COP26 Week 1: hope dances with despair

14 mins. to read
COP26 Week 1: hope dances with despair

Most world leaders and global bigwigs travelled to Glasgow this week in their private jets to preach redemption from climate sin. What are the chances they will save the planet, asks Victor Hill?

Where we are

Such is the centrality of climate consciousness in modern diplomacy that there are essentially four groups of states in policy terms right now.

The first group are those states – the UK, the leading EU countries, the US and Japan − which have declared a target of reaching ‘net zero’ (I’ll explain shortly why that term is subject to interpretation) by 2050. The intermediate targets vary. For example, the UK has made detailed pledges on carbon reductions by 2030 and so forth. Most of these countries have set target dates to end the sale of internal combustion-engine-powered cars (2030 in the case of the UK).

This group was joined by Australia just before the COP26 conference convened. Scott Morrison, Australia’s prime minister, raised eyebrows when he said that his country would achieve net zero “in an Australian way”. His government has not set any intermediate targets and will remain a major miner, exporter and user of coal for the foreseeable future.

A minority of this group of countries – notably the UK – have made their pledges “legally binding”. That means that if the UK does not achieve net zero emissions by 2050 then the courts would be able to declare the government in breach of the law. But since parliament is sovereign in the UK (that was the point of Brexit – wasn’t it?), no parliament can bind its successors, so the legal commitment could be undone at any time. And if the government were to be ruled in breach of the law – so what? I’m afraid that I regard this aspect of my country’s moral self-righteousness utterly fatuous.

Then there is a second group: China, the Russian Federation and Saudi Arabia, which have committed to net zero by 2060 – so they at least acknowledge that humanity has a problem. But we are entitled to analyse these commitments in detail. They amount to no more than statements of intent without any substantive strategy. As I have reported here previously, China’s most recent five-year plan speaks about lowering CO2 emissions per unit of GDP – in other words, improving energy efficiency – which, while laudable, is not the same as eliminating all carbon emissions.

China quite openly plans to increase the roll-out of coal-fired power stations for the rest of this decade. It is therefore certain that China, which is currently responsible for about 28 percent of all global CO2 emissions, will become an even bigger emitter in both relative and absolute terms. Russia seems disinclined to reduce extraction of natural gas, which is a vital part of its economy given that it lacks a substantial manufacturing base or indeed a vibrant service sector. Saudi Arabia is a recent convert from climate denial and is keen to diversify its economy away from oil production. But should we not assume that it will continue to pump ‘black gold’ so long as there is demand for it?

In the next group, India’s prime minister, Narendra Modi, announced last week that India would become carbon-neutral too, but not until 2070 – a half century from now, by which time Greta will be a Nordic pensioner. Again, intermediate targets put forth lack detail.

At least India aims to achieve 500 gigawatts of renewable electricity by 2030. Meanwhile, it remains the third-largest emitter of CO2, even though about half of its population still lives in poverty and its per capita output of CO2 is about one third of the global average. Desperately poor people use firewood and dung to cook and keep warm and these are more conducive to climate change than a modern gas boiler. Do not assume that poverty equates to zero carbon. Subsistence agriculture, still widespread in Africa, is much more environmentally harmful than scientific farming methods used in countries like Britain.

Lastly, there are nations which have no net-zero timeline at all. Vietnam and Brazil apparently committed to net zero by 2050 as the conference opened, but they have published little by way of policy detail.

Will this collective climate consciousness amongst the leading nations restrict the rise in the global ambient temperature to just 1.5 Celsius – which Boris Johnson re-articulated this week as the ultimate objective of COP26 by achieving global net zero by “around mid-century”? Many think not.

A survey undertaken by Nature magazine, of Intergovernmental Panel on Climate Change (IPCC) accredited scientists, suggested that two thirds of their number believe that the Earth will heat up by three degrees Celsius by the end of the century. That would entail catastrophic consequences. Moreover, a recent report by the Global Carbon Project predicted that global emissions would rebound to pre-Covid levels by the end of this year. Next year will most likely see a further rise to record levels. The 16th annual Global Carbon Budget Report 2021 will estimate that there is a 50 percent probability of hitting the 1.5 Celsius mark in the early 2030s. This concurs with the findings in a recent UN report.

Unhappily for Mr Johnson, China called for a less ambitious target of a two-degree Celsius rise in global temperatures. Beijing’s climate negotiator said that if we must focus on 1.5 Celsius “we shall destroy the consensus and many countries would demand a reopening of the negotiations”. So, we can forget the 1.5 Celsius target – it isn’t going to be achieved.

