UK government should 'stay the course' on climate change policies

OECD secretary-general, Ángel Gurría, said the UK had been 'exemplary' on climate change. Photograph: Junko Kimura/Getty Images

The UK government should "stay the course" on its green policies instead of weakening the commitment to tackle greenhouse gases, the head of the club of the world's richest nations has urged.

The comments by Ángel Gurría, secretary-general of the Organisation for Economic Cooperation and Development (OECD), come after the chancellor, George Osborne, last week told his Conservative party's conference that the UK should not be at the forefront of tackling global warming.

Gurría said the UK had been "exemplary" on the issue and urged: "Stay the course! I think they should stay the course. We said stay the course with the economy [on austerity policies], and that is having good results. We are saying the same thing about climate and environmental policies."

Gurría said: "The UK is our poster child [for climate policy] - it is the one that has legislated [through the Climate Change Act]. This kind of leadership, which is so difficult to achieve, has been so useful to the UK, and all around the world. It has not taken away from [economic] competitiveness. It is making the UK not only a better world citizen, but making all world citizens better by the UK's example."

His unusually strong and clear message is unlikely to be welcomed by some sections of the coalition, where an antipathy to green policies is increasingly marked. Osborne made it clear at the Conservative conference that to be the "poster child" for climate change policy was the last thing he wanted for the UK, saying: "I don't want us to be the only people out there in front of the rest of the world. I certainly think we shouldn't be further ahead of our partners in Europe".

The question of which side wins out will be key to the UK's future for the next two decades, and an important test of the coalition's climate credentials. Within months, ministers will have to decide on the UK's fourth carbon budget for the period 2023-27, and this is already giving rise to serious rows.

The government's statutory adviser said last week there was currently no reason to weaken the targets, and urged ministers to make a swift decision to placate nervous investors, while a group of MPs weighed in this week to argue for keeping to the current emissions goals.

But sections of industry are lobbying for a watering down of the fourth carbon budget. They drew solace from the chancellor's vow, and from remarks by the environment secretary, Owen Paterson, that global warming might be good for the UK.

Gurría's comments will carry weight as his organisation is better known for its economic advice than its pronouncements on climate, and has praised some of Osborne's policies. He also compared the climate crisis to the financial one of recent years, but said: "it's worse than the [financial] crisis because there is no bailout."

Soon it will be possible to compare the UK's performance on key policy indicators with other rich nations, as Gurría unveiled plans on Wednesday to include a new chapter devoted to climate and environmental performance in every edition of the annual country reports the OECD publishes.

Gurría also said rich countries would have to "compensate" poorer nations for keeping a proportion of their fossil fuel reserves in the ground. The world's "carbon budget" - the aggregate amount of carbon that can be emitted before triggering dangerous levels of climate change - was set out by the Intergovernmental Panel on Climate Change two weeks ago. The clear implication, according to some experts, was that many countries would have to keep some of their fossil fuels in the ground, unexploited.

But that is highly controversial, especially when it comes to developing countries. Gurría said that compensating such countries for the missed opportunity of burning the reserves would involve "transfers" from rich nations, but declined to spell out what form these would take.

"There are going to have to be adjustments made for those who have a relative abundance of this asset, that now proves unburnable," he said. "These countries are going to have to be preparing for that."

He said that rather than aiming for gradual reductions in emissions without a clear end date, the world must espouse a new goal of zero emissions from burning fossil fuels by 2050. To do so would require clear policies starting from now, tightening as the decades proceed. He likened the world's energy infrastructure to a vehicle driving towards a wall, with the choice of applying the brakes gradually from now or of trying to stop suddenly before impact, which would be much riskier.

Commenting on shale gas, which has radically transformed the US economy, Gurría said gas could be a "way station" but "not the end point". He also warned against a reliance on carbon capture and storage (CCS) technology, noting that even if all the current CCS projects come to fruition, they will account for less than 1% of emissions.

The best way of avoiding dangerous climate change and encouraging emissions cuts, according to Gurría, would be to put a "a big, fat price on carbon". This could involve emissions trading systems or taxes, but Gurría noted: "Tax is a bad word for politicians."

Carbon trading has been most fully pioneered in Europe, where an emissions trading scheme obliging heavy industries to pay for their carbon through a system of permits has been in place since 2005. But the scheme has run into serious trouble as companies were issued with far too many free carbon permits to cover their needs. As a result, the price of permits is now close to a record low, and creates almost no incentive for companies to cut their emissions.

Gurría urged governments to return their attention to the problem of global warming, as countries begin to emerge from the financial crises. He said: "Climate change is back on the front burner - it is back in the crosshairs."

At a global conference in Paris in 2015, world governments will try to forge a new international deal on greenhouse gases. Officials and ministers will meet this November for a preliminary meeting in Poland. However, there is still little agreement on what form any new deal should take or what targets might be enshrined in it