real discussion of facts, so the UNFCCC and UNEP together develop a stock take and they develop a gap analysis of whether all the national determined contributions that have been made, whether they add up to meeting the climate targets that we've agreed well below two degrees centigrade, and ideally 1.5. But there isn't really a structured and mathematical driven discussion at COP to say where are we and what are we gonna do about it? There isn't within the negotiation thing a presentation that says, here are the numbers. Does anybody disagree with the numbers?'cause the numbers look like, despite our promises, we're heading for 2.4 degrees centigrade. Here's all the emissions of the different countries. Here's the projections of where they could end up of what the different countries are gonna contribute to future emissions. And let's sit in this room, not immediate negotiation mood, but in discussion mode, saying, do we all recognize we're not on target? And what are we gonna do to make progress? So, that stop take exists as a sort of background data, and then there's a whole load of negotiation about a communicate, but there isn't really a discussion with a small enough people, number of people in the room to say, can we face reality? Can we face the maths which is in front of us?

Richard Sverrisson - Editor-in-Chief, Montel News: 9:18

I dunno whether it's a correct interpretation, but it's a lack of urgency. While people are negotiating, talking, discussing the climate is burning or there's droughts as wildfires, hurricanes,

Lord Adair Turner - Chairman, Energy Transitions Commission: 9:28

Look, I mean there are different people coming there with different aims. There are many people and for instance, most, forcefully the small island, low lying island states saying we absolutely need a pathway still to try and limit global warming to 1.5 degrees centigrade. Though we're not gonna be able to do that without an overshoot on route. That's clear. But there are others whose main aim there is to make sure that there isn't any reference which is adverse to their short-term economic circumstances. Everybody knows Saudi Arabia spends time in the negotiations trying to make sure that there is no reference to moving beyond fossil fuels. And then there are other countries, major developing countries who have what I find a slightly bizarre negotiating stance, which is, we are not gonna debate the need for stretching carbon emission reduction targets unless the developed countries promise them more money. But this includes countries like India who are in a sense far more vulnerable to climate change than the major developing countries. So it becomes almost, we are not gonna discuss something which is more important to us than to almost anybody else in the world, unless somebody else promises some money. And so this sort of, you have a whole load of diplomats in there. I think sometimes detached from the real world of the technological possibilities of what we could now achieve who have been negotiating particular lines for years. That is their national line. That's they've learned to do it and it does have a detachment from two things, both from the urgency of getting accelerated action to deal with climate change, but also from the technological possibilities, which are now, before us. Because as I say I don't spend time, I'm not part of the official negotiating process at COP, but I know a little bit about what's going on there. I find out from other people you are actually allowed to go and just listen in to find it out. I spend most of my time in the other COP, and the other COP is far more optimistic. Because you actually find out people who are talking about the latest in battery technology, the latest industrial heat technology. The latest in, I met a person from China, who's developed a business which buys and then runs as a distribution service electric vans and trucks. And you say how many have you got? And they say I've got 190,000 so far, and I'm gonna have a million and I'm going to, I'm gonna franchise this across the world of, you buy distribution vans, you buy 10 and 15 ton trucks, and then you provide them as a distribution service to mid-size companies which don't wanna run it themselves. And when you get that, you feel we're gonna fix this problem because technology and business is gonna do it. You go back towards the negotiation and there is a feeling of people, some people who don't understand what is technologically possible and who seemed a bit detached from, just how urgent this problem is.

Richard Sverrisson - Editor-in-Chief, Montel News: 12:36

We disappointed that there wasn't a clear sort of roadmap for a fossil fuel phase out.

Lord Adair Turner - Chairman, Energy Transitions Commission: 12:41

I was disappointed. I wasn't surprised because it didn't strike me that there was, the emerging consensus in advance, which would enable us to get that. And I think, again, it's one of these things where. I think there has to be a process of putting forward some analysis and getting people to discuss the analysis rather than discussing it at a high level. And what do I mean by that? So at COP 28 in Dubai there was a commitment, a hard one commitment to transition away from fossil fuels. There was a huge debate about whether it was gonna go transition beyond away from how fast was it gonna be, and there was a phrase, so what is the next step beyond that? The next step beyond that is almost to stop talking about fossil fuels just as a linguistic thing and to say, okay, here's a scenario of how fast we could reduce oil demand. And let's be clear how fast oil demand will reduce if we simply turbocharge the development which is occurring already of road transport vehicles, here's what you would do to reduce oil demand in shipping and aviation, which however might not occur, probably won't occur unless you have regulation or a carbon price. Are we agreed that the difficult bid on oil is that it will be needed for several decades for plastics production? And do we just accept that? Similarly on coal, can there be agreement that we really are going to build no new coal plants. Is there agreement that we now have the technologies like solar and batteries together and wind and other forms of storage whereby we can do renewables plus storage at a lower price than new coal, or we agreed on that, in which case can we get agreement on no new coal and what are we gonna do about the coal that already exists and sometimes is contracted to supply power for several decades where it's difficult to see that bit of coal going outta the system without actual some form of finance or subsidy. So some vision of where we will be able to move beyond fossil fuels simply by using technologies which are actually cheaper, like electric vehicles and where it's gonna have to require some cost or subsidy, and where it's gonna have carbon pricing. Now, I think that we're at the stage where. There isn't much value in having another high level debate about whether we are going to move beyond fossil fuels and where to put the comma and which verb to use. I think we've gotta move to, okay, somebody has produced a scenario of how fast they think it could happen technologically and what tools would be required to deliver it. Do you agree with this or do you agree with another one, or are we talking about completely different things? Again, I think we've gotta find a process where this isn't simply a set of words in a communicate, because I think. Words in the communique have been valuable. I think they were very valuable. Very valuable at Paris and to a degree at Glasgow and at Dubai. But I think we're getting to the stage where the ability to make progress by agreeing things at a high level is beginning to get exhausted.

