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S&P 500 nuclear component Constellation Energy (CEG) on Friday reported worse-than-expected third-quarter profit and narrowed its full-year earnings guidance. CEG stock fell solidly early before advancing in Friday’s market. Constellation Energy reported Q3 earnings growing nearly 11% to $3.04 per share while revenue totaled $6.57 billion, running basically flat vs. a year earlier. Prior to the release, analysts expected Q3…
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CANBERRA (Reuters) -Australia’s Queensland state government said on Friday it would run coal power plants at least into the 2040s, reversing a previous plan to pivot rapidly to renewables and in turn making national emissions reduction targets harder to achieve.
The centre-right Liberal National Party won last year’s election in Queensland, a huge chunk of land in Australia’s northeast where more than 60% of electricity comes from coal-fired plants that are mostly owned by the state.
“The former Labor government’s ideological decision to close coal units by 2035, regardless of their condition, is officially abolished,” said Queensland Treasurer and Energy Minister David Janetzki, laying out a five-year energy plan.
“Queensland’s coal-fired fleet is the youngest in the country and state-owned coal generators will continue to operate for as long as they are needed in the system and supported by the market,” he said.
The announcement highlights the divide between Australia’s major political parties on climate policies.
Labor, which holds power in the federal parliament and most states and territories, advocates the rapid development of renewable energy.
The federal government committed last month to cutting national emissions by 62%-70% from 2005 levels by 2035. Queensland’s previous Labor government said 80% of the state’s power would be from renewables by then, and it would have “no regular reliance on coal”.
Many Liberal and National Party figures, however, oppose what they see as a too-rapid rollout of renewable energy that would blight the landscape and hobble the economy.
Janetzki said sticking with coal generation in Queensland – a major coal producer – would save consumers money.
His plan envisions running coal plants at least as long as they were designed to run, which in several cases is until around the 2040s. The plants’ lifespans could also be extended where needed, according to the plan.
The five-year roadmap also calls for construction of a new gas-fired plant in the state and commits A$1.6 billion ($1.1 billion) to maintain the state’s coal, gas and hydroelectric plants, and A$400 million to drive private investment in renewables, gas and energy storage.
“This is a sensible and pragmatic plan, built on economics and engineering, not ideology,” Janetzki said.
($1 = 1.5232 Australian dollars)
(Reporting by Peter Hobson; Editing by Tom Hogue)
Copyright 2025 Thomson Reuters.
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(Reuters) -The Trump administration has postponed a scheduled sale of coal leases on federal lands in Wyoming two days after a disappointing auction in Montana, an Interior Department spokesperson said on Wednesday.
The Bureau of Land Management, a division of Interior that manages 245 million acres of federal lands, had been expected to keep processing permits and leases for oil, gas and coal operations during the government shutdown, according to contingency plans published last week.
A sale of 3,508 acres of federal coal reserves in Wyoming’s Campbell and Converse counties had been scheduled for Wednesday morning. The lease area contains 365 million tons of recoverable coal. Interior said it would post a new date for the sale but did not give a reason for the postponement.
BLM held a lease sale for 1,262 acres in Big Horn County, Montana on Monday that attracted one bid from the Navajo Transitional Energy Company, which operates the nearby Spring Creek Mine.
The bid of $186,000 for a lease with an estimated 167.5 million tons of recoverable coal equates to less than a penny per ton. The Interior Department blamed the administrations of former Presidents Joe Biden and Barack Obama, both Democrats, for the weak industry interest.
“While we would have liked to see stronger participation, this sale reflects the lingering impact from Obama and Biden’s decades long war on coal which aggressively sought to end all domestic coal production and erode confidence in the U.S. coal industry,” the Interior Department said in a statement.
“Fortunately, President Trump and his Administration are rebuilding trust between industry and government as part of our broader effort to restore American Energy Dominance.”
Obama and Biden had toughened environmental regulations on coal to reduce pollution and climate impact, and encourage a transition to renewable energy sources.
BLM has not yet accepted the NTEC bid because under the leasing process it first must determine whether it represents fair market value.
NTEC had argued in sale documents that the fair market value of the coal should be close to the minimum bid of $100 per acre required by law. The company did not respond to requests for comment.
President Donald Trump has vowed to revive coal leasing on federal lands so coal can fuel more of the nation’s soaring electricity demand tied to artificial intelligence.
(Reporting by Nichola Groom; editing by Diane Craft)
Copyright 2025 Thomson Reuters.
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The emergence of renewable energy like wind and solar as a viable alternative to oil, gas and other fossil fuels has raised critical questions about which form of power offers the best value today — a debate made all the more urgent by the ravages of climate change.
In the U.S., where energy policy has been shaped by politics for more than a century, the battle continues to play out at the highest levels of government. Former President Biden delivered one of the biggest endorsements of renewable energy in the form of the 2022 Inflation Reduction Act (IRA), which offered tax credits and rebates to businesses, organizations and households that invest in solar, wind and geothermal technologies.
By contrast, President Trump has been a staunch supporter of the oil and gas industry. During his inauguration speech in January, he reaffirmed his commitment to fossil fuel production, saying, “We will be a rich nation again, and it is that liquid gold under our feet. That will help to do it.”
Within six months of taking office, Mr. Trump signed the “One Big Beautiful Bill Act” into law, which phases out clean energy tax incentives while simultaneously expanding tax breaks for the oil and gas industries. Separately, his administration has pared back offshore wind leasing and made it more difficult for clean energy projects to qualify for federal dollars.
On the global trade front, Mr. Trump has issued a flurry of tariffs on dozens of U.S. trading partners, which experts say will translate into higher costs for energy projects that rely on imports. The White House is pushing these policies amid concerns over rising U.S. energy prices, with average electricity costs up 5.5% from a year ago, according to the Bureau of Labor Statistics.
To get to the bottom of which form of energy is the cheapest, CBS News analyzed the cost to produce coal, gas, nuclear, wind and solar energy, including the impact of tax incentives, tariffs and other factors.
Multiple criteria come into play in trying to assess the cheapest form of energy. These include consumers’ monthly costs; the cost to produce energy; and the potential social cost energy production can have on a community’s health and the environment. External factors like tax incentives and fluctuations in the economy also can affect the price it costs to heat and cool our homes.
CBS News set out to answer the question using what’s called the Levelized Cost of Energy, or LCOE, a commonly cited benchmark for wholesale energy costs. LCOE is the price that a power-generating facility must receive for its electricity to cover all its expenses — including capital, equipment, maintenance and other financing costs — over the lifespan of a project.
A 2025 LCOE report from investment bank Lazard shows the cost to produce energy without any government subsidies and how that changes when you layer in other factors, such as tax subsidies provided under the Inflation Reduction Act.
Yet while LCOE calculations are widely used, they don’t offer a full picture when it comes to evaluating the cost and value of energy, experts told CBS News. Other factors, such as interest rates and federal regulations, can also have a major impact on the cost of building and operating energy infrastructure.
LCOE also doesn’t account for the value a given form of energy delivers. For example, because solar and wind are affected by the weather, they tend to be less consistent than oil and gas, meaning a backup source of energy may be necessary.
“You have to talk about, what is the additional cost of balancing that production from a resource that doesn’t produce all the time?” Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business, told CBS News.
The U.S. government has a long history of using tax subsidies to encourage energy production. Oil and gas companies have benefited from such support for more than a century. By comparison, only in recent decades have renewable energy projects drawn a larger share of federal dollars.
Lazard’s report shows how the LCOE for renewable energy fluctuates when you account for certain provisions of the IRA aimed at lowering the cost of developing clean energy projects. Those include the investment tax credit (ITC), production tax credit (PTC) and energy community bonus, which increases the value of the ITC and PTC by 10% for projects in certain areas.
Lazard’s calculations assume these credits will be in place for 10 years. Notably, however, the Republican-backed “big, beautiful bill” signed into law by Mr. Trump this summer is slated to phase out those credits over the next two years.
Although Lazard examines how the IRA affects renewable energy prices, it doesn’t factor in any government subsidies flowing to the oil and gas industry, which vary widely and can be difficult to assess.
The Environmental and Energy Study Institute, a bipartisan nonprofit research group, estimates that direct U.S. subsidies to the fossil fuel industry amount to at least $20 billion per year. However, the FracTracker Alliance, a nonprofit focused on the impact of fossil fuels, says the industry receives an estimated $760 billion annually in government subsidies and tax breaks.
More benefits will go to the oil and gas industries under the “big, beautiful bill.” A June report from the Joint Committee on Taxation estimates that the legislation will funnel nearly $18 billion in tax incentives to the oil and gas industry over the next 10 years.
Oil and gas companies have lauded the new law as a win for the industry. Sunil Mathew, chief financial officer of Occidental Petroleum, said during a recent company earnings call that the measure “will provide significant cash tax benefits to Oxy.” He expects the law will save Occidental $700 million to $800 million in “cash taxes” by the end of next year.
Mr. Trump’s tariffs are also projected to alter the cost it takes to fund energy projects in the U.S. To gauge the impact of tariffs on energy costs, CBS News turned to a model created by global data and analytics company Wood Mackenzie.
In the following chart, dark green indicates a scenario in which the U.S. hasn’t applied any country-level tariffs, but still maintains levies on copper, steel and aluminum imports; the medium shade of green represents current baseline tariffs imposed by the U.S. since Mr. Trump resumed office in January through August 7; and the light green indicates if trade relations with a U.S. economic partner is likely to worsen or deteriorate.
As depicted, U.S. tariffs are projected to hit battery storage production the hardest. Chris Seiple, vice chairman of the power and renewables group at Wood Mackenzie, noted that while some energy equipment is produced domestically, other tech, such as battery cells, mostly comes from abroad, making them more susceptible to tariffs.
“The vast majority of our battery cells come from China,” he said. “And so the cost of a battery project is going to go up by a certain percentage.”
This could lead to what Seiple described as a “whack-a-mole” effect, in which over time companies move their manufacturing to non-tariffed countries to avoid an additional financial burden.
Given these multiple and interconnected factors, what ends up being the cheapest form of energy to produce?
According to Lazard, renewables remain the most cost-competitive form of generating and distributing energy. Onshore wind, which runs from $37 to $86 per megawatt-hour ($/MWh), is the most affordable on a baseline level and when tax subsidies are included.
Utility scale solar — what most people think of when they hear about solar energy — is the next most cost-effective approach, with costs ranging from $38 to $78 per megawatt-hour.
Fossil fuel and nuclear energy sources are more expensive to generate. Coal costs $71 to $173 per megawatt-hour; gas costs $48 to $109; and U.S. nuclear costs $141 to $220, Lazard found.
The main reasons for these differences in cost? Experts told CBS News that while the capital cost for renewable projects is steep, the expense of operating and maintaining such facilities tends to be lower than that associated with fossil fuel production.
“Wind and solar you basically do all the investment up front, and then it operates — not quite for free — but at extremely low operating costs per kilowatt hour,” Borenstein said.
With fossil fuels, the cost of oil, gas and coal — which can be volatile — is another key factor.
“For a natural gas-fired power plant, you have to buy the natural gas,” he explained. “And likewise, a coal-fired power plant, you have to buy the coal. And so the price… is going to fluctuate.”
