COP 27昨天开始于埃及沙姆沙伊赫It begins inauspiciously, set against the global impacts of Russia's invasion of Ukraine and the resulting food and energy insecurity and dramatic price rises which have pushed climate change down domestic political agendas across the world and increased demand for new sources of fossil fuel to reduce reliance on Russian gas. By the same token, the Russian aggression creates a lever that presents COP 27 with a rare, perhaps unique, opportunity to accelerate the energy transition.
Furthermore, since the effects of climate change are non-discriminatory, the need to tackle it is a genuine global need: a visionary take on COP 27 is that it could offer a ‘safe haven' for international dialogue and collaboration where world leaders can find effective pathways forward on food, energy, nature and security.预兆不积极..
blited effectivetusle从周六1300开始直到周日正午才结束,显示替代名称-AfricaCOP-更合适,焦点和成功键在别处。
speid='More-8223'\/span>巴黎协议引入NDC要求各国确定每年将减少多少国家排放量,目标是到本世纪末将全球变暖限制在1.5摄氏度上。 巴黎协议还强制要求提高适应和建设适应气候变化能力and to align finance flows with ‘a pathway towards low greenhouse gas emissions and climate-resilient development'.NDCs are supposed to be revised every five years in the form of updates to the UNFCCC.
Last year's COP (Number 26) held in Glasgow was the first test of this ‘ratchet' mechanism. The next test was therefore not due according to the original Paris timetable, for another five years. However, progress at Glasgow was adjudged not to be sufficient to address the urgency of climate change (even had all NDCs been fully-implemented, the world would still have armed by 2.4°C by the end of the century) and so countries were required to return at COP 27 with improved NDCs.
For mitigation purposes, therefore, COP 27 has more significance than previous COPs: every fraction of a degree that the world's temperatures rise increases the risk of reaching irretrievable tipping points. Only reducing emissions urgently can avoid hitting those tipping points: indications of success are not good – only 24 countries have submitted revised NDCs, with most countries (including Egypt and the UK) having failed to strengthen their NDCs.
But Adaptation May Grab Centre Stage at COP27 ... 2022环球极端天气,包括历史洪涝(巴基斯坦和尼日利亚)、野火(澳大利亚和美国)和干旱(欧洲和中国)。In the UK, temperatures reached 40 degrees Centigrade – a heat not predicted to be reached under most warming scenarios for another decade at least. These extreme weather events underline the vulnerabilities set out in the IPCC report ‘Climate Change 2022: Impacts, Adaptation and Vulnerability', according to which half the world's population is ‘highly vulnerable' to the impacts of climate change and those living in highly vulnerable regions already 15 times more likely to die due to floods, droughts, and storms. Those ‘highly vulnerable' regions tend to be in lesser developed parts of the world. And this is the root of the contention that may well overshadow this COP. Adaptation – adjusting to current and future climate change impacts – has long been the poor cousin to mitigation, receiving less attention and less funding.COP26Glasgow气候协议试图纠正这种不平衡状况,寻求双倍适应融资并制订全球适应目标两年期方案气候变化现在产生可见效果, 特别是对历史上对全球排放责任较低的国家, 压力越来越大, 需要做更多工作解决适应 < ahrfssss..service国家正日益要求为灾难后重建提供“损耗和损耗”资金。基本气候公正呼声 — — 最应负责气候危机者应资助最前线受气候变化影响者 。 COP 27是一个潜在的损耗热点,因为它将主办三次技术对话之一,作为2021-23全球评估的一部分GST将评估全球减缓适应进度但也将考虑为处理损失和损害而采取的措施的社会和经济后果。 返回议程问题..关键点是争论是否列入损耗问题议程项目Developed countries have resisted these calls out of a concern that accepting this historical responsibility could give rise to legal claims[iv]. In the end, agreement was reached and, for the first time ever, an agenda item directs the COP to discuss "matters relating to funding arrangements responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage." The IPCC requires emissions to peak by 2025 and halve by 2030. But global emissions are still rising fast and, following Russia's invasion of Ukraine, coal use is increasing.关于减少排放目标的协议对避免进一步气候变化影响至关重要。但只有通过展示对实现气候正义目标的明确承诺以及损耗和损害才有可能实现这一协议。无法实现第二个目标,而这个COP风险同时失效.
