Listen to Jason Mitchell talk to Chris Stark, Chief Executive of the UK’s Climate Change Committee, about COP26 expectations and the race to net zero.
Is the cynicism around net zero justified? Listen to Jason Mitchell discuss with Chris Stark, Chief Executive of the UK’s Climate Change Committee discuss the world’s expectations going into COP26; what the Climate Change Committee is doing to advise the UK government on its net zero path; and why it’s vital that we frontload climate investment in order to turn strong words into strong action on the reality of climate change.
Recording date: 23 August 2021
Chris Stark is Chief Executive of the Climate Change Committee. He was previously Director of Energy and Climate Change in the Scottish Government where he led the development of Scotland’s approach to emissions reduction and the energy system transition. Established under the UK’s Climate Change Act in 2008, the Climate Change Committee is an independent, statutory body that advises both the UK and devolved governments on emissions targets. The Committee also reports to Parliament on progress in reducing greenhouse gas emissions and adapting to the impacts of climate change.
Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.
Jason Mitchell (00:01):
Hi everyone. Welcome back to the podcast and I hope everyone is staying safe and well.
There’s a particular strain of cynicism and defeat-ISM…even fatalism that’s beginning to germinate. It may well be a byproduct of the IPCC’s Code Red Report or the recent greenwashing probes or the criticism over the cost of decarbonisation or even the growing suspicions about the underlying credibility of Net Zero itself. But let’s face it, cynicism is a pretty hollow construct. Sure, it may offer protection against disappointment…against wanting more than climate efforts are ever likely to deliver. But cynicism doesn’t solve problems. It doesn’t change behaviours. And it’s not going to galvanise collective climate action.
Perhaps that’s why this episode resonates so much with me - because it’s not just refreshing. It’s also a necessary counterpoint to all this cynicism on several measures. First, it weighs up the expectations going into COP26. And yeah, there’s a lot of heavy lifting to do. But there’s also a chance we come out with a much clearer view of 2030 national commitments and the spillover implications for decarbonising industries. Second, it considers the success of the net zero movement relative to earlier, pre-Paris Accord climate efforts. And in my mind, there’s no doubt of its benefits. And third, it’s a critical…but constructive view about the UK’s own progress towards net zero.
Which is why I’m incredibly grateful to interview Chris Stark on all of this. Chris is Chief Executive of the Climate Change Committee, and previously Director of Energy and Climate Change in the Scottish Government where he led the development of Scotland’s approach to emissions reduction and the energy system transition.
The Climate Change Committee, which was established under the UK’s Climate Change Act in 2008, is an independent, statutory body that advises both the UK and devolved governments on emissions targets and on progress in reducing greenhouse gas emissions and adapting to the impacts of climate change.
Welcome to the podcast, Chris stark. It's great to have you here and thanks so much for taking the time today.
Chris Stark (02:30):
Hi Jason. Thanks so much for having me.
Jason Mitchell (02:31):
So we have a lot of great stuff to talk about today. I'd like to start out with something a little on the unconventional side, because you've talked a lot about not being a big fan of apocalyptic climate scenarios. In fact, you're quoted as saying that whatever lies ahead, we will adapt to it. And I just want to start off on this note, I'm wondering to what extent does the latest IPCC code red report recalibrate your optimism if it does around our ability to problem solve this either technologically or from a policy perspective?
Chris Stark (03:07):
Well I think that probably refers to an interview I gave last year where I was, I was making a point that I think is often forgotten that whatever happens, we are going to have to adapt to it and that it's not actually a very positive one. We're not going to have any choice. So it's not, not a, not a particularly optimistic message there, but I mean, I stand by what I said, I'm not a big fan of apocalyptic climate scenarios, because I feel there is a lot of effort put into those climate scenarios to try and paint a picture of a world that I don't think we will reach, but I am very, very worried about where we're heading. And I am very, very worried about what's in that latest IPCC report code red as, as it was reported widely you know, to contain.
Chris Stark (03:59):
And I think it's, you know, we've got to think about it in those terms. There's a lot of bad news in that report. I'm afraid we've got CO2 levels higher than they'd been for two or 3 million years on this planet. The world is warmer than it's been for at least 125,000 years. And it is unequivocally down to what we are doing. Human beings on this planet in particular with our use of fossil fuels, there are some unprecedented things happening and that's kind of leading to these unprecedented changes in the claim that the weather extremes we're seeing the heat waves, the rainfall, the droves, all of that is contained very cogently and well presented in the IPCC report. And they worked very hard to demonstrate that it is directly linked of course, to the emissions of greenhouse gases. So I think there's lots to be concerned about there and probably the most obvious kind of summation of that is that I'm afraid we are going to breach that Paris threshold of one and a half degrees or at least meet it one and a half degrees centigrade probably in the 2030s.