It is not surprising then that the prophets of doom are out in force this week. During the pandemic, it has become common to claim not just that climate change is a major problem but that it is an existential threat to the survival of humanity. The BBC’s environment correspondent, Roger Harrabin, sees his role as one of issuing regular apocalyptic warnings. Even the prime minister talks about impending “catastrophe”. What I have called the “millenarian millennials” now mostly seem to believe that the world may end during their lifetimes.

Action or blah?

On the plus side, the conference has managed to conjure up several major initiatives in its first five days.

First off, we were told there was an agreement to cut methane emissions by 30 percent by 2030. The problem here is that there is no universally agreed methodology to measure methane outputs.

Then, on Monday, we got news of a new agreement on deforestation. More than 100 world leaders – including Brazil and Russia – vowed to end unlicensed logging in their countries. The pact was essentially a promise that each country would not cut down more trees than were being planted by 2030. A total of $12bn is to be pledged to protect and restore forests. That would be nice if it were enforced, Senhor Bolsonaro.

On Tuesday, it was confirmed that all UK stock-market-listed companies will be legally obliged to publish annual decarbonisation route maps (“transition plans”), as to how they will get to net zero by 2050, by as early as 2023. The Financial Conduct Authority will act as umpire and theoretically would have the power to suspend a company’s listing if it did not comply. There will be a “Transition Plan Taskforce” made up of industry and academic leaders, regulators and campaign-group activists.

On Wednesday night, we learnt that 40 countries, in collaboration with dozens of major financial institutions, had pledged to phase out coal-fired power plants and to end funding for coal projects (that’s new mines as well as power plants) internationally. The precise timeline was not specified. But business secretary Kwasi Kwarteng MP decreed that “the end of coal is in sight”. The list of countries includes Poland, Vietnam, Egypt, Chile and Morocco. These five countries are all highly dependent on coal to power their electricity grids. Significantly, Australia, India, China and the US did not sign the agreement. On closer inspection, however, it now seems that there is a loophole: signatories can carry on burning coal until 2050.

Rishi Sunak also announced plans to make the City of London a “green financial hub”. He claimed that 450 financial institutions have signed up to a commitment to restrict global warming. He talked about having made progress “to rewire the entire global financial system” to net zero. Does this mean that it will be impossible to get finance to develop a new gas field or coal mine? That remains to be seen.

By next week, it is probable that COP26 will culminate in a pledge for developed countries to provide $100bn in funding annually to help developing countries move away from fossil fuels. Britain already spends about $15bn a year on foreign aid, and it is not clear whether climate funding will be additional to such aid, whether aid will be rededicated to this purpose or how this funding will be policed.

What does net zero really mean?

The meaning of the term depends on what we understand by carbon capture and storage (CCS). It became clear this week that many nations are predicating their targets on tree-planting programmes.

The idea is that reforestation will absorb much of the carbon produced by industry. But, as I have mentioned here before, this is an inexact science. It is notoriously difficult to determine that a particular area of woodland will mitigate a specific amount of emissions. There are so many variables, such as what type of trees, how densely they should be planted, how long do they take to grow, and so on. Not to mention the jokers in the pack: a massive stretch of carbon-offset forest planted by Microsoft in Oregon was destroyed by wildfires this summer. So, despite its sincere best efforts, Microsoft ended up contributing to global emissions rather than mitigating them.

Then there is the still unresolved debate about biofuels. Currently, the Drax power station in Selby, North Yorkshire, which burns wood grown in North America, receives more state subsidy than any other power station, even though such biomass fuel may produce more CO2 per megawatt hour than coal. Is it reasonable to use a carbon-accounting system that postulates that new trees planted in another country will offset CO2 emissions generated here?

What they aren’t talking about

COP26 appears to be a nuclear-free zone. While nuclear energy will be essential to provide a backup to intermittent renewables, the industry’s leaders have not even been invited. This is particularly remiss, as thorium-powered nuclear reactors promise to revolutionise the industry. This technology is prospectively much safer, produces less problematic waste and can even consume the waste products from conventional uranium-powered reactors.

Green stocks to watch

With COP26 dominating the headlines across the world, now is a good moment to shortlist some likely winners from the evolution of climate consciousness. Danish wind-turbine manufacturer Vestas is powering ahead. The UK’s Aveva, the engineering-software and information-technology consulting company, is worth watching.

Uranium producers have also had a good run this year. Geiger Counter is an investment trust that is long uranium exploration and production stocks. Kingspan is a leader in the insulation- materials sector. The L&G Battery Value Chain ETF tracks the progress of major battery manufacturers. Johnson Controls helps commercial buildings consume less energy. I’m also bullish about Rolls Royce which designs and builds small, modular nuclear reactors.