Experts who spoke with CBS News agreed that renewable energy ends up being the most competitive when it comes to costs. Rob Gramlich, president of Grid Strategies, a Washington, D.C. consulting firm, concurred that solar and wind are the cheapest to run. Natural gas is the most affordable source of backup energy, which is necessary to make sure power is available around the clock, he said.
Seiple said if you need a small amount of inexpensive electricity, solar is the way to go. It’s “low cost to build, it can be deployed quickly and modularly, the fuel is free and not volatile in price, and the ongoing maintenance costs are minimal,” he said. “And if the U.S. didn’t penalize it with tariffs, it would be even lower cost.”
Despite such advantages for renewable energy, experts say the U.S. shouldn’t put all of its eggs in one basket. Multiple sources told CBS News that what’s needed is a diversity of energy options that can meet the country’s rising demand for electricity. Taking certain forms of energy out of the mix would compromise the system as a whole, they note.
“There is no one cheapest form that you can run the whole system on, and in fact, it depends on combining them in ways to [get] the cheapest possible cost,” Borenstein said.
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Oslo —The world’s first commercial service offering carbon storage off Norway’s coast has carried out its inaugural CO2 injection into the North Sea seabed, the Northern Lights consortium operating the site said Monday.
The project by Northern Lights, which is led by oil giants Equinor, Shell and TotalEnergies, involves transporting and burying CO2 captured at smokestacks across Europe. The aim is to prevent the emissions from being released into the atmosphere, and thereby help halt climate change.
“We now injected and stored the very first CO2 safely in the reservoir,” Northern Lights’ managing director Tim Heijn said in a statement. “Our ships, facilities and wells are now in operation.”
In concrete terms, after the CO2 is captured, it is liquified and transported by ship to the Oygarden terminal near Bergen on Norway’s western coast.
STIAN LYSBERG SOLUM/NTB/AFP/Getty
It is then transferred into large tanks before being injected through a 68-mile pipeline into the seabed, at a depth of around 1.6 miles, for permanent storage.
Carbon capture and storage (CCS) technology has been listed as a climate tool by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), especially for reducing the CO2 footprint of industries such as cement and steel that are difficult to decarbonize.
The first CO2 injection into the Northern Lights geological reservoir was from Germany’s Heidelberg Materials cement plant in Brevik in southeastern Norway.
But CCS technology is complex, controversial and costly.
Without financial assistance, it is currently more profitable for industries to purchase “pollution permits” on the European carbon market than to pay for capturing, transporting and storing their CO2.
The Washington Post/Getty 
Northern Lights has so far signed just three commercial contracts in Europe. One is with a Yara ammonia plant in the Netherlands, another with two of Orsted’s biofuel plants in Denmark, and the third with a Stockholm Exergi thermal power plant in Sweden.
Largely financed by the Norwegian state, Northern Lights has an annual CO2 storage capacity of 1.7 million tons, which is expected to increase to 5.5 million tons by the end of the decade.
While efforts such as Northern Lights are focused on capturing carbon directly from the most highly-polluting sources — industrial smoke stacks — there have also been efforts launched to capture the gas from the ambient air, an even more controversial methodology.
Mark Jacobson, a Stanford University professor of environmental engineering, told CBS News earlier this year that he was dubious of the motivations for and the efficacy of both kinds of carbon capture, and he said bluntly that “direct air capture is not a real solution. We do not have time to waste with this useless technology.”
Jacobson thinks direct air capture, in particular, is a boondoggle, and more effort should be focused on switching to clean energy sources.
Currently, the U.S. gets about 60% of its electricity from fossil fuels.
“You have to think about who’s proposing this technology,” Jacobson said. “Who stands to benefit from carbon capture and direct air capture? It’s the fossil-fuel companies.”
“They’re just saying, ‘Well, we’re extracting as much CO2 as we’re emitting. Therefore, we should be allowed to keep polluting, keep mining,” Jacobson told CBS News, adding that his stance has not made him popular among many in the energy sector.
“Oh, yeah, diesel people hate me, gasoline people hate me, ethanol people hate me, nuclear people hate me, coal people hate me. They do, because I’m telling the truth,” he said. “We don’t need any of these technologies.”
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MOJAVE, Calif. — One of the largest solar and battery power plants in the United States is now supplying Los Angeles and Glendale from Kern County.
Local leaders and clean energy experts gathered Tuesday beneath a blazing desert sun to mark the initiation of full production from 1.36 million solar panels and 172 lithium iron phosphate batteries that make up the Eland solar-plus-storage electricity project. It’s as large as 13 Dodger stadiums, parking lots included, and will generate 7% of the electricity for all of the city of Los Angeles, much of it at a record-low price.
The Los Angeles Department of Water and Power’s biggest solar and battery storage plant, the Eland Solar and Storage Center in the Mojave Desert of Kern County on Nov. 25, 2024, near California City, Calif.
(Brian van der Brug / Los Angeles Times)
“This is the largest project for LADWP when it comes to solar and battery, and that is a huge accomplishment for us because it takes away the fear of doing more of these — and we need about 10 more of these to hit our goals,” said Janisse Quiñones, chief executive officer of the Los Angeles Department of Water and Power. The city has committed to 100% clean energy by 2035.
With Eland’s power now flowing through its grid, L.A. is nearly two-thirds of the way there: The project has pushed the city’s total supply to 64% clean energy, Quiñones said. Other sources of power in L.A.’s portfolio include hydrogen, natural gas, biomass, geothermal, nuclear and coal, which the city aims to decommission by the end of this year.
The $2-billion Eland project was developed by Arizona-based Arevon Energy and will also supply solar electricity to Glendale Water and Power.
While Eland’s sprawling solar panels are eye-catching, it’s the unassuming batteries — which look like rows of large white shipping containers — that are the real crux of the project.
Battery energy storage units at the Los Angeles Department of Water and Power’s biggest solar and battery storage plant, the Eland Solar and Storage Center in the Mojave Desert of Kern County.
(Brian van der Brug / Los Angeles Times)
Locating batteries together with solar power or wind allows them to charge up on the clean energy, then feed it back to people’s homes after the sun goes down or the wind stops blowing. At the end of 2023, there were close to 469 such “hybrid” clean power plants in the U.S., according to a recent report from Lawrence Berkeley National Laboratory.
In California, nearly every new solar project waiting to be connected to the electrical grid included batteries.
All scenarios for effectively addressing climate change call for using storage.
The Eland project is also coming online as the Trump administration is slowing the transition to clean energy with dozens of measures that favor electricity made from coal and natural gas. The president’s so-called Big Beautiful Bill ends federal tax credits for wind and solar within the next two years.
But in California and a number of other states where addressing climate change is mandated, the transition is likely to continue.
“I spent 12 years in D.C., and to be home, where this is not a controversy — there’s no controversy about climate goals and solar and renewables — it’s an exciting day,” Los Angeles Mayor Karen Bass told The Times.
Eland “represents a significant milestone toward reaching our climate goals, and it also just reinforces our stature of leading the country in terms of renewables and moving toward clean energy goals,” Bass said.
Kevin Smith, chief executive officer of Arevon, said solar paired with battery storage is currently the cheapest source of energy “with or without tax credits,” and the fastest to deliver to market. The Eland project took about two years to complete once the first shovel was in the ground, compared with nuclear or natural gas projects that can take several years longer, he said.
Smith also cited the sudden increase in forecast need for electricity for data centers. “If we don’t meet that demand, that means the AI future is going to be won by the Chinese, because they’re building more solar in a month than we build in a couple of years.”
Two-thirds of all the renewable energy installed globally in 2024 was in China, which strongly encourages the buildout.
In the U.S. now, such projects must either begin construction by next July or be placed into service by the end of 2027 in order to receive a federal tax credit.
But much of Eland’s success will depend on DWP, which has committed to a 25-year, $1.5-billion contract for its power, with options to buy the facility outright as soon as Year 10, according to company officials.
Eland marks DWP’s first utility-scale integrated solar and battery project. Its two facilities combined — the first phase opened last year — will generate 758 megawatts of solar power and store up to 1,200 megawatt-hours of energy, all of which can be dispatched during peak demand in the evening or nighttime.
DWP officials said Eland is the lowest-cost project in their portfolio, with the cost of generation and storage averaging about 4 cents per kilowatt hour. The energy is expected to be neutral or even a cost savings for ratepayers, company officials said.
Workers install solar panels for the Eland Solar and Storage Center in the Mojave Desert of Kern County.
(Brian van der Brug / Los Angeles Times)
That’s partly because DWP was able to contract for the power prior to the COVID-19 pandemic and ensuing supply chain issues, and well before new market uncertainties related to tariffs, according to Quiñones.
Experts say such projects can’t come soon enough. Last year was Earth’s hottest on record, with rising global temperatures driven primarily by fossil fuel emissions. The Eland project alone is expected to avoid emissions equivalent to about 120,000 cars, according to company officials.
“When the City of Los Angeles first pursued renewable power some twenty years ago, it did so on moral grounds. It was ‘the right thing to do’ to reduce the City’s greenhouse gas emissions,” Jonathan Parfrey, executive director of the nonprofit Climate Resolve, said in a statement. “Flash forward to today — and solar power is now the right thing to do economically, producing electricity at a cost lower than that of coal, natural gas and nuclear power.”
About 75% of the state’s energy on Tuesday came from renewables, according to the California Independent System Operator.
With Eland, DWP is well on track to meet its 100% clean energy goal by 2035, although Quiñones said the last 3% to 4% will be the most challenging.
But a project like Eland — the largest DWP has ever done — “demonstrates our commitment toward our renewable and clean energy transition,” Quiñones said. “We’re not backing down from that.”
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A state-owned power company is splashing out 80 billion yuan ($11 billion) on an energy base that will generate electricity from , and sources. China Three Gorges Renewables Group, a subsidiary of the country’s largest hydropower company, plans to build a plant with a 16-gigawatt capacity and a five-gigawatt storage facility, reports.
This is part of China’s aim to build 455 gigawatts worth of renewable energy projects in the desert by 2030. This plant is being constructed in Inner Mongolia, which will get 135 gigawatts of the total planned output.
The China Three Gorges Corporation is looking to diversify its energy sources as building large hydro dams is becoming less feasible. According to Three Gorges, wind and solar generation from the plant will depend on grid accessibility. The coal plant is set to start operations in three years.
It’s somewhat disappointing that the new plant will have a coal power element, though it’s not fully surprising given the way China has bristled at renewable energy commitments during . As Bloomberg notes, China has been struggling to put all of its clean energy into the power grid. It often relies on coal when renewable sources like solar and wind aren’t available.
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The earlier target represents a loss for the German Greens who, ahead of a three-day party congress in Lyon this weekend, had pushed for the climate neutrality target to be delayed to 2045, according to amendments seen by POLITICO.
The election manifesto, which was adopted by a large majority of national delegations, warned that meeting these climate objectives “must not rely on false solutions such as geo-engineering.”
The Greens are at risk of losing about a third of their seats in the European Parliament at the EU election in June, while a backlash against Brussels’ green agenda has been sweeping across the Continent in recent weeks. The party’s response has been to redouble the push on its core demands for higher climate ambition.