Chris Stark (04:55):
The only question is whether we hold it to one and a half or across that threshold later in the century, but the, I am an optimist. I at least I'm positive in my outlook. And I think there's also in the report quite a lot to hang your hat on. If you have that outlook if you really want to see us tackle this thing, then it's, it's a good report to read. And for me, it's the certainty that comes with that analysis. That, that, that makes me feel that way about it. It's no very certain for example, that this goal of net zero or carbon dioxide net zero CO2 is going to hold for the warming. It's also very certain that methane deductions in the near term are going to slow the very rapid warming that we've seen recently. So that's positive. It means that we knew what to do.
Chris Stark (05:39):
We've also narrowed the range of possible outcomes right down as well in this, in this most recent report. So it looks now very much like the goal of Net Zero CO2 by 2050 globally is the one that we have to infer if we want to keep one and a half degrees on, on the table. So from my perspective, and to be more optimistic about this for a, I am, I am, I suppose I am, I'm impressed by how clear it is, what and what, what known must be done. And I am also, I bring into this, that kind of technical view that, that with my job brings, I know we can do this. I know that we can achieve that, that goal of net zero by mid century. And I also know that it's important that, that, that countries like the UK lead the way on that. So I think there is quite a lot in that to to point towards a few, if you have an optimistic mindset,
Jason Mitchell (06:23):
That's a really good response, I guess, to think about that in the context of COP 26, what are your expectations around it? It just seems like, it seems like expectations are running incredibly high. Even secretary general, Antonio Gutierrez is calling 2021 a effectively make or break year. What should we make of the fact that half of the world's nations chose not to submit updated climate plans into COP 26?
Chris Stark (06:49):
Well, it's not good that that has happened. It's important to see, but in terms of what happens at COP26, again, I'm going to strike a more optimistic tone on all of that. I mean, the first thing to say is I'm in Glasgow right now. I'm speaking to you from very sunny Glasgow, which sounds to be weird. I live when I grew up. So I can tell you confidently that we will, we'll host a good summit. So the conditions I think we'll be right for it, for something to happen. I very much hope that the kind of global ambition on claimant will come into the kind of you know, the kind of pathways that we need to be following to, to keep the Paris agreement targets on the table. I think the most important thing to see about COP 26 is I think it's going to feel different from previous COPs because as you see, expectations are higher than ever, but that's been driven by, I think, a general recognition around the world that climate change is now with us.
Chris Stark (07:40):
It's not something that's going to for the future any longer, which has always, always makes it more difficult to act on it. If you feel it's something for the next generation. Well, it's not for the next generation. It never was. But I think people really are seeing the impact of climate change happening and our understanding crucially, that that is connected with the greenhouse gas emissions that are causing the planet to warm. So for that reason, and that reason only it's a big moment for the court, but there are a set of other reasons why the COP is a big moment as well at the UN really needs this thing to work. This is the first demonstration of multilateralism in a world that has not been very multilateral in the recent pandemic year. And I think the UN will pull out the stops to make that work.
Chris Stark (08:24):
And the UK as the host needs to make it work as well, because this is our first demonstration that we can still host this global discussion post Brexit. So there's all sorts of political reasons that it, that it needs to happen and maybe more important than all of that. I think cop 26 is a moment to demonstrate that things are not moving that on the climate issues themselves. It's quite, I mean, net zero is going to be something that we're going to be talking a lot about I'm sure in cop 26, but it's quite interesting when we talk, we talk about Net Zero all the time though. We weren't talking that wasn't a term that anyone recognised just a few years ago, the fact that 80% or thereabouts of global GDP is now under a net zero target is not bad progress in six years since the Paris agreement.
Chris Stark (09:09):
So I'm sure that will be a factor. Yes, the NDCs so far have not yet been brought into view. So we need those near term commitments alongside the New Zealand commitments by mid century. But I have a hope that those will be there to potentially including changes and what's driving that of course is the fact that we are now understanding more and more about the, how the key commitments that would drive those near term reductions can be achieved fees up, call the electric vehicles, transition what we're doing in industry alongside all that, the important stuff on finance flows and also adaptation. We shouldn't, we shouldn't miss that. But all of that is I think being helped by the fact that the corporate commitment. So there are no to, to help along the way with the governmental commitment. So I think it's important to have that context in mind because you can go into this forgetting that we have actually in recent years started to really, I think, progress and to raise the ambition in the way that we need to know we need to deliver against that.
Jason Mitchell (10:01):
Yeah. I want to definitely come back to the net zero element. I, I'm just wondering one of the roles of host is to pressure countries into issuing raised climate action plans. And I'm wondering if you had to rate the UKs ability to do that over the past year. But how would you rate it?
