Welcome to this afternoon’s session of the Energy Security and Net Zero Select Committee in our inquiry on international climate policy. Welcome to panel 1. Please introduce yourselves.

Good afternoon. I am Richard Folland and I head policy for the financial think-tank Carbon Tracker Initiative.

Good afternoon. I am Professor Joeri Rogelj. I am Professor of Climate Science & Policy at Imperial College London. I was one of the founding members of the European Scientific Advisory Board on Climate Change, which is the EU equivalent of the Committee on Climate Change.

Good afternoon. I am Dr Matt Webb. I work at E3G, heading up our Global Clean Power Diplomacy work.

Good afternoon. My name is Ana Yang. I am the Director of the Environment and Society Centre at Chatham House.

Thank you. Welcome, and we look forward to hearing your evidence. Ana, I will start with you. The UNFCCC process has faced strains, it is fair to say, over the years. The United States is not contributing, and some would say is actively undermining the whole process at the moment, certainly at a federal level. If we don’t have the big emitters on board, is the UNFCCC process worth pursuing?

The UNFCCC is a negotiation process. It is a place where countries come together to set ambition and also to co-ordinate their activities. I think there is a question about what we do with the future of UNFCCC, and we should be setting this in the geopolitical context we are in. Going back to Paris, that was when multilateralism was at its best, when the US and China were friendly and we had the statement of Xi Jinping and Obama saying climate is important, there were all these agreements and we wanted Paris to set the collective framework. That was then. Now the world is a very different place. I don’t have to repeat to everyone where we are, but I think it is important to recognise the future of COP and the UNFCCC in this increased rivalry and geopolitical dynamic. We also see with the Strait of Hormuz and all the different hot wars almost a bifurcation of the petrostates and the electrostates. The question is what can you do with UNFCCC in negotiation, setting targets and sending the signals, but then the biggest question is about what implementation looks like. Implementation needs to link to national interests, prosperity and jobs. It also needs to link to the security issue. Climate change action now is completely entangled with geopolitics. The pace and shape of energy transition will be determined by access to natural resource and the alliances that nations form, and it is no longer clear, for example for the UK or whoever it is, who will be your permanent friends, because I think that is less clear. That is why I go back to the point of how you make it what is important to the UK as a nation.

Thank you very much. Matt, what can the UK do to take the lead in reviving ambitions within UNFCCC and COP?

To build on what Ana just said, we have to recognise that climate diplomacy and action has shifted from one where we were setting goals and commitments at Glasgow to one that is a delivery phase. That delivery phase requires the UK and others to work with a set of new coalitions and actors to get the job done. That is domestic policy delivery, international finance delivery and moving from setting really important commitments through to actually delivering the finance on the ground to build the infrastructure to make the transition happen. The welcome development around the UN is that we now have layers where we can do that work. Of course there is the important framework of the Paris agreement, which we must sustain and retain. We need to know whether our collective action is adding up to be enough to meet the goals that we want. There is the ratchet NDC process to continue to run, and we have to protect and work with that, but beyond the negotiations, which can be difficult where a consensus is needed, there is now a much stronger and much more well formulated action agenda that is allowing countries to form coalitions and alliances and demonstrate that they are going forward faster than their NDCs would indicate. We have to perhaps not ask the simple question of is it one or the other, but the implementation is richer and broader and it is now happening faster. The COP summit moment, which still attracts leaders and a high intensity of political engagement, can embrace all of those spaces. It may be that in a particular year it is more difficult to get a consensus breakthrough on a particular item in a negotiation, but at the same time you can get real demonstrable shifts in position. I would argue that with a combination of Brazilian leadership from Lula last year and the backing of 80 countries, there was a real shift in countries’ attitudes to the way they want to approach the fossil fuel transition. I would argue that the UK needs to play a very central role in continuing the momentum, particularly the momentum created by Brazil but also the role that Colombia played on that particular issue. It is broader and more complex. I don’t think we should be too obsessed about whether the US is there in a particular election period or not. There is a much bigger machine that is running and the UK needs to build those new coalitions.

Thank you. Richard, do you think that the UK Government would be more effective focusing on international delivery through smaller possibly bilateral agreements?

Picking up on Matt’s point, going back to the multilateral process but also the emergence of these coalitions of the willing, if I can use that phrase, I would still like to stick up for climate multilateralism and the COP process. It is important to bear in mind that of course Paris remains a foundation stone, but this is the only forum where all countries can come together on this global issue, arguably the greatest issue we will face this century. It gives global south countries, including the Pacific island states that have tended to punch above their weight in these forums over the years—bearing in mind that for some of these countries in the Pacific, climate change is an existential threat. I think it is important that the UK continues to use its diplomatic power within that multilateral forum. It is about bilateral agreements, yes, for the UK to be able to use its diplomatic network and so on, but in particular here working within these coalitions of the willing. It is a striking development over the last few years, which does say something about the weakened state of climate multilateralism—the Powering Past Coal Alliance, the Beyond Oil and Gas Alliance—but specifically I want to single out here that the UK is an oil and gas producer and can play such a constructive role in the Santa Marta process, which was kicked off in Colombia in late April. I was there, Carbon Tracker was there. We think it is an extremely important initiative, and it is important for the UK to be actively involved within this initiative, helping to shape—again, it is not an alternative—a new way of addressing what is such a major issue for climate. We should focus on the building of a new energy system, but for the transition to be managed and effective, a managed phase out of the old fossil-based system will be required.