The final manifesto, for example, calls for the EU energy system to rely on 100 percent renewable sources and to phase out all fossil fuels by 2040, “starting with coal by 2030.” It also calls on the EU to adopt a plan for phasing out “fossil gas and oil as early as 2035 and no later than 2040.”
That point is another loss for the German Greens, who had pushed for deleting phaseout dates for fossil gas and oil from the manifesto.
The Greens have also been fighting back against the conservatives’ and far right’s attacks blaming them for farmers’ current struggles and for forcing the green transition to quickly on the sector.
Over the weekend, the Greens amended their manifesto to respond to farmers’ discontent, saying they will campaign for “a new agricultural model that reduces emissions, protect the environment, and foster social justice.”
The text insists that “farmers should make a decent income of their work,” and that the Greens will push to “make sure farmers are not exposed to unfair competition from products not respecting the same standards, including those imported from third countries” — which have been key demands of farmers’ unions during the recent demonstrations.
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DUBAI, United Arab Emirates — The full-scale resistance that oil-exporting countries are mounting against a COP28 deal to end fossil fuel use is a sign of “panic,” said Germany’s climate envoy.
Last week, as ministers descended on the U.N. climate talks in Dubai, the OPEC cartel of oil-rich nations urged its 13 members, including Saudi Arabia, and OPEC+ countries to reject any agreement that aimed to slash fossil fuel production. The appeal sparked contentious debate over the weekend as officials tried to finalize a deal before COP28’s scheduled end on Tuesday.
But to Jennifer Morgan, Germany’s special envoy for international climate action, the letter was also a rare admission from the oil industry that these climate talks pose an existential threat to its business model.
“They obviously felt they needed to engage,” Morgan said in response to a question from POLITICO while speaking to a group of reporters. “Whether it was a bit of panic, whether it was a bit of realization of how far the discussions are. That’s my take on that.”
Fossil fuels have landed at this year’s climate talks in a big way after decades where they were largely absent from the negotiations, despite being the driving force behind global warming.
But as the impacts of climate change have accelerated and alternative options such as wind and solar have become more affordable, a growing number of countries are drawing attention to the need to wean their economies off oil, gas and coal.
That push is proving to be among the most contentious issues at COP28, which is taking place in a region that is home to some of the world’s top oil and gas producers.
As the talks speed toward a close, officials are working to craft language that can get support from the nearly 200 countries participating in the process. It will be up to the UAE presidency of COP28 to attempt to find consensus. Draft text over the weekend offered several options for a pledge to “phase out” fossil fuels, all with various caveats.
But several people close to the talks said that Saudi Arabia and the Arab group of negotiators have resisted such language, including storming out of one meeting room, according to one observer of the process granted anonymity to discuss the closed-door talks.
“We have raised our consistent concerns with attempts to attack energy sources instead of emissions,” Saudi Arabia’s Albara Tawfiq said during Sunday’s public session.
His comments mirror remarks delivered on Saturday in Dubai by OPEC Secretary-General Haitham Al Ghais.
“Our goal must be to reduce emissions, which is the core objective of the Paris Agreement, while ensuring energy security and universal access to affordable energy,” the OPEC secretariat posted on X, quoting Al Ghais and referencing the 2015 international climate accord to limit global warming.
Even before COP28 began, countries were aware that getting Saudi Arabia on board with supporting a fossil fuel phaseout would be supremely challenging. Oil remains the backbone of the Saudi economy, despite efforts to diversify.
“We hope following this discussion, the presidency would be able to deal with that now that he has clearly heard from all the parties,” said Seve Paeniu, minister of finance and economic development for the Pacific island nation of Tuvalu. “It’s really now in the hands of the presidency.”
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DUBAI, United Arab Emirates — Now the real work starts.
The first few days of the COP28 climate conference featured so many lofty declarations and flashy promises that you’d be forgiven for asking what delegates are still doing here. But the main negotiations have only just gotten underway.
At the core of this year’s summit sits something called the “Global Stocktake,” often abbreviated to GST — a nondescript name that conceals its vital role in international climate efforts.
In short, it’s about drawing up a report card on where the world stands eight years after signing the Paris Agreement, and how countries plan to fix their inevitable shortcomings. That plan coming out of COP28 will help determine whether the world can stave off the worst impacts of climate change or careen toward unlivable temperatures.
German climate envoy Jennifer Morgan called the stocktake the “heart” of the Paris climate accord; Toeolesulusulu Cedric Schuster, chair of the Alliance of Small Island States, labeled it a “lifeline” for especially vulnerable countries like his native Samoa.
The outcome of this obscure process is also what high-ranking ministers will be haggling over when they arrive for the second week of COP28 — and what the United Arab Emirates hosts will be judged on in the end.
“What makes this COP unique as compared to the previous COPs? First and foremost, it’s the Global Stocktake,” EU lead negotiator Jacob Werksman told reporters on Monday.
So what is it? Let’s take a look.
The Global Stocktake broadly refers to a thorough assessment of how much progress countries are making toward the Paris Agreement targets, which committed countries to limiting global warming to below 2 degrees Celsius and ideally to 1.5C compared to the pre-industrial era.
The process consists of three components. The first stage, gathering all the relevant information, began two years ago. The second phase, evaluating that data, ended this summer.
The final task — the response to this assessment — concludes at COP28. That’s the hard part.
Under the Paris accord’s terms, countries have to conduct this exercise every five years.
Yup. You’ll sometimes hear that countries will conduct an assessment of their climate efforts while in Dubai, but the United Nations already published its report summarizing the findings in September — concluding that the world is falling short of its Paris goals.
“That assessment has been done, it is clear we are not on a track,” Morgan told a press conference in Dubai last week. With current efforts, she noted, “we will see a temperature rise of 2.5C to 2.9C.”
She added: “That is unimaginable.”
Beyond 1.5C, climate impacts like extreme weather or sea-level rise get substantially worse. Scientists warn that overshooting that threshold risks triggering irreversible tipping points like dramatic polar ice loss, which would further exacerbate warming.
Negotiators in Dubai are discussing what countries should do with that report, which gave strict instructions to retain any hope of hitting the 1.5C target: First, cut 43 percent of greenhouse gas emissions this decade (compared to 2019 levels), then hit net-zero emissions by 2050.
But there are profound divisions over how to get there.
“The first component is taking stock of what the gaps are,” said Tom Evans, who tracks the stocktake negotiations in Dubai for think tank E3G. “Second, what do you do about these gaps? And that’s where the political flashpoints are.”
A lot of things, but the idea is for everyone from the Paris Agreement — that’s nearly 200 countries — to endorse a coherent plan by the summit’s end.
Again, not easy.
The document is expected to both look back at what went wrong and then look ahead with guidelines on how to remedy those shortcomings. That roadmap should include a climate wish list — everything from cutting emissions to preparing communities for climate change fallout to financing for both.
It does, for a few reasons.
First, the text will give clear directions to countries as they draw up their next climate action plans. The Paris Agreement requires governments to submit new plans by COP30, which takes place in Brazil in 2025.
Second, those words send a powerful signal to markets, local governments and more. If nearly 200 countries agree on a text that says a coal phaseout is necessary, investors will take the hint.
With the stocktake, “we have the opportunity to take a set of decisions … that finds the clarity that business leaders need to invest in the future,” Morgan said.
The outcome will also test the Paris accord’s integrity. These regular check-ins and the requirement to then update climate plans are meant to ensure everyone is upping their efforts over time.
“The effectiveness of the Paris Agreement is at stake,” Evans said.
The end result should set out what to do about planet-warming fossil fuels, as well as efforts to prepare for a warmer future and steps to ensure poorer countries have the resources to do that, as well.
“No one is trying to tear the whole thing down,” said Evans.
That doesn’t mean countries are close to an agreement.
Urgent calls for a fossil fuel “phaseout” — a much-debated term — are especially contentious.
Many developing countries say they need more financial support to back ambitious language on fossil fuels and other efforts to reduce emissions.
Meanwhile, the EU, the U.S. and climate-vulnerable countries are trying to ensure new plans don’t exempt any industries and cover all greenhouse gasses, not just carbon dioxide — something China recently said it was on board with.
Going in the other direction, several countries whose economies depend on oil and gas exports — Russia and Saudi Arabia among them — are trying to push for language that would allow for the continued use of fossil fuels.
The UAE is running the show and must shepherd the stocktake to a conclusion. At some point, the officials in charge will have to produce a draft text for countries to accept or reject.
COP28 President Sultan al-Jaber — who, controversially also helms the UAE’s state-run oil giant — has repeatedly insisted he would push for the “most ambitious response possible” to the stocktake. But he has remained vague on what that might look like.
Still, Evans said, “They’re aware that it’s the centerpiece of their COP. The shine of those early pledges will fade, and they’ll need to produce something.”
There are already some rocky signs.
As of Monday evening, negotiators hadn’t produced a detailed draft text, despite spending some 10 hours talking behind closed doors on Sunday.
A text outlining possible “building blocks” was released on Friday, but it’s more of a broad summary that left all the hard questions unanswered. Regarding the energy sector, for example, options included “phasedown/out fossil fuels” and “phasedown/out/no new coal.” In other words: All options are on the table.
Over the coming days, negotiators will try to agree on as many sections of the text as possible, but their bosses will take over in the summit’s second week to resolve the thornier questions.
This week’s talks will “inevitably lead to some very important political questions for ministers to resolve in the second week,” said Werksman, the EU negotiator. “Exactly what those questions are, we can’t fully speculate on — but we imagine that the issue of how we’re going to address fossil fuels will be top of the list.”
Technically the deadline is December 12, but if past COPs are any guide, overtime is possible.
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Zia Weise
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DUBAI, United Arab Emirates — A torrent of pollution-slashing pledges from governments and major oil companies sparked cries of “greenwashing” on Saturday, even before world leaders had boarded their flights home from this year’s global climate conference.
After leaders wrapped two days of speeches filled with high-flying rhetoric and impassioned pleas for action, the Emirati presidency of the COP28 climate talks unleashed a series of initiatives aimed at cleaning up the world’s energy sector, the largest source of planet-warming greenhouse gas emissions.
The announcement, made at an hours-long event Saturday afternoon featuring U.S. Vice President Kamala Harris and European Commission President Ursula von der Leyen, contained two main planks — a pledge by oil and gas companies to reduce emissions, and a commitment by 118 countries to triple the world’s renewable energy capacity and double energy savings efforts.
It was, on its face, an impressive and ambitious reveal.
COP28 President Sultan al-Jaber, the oil executive helming the talks, crowed that the package “aligns more countries and companies around the North Star of keeping 1.5 degrees Celsius within reach than ever before,” referring to the Paris Agreement target for limiting global warming.
But many climate-vulnerable countries and non-government groups instantly cast an arched eyebrow toward the whole endeavor.
“The rapid acceleration of clean energy is needed, and we’ve called for the tripling of renewables. But it is only half the solution,” said Tina Stege, climate envoy for the Marshall Islands. “The pledge can’t greenwash countries that are simultaneously expanding fossil fuel production.”
Carroll Muffett, president of the nonprofit Center for International Environmental Law, said: “The only way to ‘decarbonize’ carbon-based oil and gas is to stop producing it. … Anything short of this is just more industry greenwash.”