Chris Stark (10:20):
Well, it's hard for me to answer that question. I'm not here to kind of defend the UKs interests globally, but it does appear that in the last 12 months or so that something has shifted. And I think it's partly because the UK has got to grips with the role of president for the COP. It's partly because in Alok Sharma, we know have someone, I think no genuinely understands the issues and is motivating on them, but I think it's also because of the us. So you can see that the kind of interest of the Biden administration, especially with John Kerry's leadership on these issues has really changed the game and that it has brought to the table, a set participants that perhaps weren't there before, partly because of the geopolitical interest in it. But partly also I think because of the general understanding though of the economics of this transition and the fact that I think most global economies will need to be on board with this transition to zero carbon if they want to thrive.
Chris Stark (11:13):
So it feels like things have picked up of late and that the UK is ability to host and to, and to encourage tougher action is improving. I really hope it continues to do so because over the course of the next few weeks you know, we need to make sure that we deliver on this by the time we get to COP, I think there's still room for new NDCs in the COP, but we need to be moving on to the, you know, I think the more interesting and challenging questions of how you actually deliver these emissions reductions and commitments, which I think is where the real interesting stuff lies. And again, when I think we'll need UK leadership, but I think things are moving.
Jason Mitchell (11:50):
One of the major sticking points that I'm aware is that we've got this article six problem from the Paris agreement related to carbon markets. And it represents basically the last piece of the Paris accord that needs to be resolved. I remember this being a big sticking point for the last two cops, cop 24 and 25. How do you think that we're setting up for this discussion? Do you have any hope for a kind of a global UN governed international carbon market?
Chris Stark (12:16):
Yeah, I mean, the article six negotiations of blatant previous cops, and, you know, it would have been nice if you and I were talking today having resolved article six, and I don't know whether we'll be able to resolve that I'm certain it will be on the table for cop this year. But I think for me, this is one of the key tests actually of the UK diplomacy. I mean, I very much hope that article six is resolved. There's plenty of ways in which we can do that, but if it isn't, I think the question is, does the UK accept that it is this diplomatic red line, does it, is it, is it a blocker? I think it's one of the interesting things about being the presidency in the presidency of the cop is that a strong president defines the narrative for the discussions just as the French did back in 2015.
Chris Stark (13:00):
So it's only a, it's only a red lane issue if the UK allows it to be so, and as much as I very much hope that it is resolved, if it proves to continue to be different, to be difficult rather. Then I think that the job here is to move the discussion on, onto, onto other issues, so that it's, so that the process itself isn't held up. So I think it can happen. I think absolutely it would be great if perhaps if article six could be resolved and indeed I think it will need to be resolved. And so that we don't have issues of double counting, especially, but it's only a problem if the Yuki mix itself.
Jason Mitchell (13:33):
So, so what would you say, what would you judge the success, the effectiveness of cop 26 in terms of issues?
Chris Stark (13:40):
I think ultimately it has to be judged on, on the temperature goals. So I think we need to be talking about credible strategies to not just bring emissions down, but ultimately to bring the temperature outcomes down. So I think that is the basic premise of the success of the cop rest and on, on the success or otherwise of achieving that. But beneath that, what I hope is that we get into the kind of more meaningful strategies to deliver those, those temperature goals or emissions reductions that, and by that, I mean more than just commitments to emissions reductions. So I, of course we will need the 2030 commitments to come into view. Of course we will need Net Zero goals by mid-century to be in strained, preferably in law and the world, but it's actually the, it's the, it's the things that drive those, what we call emissions wedges that, that really matter there's kind of six or seven really important transitions that need to take place throughout the world.
Chris Stark (14:36):
They are more important than any national commitment. So I mentioned one earlier and actually the phase out of call is the most obvious as it was, but there's a set of other ones that go with that, you know, the decarbonisation of industry that a carbonisation of heating and cooling for buildings the move to renewables, of course there are a set of these issues that I think are much more interesting than the NDCs alone. And interestingly, this is when, again, back to my point about Yuki diplomacy, the UN process is of course driven by the national commitments, but the UK can choose to look through those national commitments and, and pull out, I think what are a set of really interesting commitments that transcend them. And for me, the test of the cop is whether we have we have we have something now coming into view that looks like an achievable transition, not just one that, that kind of adds up in terms of the global calculator. So I think there's, again, lots to be optimistic about there because I feel that the economics are moving so quickly now towards you know, a positive environment for decarbonisation overall.
Jason Mitchell (15:32):
It's interesting. That's actually quite helpful the way you've laid it out. Let's go back to net zero. Look, clearly net zero has been a success. I think at last count, there's roughly around 5,000 companies, cities, regions, and institutions that have committed to net zero. And so it seems like the simplicity and reductiveness of the net zero campaign has had a clear galvanizing effect across the different stakeholder groups. I just had the same conversation with Elizabeth Mrema, who is leading the COP15 on the convention on biological diversity. And, you know, in a sense she kind of lamented the fact that biodiversity loss doesn't have such a clear, simple kind of similar campaign to, to net zero to galvanize these different stakeholder groups. At the same time, though net zero is become increasingly controversial. There are incredibly ambitious net zero plans. There are a number of plans that seem very underpowered that seem very unambitious. And I think increasingly sort of hearing kind of calls around greenwashing. How do you sort of reconcile the commitment element, which in my mind has a lot of value that's where we start and then make it progressively more rigorous over time with this kind of controversial flashpoint?
