Climate policy at the Sharpe end

In this context, risk assessment is like long-range weather forecasting, namely totally unreliable. 

Sharpe wonders why the IPCC keeps underestimating climate risks (p56). But again I think we know the answer. 

First, emissions keep rising. Second, aerosols that prevented emissions from rising have been removed from the atmosphere. Third, additional new risks keep being identified, and existing ones found to be greater than originally thought. Fourth, understanding of feedbacks has improved, and most of them accelerate climate change.

Climate science

Sharpe says that scientists discard a hypothesis if there is a greater than five per cent probability of it being due to chance. This is not how science works. The usual procedure in experimental science is to assume that a result is due to chance (the so-called ‘null hypothesis’) and then carry out tests to prove otherwise. 

Even if the null hypothesis is not disproved at first, the substantive hypothesis may be retained for any number of reasons. 

Sharpe complains that governments don’t focus enough on what to avoid, but then when they focus on avoiding global warming of 2.7 degrees by 2100, he also complains about that. 

What he should have been doing after 2015, of course, was to try to get them to focus on the actions they should be taking to reduce their emissions now and avoid 1.5 degrees of warming by whatever date.

Economics

Sharpe is very critical of what he calls ‘equilibrium economics’, which seems to be equivalent to what is generally known as neo-classical economics. His argument seems to be well made to the extent that neo-classical economists see climate change as just a market failure, which they believe is most efficiently remedied by a carbon tax, not by the use of regulation or government investment. 

He points out that carbon taxation, though it can be useful, is not the be-all and end-all, and both public investment and regulation are necessary to achieve the green transition.

Even for a small technical change, such as the transition from incandescent to LED lighting, it was found that price was not sufficient to bring about the change, so regulatory banning of incandescent bulbs was required. 

For innovation too, public investment in research and development has often been vital to kickstart the transition process. 

Costs then reduce further due to economies of scale and learning by doing (at least this is what has happened in the case of solar PV). 

In comparison, carbon pricing has a less direct effect – it could just incentivise fossil fuels to be burned more efficiently, or it could cause a switch of fossil fuel technology, or just raise the price for consumers – in short, no self-acceleration momentum for structural change. However, levying a carbon tax could raise funding to help pay for this change.

Sharpe provides a number of examples where regulation leads to increased efficiency – energy efficiency standards in buildings, electric vehicle mandates, and efficiency standards in industry that achieve technological innovation and cost reduction. He argues that such regulation, along with supporting research and development and appropriate shaping of the relevant markets, can accelerate the transition process.

No doubt all of this is true but still it can sometimes be difficult to find the right sort of regulation or the most promising candidates for R&D investment or the most effective reforms of market arrangements. 

Sharpe makes a convincing case for the superiority of carbon taxation over a cap and trade system in advancing the transition but he also recognises that making an existing system more efficient, whether by carbon pricing or regulation or selective investment/subsidy, can actually delay the system change that is needed.

Coal to gas

It is at this point that we encounter the key problem with Sharpe’s approach, namely his concept of a system. His main examples of system change are the phasing down and out of coal and the transition from internal combustion engine vehicles (ICEVs) to electric vehicles (EVs). 

On coal, he sees the shift in the UK from coal to gas as ‘a structural change in the system’ (p161) and attributes this to the effects of carbon taxation and cap and trade and more stringent pollution controls (to which one could add the long-term decline of the UK coal industry since the 1980s).

However, this represents not a shift away from the fossil-fuel system but only a reduction in its carbon intensity – essentially, a more efficient combustion of carbon for electricity generation. Arguably, given that renewables still account for less than half of the UK’s electricity generation, the UK power sector is not decarbonising fast enough, and this is primarily due to its dependence on gas. 

If the UK is indeed the ‘fastest decarbonising country in the world in the power sector’ (p161), then this suggests that the global power sector as a whole cannot be decarbonising fast enough either.

ICEVs to EVs

Sharpe’s other example of system change is the shift from ICEVs to EVs in Norway. Again, however, this doesn’t look like a change in either system or structure. 

Whereas the shift away from coal in the UK was a change from coal to gas as the predominant fuel for generating electricity, the shift from ICEVs to EVs involved a change in the main technology for powering motor vehicles from oil to batteries. 