The divided reaction illustrates the fine line negotiators are trying to walk. The European Union has campaigned for months to win converts to the pledge on renewables and energy efficiency the U.S. and others signed up to on Saturday, even offering €2.3 billion to help. And the COP28 presidency has been on board.
But Brussels, in theory, also wants these efforts to go hand in hand with a fossil fuel phaseout — a tough proposition for countries pulling in millions from the sector. The EU rhetoric often goes slightly beyond the U.S., even though the two allies officially support the end of “unabated” fossil fuel use, language that leaves the door open for continued oil and gas use as long as the emissions are captured — though such technology remains largely unproven.
Von der Leyen was seen trying to thread that needle on Saturday. She omitted fossil fuels altogether from her speech to leaders before slipping in a mention in a press release published hours later: “We are united by our common belief that to respect the 1.5°C goal … we need to phase out fossil fuels.”
Harris on Saturday said the world “cannot afford to be incremental. We need transformative change and exponential impact.”
But she did not mention phasing out fossil fuels in her speech, either. The U.S., the world’s top oil producer, has not made the goal a central pillar of its COP28 strategy.
The EU and the UAE said 118 countries had signed up to the global energy goals.
The new fossil fuels agreement has been branded the “Oil and Gas Decarbonization Charter” and earned the signatures of 50 companies. The COP28 presidency said it had “launched” the deal with Saudi Arabia — the world’s largest oil exporter and one of the main obstacles to progress on international climate action.
Among the signatories was Saudi state energy company, Aramco, the world’s biggest energy firm — and second-biggest company of any sort, by revenue. Other global giants like ExxonMobil, Shell and TotalEnergies also signed.
They have committed to eliminate methane emissions by 2030, to end the routine flaring of gas by the same date, and to achieve net-zero emissions from their production operations by 2050. Adnan Amin, CEO of COP28, singled out the fact that, among the 50 firms, 29 are national oil companies.
“That in itself is highly significant because you have not seen national oil companies so evident in these discussions before,” he told reporters.
The COP28 presidency could not disguise its glee at the flurry of announcements from the opening weekend of the conference.
“It already feels like an awful lot that we have delivered, but I am proud to say that this is just the beginning,” Majid al-Suwaidi, the COP28 director general, told reporters.
Fred Krupp, president of the U.S.-based Environmental Defense Fund, predicted: “This will be the single most impactful day I’ve seen at any COP in 30 years in terms of slowing the rate of warming.”
But other observers said the oil and gas commitments did not go far beyond commitments many companies already make. Research firm Zero Carbon Analytics noted the deal is “voluntary and broadly repeats previous pledges.”
Melanie Robinson, global climate program director at the World Resources Institute, said it was “encouraging that some national oil companies have set methane reduction targets for the first time.”
But she added: “Most global oil and gas companies already have stringent requirements to cut methane emissions. … This charter is proof that voluntary commitments from the oil and gas industry will never foster the level of ambition necessary to tackle the climate crisis.”
Some critics theorized that the COP28 presidency had deliberately launched the renewables and energy efficiency targets together with the oil and gas pledge.
The combination, said David Tong, global industry campaign manager at advocacy group Oil Change International, “appears to be a calculated move to distract from the weakness of this industry pledge.”
The charter, he added, “is a trojan horse for Big Oil and Gas greenwash.”
A push to speed up the phaseout of coal power garnered less attention — with French President Emmanuel Macron separately unveiling a new initiative and the United States joining a growing alliance of countries pledging to zero out coal emissions.
Macron’s “coal transition accelerator” focuses on ending private financing for coal, helping coal-dependent communities and scaling up clean energy. And Washington’s new commitment confirms its path to end all coal-fired power generation unless the emissions are first captured through technology. U.S. use of coal for power generation has already plummeted in the past decade.
The U.S. pledge will put pressure on China, the world’s largest consumer and producer of coal, as well as countries like Japan, Turkey and Australia to give up on the high-polluting fuel, said Leo Roberts, program lead on fossil fuel transitions at think tank E3G.
“It’s symbolic, the world’s biggest economy getting behind the shift away from the dirtiest fossil fuel, coal. And it’s sending a signal to … others who haven’t made the same commitment,” he said.
The U.S. also unveiled new restrictions on methane emissions for its oil and gas sector on Saturday — a central plank of the Biden administration’s climate plans — and several leaders called for greater efforts to curb the potent greenhouse gas in their speeches.
Barbados Prime Minister Mia Mottley called for a “global methane agreement” at COP28, warning that voluntary efforts hadn’t worked out. Von der Leyen, meanwhile, urged negotiators to enshrine the renewables and energy efficiency targets in the final summit text.
Mohamed Adow, director of the think tank Power Shift Africa, warned delegates not to get distracted by nonbinding pledges.
“We need to remember COP28 is not a trade show and a press conference,” he cautioned. “The talks are why we are here and getting an agreed fossil fuel phaseout date remains the biggest step countries need to take here in Dubai over the remaining days of the summit.”
Sara Schonhardt contributed reporting.
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DUBAI — The vast, global efforts to arrest rising temperatures are imperiled and must accelerate, U.S. Vice President Kamala Harris told the world climate summit on Saturday.
“We must do more,” she implored an audience of world leaders at the COP28 climate talks in Dubai. And the headwinds are only growing, she warned.
“Continued progress will not be possible without a fight,” she told the gathering, which has drawn more than 100,000 people to this Gulf oil metropolis. “Around the world, there are those who seek to slow or stop our progress. Leaders who deny climate science, delay climate action and spread misinformation. Corporations that greenwash their climate inaction and lobby for billions of dollars in fossil fuel subsidies.”
Her remarks — less than a year before an election that could return Donald Trump to the White House — challenged leaders to cooperate and spend more to keep the goal of containing global warming to 1.5 degrees Celsius within reach. So far, the planet has warmed about 1.3 degrees since preindustrial times.
“Our action collectively, or worse, our inaction will impact billions of people for decades to come,” Harris said.
The vice president, who frequently warns about climate change threats in speeches and interviews, is the highest-ranking face of the Biden White House at the Dubai negotiations.
She used her conference platform to push that image, announcing several new U.S. climate initiatives, including a record-setting $3 billion pledge for the so-called Green Climate Fund, which aims to help countries adapt to climate change and reduce emissions. The commitment echoes an identical pledge Barack Obama made in 2014 — of which only $1 billion was delivered. The U.S. Treasury Department later specified that the updated commitment was “subject to the availability of funds.”
Meanwhile, back in D.C., the Biden administration strategically timed the release of new rules to crack down on planet-warming methane emissions from the oil and gas sector — a significant milestone in its plan to prevent climate catastrophe.
The trip allows Harris to bolster her credentials on a policy issue critical to the young voters key to President Joe Biden’s re-election campaign — and potentially to a future Harris White House run.
“Given her knowledge base with the issue, her passion for the issue, it strikes me as a smart move for her to broaden that message out to the international audience,” said Roger Salazar, a California political strategist and former aide to then-Vice President Al Gore, a lifetime climate campaigner.
Yet sending Harris also presents political peril.
Biden has taken flak from critics for not attending the talks himself after representing the United States at the last two U.N. climate summits since taking office. And climate advocates have questioned the Biden administration’s embrace of the summit’s leader, Sultan al-Jaber, given he also runs the United Arab Emirates’ state-owned oil giant. John Kerry, Biden’s climate envoy, has argued the partnership can help bring fossil fuel megaliths to the table.
Harris has been on a climate policy roadshow in recent months, discussing the issue during a series of interviews at universities and other venues packed with young people and environmental advocates. The administration said it views Harris — a former California senator and attorney general — as an effective spokesperson on climate.
“The vice president’s leadership on climate goes back to when she was the district attorney of San Francisco, as she established one of the first environmental justice units in the nation,” a senior administration official told reporters on a call previewing her trip.
Joining Harris in Dubai are Kerry, White House climate adviser Ali Zaidi and John Podesta, who’s leading the White House effort to implement Biden’s signature climate law.
Biden officials are leaning on that climate law — dubbed the Inflation Reduction Act — to prove the U.S. is doing its part to slash global emissions. Yet climate activists remain skeptical, chiding Biden for separately approving a series of fossil fuel projects, including an oil drilling initiative in Alaska and an Appalachian natural gas pipeline.
Similarly, the Biden administration’s opening COP28 pledge of $17.5 million for a new international climate aid fund frustrated advocates for developing nations combating climate threats. The figure lagged well behind other allies, several of whom committed $100 million or more.
Nonetheless, Harris called for aggressive action in her speech, which was followed by a session with other officials on renewable energy. The vice president committed the U.S. to doubling its energy efficiency and tripling its renewable energy capacity by 2030, joining a growing list of countries. The U.S. also said Saturday it was joining a global alliance dedicated to divorcing the world from coal-based energy.
Like other world leaders, Harris also used her trip to conduct a whirlwind of diplomacy over the war between Israel and Hamas, which has flared back up after a brief truce.
U.S. National Security Council spokesperson John Kirby said Harris would be meeting with “regional leaders” to discuss “our desire to see this pause restored, our desire to see aid getting back in, our desire to see hostages get out.”
The war has intruded into the proceedings at the climate summit, with Israeli President Isaac Herzog and Palestinian Authority leader Mahmoud Abbas both skipping their scheduled speaking slots on Friday. Iran’s delegation also walked out of the summit, objecting to Israel’s presence.
Kirby said Harris will convey “that we believe the Palestinian people need a vote and a voice in their future, and then they need governance in Gaza that will look after their aspirations and their needs.”
Although Biden won’t be going to Dubai, the administration said these climate talks are “especially” vital, given countries will decide how to respond to a U.N. assessment that found the world’s climate efforts are falling short.
“This is why the president has made climate a keystone of his administration’s foreign policy agenda,” the senior administration official said.
Robin Bravender reported from Washington, D.C. Zia Weise and Charlie Cooper reported from Dubai.
Sara Schonhardt contributed reporting from Washington, D.C.
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This article is part of the Road to COP special report, presented by SQM.
Last week’s surprise deal between China and the United States may provide a boost to the climate talks in Dubai — but the two powers remain at odds on tough questions such as how quickly to shut down coal and who should provide climate aid to developing nations.
The world’s top two drivers of climate change are also divided by a thicket of disagreements on trade, security, human rights and economic competition.
The good news is that Washington and Beijing are talking to each other again and restarting some of their technical cooperation on climate issues, after a yearlong freeze. That may still not be enough to get nearly 200 nations to commit to far greater climate action at the talks that begin Nov. 30.
The two superpowers’ latest detente creates the right “mood music” for the summit, said Alden Meyer, a senior associate at climate think tank E3G. “But it still is not saying that the world’s two largest economies and two largest emitters are fully committed to the scale and pace of reductions that are needed.”
The deal, announced after a meeting this month between U.S. climate envoy John Kerry and his Chinese counterpart Xie Zhenhua, produced an agreement to commit to a series of actions to limit climate pollution. Those include accelerating the shift to renewable energy and widening the variety of heat-trapping gases they will address in their next round of climate targets.
