When Virginia Woolf stayed in Carbis Bay, Cornwall, for seven weeks in 1905, the sight of Godrevy Lighthouse inspired one of her most famous novels. As the leaders of the G7 gather this week in that same seaside resort, will they too draw inspiration from the view?
One of the most important of the challenges those leaders face is climate change. And this is the moment for the Prime Minister to push for a decisive breakthrough.
At the Second World Climate Conference, held in Geneva in November 1990, Margaret Thatcher made a clear appeal. “The danger of global warming” she said “is as yet unseen, but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations. Our ability to come together to stop or limit damage to the world's environment will be perhaps the greatest test of how far we can act as a world community.”
How prophetic those words turned out to have been. More than 30 years have elapsed since the Earth Summit of June 1992 adopted the United Nations Climate Change Convention. That event was followed by a succession of international meetings which failed adequately to address the problem.
The dismal record was, in part at least, redeemed when the nations of the world adopted the Paris Agreement in 2015. That agreement set out the clear target of limiting global temperature increase to not more than 2C and hopefully not more than 1.5C on pre-industrial levels.
But the Paris Agreement is already more than five years old and all the evidence is that on the present trajectory of emissions the world is heading for a global temperature increase of at least 3C.
What has gone wrong? One key issue is resources. The world has signally failed to fulfil the promise made in Paris of $100 billion (£71 billion) a year to enable developing countries make the necessary transitions. Yet we believe that the G7 summit can recapture the “spirit of Paris” and set the stage for an even more successful meeting in Glasgow, at COP26, in November.
To do so, it must begin by accepting that global problems require global solutions. The way forward out of the current impasse is for the G7 leaders to make a clear and unambiguous statement in favour of carbon border tariffs (CBTs).
In our view, the logic of CBTs is inescapable. Why should countries impose carbon-reduction obligations on their own industries and manufacturers only to see their efforts undercut by imports from countries where it is cheaper to pollute?
A CBT can protect a country’s national manufacturers, while motivating them to adhere to green regulations. It can therefore lead to a rebalancing against importers from those nations with more lax environmental standards. It can also improve domestic support for climate change policies by securing the buy-in of local industry for deeper decarbonisation policies.
Properly handled, a CBT can also help generate support at the level of individual consumers who are always – and rightly – conscious of the strain on household budgets. Imagine, for example, if the proceeds of such a tax were hypothecated to help pay for the proposed phasing out of gas boilers. What a different political environment we might have.
Equally important is the international dimension. The funds generated through CBTs can and should be used not only to achieve the transformation of domestic economies but also to help developing countries, often hardest hit by climate change, carry out their own carbon-reduction programmes.
Yes, there are technical difficulties to be resolved. Which countries and which industries should be covered and on what basis? How do we measure emissions and how do we prevent cheating? How do we determine equivalence between systems? We believe that CBTs are compatible with the provisions of the World Trade Organisation but if there are challenges they must be squarely faced and the UK, chairing both the G7 and COP26, should lead the way. A commitment to this effect in the final Carbis Bay communiqué would not be amiss.
The pandemic has shown that we can successfully rise to great challenges when required. It is time for Global Britain to lead the way.