Nick Mabey / Jul 2018
This week in Brussels herds of policy wonks and modellers will convene to discuss the detail of what should go into the construction EU’s 2050 climate strategy. But what looks like nerdfest must not be ignored, as the outcome of this process will have huge global economic, social, political and diplomatic significance for Europe.
If all goes to the Commission’s plan, the EU will be the first major power to show how it can reach the Paris Agreement goal of creating a net zero greenhouse gas economy by mid-century. The Roadmap will need to go beyond talking about more wind turbines and efficient lightbulbs, to show how Europe’s transport infrastructure, industry and farming will need to fundamentally transform in the coming decades. These changes will impact investment, jobs and communities across the continent.
International eyes will also be on the EU. China – the world’s largest climate polluter – is also working on its own 2050 roadmap and will be sure to benchmark its own ambition relative to – and just behind - Europe’s. China has made a huge bet on clean industries, particularly electric vehicles, to maintain its future growth. Its leaders will be looking at the EU roadmap as a signal for how global green markets will grow. Where the EU and China lead, other countries like Japan, India, Mexico and Brazil will follow. The Paris Agreement expects all G20 countries to produce long term roadmaps by 2020.
But given the importance of the Roadmap it is deeply worrying that the current approach is fundamentally flawed. This is not because of out of date input assumptions or modelling details, but due to the basic logic of the exercise.
The Commission has said it will model a range of scenarios that move the EU to a net zero emissions economy by 2050-2070. It will then leave it to Member States and the European Parliament to decide which pathway is feasible and desirable to follow. The final decision will be made in early 2020.
But when considering which pathway to follow decision makers will be given a false choice of comparing different possible net zero scenarios against a single fantasy future. The “baseline” scenario in the Commission's modelling is a world where the EU continues emitting high levels of greenhouse gases into the second half of the century but suffers no climate damage and has access to unlimited supplies of low cost and stably-priced fossil fuels.
This low cost, high carbon future cannot exist. The Commission itself has produced many eloquent documents, for example the recent Global Strategy, explaining how uncontrolled climate change will undermine the prosperity and security of the EU. Impacts are of course uncertain but even conservative estimates range from 15-30% of global GDP being lost each year due to climate change by the end of the century. European leaders have been clear that because Europe grew rich by using fossil fuels we have a responsibility to move first and fastest towards a net zero economy. If Europe doesn’t act neither will the rest of the world.
Using this fantasy future as the “baseline” scenario would be a huge mistake for Europe. All of the net zero scenarios will - by definition - cause large scale economic change and have significant direct costs relative to this impossible baseline. Politicians will always opt for delaying big choices if they can, especially at a time of populism and distrust in elites. The structure of the roadmap exercise biases the political debate towards climate inaction.
The reality is that uncontrolled climate change will impose far higher costs on European citizens than going net zero. Future European growth will in large part depend on supplying the aspirations of middle class consumers in emerging economies; precisely the economies and consumers that will be hit hardest by climate impacts. Climate change will also cause major disruption across the EU economy; particularly in farming, fishing, tourism and urban areas vulnerable to flooding and drought. All Europe infrastructure will need to upgrade to cope with a radically different climate. This damage will not occur equally across Europe. It will be strongly concentrated in Southern and Central regions; opening up a new North – South European political divide. This will be further exacerbated by increased climate-driven migration from Africa.
The Commission is aware of these issues. There has been intense expert debate criticising the International Energy Agency, Shell and BP for not including climate damages in their forward scenarios of climate action. This has had real consequences for public debate. Shell’s latest scenarios admitted that limiting climate change to the “safe” levels agreed in the Paris Agreement was economically and technically feasible, but claimed it was unlikely countries would be able to shift their economies fast enough. In contrast, the G20 Central Bankers & Financial Regulators group have make it clear that to manage systemic economic risks from climate change, they expect investors, banks and companies to disclose the risk to their assets and business models of both the shift to a net zero emission economy and from rising levels of climate change.
The main argument against including climate damage costs or volatile future fossil energy prices is that these are too uncertain and difficult to calculate. It is true that future estimates of climate damages vary but at least if included the roadmap will be partially right while setting future climate costs to zero will be completely wrong. In no other area of European policy making – from financial stability to chemicals – is uncertainty seen as an excuse for ignoring known risks.
There is no future where Europe does not experience radical economic transitions due to climate change. The question is: do we shape the future we want by moving fairly and rapidly to a clean, efficient, resilient, net zero emissions economy, or will we be forced to change our economies and societies in reaction to a chaotically changing climate and volatile fossil fuel geopolitics?
The EU’s 2050 Roadmap must put real choices in front of Europeans or face a backlash of public credibility. The point of EU climate policy is to protect European citizens not vested interests. If Europe structures its Roadmap debate around the reality of the choices we face it will provide a template for other major economies; all of which are failing to face up to the real economic and security costs of climate change. In a time of rising nationalism and falling cooperation, opportunities to shape critical global choices are scarce. It is vital that Europe grasps this one.