U.S. President Joe Biden and Chinese leader Xi Jinping endorsed that type of cooperation after a meeting in California on Wednesday, saying they “welcomed” positive discussions on actions to reduce greenhouse gas emissions during this decade, as well as “common approaches” toward a successful climate summit. Biden said he would work with China to address climate finance in developing countries, a major source of friction for the U.S.
“Planet Earth is big enough for the two countries to succeed,” said Xi ahead of his bilateral with Biden.
But the deal leaves some big issues unaddressed, including specific measures for ending their reliance on fossil fuels, the main contributor to global warming. And the two countries are a long way from the days when a surprise U.S.-Chinese agreement to cooperate on climate change had the power to land a landmark global pact.
That puts the nations in a dramatically different place than in 2014, when Xi and then-President Barack Obama made a historic pledge to jointly cut their planet-warming pollution, paving the way for the landmark Paris Agreement to land in 2015.
Even a surprise joint deal between the two nations in 2021 failed to ease friction, with China emerging at the last minute to oppose language calling for a phase-out of coal power. The summit ended with a less ambitious “phase-down.”
A year later, a visit to Taiwan by then-U.S. House Speaker Nancy Pelosi angered Beijing so much that Xi’s government canceled dialogue with the United States on a host of issues, including climate change. China, which claims that Taiwan is part of its territory, alleged that the visit had undermined its sovereignty.
The two countries’ struggles to find comity have come at the worst possible moment — at a time when rapid action is crucial to preventing climate catastrophe. A growing number of factors has threatened to widen the U.S.-Chinese wedge further, including their competition for supremacy in the market for clean energy.
While the U.S. has contributed more greenhouse gases to the atmosphere than any other nation during the past 150 years, China is now the world’s largest climate polluter — though not on a per capita basis — and it will need to stop building new coal-fired power for the world to stand a chance of limiting rising temperatures.
The recent agreement hints at that possibility by stating that more renewables would enable reductions in the generation of oil, gas and coal, helping China peak its emissions ahead of its current targets.
The challenge will be bridging the countries’ diverging approaches to climate issues.
The Biden administration is urging a rapid end to coal-fired power, which is waning in the U.S., even as it permits more oil drilling and ramps up exports of natural gas — much of it destined for Asia.
At the same time, it wants the United States to claim a larger role in the clean energy manufacturing industry that China now dominates, and is seeking to loosen China’s stranglehold on supply chains for products such as solar panels, electric cars and the minerals that go into them. It’s also pressuring Beijing to contribute to U.N. climate funds, saying China’s historic status as a developing country no longer shields it from its responsibility to pay.
China sees the U.S. position as a direct challenge to its economic growth and energy security.
Beijing wants to protect the use of coal and defend developing countries’ access to fossil fuels. It has also backed emerging economies’ demands that rich countries pay more to help them deploy clean energy and adapt to the effects of a warmer world. China says it already helps developing countries through South-South cooperation and points to a clause in the 2015 Paris Agreement that says developed countries should lead on climate finance.
Hanging over the talks is also the prospect of a change of administration in the U.S., and continued efforts by Republicans to vilify Beijing and accuse the Biden administration of supporting Chinese companies through its climate policies and investments. And as China’s response to Pelosi’s trip underscored, climate cooperation remains hostage to other tensions in the two countries’ relationship, a dynamic likely to heighten in the coming year as both Taiwan and the U.S. hold presidential elections.
One challenge is that China doesn’t seem to see much to gain from offering more ambitious climate actions amid worsening relations with other countries, said Kevin Tu, a non-resident fellow at the Center on Global Energy Policy at Columbia University and an adjunct professor at the School of Environment at Beijing Normal University.
“In the past several years, China has voluntarily upgraded its climate ambitions a few times amid rising geopolitical tensions,” Tu said, pointing to its 2020 pledge to peak and then zero out its emissions. “So China does not necessarily have very strong incentive to further upgrade its climate ambition.”
The divide between the two nations has created a dilemma for some small island nations that often walk a fine line between negotiating alongside China at climate talks while pushing for more action to scale back fossil fuels.
“The U.S. is trying to drag everyone to talk about an immediate coal phase-out,” Ralph Regenvanu, climate minister for the Pacific island nation of Vanuatu, said during a recent call with reporters, calling the effort a “U.S.-versus-China thing.”
“But we also need to talk about no more oil or gas as well,” he added.
The dynamic between China and the U.S. will either drag down or bolster the ambitions of countries updating their national climate pledges, a process that begins at the close of COP28. Nations are already woefully behind cuts needed to hit the goals they laid out in Paris.
China’s new 10-year targets will be crucial for meeting those marks, given that China accounts for close to 30 percent of global greenhouse gas emissions and that it plans to build dozens of coal-fired power plants in the coming years. The U.S., and many other countries, will be looking for greater commitments from China — whether that’s modifying what it means by phasing down coal or setting more stringent targets.
China has pledged to peak its carbon emissions before 2030 and zero them out before 2060, a decade later than the United States has promised to reach net-zero. Beijing is unlikely to accelerate that timeline, in part because — analysts say — its philosophy is fundamentally different from that of the U.S.: underpromise and overdeliver.
Even without committing to more action, China’s massive investments in low-carbon energy installations — twice that of the United States — may inadvertently help the country achieve its peaking target early, some analysts say.
If the Trump years drove China further from America, the global pandemic and resulting economic slowdown that started during his final year didn’t bring it closer. And the energy crunch stemming from Russia’s war with Ukraine cemented China’s drive for reliable energy to meet the rising needs of its 1.4 billion people. That created a coal boom.
Meanwhile, China heavily subsidized the expansion of wind, solar and electric vehicle production. Its clean energy supply chain dominance has lowered the global costs for those technologies but drawn scorn from the U.S. as it tries to rebuild its own domestic manufacturing base.
China has turned more combative in response. Rather than work with the U.S. to make joint announcements on climate action, Xi has made clear that China’s climate policy won’t be dictated by others. At G20 meetings, China has aligned with Saudi Arabia and Russia in opposing language aimed at phasing out fossil fuels.
“At the end of the day, it’s harder to make a claim that China needs the U.S. and it’s harder to make the claim that the U.S. can rely on China,” said Cory Combs, a senior analyst at policy consulting firm Trivium China.
Wealthy countries’ inability to deliver promised climate aid to vulnerable countries hasn’t helped. While China remains among the bloc of developing nations in calling for more action on climate finance, it also points to the investments it’s making in the Global South through its Belt and Road infrastructure initiative and bilateral aid.
A foreign diplomat who asked for anonymity to speak openly said China has resisted pressure to contribute money to a climate fund that would help developing countries rebuild after climate disasters and would likely push back against a focus on its continued build out of coal-fired power plants.
“Anything that would signal that they would need to do more is something that gets blocked,” the person said.
China did release a plan earlier this month to cut emissions of the potent greenhouse methane, delivering on a promise it had made in a joint declaration with the U.S. at climate talks in 2021. But it has still not signed onto a global methane pledge led by the U.S. and the European Union.
All that amounts to a complicated picture for the U.S.-Chinese relationship and its broader impact on global climate outcomes.
“The U.S.-China talks will help stabilize the politics when countries meet in the UAE, but critical issues such as a fossil fuel phase-out still require much [further] political efforts,” said Li Shuo, incoming director of the China climate hub at the Asia Society Policy Institute.
“It’s very much about setting a floor,” and the talks in Dubai still need to build out from there, Shuo added.
He argues in a recent paper that China will subscribe to targets it sees as achievable and will continue to side with developing countries on climate finance. Chinese government officials are cautious about what they’re willing to commit to internationally, which sometimes serves as a disincentive for them to be more ambitious, he said.
The calculation is likely to be different for Biden’s team, who “want a headline that the world agrees to push China,” said David Waskow, who leads the World Resources Institute’s international climate initiative.
The power of engagement can’t be completely written off, and in the past it has proven to have a positive effect on the U.S.-China relationship.
“[Climate] sort of was a positive pillar in the relationship,” said Todd Stern, Obama’s former chief climate negotiator. “And it came to be a thing where when the two sides have come to get together, it was like, ‘What can we get done on climate?’”
Engagement with China at the state and local level and among academics and research institutes has potential — in large part because it’s less political, said Joanna Lewis, a professor at Georgetown University who closely tracks China’s climate change approach.
There could also be opportunities to separate climate from broader bilateral tensions.
“I do feel like there’s that willingness to say, ‘We recognize our roles, we recognize our ability to have that catalytic effect on the international community’s actions,’” said Nate Hultman, director of the University of Maryland’s Center for Global Sustainability and a former senior adviser to Kerry. “It doesn’t solve all the world’s issues going into the COP, but it gives a really strong boost to international discussions around what we know we need to do.”
Sara Schonhardt and Zack Colman reported, and Phelim Kine contributed reporting, from Washington, D.C.
This article is part of the Road to COP special report, presented by SQM. The article is produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.
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LONDON — World leaders will touch down in Dubai next week for a climate change conference they’re billing yet again as the final off-ramp before catastrophe. But war, money squabbles and political headaches back home are already crowding the fate of the planet from the agenda.
The breakdown of the Earth’s climate has for decades been the most important yet somehow least urgent of global crises, shoved to one side the moment politicians face a seemingly more acute problem. Even in 2023 — almost certainly the most scorching year in recorded history, with temperatures spawning catastrophic floods, wildfires and heat waves across the globe — the climate effort faces a bewildering array of distractions, headwinds and dismal prospects.
“The plans to achieve net zero are increasingly under attack,” former U.K. Prime Minister Theresa May, who set her country’s goal of reaching climate neutrality into law, told POLITICO.
The best outcome for the climate from the 13-day meeting, which is known as COP28 and opens Nov. 30, would be an unambiguous statement from almost 200 countries on how they intend to hasten their plans to cut fossil fuels, alongside new commitments from the richest nations on the planet to assist the poorest.
But the odds against that happening are rising. Instead, the U.S. and its European allies are still struggling to cement a fragile deal with developing countries about an international climate-aid fund that had been hailed as the historic accomplishment of last year’s summit. Meanwhile, a populist backlash against the costs of green policies has governments across Europe pulling back — a reverse wave that would become an American-led tsunami if Donald Trump recaptures the White House next year.
And across the developing world, the rise of energy and food prices stoked by the pandemic and the Ukraine war has caused inflation and debt to spiral, heightening the domestic pressure on climate-minded governments to spend their money on their most acute needs first.
Even U.S. President Joe Biden, whose 2022 climate law kicked off a boom of clean-energy projects in the U.S., has endorsed fossil fuel drilling and pipeline projects under pressure to ease voter unease about rising fuel costs.
Add to all that the newest Mideast war that began with Hamas’ attack on Israel on Oct. 7.
On the upside, investment in much of the green economy is also surging. Analysts are cautiously opining that China’s emissions may have begun to decline, several years ahead of Beijing’s schedule. And the Paris-based International Energy Agency projects that global fossil fuel demand could peak this decade, with coal use plummeting and oil and gas plateauing afterward. Spurring these trends is a competition among powers such as China, the United States, India and the European Union to build out and dominate clean-energy industries.
But the fossil fuel industry is betting against a global shift to green, instead investing its profits from the energy crisis into plans for long-term expansion of its core business.
