The fight against climate change is a political economy challenge for Europe and for COP26

Two climate-action milestones are about to shape our future, and social scientists need to be engaged.

• COP26, the next global climate summit, will take place in Glasgow in November 2021. It will stocktake the adequacy of world efforts to contain global warming, and seek commitments from countries to strengthen the ambition of their strategies to cap warming at ‘well below 2 degrees Celsius’. 

• The European Green Deal, the most comprehensive international commitment so far toward combatting climate change, will be a key input to the COP…but not enough by itself to meet the targets necessary for the COP to be a success. Moreover, implementing the Green Deal will require a massive socio-economic transformation of Europe over the coming decade.

A virtual conference, European Climate Action: Political Economy Challenges, discussed the implications of these milestones, asking what will it take—beyond Europe’s Green Deal—to make the COP a true success, and then, what will it take for Europe to implement the Green Deal successfully. The findings are summarized in a sequence of blogs, starting with this overview. The conference programme and a combined report can be accessed on the EuPEP website, with links to podcasts by session.

The conference was hosted by the European Studies Centre of St. Antony’s College Oxford, on January 21, 2021, in collaboration with the Europaeum. Speakers included policymakers, academics, members of the investment community, public activists, and other practitioners, with attendees from the UK, EU countries, and the USA. The ESC’s European Political Economy Project (EuPEP), especially Adrienne Cheasty (convenor), Julie Adams (administrator) and Charles Enoch (project leader), would like to thank all speakers and chairs for a lively and thought-provoking day, particularly Mauro Petriccione, the European Commission’s Director General of Climate, whose early commitment to the conference made it possible to go ahead, and Hartmut Meyer, Director of the European Studies Centre and Executive Chair of the Europaeum.

A key anchor for the conference was that climate action cannot be left to scientists alone. Global climate negotiations and socio-economic transformation are both difficult political-economy challenges: the engagement of social scientists is likely to be make-or-break for the success of climate action. Four pressing political-economy questions were covered:

• What will it take to make COP26, i.e., this coming round of climate negotiations, a success?

• How will European governments pay the unavoidable bill for climate action?

• How best to mobilize private investment, since government action alone will not be enough?

• How best to mobilize and harness public activism to support the climate-related transformation effectively?
  

Across all sessions, some themes kept recurring, which should be taken as the top-line messages from the conference.

What it will take for the world to meet climate goals?

• A whole-of-society approach. The socio-economic transformation needed to meet climate targets is gigantic and unprecedented. While governments must take responsibility for delivering on the goals, they will not be able to do so without successfully engaging private investors and civil society.
  

• Expectations management is key. Shaping the expectations of all stakeholders is a prerequisite for success. Here, national-level plans will be vital. Besides laying out government actions, clear and trustworthy plans are needed to give the private sector a predictable picture of how the economy will develop. A clear picture will allow it to choose the right investments, and do so without delay, in the confidence that enabling regulations and complementary government actions will support/justify its investments. For credibility, policies must be transparent and vested firmly in science.
  

• Carbon prices have to rise. There is no foreseeable success without raising carbon prices significantly. Unless carbon becomes significantly more expensive, the public will not shift away from consuming fossil fuels and investors will not see adequate profit in green alternatives. To manage this in the face of likely political and social opposition, carbon prices should be gradually adjusted upwards over time, and losers should be compensated.
  

• Public and private financing should complement each other. On the financing side, the relatively small resources of the official sector should target investments that catalyse/enable the private sector, and address developing country needs. Central banks can play an important role without transgressing their mandate. While oversight and standardization are necessary for managing the ferment of private investment, care should be taken to allow regulations and taxonomies evolve flexibly to support rather than hinder the dynamism of the sector.
  

What it will take for COP26 to be successful?

• Get country commitments back on track ... The Glasgow summit will be successful only to the extent that it succeeds in eliciting enough additional reform commitments to get the climate action process back on track to meet medium-term net-zero targets.
  

•  … with more specific policies ... This will require a leap from general discussion of over-arching goals (though consensus on these remains an important anchor) to more granular policies for progress in specific sectors like coal, and broadening the scope of commitments beyond energy to sectors such as land-use.
  

•  … including to meet developing-country needs. To craft a successful global consensus at the COP, Europe and other advanced countries will have to address developing country needs, notably for finance.
  

Some interesting ideas

Besides the consensus themes, the conference also offered several intriguing emerging ideas. While some of these will be controversial, they are likely to take up increasing space in future rounds of climate discussions. A summary list here gives a sense of the next frontier for policymakers and social scientists—see the session blogs for more specific context.

Climate negotiations and strategy

• The need to extend net-zero targets to trade (Europe and COP26 blog)

• A more aggressive effort to halt coal use (Europe and COP26, and Public Activism blogs)

• Start envisaging the demise of the internal combustion engine (Europe and COP26, and Public Activism blogs)

• Broaden focus to land-use and food policy, which will require reform of the Common Agricultural Policy (Europe and COP26, and Public Activism blogs)
  

How governments can pay for climate action

• Reform SGP rules to accommodate qualifying climate investment (Paying for the Green Deal blog)

• Finance climate investment through the EU budget, meaning keep it outside the Maastricht criteria (Paying for the Green Deal blog).

• Use fee-and-dividend schemes and fee-bates to make carbon taxation more tolerable (Paying for the Green Deal blog).

• Broaden Emissions Trading Systems as an alternative to explicit carbon taxation (Paying for the Green Deal blog).
  

Financing climate action

• Use the Recovery Fund to help develop green bonds (Investment in Climate Action blog).

• Central banks’ policy decisions should take account of climate change where relevant (Investment in Climate Action blog)

• Green taxonomies and standards must be kept dynamic enough to evolve with rapidly changing green products and concepts of green investment (Investment in Climate Action blog).
  

Harnessing public activism

• A National Agreement to combat climate change (Public Activism blog).

• Professional charters defining appropriate climate strategies for relevant occupations (Public Activism blog).

• Revisit the UNFCCC observer groupings to break down silos (Public Activism blog).

• Bring in state-owned enterprises as important stakeholders in climate action (Public Activism blog).
  

Hartmut Meyer         Adrienne Cheasty         Charles Enoch

 

Adrienne Cheasty (Academic Visitor with EuPEP, St Antony's College, Oxford)