Richard Sverrisson - Editor-in-Chief, Montel News: 16:16

So you need some action. Really, I think you, you always seem to be suggesting an alternative forum where actually you talk real action and real solutions here, there.

Lord Adair Turner - Chairman, Energy Transitions Commission: 16:24

I don't think it needs to be an alternative forum. But I think in order to have a proper debate about a roadmap beyond fossil fuels. Somebody in the relevant secretariat, UNFCCC, UNEP with whatever help from the IEA or other parties has to develop some scenarios and has to have a debate where people around the table saying, is this what it looks like? To give you a an example, we have some sectors of the economy, road transport, light industry, building heating where I think we now do have a set of electrical technologies, which will win, right? They will turn out to be lower cost and they will deliver consumers across the world, the energy based services that they want at a lower cost than existing fossil fuels. I have absolutely no doubt that when we get to 2060, there will be hardly an internal combustion passenger road transport vehicle on the road because electric vehicles are better, they're better, they're cheaper, et cetera. So in those sectors, it's all about the speed at which we go and turbo charging them. And we need a debate about just how fast we can go and what policies can drive that, and some of the difficult trade issues that relate to that. But we know what we need to do. We then have these sectors, sometimes people call them the hard to abate sectors. Heavy industry, cement, steel, chemicals, long distance transport, aviation and shipping where, although there are technologies to get us to net zero at the moment they are more expensive and they may be more expensive for several decades, and in some cases more expensive than the fossil fuel forever. So those are ones where we are not gonna get action unless you have regulation or carbon pricing. But they are internationally traded, so it's very difficult to progress there without some international agreement or without the EU doing what it's doing at the moment, which is having a carbon price, but then having a border carbon adjustment. So what we need, and what I would've loved to have seen that COP 30 in Brazil is a discussion saying, how are we gonna get the 10 gigatons, eight to 10 gigatons coming out of these hard to abate sectors. How are we gonna be able to get that to zero in line with what we've all committed? Because we've all committed that we'll get to zero in either 2050 or 2060 or 2070. So if you accept. If you're gonna get to zero, you've gotta get these sectors to zero as well. Is it agreed that these ones, there is what's called a green cost premium? Is it agreed therefore, that we're not gonna get there unless we have regulation such as, banning the old fuels or carbon pricing? And can we get agreement that we're all gonna head in that direction? Now, as far as I can tell, we've never had that discussion. The process doesn't have a discussion, which starts as, let's look at these slides. Here is 10 gigatons. It is coming from this sector, and this sector. If we are serious about net zero, we need a plan to get this to net zero. Here from the presidency is a proposition that we'll only get there if we head towards carbon pricing. Agree or disagree, but if you disagree, tell us what the alternative is. The system doesn't seem to have a process to force people to either agree with a proposition that will get there or propose an alternative.

Richard Sverrisson - Editor-in-Chief, Montel News: 20:04

That's very interesting. I think that's something that you could see maybe potentially as a change in future COPs. But just before I go into carbon pricing, I'd like to just ask about, you mentioned Saudi Arabia and there has been talk of petro state and the lobbying and the blocking that going on. Do they really wield that much power at COP.

Lord Adair Turner - Chairman, Energy Transitions Commission: 20:22

I think Saudi Arabia has always argued against action. At particular times in the past, it has been allied with the US and then the US has depended on the administration in power. And then there are. What you get is funny alliances. You get funny alliances of Saudi Arabia and some other Petro states saying, we wanna avoid any reference to moving beyond fossil fuels. And then you get other people who are willing to have that, but only willing to have that if there is a commitment from the developed world to carbon and finance and so who make a statement, which in principle they're happy with, hostage to another bit of the negotiation. So it's this interlinkage between the different bits of the negotiation which give power to somebody who, in the case of Saudi Arabia, typically wants to be a drag anchor on any reference to moving beyond fossil fuels.

Richard Sverrisson - Editor-in-Chief, Montel News: 21:22

And how do you avoid that situation, or how can you change that situation Adair?