This blog presents an overview of some of the detailed climate-related disclosure and reporting metrics covered by the ISSB and EFRAG climate prototypes, and highlights critical considerations for companies as more detailed and mandatory ESG and sustainability reporting frameworks begin to take shape.
Global Context & COP26 Pledges
Major developments that emerged from the November 2021 COP26 summit included the announcement of the new Glasgow Climate Pact, a renewed emphasis on the role of the private sector in addressing climate change risks and opportunities, and the launch of the Glasgow Financial Alliance for Net Zero, a coalition of existing and new net zero finance initiatives dedicated to assisting companies realign their business models for net zero.
In addition, a critical adjunct to COP26 was the announcement of the launch of the ISSB and its work towards the development of uniform global environmental, social, and governance ("ESG") reporting standards.ISSB表示努力鼓励全球吸收并合并为现有ESG报告标准(包括框架,如气候相关财务披露工作队和气候披露标准理事会倡议)。ESG报告标准全球基线旨在向投资者、资本市场参与者和各种其他利益攸关方提供关于公司可持续性相关风险和机会的信息类似于姐妹组织国际会计准则理事会,ISSB将由国际财务报告标准基金会管理。
The scope of the Climate Prototype encompasses physical climate-related risks, risks associated with the transition to a lower-carbon economy, as well as climate-related opportunities for the entity.
Pursuant to ISSB's Climate Prototype, an entity shall disclose the following cross-industry climate metrics:
| Greenhouse gas emissions | Scope 1, 2 and 3 in metric tonnes of CO2 equivalent. |
| Transition risks | Amount and percentage of assets and business activities vulnerable to transition risk. |
| Physical risks | Amount and percentage of assets and business activities vulnerable to physical risks. |
| Climate-related opportunities | Proportion of revenue, assets or business activities aligned with climate-related opportunities (in amount or percentage). |
| Capital deployment | Amount of capital expenditure, financing or investment deployed toward climate-related risks and opportunities (in reporting currency). |
| Internal carbon prices | Entity's internal price for each metric tonne of GHG emissions. |
| Remuneration | Proportion of executive management remuneration affected by climate-related considerations in current period. |
Importantly, the Climate Prototype foresees additional industry-specific climate metrics for companies to report on.ISSB气候原型附录B汇总行业报告要求其中包括为每个行业具体确定的多重需求,例如软件服务公司水压区抽取和耗用水或棕榈油供应链报告公司家庭和个人产品销售报告In light of the growing interdependence between the many ongoing ESG regulatory initiatives (especially those originating in the EU), this reporting requirement should, for example, be considered in the context of recently announced national and international deforestation due diligence requirements for specified products being placed on the UK and EU markets.
2. EFRAG's Climate Standard Prototype: Towards Harmonization?
The ISSB's Climate and General Requirements Prototypes are particularly interesting because EFRAG released a similar framework under the Climate Standard Prototype Working Paper in September 2021.EFRAG框架响应欧盟委员会关于s/www.insideEnergyandense.com/2021/05/the-e-Corporate-divity-proposition-what-company-dessb的Climate原型可能直接影响到欧盟规则。
Compaments也可能感兴趣地注意到EFRAG工作文件和Climate原型都覆盖相似水平的报告,侧重于部门不可知性报告、部门专用报告和实体专用报告EFRAG工作文件捕捉约三分之二ISSB气候原型,其余三分之一有可能在未来数月中补充EFRAG部门特有标准。
本分类法是欧洲日益注重提高气候相关活动透明度的又一标志,但它也是一套本已复杂图象中的另一套标准和指标。At a COP26 side event, for example, EFRAG's work was examined in the context of the ISSB and the work of the TCFD.
Key Takeaways
Two main recommendations flow out of the current landscape on sustainability reporting developments.
