The blast furnace was the emblem of the local boxing club. A symbol of the industry and the identity of Redcar, North Yorkshire, its giant shape was visible from anywhere in town. Locals saw it as they walked on the beach; visitors saw it as they arrived at the station.
A hundred years ago, this place on the estuary of the River Tees was the centre of the world’s steel industry—its output was used as far away as Australia, to build the Sydney Harbour Bridge. But around the start of this century, it began struggling in the face of low-cost production in Asia and falling global steel prices. In 2015, the plant closed. Its vast buildings, chimneys and conveyor belts were blown up and carted away. In November 2022, the blast furnace, left standing until the last, was demolished.
But when I visited the site in September a rebirth was beginning. The land had been largely restored, to filter out the detritus of industrial activity. A factory was being built that will make the world’s largest monopiles (fence post-like foundations) for offshore wind turbines—each more than twice the length of an Olympic swimming pool, and wide enough that you could fit the Channel tunnel inside. Representatives of local government and development corporations, collectively known as the Teesworks team, were taking prospective investors around the 4,500-acre site, with interests ranging from waste-to-energy to low-carbon hydrogen and batteries for energy storage. Neil Young, manager of Teesworks Skills Academy, explained that he talks to the businesses coming to the site to find out what skills they need in employees, then works with local universities and colleges to ensure the right courses are available, and with schools and community groups to raise interest in and awareness of the jobs. Keeping people in the area and attracting investment are mutually reinforcing objectives.
Teesside aims to become the UK’s first “net zero industrial cluster”—a place where heavy industry creates no net emissions of greenhouse gases. The Tees Valley Combined Authority and the local government plan to work with the oil firms BP, Equinor and TotalEnergies to build a 145km pipeline, joined up with a similar pipeline from Humberside, to carry away up to 10m tonnes of carbon dioxide each year and stuff it into the rocks under the North Sea.
The main customer for this service will be Teesside’s chemical industry. Just across the road from the old steel site, and stretching along both sides of the river, there are some 1,400 companies making the input materials for things like pharmaceuticals, plastics and fertilisers. Other customers will include a hydrogen production plant and a gas power plant which, with its emissions captured and stored, could help balance supply and demand in a fully decarbonised grid. Part of the cost of carbon capture and storage (CCS) will be paid for by its users, with the savings from not having a carbon price on their emissions; the rest should be covered by a government subsidy encased in a 10-year contract.
CCS is loved by oil firms and hated by climate activists, for similar reasons: it seems to offer a future for the oil industry. But most academics, including the advisers to the Chinese government who I visited Teesside with, take a more dispassionate view. It’s an ugly solution, and unlikely to be a primary one to the problem of global emissions, but we might need it for some things, such as decarbonising cement production. It’s useful to have the infrastructure there as a dustbin of last resort for the most difficult emissions to eliminate. The Chinese experts tell me they are impressed by the project’s scale. It’s probably the first time I’ve heard them say that about something in the UK.
As we bumped around the site in our van, wearing hard hats and high-vis jackets, I asked our hosts what measures the government would take to ensure that this net zero industrial cluster was internationally competitive. Nobody knew. The government is consulting on measures such as a carbon tax or regulations applied to imports to create a level playing field within the UK market, but these would do nothing to help UK firms compete globally. If producers in other countries continue burning fossils with abandon, Teesside’s chemical manufacturers could lose their $12bn a year exports and go the way of its steel industry. If the CCS plant lost its largest customer, its commercial viability could be threatened. The unanswered question could be critical to the fate of the whole venture.
Ben Houchen, mayor of Tees Valley, is unsurprisingly bullish about the area’s prospects, but he sees the importance of the international context. “We’re leading the way in the UK’s net zero ambitions,” he says, “with work now well underway on projects including offshore wind, carbon capture, green hydrogen and more. But we want to go further and make our area as synonymous with clean energy as Silicon Valley is with IT and social media. We’re already seeing huge interest from multinational companies… to truly capitalise on everything we’re doing here, it’s vital we get buy-in from industry and political leaders across the globe who are keen to come with us on this journey.”
When one of our hosts asked me what I did for a living, I told him I worked to make climate change diplomacy more useful, to help projects like this succeed. He was surprised; it seemed that he had never realised this was a possibility.
