House of Commons - Intergovernmental Panel on Climate Change Fifth Assessment Report: Review of Working Group I contribution

Intergovernmental Panel on Climate Change Fifth Assessment Report: Review of Working Group I contribution - Energy and Climate Change Contents

4 Policy implications of Working Group I contribution to the Fifth Assessment Report

Economic implications

66. The Fifth Assessment Report was published in four instalments (WGI, II and III as well as a Synthesis Report (SYR)) over the course of a year. WGII and III were both published after the start of this inquiry in March and April 2014 respectively. The SYR is due to be finalised in October 2014. WGII, which focused on impacts, adaptation and vulnerability aspects of climate change, concluded that:

167

WGIII, which examined options for mitigating the impact of climate change, concluded that:

168

The focus of this inquiry was to look at the WGI contribution to AR5 which exclusively reports on the physical science basis of climate change. We do not intend, therefore, to make any firm conclusions on the economic impacts of climate change in this report.

67. However, we note that two full Assessment Reports (AR4 and AR5) have now been published since the release of Lord Stern's 2006 review on the economics of climate change.[169] At the time, Lord Stern concluded that the estimated cost of reducing climate change impacts to a level that would be manageable at 1% of global GDP per year. This is compared to an estimated permanent loss of GDP of between 5% and 20% for a business-as-usual scenario.[170] The Stern Review was widely supported and provided an economic justification for tackling climate change. It did, however, face several criticisms including a lack of peer review.[171]

68. It is timely, therefore, that the Government working with a number of other countries across the world has set up a Global Commission on the Economy and Climate that, along with its flagship project, The New Climate Economy, will help governments, businesses and society make better informed decisions.[172] Reporting in September 2014, the project will make recommendations on actions and policies to achieve high quality economic growth at the same time as addressing dangerous climate change.[173]

69. During the course of our inquiry we took evidence on the business and policy implications of the IPCC's conclusions of the climate science. Jonathan Grant, Director, Sustainability and Climate Change at PricewaterhouseCoopers, highlighted how, "business views have evolved over time with the science, as the science has become increasingly clear".[174] He also told us "as the science has become more certain, businesses are less inclined to argue the science and they get more actively engaged in the debate about the policy response".[175] Guy Newey, Head of Environment and Energy Policy Exchange, suggested that AR5 did not change the position for policy-makers. While there were debates about the detail of the science, the "broad thrust is roughly the same".[176]

70. The Government should ensure that the report it has commissioned to look at the benefits and opportunities in tackling climate change, The New Climate Economy, considers evidence about the costs of climate change to business. We believe that this report should be peer reviewed to avoid attracting the same criticism that was made of the Stern Review.

Domestic climate policy

71. The Climate Change Act 2008 commits the UK to a legally binding target of a reduction of greenhouse gas emissions by 80% on 1990 levels by the year 2050, to be achieved by adhering to a set of five-yearly carbon budgets.[177] Carbon budgets are set by Parliament with advice provided by the Committee on Climate Change (CCC). Since 2008, four, five-year, budgets have been set up covering the period until the end of 2027.[178] DECC is obliged to review the fourth carbon budget (covering the years 2023-2027) in the first half of 2014. In anticipation of this review, and in the light of the release of the WGI contribution to AR5, the CCC issued advice to DECC explaining that:

Based on a thorough assessment of the latest evidence [primarily WGI AR5], we have found no significant change in relation to climate science or international and EU circumstances since we provided our original advice in December 2010. There is therefore, based on these legislated criteria, no legal or economic basis for a change in the budget at this time.[179]

Dr David Kennedy, CEO of the CCC also told us that based on their own analysis the CCC had come to the same conclusion as the IPCC.[180] We found a large number of respondents supported the CCC's conclusion concerning the latest climate change science and the Fourth Carbon Budget.[181]

72. Reducing uncertainties in estimates of climate sensitivity (discussed in paragraph 43) has been highlighted as a priority for the climate science community in the coming years.[182] It should not, however, have an impact on climate change policies. Professor David MacKay, Chief Scientific Advisor to the Department of Energy and Climate Change (DECC), for example, argued that there "is a very clear policy message that is completely independent of the uncertainty about the climate sensitivity".[183] This was supported by the Committee on Climate Change (CCC) in its recent assessment of the Fourth Carbon Budget.[184] Dr David Kennedy, CEO of the CCC, told us that:

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73. We believe that the Committee on Climate Change (CCC) was right to consider a range of values for climate sensitivity (and their relative uncertainties) when reviewing the Fourth Carbon Budget. We agree with its conclusion that the IPCC's latest assessment of the sensitivity of the climate towards greenhouse gas emissions gives no grounds for a change in policy action.