This may represent a transition to renewables in Norway (where electricity is generated mainly by hydro) but not in most of the world, where electricity is generated mainly by fossil fuels. 

Incidentally, this is one reason why Sharpe’s argument for different carbon prices in different sectors is not convincing, because the transition has to be accomplished across all sectors, and the power sector is crucial for this.

Evolution

Sharpe’s favoured alternative to neoclassical economics is a form of evolutionary economics, dependent on a systems approach and on the literature on innovation. This approach involves a notion of incremental changes building towards a tipping point of system change. 

When it comes to the energy transition, however, this notion is deeply flawed. The reality is that the more we decarbonise the energy system, the bigger our problems of energy storage and of electricity distribution and supply – largely due to the intermittency of wind and solar energy. 

Increasing numbers of EVs and heat pumps, along with the electrification of industry generally, serve only to exacerbate these problems. 

Therefore, if we are to go ‘five times faster’, as Sharpe says we must, it is essential that renewable capacity be grown even faster than this. Yet Sharpe has little to say on this point. 

Slow motion

He seems comfortable with the UK Government’s aim for 50GW of offshore wind by 2030 and doesn’t even mention the government’s failure to support solar or onshore wind since 2013. Clearly, the government’s efforts to meet its 2030 target for renewable energy come nowhere near to becoming five times faster than the progress they are currently making.

For some years now, the Committee on Climate Change has noted the government’s under-performance in most sectors: industry, buildings, transport, etc, but again there is no word of this in Sharpe’s book. If anything, the UK is even going slower now than it did ten years ago. 

As for targeted investment, which Sharpe rightly points out has achieved progress in various countries, through subsidy, cheap public finance and government procurement, the government continues to provide far more subsidy for fossil fuel development than for renewables, and wastes increasing amounts of money on carbon unicorns such as carbon capture and storage projects and on unsustainable biofuel plants such as Drax.

Nuclear power

Sharpe doesn’t mention nuclear power at all. It is not a renewable source, as it depends on uranium. It emits less carbon than fossil fuels but much more than renewables and is much more expensive than wind or solar energy. 

Moreover, nuclear power stations take longest to develop, far longer than any other power source. So perhaps they should not be a target for massive government investment, but this is precisely what the UK government has decided to do since 2017.

Just transition?

Sharpe also seems to believe that the transition will not only result in more clean jobs but also that dirty jobs will simply disappear. He has nothing to say about the need for a just transition except in relation to South Africa (see below). 

For him, shifting to renewable power will of its own accord result in coal mines closing and oil being left in the ground, thereby making campaigning against new coal mines and oil fields unnecessary. He holds this opinion in spite of the fact that, according to the IEA, new fossil fuel extraction and combustion is incompatible with staying within the 1.5 limit. 

One is left wondering what ‘five times faster’ really means – maybe it just signifies a five-fold increase in renewable capacity even though this could be accompanied by runaway temperature increases?

System change

By the end of this part of the book, it is abundantly clear that by ‘system change’ Sharpe means only a change in a technical or technological system, not a change in the social system. Yet it is precisely a specific kind of social system that is primarily responsible for the global warming that we are now experiencing. 

It does not occur to him that the dominance of neo-classical economics is simply a reflection of the global dominance of the capitalist system, based on the self-expansion of value through the exploitation of nature and labour – for more on this, see fossil capitalism.

A fair COP?

The third part of Sharpe’s book is perhaps the most interesting, because it describes his personal contribution to mitigating climate change, particularly in his role within the UK-led COP26 Unit. He argues that the approach adopted by the COP process from the beginning failed because it was too top-down and unrealistic in assuming that all the countries of the world would be able to move straightaway into a binding agreement to reduce global emissions.

This argument is no doubt correct, but hindsight is a wonderful thing and it may be that the excessive optimism of the COP process owed much to the success of the Montreal Protocol – an international agreement in 1987 that curbed the emission of chlorofluorocarbons, thus closing the gap in the ozone layer.

In contrast to the traditional COP approach, Sharpe advocates a more bottom-up ‘experimentalist learning’ (p195) approach, where small numbers of countries agree to work together to tackle specific problems related to greenhouse gas emissions and climate change mitigation and adaptation. 

Actually, however, given that the Paris Agreement is not binding on any individual country, there is no realistic alternative to such an approach if international cooperation is to be improved.