The air of gloom among many supporters of global climate action is hard to miss, as is the sense that global warming will not be the sole topic on leaders’ minds when they huddle in back rooms.
“It’s getting away from us,” Tim Benton, director of the Chatham House environment and society center, said during a markedly downbeat discussion among climate experts at the think tank’s lodgings on St James’ Square in London earlier this month. “Where is the political space to drive the ambition that we need?”
The most acute distraction from global climate work is the war between Israel and Hamas in Gaza. The conflagration is among many considerations the White House is weighing in Biden’s likely decision not to attend the summit, one senior administration official told POLITICO this month. Other leaders are also reconsidering their schedules, said one senior government official from a European country, who was granted anonymity to speak about the sensitive diplomacy of the conference.
The war is also likely to push its way onto the climate summit’s unofficial agenda: Leaders of big Western powers who are attending will spend at least some of their diplomatically precious face-time with Middle East leaders discussing — not climate — but the regional security situation, said two people familiar with the planning for COP28 who could not be named for similar reasons. According to a preliminary list circulated by the United Arab Emirates, Israeli President Isaac Herzog or Prime Minister Benjamin Netanyahu will attend the talks.
A threat even exists that the conference could be canceled or relocated, should a wider regional conflict develop, Benton said.
The UAE’s COP28 presidency isn’t talking about that, at least publicly. “We look forward to hosting a safe, inclusive COP beginning at the end of November,” said a spokesperson in an emailed statement. But the strained global relations have already thrown the location of next years’ COP29 talks into doubt because Russia has blocked any EU country from hosting the conference, which is due to be held in eastern or central Europe.
The upshot is that the bubble of global cooperation that landed the Paris climate agreement in 2015 has burst. “We have a lot of more divisive narratives now,” Laurence Tubiana, the European Climate Foundation CEO who was one of the drafters of the Paris deal, said at the same meeting at Chatham House.
The Ukraine war and tensions between the U.S. and China in particular have widened the gap between developed and developing countries, Benton told POLITICO in an email.
Now, “the Hamas-Israel war potentially creates significant new fault lines between the Arab world and many Western countries that are perceived to be more pro-Israeli,” he said. “The geopolitical tensions arising from the war could create leverage that enables petrostates (many of which are Muslim) to shore up the status quo.”
Add to that the as yet unknown impact on already high fossil fuel commodity prices, said Kalee Kreider, president of the Ridgely Walsh public affairs consultancy and a former adviser to U.S. Vice President Al Gore. “Volatility doesn’t usually help raise ambition.”
The Biden administration’s decisions to approve a tranche of new fossil fuel production and export projects will undermine U.S. diplomacy at COP28, said Ed Markey, a Democratic U.S. senator from Massachusetts.
“You can’t preach temperance from a barstool, and the United States is running a long tab,” he said.
U.N. climate talks veterans have seen this program before. “No year over the past three decades has been free of political, economic or health challenges,” said former U.N. climate chief Patricia Espinosa, who now heads the consulting firm onepoint5. “We simply can’t wait for the perfect conditions to address climate change. Time is a luxury we no longer have — if we ever did.”
Before the Mideast’s newest shock to the global energy system, the war in Ukraine exposed Europe’s energy dependence on Russia — and initially galvanized the EU to accelerate efforts to roll out cleaner alternatives.
But in the past year, persistent inflation has worn away that zeal. Businesses and citizens worry about anything that might add to the financial strain, and this has frayed a consensus on climate change that had held for the past four years among left, center and center right parties across much of the 27-country bloc.
In recent months, conservative members of the European Parliament have attacked several EU green proposals as excessive, framing themselves as pragmatic environmentalists ahead of Europe-wide elections next year. Reinvigorated far-right parties across the bloc are also using the green agenda to attack more mainstream parties, a trend that is spooking the center.
Germany’s government was almost brought down this year by a law that sought to ban gas boilers — with the Greens-led economy ministry retreating to a compromise. In France, President Emmanuel Macron has joined a growing chorus agitating for a “regulatory pause” on green legislation.
If Europe’s struggles emerge at COP28, the ripple effect could be global, said Simone Tagliapietra, a senior fellow at the Brussels-based Bruegel think tank.
The “EU has established itself as the global laboratory for climate neutrality,” he said. “But now it needs to deliver on the experiment, or the world (which is closely watching) will assume this just does not work. And that would be a disaster for all of us.”
The world is also watching the former EU member that stakes a claim to be the climate leader of the G7: the U.K.
London has prided itself on its green credentials ever since former Prime Minister May enacted a 2019 law calling for net zero by 2050 — making her the first leader of a major economy to do so.
According to May’s successor Boris Johnson, net zero was good for the planet, good for voters, good for the economy. But under current Prime Minister Rishi Sunak, the messaging has transformed. Net zero remains the target — but it comes with a “burden” on working people.
In a major speech this fall, Sunak rolled back plans to ban new petrol and diesel car sales by 2030, bringing the U.K. into line with the EU’s 2035 date. With half an eye on Germany’s travails, he said millions of households would be exempted from the gas boiler ban expected in 2035.
In making his arguments for a “pragmatic” approach to net zero, Sunak frequently draws on the talking points of net zero-skeptics. Why should the citizens of the U.K., which within its own borders produces just 1 percent of global emissions, “sacrifice even more than others?”
The danger, said one EU climate diplomat — granted anonymity to discuss domestic policy of an allied country — was that other countries around the COP28 negotiating table would hear that kind of rhetoric from a capital that had led the world — and repurpose it to make their own excuses.
Sunak’s predecessor May sees similar risks.
“Nearly a third of all global emissions originate from countries with territorial emissions of 1 per cent or less,” May said. “If we all slammed on the brakes, it would make our net zero aspirations impossible to achieve.”
The U.S., the largest producer of industrial carbon pollution in modern history, has been a weathervane on climate depending on who controls its governing branches.
When Republicans regained control of the U.S. House of Representatives in 2022, it created a major drag on Biden’s promise to provide $11.4 billion in annual global climate finance by 2024.
Securing this money and much more, developing countries say, is vital to any progress on global climate goals at COP28. Last year, on the back of the pandemic and the energy price spike, global debt soared to a record $92 trillion. This cripples developing countries’ ability to build clean energy and defend themselves against — or recover from — hurricanes, floods, droughts and fires.
Even when the money is there, the politics can be challenging. Multibillion-dollar clean energy partnerships that the G7 has pursued to shift South Africa, Indonesia, Vietnam and India off coal power are struggling to gain acceptance from the recipients.
Yet even more dire consequences await if Trump wins back the presidency next year.
A Trump victory would put the world’s largest economy a pen stroke away from quitting the Paris Agreement all over again — or, even more drastically, abandoning the entire international regime of climate pacts and summits. The thought is already sending a chill: Negotiations over a fund for poorer countries’ climate losses and damage, which Republicans oppose, include talks on how to make its language “change-of-government-proof” in light of a potential Trump victory, said Michai Robertson, lead finance negotiator for a bloc of island states.
More concretely for reining in planet-heating gases, Trump would be in position to approve legislation eliminating all or part of the Inflation Reduction Act. Biden’s signature climate law included $370 billion in incentives for clean energy, electric vehicles and other carbon-cutting efforts – though the actual spending is likely to soar even higher due to widespread interest in its programs and subsidies – and accounts for a bulk of projected U.S. emissions cuts this decade.
Trump’s views on this kind of spending are no mystery: His first White House budget director dismissed climate programs as “a waste of your money,” and Trump himself promised last summer to “terminate these Green New Deal atrocities on Day One.”
House Republicans have attempted to claw back parts of Biden’s climate law several times. That’s merely a political messaging effort for now, thanks to a Democrat-held Senate and a sure veto from Biden, but the prospects flip if the GOP gains full control of Congress and White House.
Under a plan hatched by Tubiana and backed by former New York Mayor Michael Bloomberg, countries would in the future log their state and local government climate plans with the U.N., in an attempt to undergird the entire system against a second Republican blitzkrieg.
The U.S. isn’t the only place where climate action is on the ballot, Benton told the conference at Chatham House on Nov. 1.
News on Sunday that Argentina had elected as president right-wing populist Javier Milei — a Trump-like libertarian — raised the prospect of a major Latin American economy walking away from the Paris Agreement, either by formally withdrawing or by reneging on its promises.
Elections are also scheduled in 2024 for the EU, India, Pakistan, Taiwan, Sri Lanka, Indonesia and Russia, and possibly the U.K.
“A quarter of the world’s population is facing elections in the next nine months,” he said. “If everyone goes to the right and populism becomes the order of the day … then I won’t hold out high hopes for Paris.”
Zack Colman reported from Washington, D.C. Suzanne Lynch also contributed reporting from Brussels.
This article is part of the Road to COP special report, presented by SQM. The article is produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.
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The EU was quick to hit Russia with sanctions after Vladimir Putin launched the invasion of Ukraine — but it took time and an escalation of measures before Moscow started to feel any real damage.
Since the war started in late February last year, November was the first month when the value of EU imports from Russia was lower than in the same month of 2021. Until then, the bloc had been sending more cash than before the conflict — every month, for nine months. More recent data is not yet available.
The main reason behind this? Energy dependency on Russia and skyrocketing energy prices. But that’s not the whole story: Some EU countries were much quicker than others to reduce trade flows with Moscow — and some were still increasing them at the end of last year.
Here is a full breakdown of how the war has changed EU trade with Russia, in figures and charts:
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Swedish activist Greta Thunberg was removed Sunday by police along with other protesters as they demonstrated against the razing of the German village of Lützerath for the expansion of a coal mine.
Thunberg did not comply with a police request to leave the area, prompting officers to physically escort her away, German media outlet Bild reported. Thunberg was among a group of activists still at the site on Sunday, the newspaper said.
Climate activists have been squatting in the village in the western state of North Rhine-Westphalia for more than two years to protest its demolition to accommodate an extension of the Garzweiler coal mine.
Thunberg joined them on Saturday, telling a large rally in the fields outside Lützerath that the German government’s compromise deal with the owner of the coal mine was “shameful.”
According to the police, nine activists were taken to the hospital, Bild reported. More than 70 police officers have been injured in the operation to clear demonstrators from the site, the newspaper said.
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The shocking behind-the-scenes story of climate deniers’ fight to discredit climate change science over the past twenty-five years, told by one of the world’s foremost climate scientists who lived it
© Copyright by GrrlScientist | hosted by Forbes
A hungry polar bear on the outskirts of Norilsk, hundreds of miles from its natural habitat, … [+]
Greta Thunberg and Fridays for Future. Tomato soup splashed onto a priceless van Gogh masterpiece. Orange paint sprayed on landmarks and across office buildings around London. What is all this drama about?
Climate change, or more accurately, climate catastrophe, after the complete failure of COP26. Now that COP27 is underway and is making international news, you may finally have become concerned to learn about climate change: what it is, what it’s doing to us globally and locally, how we know that the climate is indeed warming up and why we all — every one of us — should care deeply about this issue. If so, then you will learn a lot from this provocative debut book, Hot Air: The Inside Story Of The Battle Against Climate Change Denial (Atlantic Books, 2022: Amazon US / Amazon UK).
