Obama on Climate: Yes He Bloody Well Did!

12/02/2016 19:14 GMT | Updated 12/02/2017 10:12 GMT

Obama came into the White House to the mantra of "Yes we can" and this weekend as he announced his final budget we can happily conclude that as far as climate change is concerned: "Yes he bloody well did!"

The problem with climate change has always been that whilst political timeframes and economic investment timeframes work on a 3-5year cycle, the planet needs a rather longer term view. That is what Mark Carney, the Governor of the Bank of England, has called the Tragedy of the Horizon: investors requiring the best possible return over the short-term at the expense of the best return over the medium and long.

Non-economists have simply called it market failure. And of course climate change is perhaps the best example of market failure that we have: individually rational, economically prudent, short-term decisions that collectively undermine the global public good.

That is why the UK Climate Change Act charged the Committee on Climate Change with the legal duty to advise government on the most cost effective pathway to achieving our long term goal of an at least 80% reduction in emissions by 2050.

Acting on long-term thinking

Last weekend, Barack Obama set a bold example of long-term thinking by announcing he plans to use his final budget as President to double U.S. spending on clean energy research by 2020. This followed his decision last week to boost investment in electric vehicles by introducing a $10 per barrel fee on oil paid by oil companies.

It used to be thought that the last year of a presidency was lame duck territory. Obama has proved that not standing for re-election can, in fact, be a tremendously liberating experience.

Courageous political leadership is precisely what is needed to deliver the low-carbon vision that world leaders agreed at COP21 last December. Obama has now given a clear signal to the markets that they need to invest in the future rather than continue to rely on the subsidies of a fossil fuelled past. The White House wants to use the budget to increase funding for research into clean energy, electric cars and battery storage. This is a dynamic boost that will carry forward the momentum from Paris and give real substance to the pledges that the U.S. brought to the conference.

The Paris Agreement is a highly significant step in tackling climate change - but a piece of paper will not save the world. It is not 'job done'. This international agreement on tackling climate change provides the mechanism to speed up and scale up climate action. Governments must now put solid resources and tough regulation behind the visionary text of the agreement. This means, a step change in investment to scale-up clean energy globally.

Bringing Paris home - or not

Obama's announcement builds on Mission Innovation, an initiative launched at COP21 where 20 countries, including the UK, pledged to double clean energy research and development investment up to 2020. This evolved out of the Global Apollo Programme, which the UK's own climate change envoy, Sir David King, launched last year to supercharge investment in clean energy research and development. In his speech to the Paris conference, David Cameron told delegates, ""Instead of making excuses tomorrow to our children and grandchildren, we should be taking action against climate change today".

But underneath this rhetoric on the world stage, the UK's domestic action is going backwards when compared to our international partners. I welcome the doubling of innovation funding by the Department of Energy and Climate Change (DECC) to £500m in 2020. But Cameron must realise that this has been undermined by a swathe of spending and policy decisions that have seen investor confidence plummet in the UK's capacity to deliver regulatory stability for clean energy. This saw Britain fall out of the Top 10 of places to do low-carbon business for the first time last autumn.

George Osborne's Autumn Statement just before the Paris conference was anything but a confidence boost to the clean energy sector in the UK. In a sharp contrast to Obama's plans to pump $564 million into the development and deployment of carbon capture and storage, the UK Government withdrew all capital funding for CCS just days before COP21 began. This raised serious questions which have gone unanswered about how the UK will be able to meet its existing climate change targets - let alone uphold its obligations to ramp up ambition over time, as all countries have now agreed to do.

It used to be an article of faith held across parliament that the government should be "technology neutral" to achieve cost-effective decarbonisation. Now, just as the rest of the world is speeding up its transition to a low-carbon economy the UK government has decided to champion fossil fuels, like gas and diesel, and extremely expensive nuclear. With the government eliminating support for clean energy options, it is little wonder that the Committee on Climate Change have warned that trying to meet our climate targets without CCS could double the cost to the UK.

In another stark difference to the plans laid out by the White House, George Osborne's changes to vehicle excise duty have actually made it more expensive for drivers to choose smaller, cleaner cars that are better for our environment. Alongside such perverse tax changes, scrapping support schemes for clean energy have threatened the economic viability of renewables from windfarms to solar, where industry claims over 20,000 jobs in the UK have been lost by the government's inconsistent approach.

In fact, one of the only signs of stability in UK energy debates has been the consistently high public support for renewable energy. The latest public polling conducted by the Department of Energy and Climate Change found that only 4 out of 100 people are opposed to clean energy. What is lacking is the political commitment to low-carbon energy. How different from the U.S. where, despite vocal opposition from Republicans who fail to recognise the wide-ranging benefits of the clean energy transition to their constituents, Obama has shown a determination to prioritise climate action that is achieving far more than many thought possible.

We must hope that Obama's announcement ups the Chancellor's game for next month's Budget. As fossil fuel company share prices continue to nose-dive, and companies and pension funds begin to prioritise smart, forward-facing investments in clean energy and transport, might the UK not look to Obama's lead? How tragic if the fullest aspiration of George Osborne's Budget is to deliver himself into No.10 rather than to deliver the clean energy future that our country so badly needs.

Barry Gardiner is the Member of Parliament for Brent North, and shadow minister for energy and climate change.