More than any in recent decades, the inauguration of Joe Biden today signals a fundamental shift in economic and political direction for the US. In no area is this more true than climate change – where the new president was elected on a platform of rapid and ambitious action. This is an inflection point in the global move to act on climate change – and creates a crucial opportunity for the UK to seize the moment and carve out a post-Brexit international role.
The global momentum to decarbonise is irresistible – now the UK must deliver a successful COP26
The COP26 summit was originally scheduled to be held in November 2020. Delaying the summit to November 2021 has greatly increased the prospects of success. Major economies across the world – including the UK, EU, Japan, China and South Korea – have now set net-zero targets, and many have already increased their 2030 ambition. The US will shortly follow.
This creates the opportunity for a successful COP26 outcome, and for the UK to build a post-Brexit global role. Having spent much of the last five years jeopardising its global political capital and soft power, the UK government now has a defining opportunity to rebuild it, while forging common cause with the Biden administration. It would be foolish not to capitalise.
Put net zero at the heart of economic and innovation policy
The Biden administration’s rationale for climate action is built around growth and jobs. This is both an offensive play, looking to make the US a world leader in growing low-carbon technologies and industries, and a defensive move, recognising that incumbent industries are at massive risk of devaluation and loss of market share if they fail to adapt.
The UK’s net-zero strategy, slated to be published ahead of COP26, needs to build on Boris Johnson’s Ten Point Plan by setting out how the UK will seize the domestic and global market opportunities of the net-zero transition. Failure to do so will mean the opportunity of leadership in new and emerging sectors is missed.
Make the case for markets to be at the heart of climate action
Biden’s policy platform on climate – net zero by 2050, $5 trillion of public and private investment over ten years, 100 per cent clean energy by 2035 – is undoubtedly ambitious. But there is much to play for on how that transition is achieved, and in particular whether it is delivered principally through enabling and incentivising markets to mobilise investment, or relying on the power of the state.
The UK has the opportunity to argue for a market-led approach to delivering net zero – with governments shaping markets to value decarbonisation through regulatory frameworks and pump-priming investment, and economic and technological innovators enabled to deliver the outcome. Winning that argument could help to define global economics and politics for the next three decades and beyond.
Global collaboration, not “decarbonisation in one country”
Climate change is the archetype of a global problem requiring global solutions. The move away from “America First”, and global commitments to net zero, create the opportunity for international collaboration to both accelerate the delivery of net zero, and reduce its costs.
The UK government can lead the political argument for supporting global, not just national, transitions. Our need for a post-Brexit trade policy, and the world-leading strength of our science and research base, mean we are ideally placed to make the case for global markets and innovation policy to prioritise the net-zero transition.
A whole-of-government effort
The Biden administration’s focus on net zero recognises that it is a systemic and strategic challenge – not one which can be advanced in isolation. This presages a whole-of-government effort – recognising that effective climate action must be at the heart of every element of government policy, from housing to health, and technology to trade.
The UK has made moves in a similar direction, but – as yet – with less focus and less detail. Net zero was prominent in the Conservatives’ 2019 manifesto, and a new PM-led Cabinet Committee has been established. But words and committees won’t be enough. Climate needs to play a central role in policy and fiscal decisions across government and all ministers – not just those with Energy in the job title – need to be held accountable for it.
Leave no-one behind
Along with its ambition, the most striking element of the Biden plan is the framing: not as an environmental agenda, but an economic and social plan which will have benefits across society. A focus on issues designed to appeal to middle America – jobs, growth, community, natural environment, and health – is central to his argument.
Internationally, the routemap to a fair global transition – providing finance to support emissions cuts in low-income countries; enabling global carbon markets; supporting technology transfer – is increasingly clear.
The UK has made some moves in the same direction, but the evidence is mixed. In the international sphere, we have sent the wrong signal by cutting the development budget. At national level, the government is taking tentative steps to embed fairness in its own net-zero plan, through investment in technologies and regional economies which could be at risk from the move to clean energy. Success in doing so is a requirement if national and global momentum on climate action is to be sustained