Chris Stark (16:44):
This is, I mean, this is probably the most interesting topic of discussion for me at the moment, actually, that this Netcito thing. I mean, I'm, I'm very clear on it. I think it's been an incredibly helpful development that we are no talking about net zero. It has brought, I set a parties onsite on this transition that previously we're not even talking about it. I mean, in the UK, we've had this, we used to have a target for an 80% reduction in greenhouse gas emissions by 2050. And that was the target that was set back in 2008 by the UK parliament. It was in line with what we've understood the science to be at the team, but as an 80% target, it had this kind of unfortunate problem that, that rather too many people thought they were in the 20%. So you had this, you had this issue really that it wasn't seen as an all-encompassing target, which I think Net Zero is an in particular it's brought onsite.
Chris Stark (17:35):
The commercial commitments that, that really are, I think, in helping and encouraging world leaders to make these more ambitious statements of intent, which is all good. But I, you know, we've got to acknowledge that Net Zero always net, you know what it's it's it's not absolute Seattle. And I think when you start to get beneath that issue of net zero it's, there there's a, there's less understanding perhaps of what what's necessary to deliver it. So I think the first thing to say is that net zero is a meaningful thing at global level. It is the point very simply when we will stop increasing the temperature on the planet. So, you know, that is something that we all have to have and our made it is the implication of the Paris agreement. It is also a scientific fact. I think it also has a value at national level.
Chris Stark (18:21):
So like, you know, these national targets to bring production emissions to Netcito also means something. I think when it's, when it ceases to have such a clear value is when you get down to the level of individual corporate commitments, possibly with the exception of the very largest multinationals or even kind of regional commitments to, to Net Zero or beneath that kind of national level. And there's rather too many of them. And I think that's one of the problems for me is that what we need is corporate commitments, regional commitments that are, that are in line with the kind of national goals for net zero. So that means that they are well aligned with what needs to happen to drive the whole economy to Nancy, to they needn't be Net Zero themselves. So, you know, that, that kind of idea that net zero was a binding thing at the level of any particular corporate is I think an unhelpful thing, because it leads you down the route of thinking about offsets.
Chris Stark (19:11):
And what we really need to do is just going to stand back a little and say, well, actually in most sectors of the economy throughout the world, regardless of where we are, it is actually a requirement that we get to near as, zero emissions. So in particular, in any, any of the energy sectors, but there are going to be continuing emissions in a handful of areas, very of course they need to be minimized as well, but they must also eventually be offset by credible, meaningful lasting of sense, which are difficult things to pull off. It's not just about planting a few trees and crossing your fingers. So for me, the net zero challenge is actually to, to properly communicate what it is, what it means, but also to pull out from it that kind of meaningful strategies that will accelerate the, the world and perhaps at national level to net zero, which I think is still you know, useful concept that we should be talking about, partly because of its scientific merit, but also because it has, I think successfully brought people into the tent of wanting to commit to this transition.
Jason Mitchell (20:10):
The offsets element is increasingly a controversial kind of topic within the investor community. I think there's sort of a general adoption to say that asset managers, asset owners won't use offsets. I think where I really kind of struggle with is getting kind of the opposite signals from policymakers. Another podcast that I had with the commodities futures trading commission in the U S indicated they want to help develop one of the largest offsets markets in the U S I got the sense through the convention of biological diversity, if they could do the same thing as well. I mean, obviously China with just formerly launching its own carbon markets, you know, just, it feels like there's this move towards at least over the next 10 years, trying to provide a higher quality type of offset, you know, not just avoidance, but carbon removal. The scarcity of that is such that I think we've got this sort of transition period where we've just got to be pragmatic.
Chris Stark (21:06):
Yeah, I do agree. Actually, I think that's a very good summary of, of what needs to happen. I mean, we are not dogmatic about it in our analysis and we asked UK level, of course. So at UK level we see our important role for offsets in the short term and in the term, but in really important, it changes, it changes over time. So as we get more and more comfortable with the strategies for achieving actual decarbonisation we should be using offsets less and less and restricting their use for those things overtake that we have less of an understanding about how to decarbonize, so that by the time you get to the kind of 2040s, there are boats, you really aren't using high quality of sense and come back to what that means. In really only a couple of areas, the two F's mainly so that the flying and farming there are the areas where we see a real need to, to, to, to use offsets.