Hot Air by Peter Stott (Atlantic Books, 2022)
Hot Air is the fascinating personal narrative by climate scientist Peter Stott, who heads the Climate Monitoring and Attribution team of the Hadley Centre for Climate Prediction and Research at the Met Office. He also is Professor of Detection and Attribution in the Mathematics Department at the University of Exeter, and is a world expert on natural and human causes of climate change.
In this informative book, Professor Stott presents a comprehensive history of the behind-the-scenes actions of numerous climate denialists he’s dealt with throughout the years, giving readers a real sense of the frustrations that scientists face when trying to make any climate progress at all, even as the climate emergency grows ever more dire. Almost perversely, whilst climate science is constantly being updated and improved, the denialists’ arguments have remained unchanged since the 1990s.
In Professor Stott’s meticulously researched and copiously cited narrative, you will learn about the nuances of climate science research as he shares some pivotal events in his career during the past 40 years, you will gain a deep appreciation for how rigorous climate science truly is and how many disparate disciplines it draws from, and you will understand the urgency with which we all must act — both personally and locally as well as nationally and globally. You also will see many of the disgraceful tactics used by climate change denialists, anti-science wingnuts and other lunatics to promote mountains of disinformation disgorged by global oil, gas and coal corporations, big agriculture companies, and the logging, mining and transportation interests who, along with politicians, elitists, fabulists and profiteers, seek to convince the public that burning alive in a barren hellscape is not as bad as we think it will be.
Shame, shame, shame on them all.
The truth is that it is relatively easy to dispute climate science because the data are often quite complicated. But in Hot Air, Professor Stott provides readers with clear examples that explain and illuminate these complex findings and make them comprehensible. The author’s discussions of “the hockey stick graph”, Al Gore’s movie, An Inconvenient Truth, Greta Thunberg and Trump were all insightful. The drama of conference presentations was interesting and, at times, surprising. But perhaps most surprising was that before each IPCC report is released, scientists and world delegates go through a painstaking process of approving each and every word in every sentence, words such as “substantial”, “likely” and “unequivocal” — despite the efforts of delegates from nations such as Saudi Arabia that have a vested interest in derailing or diluting the message to preserve the status quo. Such a difficult task faced by climate scientists in particular!
This perceptive and entertaining book is a must-read for everyone, but especially those who are inclined to believe the absurd, baseless claims of climate deniers and other anti-science nutters despite evidence to the contrary. For example, according to NASA, all ten of the hottest years on record have occurred since 2005 (ref); with the hottest five since 2015. But there is time — a tiny fleeting window of opportunity — to avert the worst effects of climate change, but we all must aggressively demand immediate action from our leaders — and from the world’s elites. This timely book is a clarion call to all of us to act to save our planet and ourselves and our grandchildren.
Hot Air has been shortlisted for the Royal Society Science Book Prize of 2022 and for the Royal Society for Literature Christopher Bland Prize of 2022.
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LIVERPOOL, England — On the long picket line outside the gates of Liverpool’s Peel Port, rain-soaked dock workers warm themselves with cups of tea as they listen to 1980s pop.
Dozens of buses, cars and trucks honk in solidarity as they pass.
Dockers’ strikes are not new to Liverpool, nor is depravation. But this latest walk-out at Britain’s fourth-largest port is part of something much bigger, a great wave of public and private sector strikes taking place across the U.K. Railways, postal services, law courts and garbage collections are among the many public services grinding to a halt.
The immediate cause of the discontent, as elsewhere, is the rising cost of living. Inflation in the United Kingdom breached the 10 percent mark this year, with wages failing to keep pace.
But the U.K.’s economic woes long predate the current crisis. For more than a decade, Britain has been beset by weak economic growth, anaemic productivity, and stagnant private and public sector investment. Since 2016, its political leadership has been in a state of Brexit-induced flux.
Half a century after U.S. Secretary of State Henry Kissinger looked at the U.K.’s 1970s economic malaise and declared that “Britain is a tragedy,” the United Kingdom is heading to be the sick man of Europe once again.
Here in Liverpool, the “scars run very deep,” said Paul Turking, a dock worker in his late 30s. British voters, he added, have “been misled” by politicians’ promises to “level up” the country by investing heavily in regional economies. Conservatives “will promise you the world and then pull the carpet out from under your feet,” he complained.
“There’s no middle class no more,” said John Delij, a Peel Port veteran of 15 years. He sees the cost-of-living crisis and economic stagnation whittling away the middle rung of the economic ladder.
“How many billionaires do we have?” Delij asked, wondering how Britain could be the sixth-largest economy in the world with a record number of billionaires when food bank use is 35 percent above its pre-pandemic level. “The workers put money back into the economy,” he said.
What would they do if they were in charge? “Invest in affordable housing,” said Turking. “Housing and jobs.”
The British economy has been struck by particular turbulence over recent weeks. The cost of government borrowing soared in the wake of former PM Liz Truss’ disastrous mini-budget on September 23, with the U.K.’s central bank forced to step in and steady the bond markets.
But while the swift installation of Rishi Sunak, the former chancellor, as prime minister seems to have restored a modicum of calm, the economic backdrop remains bleak. Spending and welfare cuts are coming. Taxes are certain to rise. And the underlying problems cut deep.
U.K. productivity growth since the financial crisis has trailed that of comparator nations such as the U.S., France and Germany. As such, people’s median incomes also lag behind neighboring countries over the same period. Only Russia is forecast to have worse economic growth among the G20 nations in 2023.
In 1976, the U.K. — facing stagflation, a global energy crisis, a current account deficit and labor unrest — had to be bailed out by the International Monetary Fund. It feels far-fetched, but today some are warning it could happen again.
The U.K. is spluttering its way through an illness brought about in part through a series of self-inflicted wounds that have undermined the basic pillars of any economy: confidence and stability.
The political and economic malaise is such that it has prompted unwanted comparisons with countries whose misfortunes Britain once watched amusedly from afar.
“The existential risk to the U.K. … is not that we’re suddenly going to go off an economic cliff, or that the country’s going to descend into civil war or whatever,” said Jonathan Portes, professor of economics at King’s College London. “It’s that we will become like Italy.”
Portes, of course, does not mean a country blessed with good weather and fine food — but an economy hobbled by persistently low growth, caught in a dysfunctional political loop that lurches between “corrupt and incompetent right-wing populists” and “well-intentioned technocrats who can’t actually seem to turn the ship around.”
“That’s not the future that we want in the U.K,” he said.
Reviving the U.K.’s flatlining economy will not happen overnight. As Italy’s experience demonstrates, it’s one thing to diagnose an illness — another to cure it.
Experts speak of an unbalanced model heavily reliant upon Britain’s services sector and beset with low productivity, a result of years of underinvestment and a flexible labor market which delivers low unemployment but often insecure and low-paid work.
“We’re not investing in skills; businesses aren’t investing,” said Xiaowei Xu, senior research economist at the Institute for Fiscal Studies. “It’s not that surprising that we’re not getting productivity growth.”
But any attempt to address the country’s ailments will require its economic stewards to understand their underlying causes — and those stretch back at least to the first truly global crisis of the 21st century.
The 2008 financial crisis hammered economies around the world, and the U.K. was no exception. Its economy shrunk by more than 6 percent between the first quarter of 2008 and the second quarter of 2009. Five years passed before it returned to its pre-recession size.
For Britain, the crisis in fact began in September 2007, a year before the collapse of Lehman Brothers, when wobbles in the U.S. subprime mortgage market sparked a run on the British bank Northern Rock.
The U.K. discovered it was particularly vulnerable to such a shock. Over the second half of the 20th century, its manufacturing base had largely eroded as its services sector expanded, with financial and professional services and real estate among the key drivers. As the Bank of England put it: “The interconnectedness of global finance meant that the U.K. financial system had become dangerously exposed to the fall-out from the U.S. sub-prime mortgage market.”
The crisis was a “big shock to the U.K.’s broad economic model,” said John Springford, from the Centre for European Reform. Productivity took an immediate hit as exports of financial services plunged. It never fully recovered.
“Productivity before the crash was basically, ‘Can we create lots and lots of debt and generate lots and lots of income on the back of this? Can we invent collateralized debt obligations and trade them in vast volumes?’” said James Meadway, director of the Progressive Economy Forum and a former adviser to Labour’s left-wing former shadow chancellor, John McDonnell.
A post-crash clampdown on City practises had an obvious impact.
“This is a major part of the British economy, so if it’s suddenly not performing the way it used to — for good reasons — things overall are going to look a bit shaky,” Meadway added.
The shock did not contain itself to the economy. In a pattern that would be repeated, and accentuated, in the coming years, it sent shuddering waves through the country’s political system, too.
The 2010 election was fought on how to best repair Britain’s broken economy. In 2009, the U.K. had the second-highest budget deficit in the G7, trailing only the U.S., according to the U.K. government’s own fiscal watchdog, the Office for Budget Responsibility (OBR).
The Conservative manifesto declared “our economy is overwhelmed by debt,” and promised to close the U.K.’s mounting budget deficit in five years with sharp public sector cuts. The incumbent Labour government responded by pledging to halve the deficit by 2014 with “deeper and tougher” cuts in public spending than the significant reductions overseen by former Conservative Prime Minister Margaret Thatcher in the 1980s.
The election returned a hung parliament, with the Conservatives entering into a coalition with the Liberal Democrats. The age of austerity was ushered in.
Defenders of then-Chancellor George Osborne’s austerity program insist it saved Britain from the sort of market-led calamity witnessed this fall, and put the U.K. economy in a condition to weather subsequent global crises such as the COVID-19 pandemic and the fallout from the war in Ukraine.
“That hard work made policies like furlough and the energy price cap possible,” said Rupert Harrison, one of Osborne’s closest Treasury advisers.
Pointing to the brutal market response to Truss’ freewheeling economic plans, Harrison praised the “wisdom” of the coalition in prioritizing tackling the U.K.’s debt-GDP ratio. “You never know when you will be vulnerable to a loss of credibility,” he noted.
But Osborne’s detractors argue austerity — which saw deep cuts to community services such as libraries and adult social care; courts and prisons services; road maintenance; the police and so much more — also stripped away much of the U.K.’s social fabric, causing lasting and profound economic damage. A recent study claimed austerity was responsible for hundreds of thousands of excess deaths.
Under Osborne’s plan, three-quarters of the fiscal consolidation was to be delivered by spending cuts. With the exception of the National Health Service, schools and aid spending, all government budgets were slashed; public sector pay was frozen; taxes (mainly VAT) rose.
But while the government came close to delivering its fiscal tightening target for 2014-15, “the persistent underperformance of productivity and real GDP over that period meant the deficit remained higher than initially expected,” the OBR said. By his own measure, Osborne had failed, and was forced to push back his deficit-elimination target further. Austerity would have to continue into the second half of the 2010s.
Many economists contend that the fiscal belt-tightening sucked demand out of the economy and worsened Britain’s productivity crisis by stifling investment. “That certainly did hit U.K. growth and did some permanent damage,” said King’s College London’s Portes.
“If that investment isn’t there, other people start to find it less attractive to open businesses,” former Labour aide Meadway added. “If your railways aren’t actually very good … it does add up to a problem for businesses.”