However, progress on this voluntary basis is likely to be slow, uncertain and insufficient in comparison with statutory regulation, and so it has proved up to now. So-called ‘nationally determined contributions’ overall have not been large enough to avoid 1.5 degrees of global warming, and countries are not even achieving the level of contributions they committed to make back in 2016. 

Greenwash

No doubt everyone wants to see the faster innovation, larger economies of scale and level playing fields that Sharpe calls for (pp219-24) but it is not clear how this is to come about. Peer pressure, five-yearly reviews and virtue signalling (pp204-5), while not being wholly ineffective, have not (yet?) produced the desired result. 

Instead, the main effect seems to have been increased greenwash, such as the setting of net zero targets decades into the future while allowing emissions to continue to increase up to 2030 and perhaps beyond.

Sharpe argument?

Sharpe’s first argument for making progress is that small groups of countries that are most responsible for products such as coal, palm oil, soy, cocoa and cars could collaborate to achieve a transition to low-carbon production (pp226ff). It seems obvious that they could but the question is: why would they? 

If these products can be produced more cheaply in a low-carbon process, then they could be doing this, anyway. If the technology doesn’t yet exist to do that, then they could be investing in that technology. And if the low-carbon production is more expensive, then the group of countries involved could be undercut by their competitors who are still using fossil fuels. So this argument doesn’t seem to get us very far.

Sharpe’s second argument is that global institutions are needed to bring producer and consumer countries together, in sectors such as land use, agriculture, transport and heavy industry – institutions comparable with that of the IEA in the power sector. 

At first sight, this looks like a good idea but it is unclear how these institutions are to be formed or how they would relate to cognate UN bodies such as the Food and Agricultural Organisation or how they could be scaled up to the global level. 

More importantly, perhaps, the IEA itself is beginning to act as an overarching institution because of the foundational role that energy plays in the global transition, so it might be sensible to enhance the IEA accordingly rather than inventing new bureaucracies from scratch. 

A practical approach?

In any event, it is difficult to see how Sharpe’s piecemeal sector-by-sector approach, even if it were agreed at an international level (which is not the case), could achieve the accelerated change that is sorely needed. Along the lines of these arguments, Sharpe provides a more detailed account of COP26 Unit campaigns on energy, road transport and land use (one chapter on each). 

The most successful of these campaigns has been on the transition from coal to clean power, where from 2017 onwards the Powering Past Coal Alliance has resulted in many countries committing to the phasing out of coal power by 2030, including the US which joined at COP28 in 2023.

This is definitely progress, but is it fast enough? After two years, the Alliance still includes only 60 countries, it does not include massive coal producing and consuming countries such as China, India and Australia, and the COPs have still not agreed on a phase out of coal power. 

The Just Transition Energy Partnership led by South Africa at COP26 in 2021, which offered to decommission old coal power plants and invest in significant renewable energy capacity in return for funding for large-scale regional programmes and financial stabilisation of the electricity sector, has received by December 2023 only four per cent of the funding it required. 

In August 2023 Bloomberg reported that: ‘the process has been slow and politically fraught, raising the question of whether such flagship plans can be inclusive, effective and timely enough to fulfil their promise.’

Sharpe’s conclusion on the transition from coal to clean power is worth quoting in full: “If in the coming five years we can cancel the rest of the new coal plant pipeline while helping countries all over the world scale up clean power instead; if we can do some more South Africa-style deals to support large emerging economies move more quickly away from coal; and if we can demonstrate the ability of energy storage, interconnectors, and flexible grids to integrate massive amounts of renewables, then it is just possible that by the second half of this decade, as solar and wind accelerate up the steepest part of the S-curve, we could see the global power sector on track for a Paris-aligned transition.”

Two years on, none of these ifs is looking at all likely. True, clean power is scaling up, most notably in COP28’s commitment to triple renewable energy capacity by 2030, but new coal plants continue to be built. 

The South Africa deal is not progressing fast enough, and no similar deals are being struck. And interconnection is not even keeping up with the growth of renewable electricity generation in countries such as the UK. So Sharpe’s practical approach just does not look capable of accelerating the energy transition. More radical action is needed.