Chris Stark (22:01):
And for one of those for flying we think we should be applying, you know, a higher standard, I suppose, of offset. So, you know, kind of, I, an engineered removal from the atmosphere by whatever means so that we are actually removing carbon dioxide from the atmosphere and storing it permanently, probably under the sea in the UK where we used to have oil and gas reserves. So it's, so you know, that, that is an expensive process that, that, that means that, you know, there should be a direct link between, you know, the, the, the cause of those emissions and the, and the, and the, and the offset,
Jason Mitchell (22:32):
I guess. I'm just wondering to what degree is iota comfortable with that view. I think there's always been some sort of frustration that they've kind of gone the course of self-regulation and less ambition.
Chris Stark (22:43):
Yeah. And I think, I mean, I think that's a legitimate view as well. I mean, the kind of my role is to point out the technical pathways and to see, like, I can see a way to do this, but I think there's the political reality of achieving that. And then the kind of concerns that go with that are a factor too, and I'm not blamed to those things. So, I mean, I think that the important thing to say is that offsets clearly have an important role. Their governance is another part of it, and we've advised them that too, to see that that the governance of those offs, this is, is almost as important as understanding what the kind of meaningful strategies are that underpin them, but when it comes to, you know, international air travel and, you know, and then I would add shipping into that as well.
Chris Stark (23:25):
You've got a situation where, to my mind, you've got a set of actors at the woman who had docking their responsibilities because they're not captured easily by the national targets under the UN framework. So, so, so it's important for me in my work to point that out to the UK administration and to make the point that the, in the UK, for example, we have just won the argument that the national targets must count international aviation and shipping emissions. And the reason that we give that advice and we have consistently done so until finally this year, that UK government accepted that device is that it will, it will force the right actions from policy makers. So by properly counting those emissions, that we are responsible for internationally, when it comes to flying and shipping, we're going to drive policies. We're actively that that cut those emissions, where we have the capacity to do that. So I, you know, again, that, that, that please enter the emissions studio, please enter the the offset story. I beg your pardon. But more importantly, it's the UK modeling what the rest of world needs to do as well, which I think is a really important part of climate leadership.
Jason Mitchell (24:29):
I want to stay on this net zero issue just a little bit longer. How do you reconcile the idea that net zero targets need to be hold forward? Our interest is in having more ambitious, you know, near term net zero targets versus the 2050. And yet I think the committee's findings is that government investment in most areas, not all looks increasingly back-end loaded. Why do you think from a government perspective, why is there a general reluctance to recognize that more front end loaded investment means greater cost savings and benefits, maybe healthcare employment, et cetera?
Chris Stark (25:04):
Well, I mean, there's enough, fairly obvious answers to that, which is the government. So never keen to incur costs in the short term, if the benefits come later, I think it's one of the really kind of interesting. And I think one of the great advantages of having a UK climate change act is that it has that there needs to counter that in trained in law. So you have in the UK, a piece of climate legislation that, that recognizes something must be done over several decades. But equally recognizes that governments have a more short term outlook, and therefore it needs to be, needs to stick to the course. So, you know, you have you have a kind of interim targets and you have a body of the climate change committee, my organization advising, and what the targets are, and also marking the hallmark of the government and whether they're meeting them.
Chris Stark (25:49):
So I think that that idea is kind of insuring those spools in, in UK law, at least. But the general reluctance to do it is, is, is partly political, partly I would seal. So I kind of feel your vision because the experience is that when policy is applied, when government ambition is raised, when when it is clear that the government is fully committed to achieving something that you get those benefits much more quickly than than even the conventional economics message suggest. So the most obvious example of that is what's happened in the UK over the last decade on, on renewable electricity, where you've seen what seemed to be a very expensive strategy of moving towards renewables and increasing them in the electricity mix in the UK has rapidly condoned in priests as big corporate commitments, especially they've come in behind that.
Chris Stark (26:43):
And I have no reason to think that that would not happen in other areas. So I think the point about this is that the government in the UK, the governments around the youth around the world need to, I think, learn from the experience of where, you know, where policies applied. Do you get these learnings, you get learning by doing you get there, that you get the, you know, the, the cost falling and you get greater and greater benefits as, as those things snowball. And, and that kind of general view is becoming more accepted. And I suppose, but it's still too slow in terms of it's the way it feeds through into the policy process. So it's our job to point that out. And you know, that overall view that this is a largely investment challenge took the carbonized and a conduit that you kid is mainly capital investment challenge over at all.