- Companies should consider which aspects of their current voluntary sustainability reporting could be integrated into mandatory financial and non-financial sustainability reporting requirements in the future. As new standards emerge, companies have an opportunity to actively monitor developments and "best practices" within their industry and to proactively prepare for future mandatory reporting requirements.美联储报表公司还应该考虑ISSB和EFRAG披露原型方面会如何影响美国正在考虑的与气候有关的披露规则证券交易委员会公司应开始识别本行业相关度量值,制定策略和过程识别物风险和机会,并开发必要的报告控制程序以确保信息收集与报告及时准确性。
As the United Nations Climate Change Conference of the Parties ("COP") in Glasgow has drawn to a close, with seemingly mixed messages and a somewhat ambiguous conclusion, it is worth reflecting on the overall trajectory of the climate issue, societal expectations, and the accomplishments that — with time — Glasgow is likely to represent. COP26 highlighted the fragility of the planet, as well as the fragility of the global consensus-based United Nations approach to protecting it. It highlighted the sweep of global climate-induced challenges and the scale of transformation needed to address them. With rising temperatures has come a rising global focus on climate and a far greater set of emerging societal expectations for meaningful responses by government and the private sector. Despite the risk that the global agreement forged in Glasgow is seen by climate activists as all talk and no action — what they referred to as "blah, blah, blah" — I believe that a number of features will endure as important accomplishments.
Representatives from 197 nations, businesses, hundreds of civil society organizations, scientists, educators, media, and climate activists — you name it — all converged on Glasgow to shine a global spotlight on the climate crisis. The Conference had some 40,000 registered participants. With just a few thousand of those involved in the negotiations themselves, the rest converged around elevating climate understanding, climate solutions, and climate action. And still tens of thousands of others converged to protest and lend their voices to the climate debate.期望因Covid-19延迟一年以及美国返回巴黎气候进程而提高但这些期望都集中在依赖实现每一项结果一致性的联合国谈判进程上 。
尽管Covid云下集合和大批与会者所构成挑战,但缔约方会议在某些方面组织得比以往更好。它不再完全是一个国际谈判,而更多地是一个通信机制,以凝聚世界对雄心气候行动需求的看法United Nations进程启动全球领导人峰会,有120位国家元首参加It featured inspiring statements from governmental and societal leaders, such as Sir David Attenborough. The Summit then flowed into the overall COP, which had a thematic organization for each day of the conference, by which it highlighted actions or the sweep and scale of climate impacts in a more coherent fashion than ever before — spanning from energy, finance, transport, cities and the built environment, science and innovation, nature, gender, youth, and adaptation to and loss and damage from climate change. And the overall gathering encapsulated a heightened global focus on climate as a defining generational issue in a way that has never happened before.
The World Rallied Around the Urgency Shown By the Evolving Climate Science
The defining element of the Glasgow considerations was the acceptance of a far sharper sense of climate science findings around the scale and urgency of emissions reductions needed to stabilize the earth's climate and prevent catastrophic consequences. Every aspect of the discussions was judged by the context the new climate science shows.
Leading up to the COP, the UN's authoritative science body, the Intergovernmental Panel on Climate Change ("IPCC"), had issued two reports — one in 2018 focused on the imperative of holding global average temperature rise to 1.5 degrees Centigrade, and one in the Summer of 2021 highlighting the "overwhelming" evidence of climate change. The reports showed that a rise in global temperature to 2 degrees would lead to catastrophic results in both the frequency and severity of climate-induced events and global changes. The reports found the science of human-induced impacts "unequivocal" and noted that global temperatures had already risen by 1.1 degrees over pre-industrial levels — demonstrating how limited the remaining carbon budget is — and that climate adverse effects were widespread, rapid, and intensifying.The report further found that urgent action is needed to cut emissions by 45% by 2030 and achieve net zero emissions by 2050 in order to maintain a sustainable trajectory.