Epilogue: ideological confusion

The first generation of ‘greens’ were essentially conservationists who wanted to preserve the natural environment and who fought to prevent its wanton destruction. They cared for the welfare of animals. That became a lifestyle – a noble one − of “Think globally – act locally”. This week the Queen cited her late husband, Prince Philip, as a pioneer environmentalist; but he was fundamentally a conservative conservationist (note the etymology). The late English philosopher, Sir Roger Scruton, wrote in his Green Philosophy about environmentalism based on personal responsibility, property rights and stewardship (a concept that has a particular place in Christian, Buddhist and Islamic thought).

The current Tory government in the UK, however, seems to be closer to Extinction Rebellion (XR) than the Duke or Sir Roger. A government-driven decarbonisation agenda means that the role of picking winners and dropping losers is prised from the private sector and arrogated to the state.

For example, banning all new gas boilers by 2035 and forcing homeowners to instal electric-powered heat pumps will disrupt an important industry. First, virtually all those heat pumps will have to be imported as we don’t manufacture any in the UK yet. Second, this disincentivises extant gas-boiler manufacturers from developing models with in-built carbon capture. Third, it may hinder the rollout of hydrogen-based domestic heating. Beware of the law of unintended consequences.

In the 1970s, the UK was the world leader in nuclear-power technology. We had two fast-breeder reactors at Dounreay in Scotland as well as a pressurised-water test facility. There were Magnox and other advanced gas-cooled reactors in England, plus a single pressurised-water reactor at Sizewell. Yet successive governments determined that nuclear power was too expensive because coal, oil and gas were so cheap. Governments miscalculated then – and it is eminently possible that governments will miscalculate in this era too.

I have written here before that it is far from clear that the transition to lithium-ion battery-powered electric vehicles (EVs) is the optimal environmental solution. Such batteries are responsible for massive carbon emissions in their sourcing and manufacture; and there will be substantial energy costs when they are recycled at the end of their economic lives. And EVs still generate harmful particulate emissions from their brakes and tyres. There is good reason to suppose that a better solution to vehicular transport lies in the hydrogen economy – on which more soon.

Furthermore, there is so much more to environmentalism than carbon dioxide. The inadequacy of Britain’s sewage and water treatment infrastructure has been on the agenda for decades. Recycling facilities are unfit for purpose (though apparently the PM thinks that recycling plastic is a waste of time).

Food waste is still rife in Britain where consumers throw away about one third of all the food they buy, which accounts for eight percent of all the UK’s territorial CO2 emissions, according to the ONS. Forget about cutting down on eating meat – why not cut out binning meat in domestic garbage? And what about flood and sea defences? If sea levels are going to rise, we should learn lessons from the Dutch about how to prepare ourselves. We also have the problem of plastic in the oceans, which is getting into the marine food chain. That is a massive issue which has nothing to do with CO2.

The UK has managed to cut its carbon footprint substantially over the last 25 years or so. That is partly because it has drastically cut down on coal-fired power plants in favour of renewables – for which credit is due. But it is also because, in the era of rampant globalisation, we have outsourced manufacturing to China and elsewhere. In so doing we have also outsourced our carbon emissions − hence the argument for a carbon tax on industrial imports from countries with a more lenient carbon agenda.

If the proposed new coal mine near Whitehaven, Cumbria is denied planning permission, as now seems likely, the UK steel industry will be obliged to import coking coal from abroad. So, there will be no net reduction in carbon emissions. And British steel, already the most expensive in Europe, will be further disadvantaged relative to its foreign competitors. We are still a long way away from producing steel with green hydrogen – though that remains a medium-term possibility.

No doubt we could become entirely carbon-neutral just by shutting down our industry altogether and relying on imports – which is apparently what XR and its fellow travellers want us to do. But that would not solve the global climate crisis.

Ultimately, individual behaviour – attitudes − will be key to restricting global warming, though we won’t be hearing much about that at COP26.

Make do and mend. Waste not want not. A fool and his money are soon parted. Beggars can’t be choosers. More haste, less speed. These were some of the homespun proverbs that my parents’ generation lived by. They went through life wasting almost nothing (I hear that the Queen goes round switching lights off at Buckingham Palace). The millennial millenarians would do well to rediscover those pearls of wisdom. They might start to save the planet by favouring reusable, plastic water bottles, cutting down ‘facetime’ on their smartphones and growing their own vegetables.

In the meantime, the blah blah blah continues.


Glasgow. I spent time there some 20 years ago and was irritated that the City Council never bothered to remove the traffic cone from the mounted Duke of Wellington’s head on Queen Street − that was when the city was run by Labour. Now, the city’s SNP councillors are blaming the rats and uncollected garbage on Margaret Thatcher.

