The International Energy Agency will tomorrow publish its annual World Energy Outlook report for 2015. It will examine the global impact of falling oil prices, which have plunged from $115 a barrel in summer 2014 to less than $50 a barrel currently, along with a look at renewable energy technologies in different markets. There will also be a particular focus on the Paris Climate Conference taking place later this year, where delegates are hoping to secure a global deal to curtail worldwide emissions.
There appears to be a growing consensus that a fully global, legally binding deal on CO2 emissions may not materialise from the conference. This poses a significant risk for the UK. Under the Climate Change Act 2008, the UK Government is currently committed to a legally binding target of reducing CO2 emissions by 80% by 2050, compared to 1990 levels. In the absence of an effective global agreement, this would leave the UK with a unilateral climate policy that could continue to cause significant damage to UK industry and the wider economy.
Policymakers must also be aware that unilateral policies are likely to further exacerbate emissions outsourcing to other countries, leading to a loss in UK jobs but doing little to reduce global emissions. There is significant evidence to suggest that this is already occurring, both for the UK and other developed nations. For example, figures from DEFRA show emissions relating to the consumption of goods and services produced in the UK fell by 19 per cent from 1997 to 2012, while emissions associated with imports from China increased by 78 per cent over the same period. Furthermore, a study from the United Nations claims that a growing share of China’s carbon pollution is generated from producing goods bound for markets in the United States and Europe. Exports are now estimated to account for one-third of China’s emissions, according to the Worldwatch Institute.
This makes it all the more pressing for the Government to review current unilateral targets post Paris Conference. The Climate Change Act gives the Secretary of State for Energy and Climate Change the power to make amendments to carbon budgets “if it appears there have been significant developments in European or international law”. The Secretary of State must not be afraid to exercise this option should circumstances require it.