The IPCC findings were characterized by UN Secretary General António Guterres as a "code red for humanity." They became the touchstone for judging the adequacy of country pledges and private sector net zero commitments. In addition to the scale of the emissions reductions, the need for an accelerated pace of change also became far clearer and a widely accepted expectation. The notion that we are now in a "decisive decade" to get on the right emissions trajectory was embraced by the COP process. Going into the COP, various assessments, such as from the International Energy Agency, showed that existing country emissions reduction commitments would lead to a global temperature rise of 2.8 degrees by the end of the century. Those pledges covered less than 20 per cent of the gap in emissions reductions needed to be closed by 2030 to keep a 1.5 degree path within reach. According to a number of projections, the plethora of new commitments announced at the COP would, if delivered in full, lower the rise to somewhere between 1.8 and 1.9 degrees. The UN noted that the actual nationally determined contributions ("NDCs") submitted by participating nations would result in an unsustainable global temperature rise of 2.4 degrees.
At the end of the day, the overall agreement reached by 197 countries — including new emissions reductions announcements, the move to more regular revision of national commitments, transparency requirements around that process, and the development of rules for the global carbon markets — at bottom kept alive the possibility of limiting global temperature rise to 1.5 degrees by the end of the century and essentially transformed that temperature target into the new object of the UN process.虽然1.8度和1.5度之间的差值似乎不大,但实际上它代表着减轻气候变化最大破坏性影响的实质性差值。 广泛报道的争议涉及是否逐步停用煤炭和化石燃料补贴,发展中国家是否有足够的气候资金,以及是否向受影响国家提供补偿“损耗和损害”抑制了对协议的热度。 尽管如此,正如缔约方会议主席Alok Sharma得出的结论, “我们现在可以可信地说我们已经保住1.5度。But, its pulse is weak and it will only survive if we keep our promises and translate commitments into rapid action."
Paired with these science targets was a far more prominent voice given to the moral underpinnings to the proceedings that focused on the inequity created because the most vulnerable nations to climate impacts are those who have contributed least to the emissions causing such impacts, and a palpable sense of obligation to future generations. The IPCC report drove home the concept that the COP process is not some future exercise with distant impacts, but that the delegates were poised to address an urgent crisis of the here and now.
The Paris Climate Framework Survived the Absence, and Accommodated the Return, of the United States as an Active Participant
The nations of the world remained committed to the UN Climate Framework Convention's goal of "the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system" even in the absence of U.S.巴黎气候协议自下而上承诺框架由每个国家根据自身环境确定,体现了应对这一全球挑战的共同全球承诺,没有美国则保持稳定和适切性participation, and the reaffirmation of that framework may be one of Glasgow's greatest accomplishments.
The Paris balance had achieved a "bottom-up" system of emissions reduction commitments that flexibly accommodates the circumstances of individual countries, yet one that does not allow so much flexibility that there is no realistic hope of actually bettering the climate situation by addressing emissions mitigation, adaptation to the already locked-in effects of climate change, and assistance for climate-impacted developing nations. Paris provided a solution and a directional sense of its goals, even as it admitted that its trajectory may need to grow more stringent over time, informed by meaningful science. Glasgow refined that process with a commitment by the parties to revisit their NDCs in one year rather than five and with enhanced transparency around individual country goals and their implementation. This process preserves the possibility that the collective emissions reduction actions are calibrated to avoid the worst climatic impacts.
The durability of the Paris structure was aided, to be sure, by the promise of new technology, which could allow for countries to enhance their emission reduction commitments through cost effective wind, solar, energy efficiency, and electric vehicle technologies — technologies that were still only on the verge in Paris — making a clean energy transformation that is consistent with the Paris climate goals today seem like an attainable objective.
When the United States did return to the negotiating table, it brought with it an ambitious NDC — pledging to achieve a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030, to achieve 100 percent carbon pollution-free electricity by 2035, and net zero emissions no later than 2050. It also brought a bevy of other actions to instill more confidence in its commitment.This included leadership in assembling a global methane reduction coalition by which more than 100 countries agreed to cut emissions to tackle this highly potent short-acting greenhouse gas by 2030, a "first movers" technology coalition, as well as a series of whole-of-government financial and regulatory initiatives.
While the Biden Administration would have liked to have had its actions backed up by climate legislation, particularly power plant incentives and a range of clean energy tax credits in the reconciliation bill, it made a strong case nonetheless about the comprehensive approach it is taking to prioritizing climate outcomes across the government, whether that be in the financial sector, energy, or transportation. And the United States demonstrated ambition in its diplomacy, reaching a surprise commitment with China to work collaboratively across a range of areas to keep alive the prospects for achieving 1.5 degrees. President Biden's address to the COP was complemented by a widely praised speech by former President Obama speaking directly to youth climate activists who had taken to the streets during the COP, as well as by Congressional leadership.