We heard some really interesting evidence about how coalitions of the willing can make a big difference. This is a question to all of you, but starting with Richard: does the Santa Marta summit on the phasing out of fossil fuels signal a new era in international climate negotiation?

I think new era might be overdoing it. It is early days, and we have to bear that in mind. That was the first conference, but then we must also think about what happened there and the counterfactual. The Colombians really went out on a bit of a limb after the Belém COP30 conference with this initiative. Nearly 60 countries showed up to participate in this and they came out with an important set of conclusions, where work will now be taken forward. It has come out with some political momentum.

I can also see the Santa Marta process as a really good complement and reaction to the COP process. Of course, the COP process is essential for inclusivity, but that inclusivity also frustrates some of the more progressive actors. The negotiations, as has been highlighted, are about going from setting the framework to its implementation. The Santa Marta process is critical for the exchange of best practices and the formation of coalitions—if not political then at least coalitions of practitioners and practice, where we learn from each other to achieve the transition away from fossil fuels, which was one of the key outcomes of the first global stocktake.

Matt, how can its outcomes feed into the more formal UNFCCC process at COP31 and beyond?

On your point about whether it is a new era, I would say that it is a rupture, to nick Carney’s very much repeated language, because post-Dubai and the first global stocktake, a huge amount of energy was deployed by many countries of fossil fuel interests to keep a conversation about moving away from fossils off the agenda. The great success of that first stocktake was to get that critical phrase included around transitioning away from fossil fuels within a range of systems. It then became quite difficult, because of the last energy crisis, rather than the current energy crisis, to make meaningful progress. We saw, particularly under some very clear political leadership from Marina Silva and Lula, countries come out and say, “This simply cannot be the case. We cannot have spent nearly 20 years to get our first reference to fossil fuels, our coal phase-out reference in Glasgow, to have absolutely no progress”. I think it marked a watershed where countries said this is too important to be blocked. Unlike perhaps all of the other pieces of the agenda, we have a very large action agenda, as you will be well aware, of many axes and many alliances. The fundamental importance of talking about how you will have a secure and just transition seemed to be too important to be blocked, so I think we are in a different era. That answers your second question. We have to employ an “and” strategy now. We have to support the efforts that Colombia started and the Netherlands supported. We have to support that to continue and have that space for dialogue. Everybody who came back from Santa Marta said it was a different tone, a different style. People were looking for solutions and not divisions and arguments, so we have to support that. To answer your question, we cannot go silent within the UNFCCC process. That has to be a continuation of what the Brazilian presidency started, and it has to run right through to the global stocktake. The ideal scenario is you have a very live, very non-constrained conversation where people are looking for solutions, but there has to be a clear docking point. I think it is the responsibility of the troika of presidencies to continue for there to be a port to dock that in. If you will let me say one final thing, you will see in the outcomes of that Colombia statement that is exactly what they asked for. They were not heading off into the wilderness. They wanted to head that off and feed back.

Ana, a final question to you. A problem with the COPs is that they are too far removed from people’s everyday experiences. Will the agreements from Santa Marta have a more direct impact on people’s lives?

I think that COP being removed from people’s lives is probably not a bad thing, because it is really complex and there is the diplomacy, but I think what is important is explaining why nations choose to do energy transition and how that affects the price of energy, food prices, and how they move around. That is the story that is important. There is a discussion that happens at COP that is the responsibility of countries, officials and all of that, but how those decisions trickle down and affect everyone’s daily life and how much it costs is the homework that we need to do. In the previous inquiry there was a discussion about storytelling, the narrative, and I think that is the next stage of how you translate the outcomes of COP and Santa Marta into things that really matter to people.

On storytelling, the everyday person would generally see COP as rich people and leaders of the world travelling by private jet, staying in five-star hotels to talk about us all having to turn on our washing machines in the middle of the night and get rid of our petrol cars. Are we telling the right stories about these gatherings?

Definitely not. It is my view that any transition is not easy. These are choices, they are trade-offs that we have to make, and especially in this context of geopolitical rivalry. The questions of who the UK forms alliances with to access raw materials, and what kind of relationship the UK has with China, are hard to answer. Also there are choices that you have to make about who gets involved. The thing that I don’t have the answer to, and I think we collectively need to do better at storytelling, is that although that really matters, how does that then affect somebody’s everyday life, and ultimately how does that convert into voting and give legitimacy and credibility to us who sit here?

