by Alexander Clark and Alexander Pfeiffer
Good afternoon from Marrakech! It’s Thursday of Week 2 at COP22, and it has been quite a whirlwind so far.
China and Sustainable Infrastructure
Lord Nicholas Stern, esteemed economist and author of the infamous Stern Review, joined the Chinese pavilion for a discussion on sustainable infrastructure over the next two decades. According to Stern, sustainable infrastructure spending is fundamental to the economic transformation challenge facing the world’s large economies, and most urgent of all in China. The policymakers of today have a huge responsibility on their shoulders to avoid being locked into a congested, polluted future. Speed and decisive, credible action by governments on infrastructure decisions matters enormously at this stage. Billions of dollars will be invested in such assets over the coming years and these investments decide which path our economies will go.
Stern presented infrastructure spending as a “fourth way” out of the stagnant growth that has been plaguing many key economies since the 2008 crash. The other three options – monetary policy, fiscal policy, and structural reform – are either reaching their limits, politically unfeasible, or too long-term to be of use. Simply to meet the energy and emission needs of a 2 degree Celsius climate scenario we will require 30% more investment in power production, and a 37% increase in efficiency.
In China’s case, stable and credible policy making by the Party’s central committee gives it a great advantage in moving towards the removal of fossil fuel subsidies, revolutionising city design, and implementing carbon pricing. These are all prerequisites to making smart infrastructural investment decisions in an environment of what Stern termed “predictable flexibility.” This is a world away from how policy making on renewable energy is being conducted in the West. Stern concluded by underlining the immense costs of getting the transition wrong. As YEL’s lead delegate at COP22 Alexander Pfeiffer has written at the Institute for New Economic Thinking, we have little room for manoeuvre on high-carbon infrastructure and risk locking ourselves into a much higher emissions path, with disastrous consequences for our planet’s climatic stability.
The Marrakech Partnership for Climate Action
The focus on state-to-state negotiations at the COP conferences too often neglects the role of non-state actors – and yes, this means business. It has taken so long to reach any sort of agreement on climate, that the global economy is now in a position where any hope of keeping temperature rises below 2 degree Celsius requires full participation from every actor able to contribute. This ranges from consumer goods firms to religious groups, pension funds to advocacy networks. Unifying all these actors under one banner, and helping them collaborate with states, is one of the primary challenges that COP22 must address. Earlier this morning, the UNFCCC released a draft edition of the Marrakesh Partnership for Global Climate Action, the aim of which is precisely this: making interaction between countries, businesses, cities and other sub-national governments, civil society, investors, faith groups, and other actors as effective as possible.
An exciting week will come to an end tomorrow with the closing plenaries and it has been a very exhausting week so far. The Partnership declaration seems an appropriate way to begin the last days of this historic conference.
Alex Clark is the Henry Fellow at Harvard Graduate School of Arts and Sciences, having graduated from Oxford University with an MSc in 2015. He is currently working on energy policy, climate change and global health and is also project leader for operations with SDSN Youth
Alex Pfeiffer is the head of Young European Leadership’s delegation to the COP and a doctorate student at the Institute for New Economic Thinking (INET) at the Oxford Martin School