The Global Focus on the Climate Crisis Puts a New Spotlight on the Importance of Business Solutions and the Business Opportunities Around Climate — Subject to Ever Greater and More Intensive Scrutiny
The first week of the COP brought a breathtaking series of collaborative public and private sector announcements to achieve carbon emissions reductions. In many ways, these commitments seem almost as significant in accomplishing a clean energy transformation as the text of the UN agreement itself.
In addition to the methane pledge, leaders from over 120 countries, representing about 90 percent of the world's forests, pledged to halt and reverse deforestation by 2030. Hundreds of financial firms, operating through the Glasgow Financial Alliance for Net Zero (GFANZ), committed over $130 trillion of private capital — representing 40 percent of global financial assets — to transforming the economy for net zero.Various combinations of development organizations and private sector capabilities identified a range of opportunities they will pursue for investments in particular developing nation economies, such as in efforts to stem coal use in South Africa. Nearly 30 national governments, joined by cities, states, major automotive manufacturers, fleet owners, and investors, signed the Glasgow Declaration on Zero-Emission Cars and Vans to end the sale of internal combustion engines by 2035 in leading markets, and by 2040 worldwide. Other transportation commitments touched on heavy duty vehicle electrification, green shipping, and enhancing the deployment of sustainable aviation fuels.
Glasgow in many ways represents a shift in focus from a governmental initiative to a recognition that the scale and pace of the energy and societal transformation and response demanded by climate change necessarily will require swift and credible action by the private sector as well. As one Chief Executive Officer put it, the concept of a "climate-advantaged" company has taken hold, where sustainability has been transformed from a "nice to have" effort being done on the side, to a vital consideration at the center of business strategy, and where such companies can benefit from a substantial value premium. As one of the UN's High Level Climate Champions put it: "Net zero has gone from extreme to mainstream."
Of course, with the proliferation of net zero pledges comes an increasing level of skepticism about the credibility of those commitments and the ability to deliver on them in the long run. In the ramp up to the COP, the IPCC focus on the more stringent and nearer term emissions reductions meant that the Science Based Targets Initiative formally revised its goals for net zero corporate commitments to align with the new 1.5 degree IPCC target and issued a new standard for evaluating company emission reduction offerings. Along these same lines, the so-called "Under 2 Coalition," representing commitments by some 60 percent of world's economy, is recasting itself as the "Net Zero Coalition."
Likewise, the UN Secretary General, at the Opening to the World Leaders Summit portion of the COP and prompted by developing nation and activist concerns over the credibility of emissions reduction commitments, characterized "a deficit of credibility and a surplus of confusion over emissions reductions and net zero targets, with different meanings and different metrics." The Secretary General therefore announced that he will "establish a Group of Experts to propose clear standards to measure and analyze net zero commitments from non-state actors." The Secretary General reiterated his intent to establish a high level group for this purpose at the conclusion of the COP as well. These will likely complement a range of emerging national financial sector and ESG transparency requirements, including the announcement of the formation of a new International Sustainability Standards Board, along with other Paris Climate Agreement provisions, particularly the new carbon market rules.
Indeed, youth activists expressed particular concern over the pace and credibility of emissions reduction commitments, stating quite simply that "we don't believe you" and urging the business community to "prove them wrong." This skepticism was heightened by the overall context of the final COP debate around the failure to honor in a timely way climate finance commitments of $100 billion per year to affected developing countries, the absence of a clear loss and damage compensation commitment, and the somewhat relaxed treatment of fossil fuels, particularly the insistence by some nations to preserve an ongoing role for coal.