Climate change diplomacy has been going on for more than 30 years. Throughout this time, its central focus has been countries lobbying each other over long-term targets to reduce emissions. The results have been mixed, at best. A consensus that the increase in global temperature should be limited to below 2°C, and if possible, below 1.5°C, was achieved in Paris in 2015. Almost all countries have agreed to aim for net zero emissions nationally by around the middle of the century. But according to the UN’s latest assessment, it’s still not possible to say whether, in aggregate, countries’ emissions targets for the 2020s—a timescale closer to the life expectancy of most political leaders and governments—point up or down.
Diplomacy is rarely effective when its scope is set too wide. There was once a treaty to establish world peace—the Kellogg-Briand pact, in which the world’s major powers committed to “renounce war as an instrument of national policy”, was agreed in 1928. We don’t try that anymore. Peace agreements focused on specific places and problems have proved to be more effective. Likewise, by setting the scope of climate change diplomacy as wide as possible—focusing on economy-wide emissions—we have made its job as difficult as it could be. At this scale, governments have the least confidence in what they can achieve, and too much is at stake for them to open their decisions to international negotiation.
Negotiating over national targets proved so difficult that the attempt was abandoned in the years after the Copenhagen conference of 2009. The Paris agreement set global goals but explicitly left countries free individually to do what they liked. Lobbying over targets continued, but the negotiations focused on process: when countries should set targets, how to count emissions, and so on. It was as if a government had told its citizens exactly when and how to fill out their tax returns, but left it up to them to decide how much tax, if any, they would pay. As a result, we have a system of unilateral action dressed up as a multilateral process. As long as this is the focus of climate change diplomacy, we are collaborators in non-collaboration.
To meet those internationally agreed temperature targets, global emissions must stop rising, and instead fall by more than 40 per cent by 2030. The emissions intensity of the global economy—emissions per unit of global GDP—needs to fall five times faster this decade than it did over the past two decades. How is diplomacy going to help?
The starting point is to get practical. In each of the greenhouse-gas emitting sectors of the economy, fossil-burning must be replaced with zero emission technologies and practices. This is a process of transition: new technologies are developed and deployed, and markets infrastructure, business models and jobs are gradually reconfigured to suit new technologies instead of the old.
By setting the scope of climate change diplomacy as wide as possible, we have made its job as difficult as it could be
There are ways for international cooperation to help these transitions. Aligning efforts in research and development can accelerate innovation. Coordinated steps to establish and grow the markets for clean technologies can create stronger incentives for industry investment, larger economies of scale and faster cost reduction than any country can achieve alone. Agreements on standards can prevent trade from holding back the transition.
Diplomacy will be best able to access these gains if it focuses on specific economic sectors—because each of the main greenhouse gas-emitting sectors of the global economy is different from the others. The problem of upgrading electricity grids, essential for the expansion of renewables, is different from the problem of ending deforestation. The interests at stake in agriculture are different from those at stake in aviation. The interactions between countries’ policies on cars, which are sold and shipped around the world, are different from the interactions between their policies on buildings, which tend to stay where they’re put. Lumping these things together makes meaningful agreements on any of them impossible.
Substantial agreements will not be achieved by negotiations involving all the world’s countries, either. Seeking global consensus makes the lowest common denominator as low as it can be. Giving Saudi Arabia a veto over every piece of collective action would not help anyone (ultimately, not even the Saudis). But in most sectors, the top ten countries tend to account for around three quarters of global production or consumption. That is more than enough to shift global markets. Coalitions of the willing can get transitions started; coalitions of the influential can take them to the tipping points where they become self-sustaining.
Progress will be faster if diplomacy is focused less on targets and more on actions. In 2006, government targets around the world implied that around 50GW of solar photovoltaics would be deployed globally by 2020. The actual amount of solar PV deployed globally by 2020 was 714GW—twelve times as much. China, outstandingly, had deployed 140 times as much by 2020 as its original target for that year. How? It introduced subsidies and reformed regulation, which led to a self-perpetuating cycle of investment, innovation and falling costs. A lot of effort can be wasted haranguing countries over their targets, but a little effort spent on supporting the right actions can be repaid many times over.