Chris Stark (27:31):
It's about replacing all the capital assets in the economy. That means I'm afraid that at some stage the government is going to have to have to have to grasp the challenge properly, say to the things that it's already doing notably it's already doing well and just the generation, but it needs to know move into the elevators lake and the city carb lake transport, decarbonization lake, especially, I mean, really tough, soft challenge in the UK decarbonization of buildings. These are big investment challenges. Some of them are quite expensive and the sooner we act on them, the greater the benefit in the long run,
Jason Mitchell (28:03):
The climate change committee is that a welcome independent check on government progress towards net zero and adaptation, as you said, could be in the form of checking the government's homework. It seems to me though that the committee's work is increasingly starting to serve another purpose, which is to provide a factual counterpoint to let's call it the boosterism and even hyperbolic rhetoric of the government. And I'm wondering if you can pull back the curtain on what that exchange is like between the committee and the government.
Chris Stark (28:31):
That's a great question. I mean, I, I think you're right as well. I think they're kind of implicit in your question is something that I, I, I do believe, I mean, the record in the UK is a good one. When you look at the emissions that we produce at home we've done better than any G7 country, probably the best in the G 20 on that, on that, on that record alone. And we've been growing the economy while cutting emissions. No, it turns out that minister's quite like to use that fact in their public rhetoric. But recently we've been moving away from the congratulatory stuff into being much harder on them, I think, on their, on their willingness to go, you know, the next, the next to the next stage, what needs to be done on it over the next decade, which is where the real kind of feelings lie.
Chris Stark (29:18):
I think that we're not seeing that step up, that we will need to see so that we get to the point by 2030 when we're ready by and large to stop the sale of fossil fueled technologies in this country. So we've been trying to point out to the future rather than looking back ministers. Politicians tend to want to crew a bit about previous achievements and and I'm a bit bored of heating it actually. So I think that the, the kind of rule for us now in this next stage as the climate change committee in the UK, is to be more difficult until we see that progress. And to be that you know, kind of voice of, of, of, of factual accuracy and reasonableness. And that means that the exchanges that we have between the heinous sins, the UK government and ourselves can often be a bit testy, can often be difficult.
Chris Stark (30:11):
So far we haven't had a major falling out we've definitely had differences, differences of opinion about progress and where that action needs to happen. But I think there's a respect from the UK government sites about what we see and the factual accuracy of it, and the basis of it which ultimately leads to, you know, kind of an understanding at least of, but why the rhetoric has changed. What's interesting is that it's a two way process. W we offered our advice on how we feel the UK should decarbonize across the whole economy across every sector, but, but the climate change act is very clear that it's the responsibility of the government to make the plan for have to actually achieve it in practice. And that means that there is a scope to differ from what we see, of course. So we're not regulator and what we see doesn't go it's down to the elected representatives to decide what policies they want to put in place.
Chris Stark (31:05):
And then we have to respond to that too. So I'll just give you one example of that. We are actually quite we are quite optimistic about the potential for a behavior change in the economy to, to, to cut emissions. So think about things that are often politically quite difficult, like changing and changing diets or flying less. It seems that the present government in the UK is less keen on those things and you know, there's room for that. So if their strategy, which we are due to see for decarbonizing the economy and achieving net zero, we should see that in the next few weeks, if that snatched, he has less behavior change in it than our modeling, and we are going to have to respond to that. So we will have to accept that that is the government's outlook and, and look harder at what other other things can be done. And I think that's sort of the two and for all of that, that kind of the pushing and the pooling is actually a really good part of the UK model overall. And if we were dogmatic and stuck in our own assessments and didn't move from them, then it wouldn't feel it wouldn't feel very democratic actually as an overall system of governance.
Jason Mitchell (32:07):
I wanted to touch on this. I wanted to touch on your efforts at working to dispel the notion that net zero is in some ways, prohibitively expensive. I think you've talked about it being less than 1% of GDP per annum. And I'm wondering how has the pandemic sensitized or desensitized the debate around public investment in climate action in the UK? And on one hand, the pandemic is absolute clear proof of the enormous economic costs that systemic shocks like climate change represent. On the other hand, there's a clear on fiscal spending, following the significant support, almost 300 billion sterling of COVID related support. So how do you see the urgency of climate related investment coexisting with the likelihood of fiscal austerity measures?
Chris Stark (32:53):
Gosh, I mean, that's, that is the, that's the question of the edge, isn't it? I mean, if you just break it down, you never can. So maybe, so we talked in your question, you asked about the cost of this thing, and we have in the last three years, I've been in this role for nearly four years now. And most of the time I'd been in this role in the UK climate change committee, we have been working hard at the economics of the transition to net zero and a few things to say about it. Firstly, it does involve, as I mentioned earlier, a lot of capital investment, you know, you're, you're investing a lot as an economy to decarbonize. And what that really means is that you are, you are, you are buying and, and replacing capital assets extensively across the economy. So all the things that we use today that caused the emissions directly by burning fossil fuels cars the the, the boilers that we used to heat buildings, that plant and machinery that, that use fossil fuels in the production process, all of those things we are replacing and the investment challenge is very significant.