Just as there will be these formal processes to help refine net zero expectations, there no doubt also will be enhanced activist group scrutiny of company pledges and climate impacts. Companies will be called to task to demonstrate what they are doing to implement their net zero commitments.This scrutiny is likely to be even more acute given the inability of the formal negotiating process to achieve a level of ambition through country NDCs that will reach the 1.5 degree target or deliver in the short term the climate finance commitments for the developing world and the credibility gap that this outcome may perpetuate. As France's former Climate Ambassador and the key architect of the Paris Climate Agreement, Laurence Tubiana, put it, "Greenwashing is the new climate denial." Climate accountability in many ways will be the new currency.
We Can Expect More Focus on Climate Commitments Going Forward
Building on the Paris accord, the agreement follows the pattern of existing domestic environmental laws in recognizing that it may not be a perfect solution, in and of itself, and that the science will continue to evolve.But those frameworks recognize that it is critical to get started on the emissions reduction process even if the target may be revised in the future. Similar to the Clean Air Act's five year review provision for fundamental health-based pollutants, Glasgow acknowledges the need to calibrate future emissions reductions based on new science more frequently and with greater transparency to assess the success of country measures in meeting the emissions targets, and that there is a fierce urgency of the now being expressed by climate advocates that should inform those evaluations. While the global community has demonstrated that it can, in essence, walk and chew gum at the same time, the question this time is whether it can do so while running.That will be tested starting next year with submissions to the next COP.
Implementation of the various COP26 pledges will be a critical piece of the equation. The test will continue to be how to turn commitments into action for this decade. As the UN Secretary General indicated, "COP27 begins today." In some ways, Glasgow represents a sharper focus on science-aligned plans — by governments and business and in the face of a new global climate consciousness — to maintain climate stability, and the focus will now shift to the implementation and refinement of those commitments. For companies, growing global climate consciousness and risks and opportunities posed by the energy transformation present a new post-Glasgow dynamic necessitating climate engagement, but requiring a credible approach in doing so.
The focus is on domestically-generated renewable electricity to create a power system based on a mix of renewables, new nuclear power stations, flexible storage, gas with CCS and hydrogen.
Specifically, the NZS undertakes to:
- Secure FID on a large-scale nuclear plant by the end of this Parliament;
- Launch a new £120 million Future Nuclear Enabling Fund.
- Create 40 GW of offshore wind by 2030.
- Create up to one of floating offshore wind by 2030.
- Deploy new measures to help smooth out future price spikes.
2) Fuel Supply & Hydrogen
The NZS re-states the ambition that the UK will deliver 5 GW of hydrogen production capacity by 2030. The UK will at the same time halve emissions from oil and gas and increase the production of biofuels.
Specifically, the NZS undertakes to:
- Provide up to £140 million to establish the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme, with a target of creating up to 250MW of green hydrogen production capacity in 2023.
- Introduce a climate compatibility checkpoint for future licensing on the UK Continental Shelf.
- Regulate the oil and gas sector in a way that minimises greenhouse gases through the revised Oil and Gas Authority Strategy.
3) Industry
The NZS commits the UK to creating four carbon capture usage and storage (CCUS) clusters by 2030. The UK will support a ‘deep decarbonisation of industry' through carbon pricing and the creation of low carbon industry clusters, which would have access to Government support under the CCS Infrastructure Fund and revenue support mechanisms.
Specifically, the NZS undertakes to:
- Accelerate the development of the Hynet and East Coast Clusters to capture 20-30 MtCO2 per year by 2030.
- Create a ‘reserve cluster' of Teesside and the Humber, Merseyside, North Wales and the North East of Scotland.
- Use the Industrial Energy Transformation Fund to future-proof industrial sectors.
- Consult on a net-zero-consistent UK Emissions Trading Scheme (ETS) cap to incentivise cost-effective abatement in industry.
4) Heat and Buildings
The NZS creates a pathway to ensuring that from 2035 all new heating appliances in homes and workplaces are low carbon and sets 2026 as the date for a decision on the role of hydrogen in heating.The Government will seek to reduce electricity costs and to rebalance energy levies (such as RO and FiTs) and obligations (such as ECO) away from electricity to gas.
Specifically, the NZS undertakes to:
- Prevent the sale of new gas boilers beyond 2035.
- A Boiler Upgrade Scheme will incentivize the swap-out of domestic gas boilers.