74. With regard to carbon budgets, we were made aware that a focus on reducing domestic net emissions is not always helpful; an alternative approach would be to keep track of so-called "embedded" emissions (which take account of the carbon content of goods that are being consumed by a country through imports).[186] As Professor David MacKay, Chief Scientific Advisor to DECC explained:

Our overall carbon footprint for most of the last 15 years has trended up. There has been a slight drop in the last couple of years, but, yes, because of our imports from other countries of what we call embedded emissions, in that way of accounting things our net emissions have gone up. I do not think it is right to blame our policies for causing that outcome.[187]

The benefits of considering embedded carbon emissions alongside territorial emissions in the policy-making process were highlighted in our 2012 report, Consumption-Based Emissions Reporting and our 2014 report, Carbon Capture and Storage.[188] The Minister of State Climate Change, Rt Hon. Gregory Barker, said he thought the approach, "has a great deal of intellectual merit" but cautioned:

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75. The WGI contribution to AR5 re-affirms the scientific underpinning of the Climate Change Act 2008 and hence the UK's ambitious greenhouse gas emission reductions targets. We believe that there is merit in considering embedded carbon emissions alongside territorial emissions in the policy making process.

International climate policy

76. The WGI contribution to AR5 sets, for the first time, a cumulative global carbon budget required to stay below a 2° Celsius rise in global mean surface temperature (GMST) by 2100.[190]The UK accounts for less than 2% of total global greenhouse gas emissions.[191]It is clear that unilateral action by the UK will not be sufficient to mitigate dangerous climate change: a global agreement is required.[192] The Government assured us that it was aiming to achieve "an ambitious global deal" at the upcoming Conference of the Parties (COP) in Paris 2015.[193]The Minister acknowledged that a global agreement was, "by no means a done deal and there is a lot of work that needs to be done in order to avoid a Copenhagen-style outcome".[194] We received evidence from Professor Sir David King, the Foreign Secretary's Special Representative on Climate Change, who described the task ahead as "the biggest diplomatic challenge of our time".[195] Professor King explained a number of preparatory measures he was undertaking in order to ensure the best outcome from Paris.[196]Both Professor King and the Minster have emphasised the importance of high-level leadership at an early stage. The Minister said:

I think the global community has learnt from Copenhagen, where too much was left until the last moment. Too much weight was put on the ability of leaders to turn up in the final two days and conclude a deal, which is why we need a clear roadmap. I will be going to Abu Dhabi in May for the pre-leaders meeting to talk about the agenda for the Ban Ki-Moon summit in September, which will be an important milestone on the road to Paris 2015.[197]

77. Recently, senior government figures have shown strong commitments to tackling climate change. Earlier this year, the Prime Minister said that "manmade climate change is one of the most serious threats that this country and this world face".[198] In a speech to business leaders in Hong Kong in February 2014, the Chancellor of the Exchequer said "I'm someone who believes climate change is happening, that it's caused by human beings. We should do what we can to prevent it".[199] We were also pleased to see a recent joint statement from the UK and China recognising the "threat of dangerous climate change as one of the greatest global challenges", the publication of AR5 confirming that "climate change is already happening, much of it as a result of human activity" and the "clear imperative to work together towards a global framework for ambitious climate change action".[200]

78. The WGI contribution to AR5 strengthens the scientific case for rapid, drastic action to reduce global greenhouse gas emissions in order to avoid a 2° Celsius rise in global mean surface temperature (GMST). It is generally agreed that such dramatic emissions reductions strategies could best be implemented within the framework of a unified global agreement. Attempts to reach an agreement in the past have lacked early high level leadership: a public commitment from the UK Government is required early in the preparations of COP 2015 in order to guarantee the highest chance of success.

79. The Government should provide an explicit commitment on the involvement of senior figures in the early stages of the Paris COP 2015. Senior Government members should be actively involved in the strategy for obtaining a global climate deal. The early commitment of the Prime Minister, Chancellor of the Exchequer and DECC ministers to the preliminary stages of the global climate negotiations will encourage other world leaders to similarly get involved.

167 "A changing climate creates pervasive risks but opportunities exist for effective responses", IPCC press release 2014/11/PR, 31 March 2014 Back

168 "Greenhouse gas emissions accelerate despite reduction efforts", IPCC press release 2014/19/PR, 13 April 2014 Back

169 HM Treasury, Stern Review of the Economics of Climate Change, (2006) Back

170 HM Treasury, Stern Review of the Economics of Climate Change, (2006), vi Back

171 Global Warming Policy Foundation, What is wrong with Stern? (2012), p18 Back

172 Oral evidence taken on 5 November 2013, HC (2013-14) 807, Q5 [Professor Lord Stern], HC Deb, 3 April 2014, col 998 Back

173 The Global Commission on the Economy and Climate, 'The New Climate Economy,' accessed 15 July 2014 Back

174 Q154 [Mr Grant] Back

175 Q155 [Mr Grant] Back

176 Q156 [Mr Newey] Back

177 Climate Change Act 2008, section 4 Back

178 The Committee on Climate Change, 'The Climate Change Act and UK regulations,' accessed 15 July 2014 Back