Chris Stark (34:04):
I'm not going to dismiss it. We're adding about an eighth to the total capital expenditure that would normally happen pre pandemic that would normally happen in the economy as a whole, most of that investment in the UK, it's about 50 billion pounds Sterling, a year extra investment that we're doing. You can, you could multiply that by 10 to get to going a similar figure for the U S it gives you a sense of just the size of the, of the overall commitment that immediate economy labor UK would be making. If it were to achieve net zero, that is a major, major change in, in the in the economy of it all. And it delivers us our effects via a whole turnover of the capital stock of the economy. And it's expensive. There's no doubt about that, but what's interesting is not only does that reduce emissions, it has a set of other impacts as well, which is a really, really interesting story.
Chris Stark (34:52):
The stories kind of come in. So it turns out that replacing all those capital assets with the hydrocarbon versions is is a very interesting, it's a very sensible thing to do on a whole host of grains, not just climate change, because those assets typically are much, much more efficient in the way that they use fuel. The fuel for it is mostly in our assessment, at least is about electricity. And that electricity is progressively decarbonizing through renewables, which become cheaper and cheaper over time. So using changing those capital assets from high carbon to zero carbon means that you have a much more efficient capital stock using quite a cheap energy source, progressively getting cheaper over time. And of course you're not spending on fossil fuels and you are yourself to a large degree from some of the global problems of using less fossil fuels and importing them.
Chris Stark (35:43):
We are an economy that imports most of our fossil fuels now in the UK. So that has a benefit too. And there's a set of other benefits that go with that, which we haven't even tried to factor in late the health benefits and and the benefits to the environment more generally. So, you know, that is overall this major investment requirement set off by these falling costs of using those, those campaigns, those capital assets it means that you get to an aggregate position that is no, I think very cheap. So we, you know, we can look at that and make an assessment of it in terms of its proportion of GDP. And it's less than 1% of GDP every year between now and 2050. So I think that's worth it in terms of arresting our, our our our contribution to the problem of climate change in the UK.
Chris Stark (36:27):
But it's interesting, you asked the question about what impact COVID has had. And the important thing to say is that although that investment challenges major, not all of it is public investment. In fact, the vast majority of it is private investments. So it's individuals and corporates making those investments. And I think that the challenge for the government is that they need to know, put a policy framework around this. Are they going to do it for example, by doing the kind of COVID related investment and spending that's happened over the last 18 months. So lots and lots of publicly pump primed public investments are either going to do it through different means a bit of cajoling and a bit of hard regulation, possibly some use of the tax system. And I suspect it's in, it's in the latter camp, actually that the government is presently designing its it strategy and, and you know, there's many different ways to skin this particular cat and I'm not too worried really, but how we do it as long as we get the investment happening.
Chris Stark (37:23):
And for me, that kind of faint point, see, and this is that it's not just us, no recognizing the logic of all that. So yes, there is a need to do this for the claimant, but there's also a broader recognition, certainly in the UK that if we don't act on this, then the impact of climate change itself will dwarf that kind of investment cost and crucially. And this is the real killer argument that acting early on. This is also cheaper in the long run. So by getting ahead of this, you bring the costs down in the long run. And that of course is very, very important to the overall cost of the economy and the success of our competitiveness in the future.
Jason Mitchell (37:59):
It's an incredibly cogent argument you just made. I think that's why I have so many problems sort of reading through the committee's 2021 progress report to parliament and sort of effectively, which was a pretty stinging appraisal of the lack of progress on cutting emissions to net zero and adapting to climate risks facing the UK. And I'm just between that argument and sort of doing that homework for the short term, where is the UK kind of coming up short? Why is progress still so narrowly focused? I mean, largely decarbonizing electrification.
Chris Stark (38:28):
Yeah. I mean it not only focuses is a really good way of summarizing where we are. So we are doing some good things in the, and we're seeing that when you have those things don't happen in another country. So I suppose we should, we should, we should think, think about that and B be happy it's happening, but it's not enough. So it really important to see that, that we're also seeing the impacts of not tackling the challenges and other ideas beyond the decarbonization of the power sector in this country. And actually you can see that in the path that we do for the government in terms of where we feel UK emissions should head over the next 30 years, you can imagine it looks a bit like an inverted S if you look at the overall emissions shape of the curve, and the first part of that is quite a shallow reduction in emissions over the course of the next five to 10 years or so.
Chris Stark (39:16):
And the reason it's shallow is because we've run out of road on cutting emissions in the power sector. We will in 2024, close the last coal fired power plant in the UK. And actually the progress now needs to be made outside of the power sector. And we haven't been doing enough to scale up the supply chains, to put the policies in place, to bring down the cost, to get there. You know, they get prepped for the rapid reductions in emissions that are necessary. So you get this kind of shallow impact over the course of the next few years. And then, and then emissions really start to come down over the 2030s. And that I think reflects the overall policy challenge that faces the government. And we were pretty stinging in our criticism that the government has not yet put the policies in place to deliver that kind of outcome.