A 2015 study found U.K. productivity, as measured by GDP per hour worked, was now lower than in the rest of the G7 by a whopping 18 percentage points.
“Frankly, nobody knows the whole answer,” Osborne said of Britain’s productivity conundrum in May 2015. “But what I do know is that I’d much rather have the productivity challenge than the challenge of mass unemployment.”
Rising employment was indeed a signature achievement of the coalition years. Unemployment dropped below 6 percent across the U.K. by the end of the parliament in 2015, with just Germany and Austria achieving a lower rate of joblessness among the then-28 EU states. Real-term wages, however, took nearly a decade to recover to pre-crisis levels.
Economists like Meadway contend that the rise in employment came with a price, courtesy of Britain’s famously flexible labor market. He points to a Sports Direct warehouse in the East Midlands, where a 2015 Guardian investigation revealed the predominantly immigrant workforce was paid illegally low wages, while the working conditions were such that the facility was nicknamed “the gulag.”
The warehouse, it emerged, was built on a former coal mine, and for Meadway the symbolism neatly charts the U.K.’s move away from traditional heavy industry toward more precarious service sector employment. “It’s not a secure job anymore,” he said. “Once you have a very flexible labor market, the pressure on employers to pay more and the capacity for workers to bargain for more is very much reduced.”
Throughout the period, the Bank of England — the U.K.’s central bank — kept interest rates low and pursued a policy of quantitative easing. “That tends to distort what happens in the economy,” argued Meadway. QE, he said, is a “good [way of] getting money into the hands of people who already have quite a lot” and “doesn’t do much for people who depend on wage income.”
Meanwhile — whether necessary or not — the U.K.’s austerity policies undoubtedly worsened a decades-long trend of underinvestment in skills and research and development (Britain lags only Italy in the G7 on R&D spending). At British schools, there was a 9 percent real terms fall in per-pupil spending between 2009 and 2019, according to the Institute for Fiscal Studies’ Xu. “As countries get richer, usually you start spending more on education,” Xu noted.
Two senior ministers in the coalition government — David Gauke, who served in the Treasury throughout Osborne’s tenure, and ex-Lib Dem Business Secretary Vince Cable — have both accepted that the government might have focused more on higher taxation and less on cuts to public spending. But both also insisted the U.K had ultimately been correct to prioritize putting its public finances on a sounder footing.
It was February 2018 before Britain finally achieved Osborne’s goal of eliminating the deficit on its day-to-day budget.
Austerity was coming to an end, at last. But Osborne had already left the Treasury, 18 months earlier — swept away along with Cameron in the wake of a seismic national uprising.
***
David Cameron had won the 2015 election outright, despite — or perhaps because of — the stringent spending cuts his coalition government had overseen, more of which had been pledged in his 2015 manifesto. Also promised, of course, was a public vote on Britain’s EU membership.
The reasons for the leave vote that followed were many and complex — but few doubt that years of underinvestment in poorer parts of the U.K. were among them.
Regardless, the 2016 EU referendum triggered a period of political acrimony and turbulence not seen in Westminster for generations. With no pre-agreed model of what Brexit should actually entail, the U.K.’s future relationship with the EU became the subject of heated and protracted debate. After years of wrangling, Britain finally left the bloc at the end of January 2020, severing ties in a more profound way than many had envisaged.
While the twin crises of COVID and Ukraine have muddled the picture, most economists agree Brexit has already had a significant impact on the U.K. economy. The size of Britain’s trade flows relative to GDP has fallen further than other G7 countries, business investment growth trails the likes of Japan, South Korea and Italy, and the OBR has stuck by its March 2020 prediction that Brexit would reduce productivity and U.K. GDP by 4 percent.
Perhaps more significantly, Brexit has ushered in a period of political instability. As prime ministers come and go (the U.K. is now on its fifth since 2016), economic programs get neglected, or overturned. Overseas investors look on with trepidation.
“The evidence that the referendum outcome, and the kind of uncertainty and change in policy that it created, have led to low investment and low growth in the U.K. is fairly compelling,” said professor Stephen Millard, deputy director at the National Institute of Economic and Social Research.
Beyond the instability, the broader impact of the vote to leave remains contentious.
Portes argued — as many Remain supporters also do — that much harm was done by the decision to leave the EU’s single market. “It’s the facts, not the uncertainty that in my view is responsible for most of the damage,” he said.
Brexit supporters dismiss such claims.
“It’s difficult statistically to find much significant effect of Brexit on anything,” said professor Patrick Minford, founder member of Economists for Brexit. “There’s so much else going on, so much volatility.”
Minford, an economist favored by ex-PM Truss, acknowledged that “Brexit is disruptive in the short run, so it’s perfectly possible that you would get some short-run disruption.” But he added: “It was a long-term policy decision.”
Plenty of economists can rattle off possible solutions, although actually delivering them has thus far evaded Britain’s political class. “It’s increasing investment, having more of a focus on the long-term, it’s having economic strategies that you set out and actually commit to over time,” says the IFS’ Xu. “As far as possible, it’s creating more certainty over economic policy.”
But in seeking to bring stability after the brief but chaotic Truss era, new U.K. Chancellor Jeremy Hunt has signaled a fresh period of austerity is on the way to plug the latest hole in the nation’s finances. Leveling Up Secretary Michael Gove told Times Radio that while, ideally, you wouldn’t want to reduce long-term capital investments, he was sure some spending on big projects “will be cut.”
This could be bad news for many of the U.K.’s long-awaited infrastructure schemes such as the HS2 high-speed rail line, which has been in the works for almost 15 years and already faces a familiar mix of local resistance, vested interests, and a sclerotic planning system.
“We have a real problem in the sense that the only way to really durably raise productivity growth for this country is for investments to pick up,” said Springford, from the Centre for European Reform. “And the headwinds to that are quite significant.”
For dock workers at Liverpool’s Peel Port, the prospect of a fresh round of austerity amid a cost-of-living crisis is too much to bear. “Workers all over this country need to stand up for themselves and join a union,” insisted Delij.
For him, it’s all about priorities — and the arguments still echo back to the great crash of 15 years ago. “They bailed the bankers out in 2007,” he said, “and can’t bail hungry people out now.”
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Poland awarded a contract to build its first nuclear power plant to a U.S. bid as the country seeks to burn less coal and increase its energy independence.
The government in Warsaw chose Westinghouse for the nuclear project, Prime Minister Mateusz Morawiecki said late Friday in a tweet praising the U.S. company’s “reliable, safe technology.”
“A strong Poland-U.S. alliance guarantees the success of our joint initiatives,” Morawiecki said.
Westinghouse reportedly beat out France’s EDF and South Korean state-run company Korea Hydro & Nuclear Power for the contract.
Polish government spokesman Piotr Mueller said on Saturday that the administration would adopt a decision at a meeting on Wednesday that will launch environmental approval and investment procedures, the Associated Press reported. Mueller said the nuclear plant in northern Poland would require improving infrastructure in the area, including roads.
U.S. Energy Secretary Jennifer Granholm welcomed Warsaw’s decision, calling it a “huge step in strengthening our relationship with Poland for future generations to come.”
“This announcement also sends a clear message to Russia: We will not let them weaponize energy any longer,” Granholm said in a tweet. “The West will stand together against this unprovoked aggression, while also diversifying energy supply chains and bolstering climate cooperation.”
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The Iron Law of Electricity strikes again. A wind project next to the Garzweiler open-pit mine near … [+]
Last week, numerous media outlets reported that Germany will extend the lives of three of its nuclear power plants. The move to keep the reactors online, which was opposed by the country’s Green Party, showed that German politicians are recognizing the need to keep reliable generation plants online to assure the country has enough electricity this winter.
But another equally important announcement was also made last week that got far less media attention: German Chancellor Olaf Scholz announced that Germany was reopening five power plants that burn lignite, a low-rank coal. Germany’s return to lignite demonstrates, yet again, the Iron Law of Electricity, which says that people, businesses, and governments will do whatever they have to do to get the electricity they need.
Indeed, Germany’s move back to lignite is chock-full of contradictions, including one that belongs in the “you can’t make this up” column.
The Iron Law of Electricity is so powerful that the utility RWE is dismantling the Keyenberg wind project in the western part of the country to, wait for it… make more room for the expansion of the Garzweiler mine. Lignite from Garzweiler fuels the Neurath C power plant, which is one of the power plants being brought back online. A spokesperson for RWE told the Guardian newspaper that “We realize this comes across as paradoxical.”
Yes, there are paradoxes aplenty. Germany’s need to keep the lights on explains why the government is willing to ignore the fact that burning lignite to produce electricity emits more carbon dioxide than any other form of power generation.
Furthermore, burning lignite contradicts Germany’s climate goals. Under the country’s much-vaunted Energiewende (German for “energy turnaround”) Germany has pledged to slash its total greenhouse gas emissions by 95% by 2050. The cost of that pledge could total more than $500 billion by 2025 — and that figure only accounts for the investment needed to decarbonize the electricity sector. The result of all that spending is that residents of Germany are now paying some of the highest electricity prices in Europe.
Of course, Germany isn’t the only country that is proving the Iron Law of Electricity. Global coal demand has been soaring for months. European electric utilities are scrambling to buy as much coal as they can to replace Russian natural gas. The Newcastle benchmark price for thermal coal going into the Asian market has been at, or near, $400 per ton for several months in a row. That’s an eight-fold increase over the levels seen in early 2020. gas. And in July, the International Energy Agency said that global coal use will hit an all-time high this year.
In August, the Centre for Research on Energy and Clean Air and Global Energy Monitorreported that China is planning to build 43 new coal-fired power plants as well as 18 new blast furnaces. As reported by Time.com, the projects “were announced in the first half of this year despite the world’s largest polluter pledging to bring its emissions to a peak before 2030, and to make the country carbon neutral by 2060.”
The report also found that China began construction on 15 gigawatts of new coal-fired power capacity “started construction in the first half of the year and 24 gigawatts of new projects were announced or re-activated…The volume of new projects represents a return to pre-COVID levels after new projects surged in 2020 but still amounts to almost one coal plant unit per week.”
That last sentence is remarkable and bears repeating: this year, China has been starting construction on almost one new “coal plant unit per week.”
While announcing the reopening of the lignite plants, Scholz claimed that the move is “a time-limited but necessary emergency measure.” He added that Germany will “continue to stand firmly by our climate targets.”
Scholz also said, “The Russian aggression and its consequences mustn’t lead to a worldwide renaissance of coal…We will make clear offers so that developing and emerging countries also can embark resolutely on the path toward a climate-neutral energy sector.”
But right now, the idea of a “climate-neutral” energy sector in Germany and nearly every other country on the planet, is taking a distant back seat to the more immediate need to keep the lights on. I will end by repeating the same message I have been touting for more than a dozen years: If the countries of the world are serious about reducing their greenhouse gas emissions, the way forward is N2N: natural gas to nuclear. And if the goal is to decarbonize the electricity and industrial sectors and do so quickly, the goal must be to develop and deploy smaller, safer, cheaper nuclear reactors, and do so by the thousands.
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Robert Bryce, Contributor
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