Problems of transition

On surface transport, Sharpe understands the transition in narrow terms as a shift from ICEVs to EVs, as mentioned above. He recognises that ZEV mandates are effective in making this shift, which shows signs of increasing momentum over the next few years. 

However, he does not acknowledge the enormous carbon footprint made by all motorised transport, making it necessary to reduce the number of cars on the road and work harder for a modal shift to public and active transport. 

He doesn’t seem to realise that, even if all ICEVs were replaced by EVs tomorrow, road transport would continue to have a significant impact on global carbon emissions – e.g. from particulates, from road maintenance and especially from the extraction of materials for the manufacture of those EVs. So this is basically only a technological transition, not a change to a 100 per cent green transport system.

On land use, Sharpe focuses on the need to stop deforestation. He points out that regulation can work well here, citing the example of the Soy Moratorium in Brazil in 2006. He also usefully provides a set of conditions for an agreement that could achieve this goal. 

It must: cover all of the main forest-risk commodities; involve action on both supply and demand sides; be agreed by a plurilateral partnership, involving the largest producers and consumers; have agreed systems of traceability and transparency; and provide support to farmers to help them meet the expected standards (p264).

COP achievements 

Sharpe was involved in creating the Forest, Agriculture and Commodity Trade (FACT) dialogue for this purpose, which he discusses on pp264-9. This has had some success according to a Progress Report in 2023: “In Brazil, we have seen deforestation rates plummet as Forest Code enforcement has slashed illegal clearing practices.

At a global level, however, it is not clear how much progress has occurred, or is likely to occur in the future. There is concern, for example, that the commitment at COP28 to triple renewable energy supply by 2030 and phase down unabated coal could involve more than doubling the use of biomass, leading to increased deforestation, particularly in Indonesia.

Sharpe claims that his COP26 Unit worked to agree sectoral goals with a number of countries: in the power and road transport sectors, to make clean power and ZEVs the most affordable option in every part of the world by 2030; to make near-zero emission steel the preferred choice in global markets; to make affordable renewable hydrogen available globally; and for climate-resilient, sustainable agriculture to be the most attractive and widely adopted option for farmers everywhere by 2030. 

This effort led to over 40 countries, covering over 70 per cent of global GDP, committing to the so-called Breakthrough Agenda, working together to ‘make clean technologies and sustainable solutions the most affordable, accessible and attractive option in each emitting sector globally’ by 2030.

The examples he gives of such collaboration are: a group of 14 countries agreeing to increase the energy efficiency of energy-intensive appliances; in agriculture, a group of countries working together on research and development and reorienting their subsidies and other forms of public support to incentivise a shift towards sustainability (pp277-8); a small group of countries agreeing to coordinate on the public procurement of low-carbon steel and cement (p278); and the Clydebank Declaration, in which a group of 22 countries agreed to establish at least six ‘green shipping corridors’ by the mid-2020s and more thereafter.

Going faster?

This is all most welcome, of course, but cannot reasonably be said to represent system change, and the extent of intended progress is unclear in every case. In particular, it is not clear how these agreements are to be maintained and indeed advanced over subsequent years. One can agree that ‘something important was changing, in a good direction’ at COP26, and the evidence from COP28 suggests that this change is continuing. The rate of change, however, does not look fast enough. 

Sharpe hopes for positive ‘tipping cascades’, e.g. arising from improvements in battery technology, but the discussion seems largely speculative, potential positive tipping points are not clearly identified, and the policies that could help to bring such tipping points forward are not in place.

Sadly, contrary to what Sharpe believes, the structures of the fossil fuel system remain firmly in place. Nor has this fossil fuel dominance anything to do with “reductionism” (p296). None of the great scientists, such as Galileo, Newton, Maxwell, Darwin or Einstein, was reductionist. 

The best scientific explanation enhances our understanding of what is to be explained, it does not ‘reduce’ it in any sense of the word. Fossil fuel dominance is far better explained as a feature of the capitalist mode of production, where nature and labour are treated as capital, that is as commodities to be extracted and bought or sold (in the case of natural materials) or exploited (in the case of labour), for the sake of profit. 

The problem is not scientific reductionism but the deepening financialisation of capital, in which the whole world is reduced to the bottom line of money-making. But Sharpe has nothing to say about this.

This Author

Peter Somerville is emeritus professor of social policy at the University of Lincoln.