- Create a new Heat Pump Ready programme to provide funding for heat pump technologies with a target of 600,000 installations a year by 2028.
- Rebalance policy costs from electricity bills to gas bills.
- Fund the Social Housing Decarbonisation Scheme and Home Upgrade Grants and decarbonise public sector buildings by 75% by 2037.
- Launch a Hydrogen Village trial to inform a decision on the role of hydrogen in the heating system by 2026.
- Consider mandatory disclosure requirements for mortgage lenders on the energy performance of homes in their portfolios (UK housing stock generates 20% of carbon dioxide emissions).
5) Transport
The NZS aims to remove all road emissions and begin work to deliver zero emission international travel including through new vehicle grants and investment in electric vehicle infrastructure!and to increase use of public transport, cycling and walking.
Specifically, the NZS undertakes to:
- Introduce a zero emission vehicle mandate to give a clear signal to investors.
- End the sale of new petrol and diesel cars by 2035.
- Increase funding for zero emission vehicle grants and EV Infrastructure.
- Allocate funding to support the electrification of UK vehicles and their supply chains.
- Trial three zero-emission HGV technologies on UK roads to determine their operational benefits and infrastructure needs.
- Introduce funding to promote cycling and walking in UK towns and cities.
- Fund an increase in bus use.
- Make local transport systems net zero, including through zero-emission buses and trains and supporting infrastructure and remove all diesel-only trains by 2040.
- Extend the Clean Maritime Demonstration Competition.
- Research zero emission flights and commercialise sustainable aviation fuel.
6) Natural Resources, waste and fluorinated gases
The NZS sets out the Government's ambition to increase woodland creation in England to meet the UK's overall target of planting rates to 30,000 hectares per year by the next election.NZS旨在鼓励农民实施低碳耕作法,包括通过农林业The NZS sets out the UK's ambition to encourage a circular economy and continue to phase out the use of F-gases.
Specifically, the NZS undertakes to:
- Support low-carbon farming and agricultural innovation.
- Restore 280,000 hectares of peat in England by 2050 and treble woodland creation rates in England.
- Increase investment in net-zero-related R&D across Natural Resources, Waste & F-gases.
- Explore options for the elimination of biodegradable municipal waste to landfill from 2028.
7) Greenhouse Gas Removals
The NZS sets out the UK's ambition to deploy at least 5 MtCO2/year of engineered GGRs by 2030 through Government support to early commercial deployment of GGRs, with an ambition to move towards a market-based framework for GGRs.
Specifically, the NZS undertakes to:
- Invest in the increased deployment of GGRs.
- Explore regulatory oversight monitor, report and verify GGRs.
8) Support the transition with cross-cutting action
The NZS sets out the UK's intention to use its status as COP26 host nation to encourage other countries to get to net-zero by 2050, and set more ambitious interim emissions reduction targets.NZS鼓励私营部门提供绿色金融并设定政策意图使选择绿色选项对消费者更容易和便宜The NZS aims to support training and skills including through a focus on local solutions and undertakes to embed climate into all Governmental policy and spending decisions.
Specifically, the NZS undertakes to:
- Deliver funding to support net zero innovation projects.
- Use the UK Infrastructure Bank (UKIB) to crowd in private finance and pull through low carbon technologies and sectors to maturity and scale.
- Introduce a new Sustainability Disclosures Regime, including mandatory climate related financial disclosures and a UK green taxonomy.
- Reform the skills system to incentivize employers and learners in delivering net zero.
- Publish an annual progress update against a set of key indicators.
Reaction:
Overall, the Net Zero Strategy has been welcomed as providing a clear response to the scale of the climate change challenge and the transformation to the UK economy that decarbonisation will require over the next 30 years.
In particular, commentators welcomed the prominence given to: the ZEV mandate!资助离岸风供应链和基础设施近海传输网络协调承诺审查CfD拍卖频率重写氢雄心and the nuclear power commitments.
Commentators have welcomed the emphasis on carbon sequestration, both through natural means (peat bogs, trees) and new capture and storage technologies. For others, the requirement for the UK Government to reflect environmental issues in national policy- making, is one of the most important commitments in the document, since it places net-zero at the core of governmental decision-making processes.
