A complex mix of factors, including energy security concerns, economic realities, and political complexities, have stalled the efforts of the UK and the European Union (EU) to reach their climate targets. And amid these efforts, the 28th United Nations Climate Change Conference (COP28), set to take place between November 30 and December 12 in Dubai, marks a milestone: it will be dedicated to the first global stocktake of the implementation of the Paris Agreement.
In the UK, the Government's reputation as a climate leader is under scrutiny following policy decisions to slow the country’s march toward net zero by 2050. A focus on energy security, the need to balance environmental goals with economic realities, and concerns about inflation have influenced the shift in policy. Compounding all this is the upcoming general election, scheduled for no later than January 2025, which adds complexity to the situation, as the Conservative Party trails in the polls.
The EU, meanwhile, faces the challenge of reaching an agreement on heightened greenhouse gas emission reduction targets. The European Commission advocates faster reductions in fossil fuel consumption, the phasing out of fossil fuel subsidies, and increases in renewable energy and energy efficiency. However, these measures have been met with criticism from some Member States and the public – leading to a growing divide between those who prioritize climate action, and those seeking to balance environmental concerns with other economic worries.
Both the UK and EU confront uncertainty in aligning their climate commitments alongside electoral priorities as COP28 approaches. A divergence in the pace and direction of climate transition between the UK and the EU may become more apparent at the upcoming COP28,
Businesses should recognize the pivotal roles that alignment and compliance play and their potential impact on climate and energy policies. Engaging with governments during COP28 can provide a platform for fostering constructive relationships with decisionmakers, and shaping the future of climate policy.
In the United Kingdom
As we approach the fifth anniversary of the UK's groundbreaking Climate Change Act 2008, and nearly two years since the COP26 summit in Glasgow, the country’s reputation as a climate leader has come under fire as a result of domestic policies.
In September, Prime Minister Rishi Sunak announced a reassessment of several targets previously set to support the country’s drive to net zero. Specifically, he announced that a ban on petrol and diesel cars originally timed for 2030 has been postponed to 2035, a target for eliminating the sale of gas boilers to homes has also been delayed, and plans requiring landlords to upgrade the energy efficiency of properties have been scrapped. Furthermore, in August, the government approved the development of the Rosebank oil field in the North Sea by Norwegian petrol giant Equinor.
These decisions have been condemned by climate activists, politicians, and business leaders who accuse the government of inconsistent messaging and abandoning climate commitments. In June, the UK’s Climate Change Committee Chairman John Gummer said that “the UK has lost its clear global leadership position on climate action.” Discontent has also been brewing within the prime minister’s own party.
The geopolitical landscape, influenced by Russian President Vladimir Putin's illegal war in Ukraine, has shifted priorities toward energy security, where environmental ambitions confront economic realities. And with the upcoming general election mandated to take place no later than January 2025, inflation continues to be a key concern for voters, posing a key challenge for the government, and with the Conservative Party trailing in the polls.
Consequently, it has become a priority for the government to be perceived as addressing these economic realities, which has prompted the reevaluation of these climate targets. Home Secretary Suella Braverman, emphasized that the government was “not going to save the planet by bankrupting British people.”
Supporters of this strategic shift argue that this adjustment represents a more pragmatic approach. It underscores the importance of striking a balance between environmental objectives and economic growth. Polling by YouGov reinforces this, with one poll highlighting that 50% of British adults support the delay in the implementation of the petrol and diesel car ban. Indeed, the recent Conservative Party by-election victory in Boris Johnson’s former constituency of Uxbridge and South Ruislip, where the Conservatives opposed Labour Mayor Sadiq Khan’s expansion of the Ultra-Low Emissions Zone (ULEZ), further fueled this argument.
Although the announcement to delay the ban on petrol and diesel cars faces scrutiny, it's important to retain perspective; despite this decision, the UK remains in alignment with the EU's target. While the government has scaled back on some climate commitments, businesses should remain assured that a strategic commitment to net-zero climate policy remains.
Nevertheless, as we approach COP28, any push to implement ambitious climate pledges by the UK will be met with skepticism given the perception that the UK is not pulling its weight.
In the European Union
With the replacement of Frans Timmermans as European climate chief by former Dutch Foreign Minister and former leader of the Dutch Christian Democratic party, Wopke Hoekstra, some fear that the EU has lost its “green steering wheel” ahead of COP28. The nomination also raised concerns among environmental NGOs, given that fossil fuel giant Shell was once Hoekstra’s employer.
Furthermore, though EU Member States signaled their ambition at COP27 in Egypt to increase the 2030 greenhouse gas emission reduction target to 57 percent, an agreement on the EU’s pledge has still yet to materialize. Nevertheless, a meeting of the 27 environment ministers on October 16 led to several commitments.
Member States stressed the need to phase out of unabated fossil fuels before 2050 and to end fossil fuel subsidies to accelerate the transition to a climate-neutral economy. Additionally, Member States suggest tripling the renewable energy capacity to 11,000 TW and doubling energy efficiency by 2030. These aspirations are deemed essential to the transition to a green energy system that supports developing countries in their transitions towards climate neutrality.
More worryingly, the EU and its Member States face criticism over climate measures, with French Ecological Transition Minister Christophe Béchu calling them “soaring indicators of climatoskepticism, or climatorelativism.” The centre-right European People’s Party (EPP) was quick to jump on the bandwagon, with German European Parliament Member Manfred Weber stating that a “deep divide” has emerged between “politicians who believe climate and nature considerations outweigh all other concerns, and those who look for a balance between the impact of climate change and the people of Europe.”
This growing schism, demonstrated during the European Parliament negotiations on the proposal for a Nature Restoration Law, is likely to persist. The roadmap to European elections, scheduled for June 6-9 2024, reveals the shift underway in the EU, with political groups facing difficulties in reaching a majority. The “governance parties” of the centre-right (EPP), liberals (Renew Europe), and centre-left (Socialists & Democrats) could count between 55%-60% of seats, less than in the past elections.
With these forecasts, the European Parliament may change its approach toward industrial regulation, moving in a free market direction which could hamper the EU Green Deal, despite it being enshrined in EU law. Similarly, EU Member State leaders might be extra-conscious of their climate commitments, including at COP28, ahead of the 2024 elections.
The road to COP28 will be paved by uncertainty, as the UK and EU try to reach a green consensus given upcoming elections. Despite the struggle to balance green commitment and ambition with green skepticism, the UK and the EU might nevertheless seek to position themselves as ambitious parties during the COP28 negotiations.
For business, this means that the negotiations taking place at the Expo City in Dubai is critical. While the opportunity to engage during these negotiations will be limited, key sectors should continue to seek to have a framework that will shape “the how” and maintain scope for local flexibility and innovation. Companies should seek to demonstrate engagement and provide constructive support as core allies to governments, constructing long-term relationships with key decision-makers that allow emerging issues and key points of contention to be addressed during the negotiations.