Practical cooperation on climate change is already happening, but it must be taken more seriously. While the main focus of diplomacy is on economy-wide emissions targets, many countries feel no compulsion to participate in sector-specific initiatives that can have far greater substance. Scandinavians and Californians tend to be well represented in groups such as the Zero Emission Vehicles Alliance or the Leadership Group for Industry Transition; large emerging economies less so. While ministers engage in negotiations to agree accounting processes, their attention is diverted from matters of substance. At the end of one UN climate conference, a UK government minister told me that he felt as if he’d spent a fortnight arguing and falling out with his foreign counterparts over nothing that truly mattered. While meetings to discuss practical solutions continue to be treated as “side events”, it will be hard to establish the sustained engagement needed to reach difficult diplomatic agreements. The Iran nuclear deal was agreed after a dozen years of dedicated diplomacy; it did not happen at a side event one day in the margins of the UN general assembly.
As the UK government team, of which I was a part, worked towards the COP26 climate conference that we would host in Glasgow in 2021, we found many of our contacts in other countries shared our desire to get serious about practical cooperation. Even within the formal negotiations process, the sentiment that it was time to move “from negotiation to implementation” was often expressed. We had used the two-year lead-up to the conference to bring countries together in small groups to try to make progress on the transitions in the power sector, the road transport sector and on land use, as well as on problems of finance and adaptation. At the same time, we asked countries what they thought a longer-term process should look like.
The result of these talks was the launch at COP26 of the “Breakthrough Agenda”, a commitment by 45 countries covering 70 per cent of the global economy to work together to “make clean technologies and sustainable solutions the most affordable, accessible and attractive option in each emitting sector” before the end of this decade. Countries would meet regularly, in groups focused on one sector at a time, and would review the international cooperation taking place in each sector. Informed by an independent report, they would agree on the next priorities for collective action. They would then take these actions forward through the most relevant international initiatives.
In September 2023, the International Energy Agency, International Renewable Energy Agency and UN Climate Change High-Level Champions jointly published the second annual, independent, Breakthrough Agenda Report. The report highlights some good examples of joint efforts underway, but much more that needs to be done.
In the power sector, China, the UK and Italy are leading an initiative that will test how electricity systems run when up to 80 per cent of their power is produced by variable renewable energy sources. There will be five demonstration projects implemented across five continents. Many organisations are helping countries of the global south to deploy more solar and wind power, but demand for assistance far outstrips supply. More financial instruments, such as loan guarantees, are needed to bring down the cost of capital for investments in renewable power and electricity grids, and more support for economic diversification is needed to develop new jobs and industries in the most coal-dependent regions, such as Shanxi province in China, Jharkhand in India, or Mpumalanga in South Africa.
In road transport, groups of countries in east and west Africa have agreed to apply minimum standards to imported used cars, helping to dump the dirtiest old bangers out of the global market. Countries accounting for a fifth of the global market in heavy-duty vehicles (HDVs) have agreed to make 30 per cent of new HDVs zero emission by 2030, and all of them zero emission by 2040. If the world’s three largest car markets—China, the EU and the US—were to align their regulations towards all new cars being zero emission by 2035, this could bring forward the date when electric vehicles are cheaper to buy than petrol cars by years. Economies of scale are powerful.
Our best hope is to work together to cross tipping points in the global economy
In the steel sector, countries including India, Germany and Japan that account for 20 per cent of global steel production aim to use public procurement to create the first market for near-zero emission steel. By acting together, the group can create a larger market for the goods. This will make it more likely that multinational companies will risk betting the approximately $2bn it takes to build a new near-zero emission steel plant, whose products will cost more than those made with fossil fuels. To expand this from a niche market to the new normal, the world’s largest steel producing and consuming countries will need to agree how to align trade with the transition. Given that the EU has jumped the gun by announcing a unilateral border carbon tax to protect its low-carbon steel producers from fossil-based foreign competition, and China looks quite likely to sue in response, they might as well start these talks now.
Similar opportunities—and uniquely different ones—exist across buildings, cement, agriculture, shipping and aviation. In many areas, coalitions of businesses working together to change their sectors are also growing.
Those who are sceptical about this practical agenda for climate change diplomacy usually point to the industrial and geopolitical competition between the US and China, and suggest that to propose cooperation in this context is naive and unrealistic. Their concern is valid; there is no doubt that things would be easier if presidents Biden and Xi were best buddies. But I am not sure what the alternative is. Is it that we should continue—within this same geopolitical context—to verbally bang each other over the head about national emissions targets for the next 30 years, as we have for the past 30? Or is it that we should abandon any attempt at diplomacy on the largest collective action problem that humanity has ever faced?