On the Other Hand…
No Strategy ever satisfies everyone and some of the critical comments are worth examining briefly.
1) Weaknesses of the Policy Offering
- The NZS simply consolidates in one place the various UK Government strategies published in the last 12 months, rather than contributes significant new funding, or policy.
- There is no mention of the EU in the International Cooperation Section of the NZS and therefore no indication of how to solve the issues around carbon pricing cooperation (including any potential linkage between the UK and the EU ETS).
- The PM's 10 Point Plan of last December had already made the commitment to 5 GW of green hydrogen by 2030, so the absence of clarity on the UK's post-2030 hydrogen plans (including silence on the potential split between green and blue hydrogen) in the NZS was a missed opportunity.
2) Reliance on Unproven Technology
- The NZS's low carbon future society relies heavily on a techno-centric, market-driven vision, based on largely unproven technology.
- Greenhouse gas removal technologies (that are untested at scale) must, between now and 2050, be developed and deployed so as to remove and store more carbon than the UK currently emits from all its homes.
- Green hydrogen is allocated a major role, though the UK currently has very few operating production facilities.
- Nuclear has been given a (welcome) central role in addressing renewables' intermittency problems. But the solution chosen – small modular nuclear reactors – uses largely unproven technology.
3) Financing
- The Committee on Climate Change has previously calculated that £1.4tn of investment is required over 30 years (equivalent to 2.4% of the UK's GDP or £46 billion per year) to make the country carbon neutral.
- The scale of finance committed by the government in decarbonising the UK's housing stock is less than a quarter of the investment required by 2025.
- The NZS aims to mobilise £60bn of private finance by 2030 in addition to £26bn of public funds: equivalent to the sum the UK has invested in the renewable industry over the last decade.
- The NZS target for installing heat pumps is 600,000 per year by 2028.But the grant funding available for heat pumps will cover the installation of only 90,000 pumps.
4) Government Inconsistencies
The Treasury's Net Zero Review (NZR), released on the same day as the NZS, accepted that action to mitigate climate change was "essential to long-term UK prosperity". However, there were points where the NZR did not appear to share the NZS enthusiasm for the green revolution:
- The NZR raised concerns about the possibility of ‘industrial leakage' caused by stricter green policies in the UK as compared to other countries.
- The NZR raised concerns that the race to Net Zero was likely to result in the loss of up to £37bn a year in tax revenues from fossil fuel duty.
- The NZR noted the need for new taxes to pay for the NZS.
- The Treasury is concerned about possible job losses caused by the energy transition.
- Treasury officials are said to be considering some form of road pricing as another mechanism to raise funds.
There are other areas of apparent inconsistency:
- The apparent tension between Government commitments to grant new oil and gas licenses in the North Sea and open a new coal mine in Cumbria and the green agenda set out in the NZS.
- The NZS is silent on meat-eating, which contrasts with the approach taken in the UK's national food strategy.
Comment:
For all this criticism, the NZS is a welcome document. It is one of the first to comprehensively attempt to chart with some degree of precision how a country (the UK in this case) will reach its mid-century Net-Zero target.
If it was not clear before, the NZS reveals the almost unimaginable scale of the transformation that will be necessary to reach Net-Zero by 2050. By 2035, electricity will be fully clean!燃气锅炉和油气耗车将从英国房屋和公路上消失by 2025, the UK will be planting trees covering an area the size of Milton Keynes annually. And Net-Zero considerations will be placed at the centre of Government policy decision-making.
It is also clear that the UK is serious about addressing the climate crisis and that there is cross-Party support for accelerating the UK's Energy Transition. The government views its Presidency of COP26 as an opportunity to act as a global catalyst for progress in confronting the climate crisis and the NZS is a road-map to which the UK Government hopes other countries will look for inspiration.
There will be turbulence as the UK economy adjusts to the transformation. Turbulence which may create investment risks, but will also create major opportunities for investment- wind, nuclear, hydrogen, EV, energy efficiency, smart grids, smart storage etc.
Covington is well-placed to offer legal and public policy advice and support to companies seeking to navigate this new environment and discuss these opportunities with you to identify how we might work together.