Chris Stark (40:02):
And of course the every month that passes is a wasted month. That means makes it harder to make that progress later. So we were quite clear that we wanted to make that statement to the UK government, but we are equally clear that there is scope to repair that, that, you know, in the course of the next few months, especially as the UK prepares for cop 26, that there is scope to bring together the kind of policy proposals and strategies that we need in every sector of the economy to cut emissions, but also to adapt to the change in the climate. That's, that's, I'm afraid baked in, and I really hope that they take that window and I will be the first in line to offer the the congratulations if if that strategy comes into, into the kind of space that it needs to. I think it's really important that you have in the climate change committee, someone is willing to offer that kind of criticism at the key moments, but also someone who's willing to willing to see the positive things when the strategies come through.
Jason Mitchell (40:59):
Final question. What are your expectations for the upcoming treasury's net zero review? And it seems like following the committee's June report, I guess I'm wondering how the treasuries review will manage to hit what were at least once quite high expectations like reforming price signals, raising offsetting revenues determining how de-carbonization is funded and costs allocated.
Chris Stark (41:23):
Well, this is the, probably most uncertain bit of the architecture in the UK at the moment. So it's very easy for someone in my position to say, we need policies across the economy to drive the carbonization. It's much harder to actually design them. And the hardest to design are probably the fiscal policies that, that will get us there. So back to your question earlier, but that the overall cost of this, that the big challenge, but how you distribute the, you know, the, the investment challenge between private and public investment. There's also a big challenge about how you give incentives to millions of people to change what that present they do and, and move towards the zero carbon assets and technologies that we know will get us to net zero. So that is overall an enormous challenge. Now what's interesting for me is that the treasury in the UK has not said very much at all about this.
Chris Stark (42:13):
In fact, hadn't really ever looked at this challenge in the, in the, in the whole time that we've had the climate change act since 2008. And that's odd because the UK treasury was the institution that inspired the Stern review into the economics of climate change. So at one stage, the Stern review was a UK treasury production. And that of course shaped the global discussion on the need for tackling climate change and the economics of that overall. So I feel that there is a space now for the treasury to come back in, to look at the fundamental economics of this transition as it pertains to the UK. And if it does that, what I hope they will do is look at not the overall challenge of the cost itself. If I hope they accept the argument that overall the cost is becoming smaller and smaller in the aggregate sense that actually the challenge is how you spread those costs that do exist and are real in a fair way across the economy, and also spread the benefits.
Chris Stark (43:09):
And that for me, is the critical test of whether the tuition has done this net zero review that they promised properly, because they're going to need to look at the challenge of, of fairness. So spreading what are real costs in some difficult sectors, notably the cost of the carbonizing buildings in this country and the decarbonization of industry in this country. So just think about that. That's homes and jobs, you know, big, big challenges there, but also meets helping to meet that costs by capturing some of the benefit from what we see as no cost saving to parts of the transition, which include the transition on surface transport. We reckon that we'll know, save the economy money as we move towards electric vehicles, because they're more efficient. The fuel for them is cheaper. So, you know, that kind of idea of mixing those two things together in a fairway is one, is one element of it.
Chris Stark (43:52):
And then the other aspect of this is the fiscal policies themselves and what they look like. And in the UK, the treasury has 28 billion reasons to worry about fuel duty revenues. If I'm right about that transition to electric cars. And interestingly that transition to electric cars, which will cause fuel duty revenues to dwindle for the chancellor is being prompted by the prime minister himself by naming the 2030 date that we will stop selling petrol and diesel cars in this country. So there's lots of reasons to think that apart from anything else, they're going to have to think properly about fiscal tools for the first team because of the transport transition cause otherwise we'll be in a pickle. So I think, you know, for the first time, we're now going to have to potentially a real discussion about carbon pricing, a real discussion about the incentives for consumers to move away from fossil fuels, for things like domestic heat and a real need to think about how can we capture those benefits in so many areas and spread them into the the challenge of meeting the costs and others. And unless the Treasury that is fully behind this, it's not gonna, it's not gonna work as a transition. We wouldn't have a credible policy program.
Jason Mitchell (44:54):
Wow. That's fascinating. So it's been fascinating to discuss how to think about expectations going into COP 26 with the climate change committee is doing to advise the UK government on its climate action and adaptation strategy and why it's vital. We front end load climate investment in order to bridge rhetoric with the reality of climate change. So I'd really like to thank you for your time and insights. I'm Jason Mitchell, co-head of responsible investment at Man Group here today with Chris stark, chief executive of the climate change committee. Many thanks for joining us on a sustainable future. And I hope you'll join us on our next podcast episode. Thanks so much, Chris.
Chris Stark (45:30):