Lord Adair Turner - Chairman, Energy Transitions Commission: 21:27

I think it's incredibly difficult. I think there's a whole set of things in the COP process, which ideally would be reformed. For instance, we have these negotiating blocks. There is a bizarre negotiating block called the G 77 plus China. Now. Now China should be one country there in the same way that the EU is one group there. China is now simultaneously the biggest emitter in the world with higher per capita emissions than Europe or the UK and the provider above all of the brilliant technologies which they have driven, which can help us solve this challenge. And any discussion with China has to have both of those facts on the table start with. So the idea that China is in the same negotiating group as some, low income, vulnerable country is simply an absurdity. This is always the case with international organizations. Would anybody design the permanent members of the Security Council of the United Nations to be the five that are there at the moment if they were starting a new? Doesn't include India, does include UK and France because of the size we were in 1945. Unfortunately, these international processes they emerge with structures and ways of operating which made sense when they were created in this case, 30 years or so ago. But don't make any sense. I think, could there be a boldness with one president is to say, guys, the time is now where we've gotta talk, not just about how we all get in the room and do what we do each time, but can we do more fundamental changes to the structure of the way the discussions work or the structure of the negotiation groups? I think people looking from outside like me think it's obvious. People from inside obviously think it's impossible because, you just have people who have interests in the continuation of the existing thing. That is the imperfection of all international diplomacy mechanisms.

Richard Sverrisson - Editor-in-Chief, Montel News: 23:37

I'd love to talk more about, reforming and changing the global order there. But let's move to carbon pricing and the carbon market. Do you think a global carbon price is achievable or realistic?

Lord Adair Turner - Chairman, Energy Transitions Commission: 23:48

First of all, I don't think we need a global carbon price on all sectors of the economy. We have this idea of common but differentiated responsibilities, and that means that in different parts of the world, you should expect some sectors to move more slowly towards decarbonization than others. So we need in the UK to meet our commitment, to reduce our emissions to zero. Because we're a rich country faster than others. We need a clear strategy for decarbonizing residential heat. And that won't necessarily involve a carbon price, but it involves a set of actions. But it doesn't matter whether some other country, which for instance has a different challenge, like say, dealing with traditional use of biomass, whether it's going faster or slower than us in reducing those emissions in a non-traded sector of the economy. We all want a commitment that will all reduce them to zero eventually, but it can be faster in one country than another. It can be a higher carbon price in one country or the other, and can be different regulations. The challenge becomes when you get to a set of industries or services which are internationally traded, right? Residential heat is not internationally traded. If the UK government did impose a carbon tax on residential gas, I can't say, oh, I think I'll go and buy my residential gas from India or China. I can't do that, but I can with steel and I can with chemicals, right? They're internationally traded. So what we have in those sectors of the economy are ones where the. If an individual country goes ahead and has a carbon price and others don't, we'll get decarbonization in the first country, but we won't get decarbonization at the world level. The activity will move elsewhere. And the first country, when it decarbonize, we'll be lying to the world. It will be saying I've not got these emissions from steel making in Europe. We'll just be a hypocrite lie because we'll be buying our steel with the emissions from elsewhere. So we have these sectors of the economy. They are the heavy industry and aviation and shipping, which either in the case of aviation shipping, are inherently international. The very process which occurs is international or they're internationally traded and they are sectors where energy is a large amount of the total input. And where they are managed, unlike residential heating by professional managers of energy and cost and carbon. So those are sectors where it is highly likely that there will be a strong response to a carbon price and where you need some international coordination of carbon pricing, because otherwise you'll simply get emissions moving from one part of the world to another. I don't think we should start a big debate about, are we gonna get one carbon price across the whole of the world with a developing country popping up and saying, oh, but hang on. That would mean increasing the cost of cooking to my. Poor people. We don't need that. Completely unnecessary, but we need a debate about carbon price for a specific set of sectors of the economy. And that should be a crucial thing put on a COP agenda. And it should include an open debate of what Europe is doing. Europe has said we are gonna have a serious carbon price. And the UK for this purpose is part of Europe for this 'cause we are broadly speaking to Europe. We're gonna have a serious carbon price. We're not gonna give our chemicals and our steel industry free allowances, they're gonna face this carbon price. But if we do that and the rest of the world, doesn't do the same, we're gonna have to have a border carbon adjustment and that should be debated at the COP with facts and figures in front of us. I would like to see a proposition that says we try to get a global agreement that in those sectors of the economy, all countries will transition towards a significant carbon price o over time. But if people won't agree with that, they've gotta tell us what the alternative is. But, so let's focus this debate about carbon price not on some generalized proposition discussed at a high level, but apparently relating to all sectors. Let's do it as a focus discussion on the sectors where it is needed, because if we don't have it, we will not get the decarbonization.

Richard Sverrisson - Editor-in-Chief, Montel News: 28:34

I think lots of food for thoughts here, and I had certainly would like to continue the discussion talking about the carbon border adjustment mechanism or CBAM and pros and cons there. But unfortunately we have run out of time for this episode. So thank you very much for being a guest on the Plugged In Podcast.

Lord Adair Turner - Chairman, Energy Transitions Commission: 28:50

Thank you.

Richard Sverrisson - Editor-in-Chief, Montel News: 28:51

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