Perhaps I’m prejudiced. I’ve always wanted to live in Edinburgh. Glasgow can never aspire to the classical perfection of Scotland’s capital – a city so richly endowed with architectural gems, and which resonates with the Scottish enlightenment − and with such a unique, distinctive light that it seems to float above the Earth on a summer’s evening…

Who was the man or woman who chose Glasgow for COP26 rather than Edinburgh (where the sensible American delegation is based)? No wonder Jinping and Vladimir chose not to come. But we are where we are – in more senses than one.

Listed companies cited in this article which merit further investigation:

  • Vestas Wind Systems AS (CPH:VWS)
  • Aveva Group PLC (LON:AVV)
  • Geiger Counter Ltd (LON:GCL)
  • Kingspan Group PLC (LON:KGP)
  • Legal & General Battery Value Chain UCITS ETF (ISIN:IE00BF0M2Z96)
  • Johnson Controls International PLC (LON:OY7S)
  • Rolls Royce PLC (LON:RR)

Comments (5)

  • lol says:

    Coca Cola and Pepsi were named as the worst plastic polluters in the world.I noticed they are 9th and 10th in Legal and General Socially Responsible Investment Index fund.So that’s alright then.

  • Bob Mackintosh says:

    Thank you yet again Victor for a very useful overview indeed.
    Some points:
    1. As you say, coal can have both thermal and coking uses. If we are to continue to produce steel, coking coal must be used, and this produces CO2. (Recycling steel provides insufficient, and is energy-consuming in itself.) Hopefully, when COP26 is over, the Cumbrian mine will be given the go-ahead, because it will provide valuable jobs.
    2. We are in the Holocene interglacial period in the Quaternary glaciation, i.e. we are in a cold period in the earth’s history. A few degrees are going to make no difference at all to the planet itself. (Life on its surface is a different matter.) [See Wikipedia “Ice age”.]
    3. The key process in all this is the Carbon Cycle, the circulation of carbon betwen CO2 in the air and “fixed” carbon in living things (first in plants and then in animals). Carbon in fossil fuels is not in the carbon cycle (like cars in the pits are not racing on the track in a grand prix). The key to how much of the carbon in the cycle is in CO2 at any time is carbon’s distribution between air and living things. Bulk living things like large trees store carbon in their wood, which is also out of the cycle, in one sense. Other carbon is recycled when parts of, or entire, living things die.
    4. Algae (plants) in the oceans will grow more and absorb more CO2 as CO2 levels increase. Increased temperature may further promote this growth.
    5. The greatly-decreased air travel during the pandemic reduced the amount of water vapour (vapour trails) in the atmosphere, allowing more sunlight to reach the earth’s surface, and increasing the surface temperature slightly.
    6. Thus there will be internal balances in operation. It is usually assumed that the general public cannot handle this kind of scientific analysis, and that the “science”, as put out by “scientists”, must be listened to. But I think this is unnecessarily patronising – many people have qualifications in science, at one level or another, and can cope with this quite well. (They may well be able to correct me on some points!)

  • Douglas Battersby says:

    I own shares in Drax Power Station. How burning biomass can produce more Co2 than burning coal is not clear. Burning biomass can only release the Co2 absorbed by the plant material during its growth. Transporting the biomass across the Atlantic of course is not zero carbon.

  • P Beranek says:

    Is an erupting volcano/s included in climate change calculations?

  • TonyA says:

    As a property developer, I completely agree with Victor’s hesitancy about air-source heat pumps as the great panacea in new housing from 2025. We should see the national gas grid as a potential asset for a future of domestic heating based on hydrogen, not some redundant infrastructure to be abandoned.

    And as for the enormous programme of insulation needed on our existing housing stock, the utter uselessness of repeated Governments with the Green Deal and then the Green Grant last year is just astounding. There are nowhere near enough qualified contractors, the qualification programme is slow and ridiculously expensive, the bureaucracy to claim grants is ditto, and any sensible builder – who is perfectly capable of doing all the work involved as it’s not technically difficult, just time-consuming and the detailing and draught-proofing and ventilation balance needs to be right – is going to steer well clear without radical revision of the programme. In my view the whole system should be run by SAP assessors and building inspectors, just like a new-build or an extension. We already have a pretty decent system of monitoring building standards, so this just needs to be upscaled and a hefty mix of grants and tax carrots and sticks (25% council tax reduction for 5 years anyone? Or 25% extra if you *don’t* get your house insulated when offered the chance?) thrown in to incentivise the mass market of owner-occupiers. Sticking to new-builders and landlords is just punitive and counter-productive while most householders get off scot free.

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