Cooperation and competition are not mutually exclusive. The relationship between the US and the USSR during the Cold War was hardly an entente cordiale, yet the two superpowers negotiated a series of arms control agreements. Every trade deal ever agreed has been an act of cooperation in a context of competition. It would be groundless, not to mention self-defeating, to assume that no substantial cooperation to accelerate the low-carbon transition is possible.
As COP28, the next UN climate conference, approaches, the risk is that political capital will again be squandered, campaigners’ energy wasted and much of the media attention will miss the point. Governments are gearing up for a battle within the formal negotiations over whether to commit to phase out fossil fuels in the conference’s outcome “decision” document. This might sound positive, until you realise that such a phase-out was already agreed implicitly in 1992. In the UN Framework Convention on Climate Change, countries agreed the goal of “stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.” Stabilising concentrations can only be done by reducing net emissions to zero. Net zero emissions can only be achieved by phasing out the use of unabated fossil fuels. (The word “unabated” would be part of any phrasing agreed at the conference, because most countries don’t want to rule out the use of CCS .) Repeating the goal of the 1992 agreement with slightly different wording 31 years later does not make it any easier to achieve.
Fossil fuels get phased out when the alternatives are ready to take over. When India phased out incandescent lightbulbs, nobody cared, because the highly efficient LED lightbulbs were better. The 23 countries that made new commitments at COP26 to phase out coal power did so because wind and solar power were already cheaper; when the UK shuts down its last coal power station next year, nobody except energy nerds will notice. In most sectors, we are only at the beginning of the transition, and getting the alternatives to fossil fuels into global markets is the urgent task at hand.
The other big argument at COP28 is likely to be about compensation for the irretrievable “loss and damage” that climate change has already caused. The claim—made most loudly by small island states and countries of the global south—is a fair one which deserves a hearing. At the same time, it would be pointless to pretend that there are no limits to how much money any government can give to other countries without putting its own political survival—and by extension, the continuation of the funding flow—at risk. When resources are limited, how does compensation compare in usefulness to spending on adaptation and resilience to save lives when future extreme weather events hit?
Although adaptation to climate change is not fundamentally a collective action problem in the way that emissions reduction is, it could still benefit from more organised cooperation. The development of climate-resilient crops, the agreement of trade responses to food supply shocks, and the creation of international early-warning systems to avoid disasters (such as the tragic loss of life in the September floods in Libya), are all areas where countries have much to gain from working with each other. The launch of the Sharm El Sheikh Adaptation Agenda, potentially a mirror image of the Breakthrough Agenda, could turn out to be the most important contribution of Egypt in its presidency of 2022’s UN climate talks.
Twenty years ago, scientists thought that the risk of crossing dangerous tipping points in the Earth’s climate system would become high when global average temperatures increased by 4 to 5°C above pre-industrial levels. Expert judgement has changed so much since then that the risk is now thought to become high at around 1.5 to 2.5°C above pre-industrial—and we have already reached 1.2°C above.
Our best hope is to work together to cross tipping points in the global economy, where markets decisively shift from fossil fuels to clean technologies. This, the aim of the Breakthrough Agenda, should be the central focus of climate change diplomacy from now on.
In 2022, in a report I wrote with the consultancy firm Systemiq and Exeter University, we identified opportunities for international cooperation in one sector to enable faster progress in others. One of these potential “super-leverage points” was the international agreement of mandates for green ammonia use in fertiliser production. In the zero-emission economy, most of our energy is likely to be carried by electricity. But some, perhaps a tenth or more, may be carried by hydrogen and its derivatives, such as ammonia.
Green hydrogen can be produced by electrolysis powered by renewable electricity, but at present this is expensive. The easiest place to start deploying green hydrogen and bringing down its cost is in sectors like fertilisers and refining, where hydrogen made with fossil fuels is already used. If mandates requiring 25 per cent of the ammonia used in fertiliser production to be made from green hydrogen were applied globally, this could create demand for 100GW of electrolysers, potentially cutting the capital cost of electrolysers by 70 per cent. That would in turn make it easier to deploy green hydrogen in steel production, shipping and energy storage. Agreeing these mandates internationally would not only achieve the necessary scale—it would also avoid the problem of first movers being undercut by cheaper, fossil fuelled competition.
In Teesside, that could help ensure the UK’s first net zero industrial cluster is a success. I hope to revisit the site in the next few years, together with the Chinese experts. As they consider what advice to give their government, they will be more impressed if we manage to lose the emissions without losing the industry. As, I expect, will the local people.