We will move on, because we are trying to do a lot this afternoon.

First to Joeri and then Matt. The second global stocktake is coming in 2028. Will that stocktake on progress have any value in the context in which you are operating?

Whether it will have value still depends on how it is carried out. We can look back at the first global stocktake, which was carried out under a presidency of a fossil fuel producer, at that point still an OPEC member. That entire process culminated in a decision with language on the transition away from fossil fuels. Subsequent progress has been slow, but again the decision that came at the level of the UNFCCC led down through the Santa Marta process to momentum being developed. The global stocktake process has two phases. One is a technical phase and one is a political phase, and both of these phases are important. The technical phase is important because in today’s world even just the consideration of evidence and facts is not a given any more. When I think about what the UK could be doing or the role it can play, as it will not be up for the presidency of any of the COPs during which the global stocktake will happen, it is really to focus on ensuring that this evidence is available, and that the processes through which evidence becomes available to the UN negotiations are strengthened. This is for the IPCC, the Intergovernmental Panel on Climate Change, but equally coalitions with other countries. The Santa Marta process will also produce evidence. There will be road maps developed for countries that can be fed into as evidence in the global stocktake process next year and can be considered as examples of how things can be done. It is definitely an important process at the multilateral, international level. On how important it is for people’s everyday lives, I think there is a very large bridge to be built between those two worlds, but at this point the first global stocktake was definitely successful in the momentum that it generated.

On your political point, is it worthwhile for a stocktake to include how successful Administrations are in building consent and support as well as their technical delivery?

We can anticipate a bit what the political phase of the global stocktake will be, and it will be potentially much harder than it was the first time around to get a very strong outcome of the global stocktake at the political level. That is a reflection of not just the challenges within the UNFCCC but within the entire UN system and the entire multilateral rule-based system. I can’t name any multilateral forum that does not have challenges today with finding a consensus-based, ambitious, progressive outcome. The global stocktake is just one of those fora that will be deeply challenged.

Slightly blending the answers to the previous one, on the optics of leaders going to summits on private jets—I thought you were talking about Davos to start with rather than the COP. The COP is a lot more taxing.

Similar personnel.

You are absolutely right, if this does not look like a summit that solves people’s issues—and that can be anything from justice and equity to debt through to affordability of energy and our energy security—the COP is not working. In a world of precious few multilateral moments, the COP still retains a moment as a leaders summit and we have to treat it with that importance. It can do a number of things, but you are quite right, it has to be about communicating back to people that this is solving—and I am going to just take Guterres’s speech—the twin crises that they are facing. If it does not answer that question, it is not doing the right purpose. Reflecting on something that was said about the recent defence funding, and this is also something that Carney said in January, we have probably been complacent. We have assumed that things are going to be okay, the previous hegemony was going to last, and we have not been making enough in our narrative to people that we have to invest more—there is a debate about defence—in our climate security. The summit has to do that. I totally agree with Joeri’s point. There will be a long technical phase that will look very frustrating, very slow. It will be blocked within the halls of the negotiations, and then before we know it there will be a very difficult political phase that will come very fast at us. We have to be working on the two things at once. We have to be looking at the types of commitments we want at GST2, and they can’t be restricted to just banning fossil fuels and expanding renewable production. It will be about green industrial relations, trade, prosperity, energy access. It will be what, crudely, the old global south cares about as much as what we care about, and we have to start thinking about the framing and the kinds of targets on finance, economic development and industrial relations that will be resonating globally. While we are thinking about the targets, the critical thing is considering what are the different coalitions that we will build to make those targets politically acceptable when we get there. What are the new generations, going back to the coalitions of the willing, that we are going to work with—the major economies, like Indonesia, Vietnam and South Africa, that will demonstrate that this is doable when we get to GST2? There is a lot of work to do. The final thing is it is imperative that when we get to GST2 we have reviewed this, but also we have set suitably high benchmarks for where we have to be in 2035, because we have to drive that ratchet for the NDCs once again. We can’t fail.

Richard, looking at reforming the finance system now, how can the UK leverage its ambition to lead on green finance to inform reform of the global financial system?

I don’t need to tell the Committee that the UK is a huge financial centre and it is out there. It sets governmental objectives by the Green Finance Institute about London in particular being the global lead for green finance. What can the UK itself do around this? As I introduced Carbon Tracker at the start, we are a financial think-tank and so we engage with a full range of financial institutions, and I will single out here the importance of asset owners, pension funds. This is where the deep pools of capital lie if you are talking about shifting financial flows. That is singled out in the Paris agreement, the need for financial flows to move from high to low-carbon sectors. What can the UK Government do, on the supply side of government as well, but the UK with London as a green finance hub? What do asset owners, the financial institutions, say to us? They need stronger and more consistent policy signals but also messaging, with a whole of government approach. Within the UK, DESNZ, Ed Miliband, is sending a very strong signal to investors around the clean power plan and so on, but our question here is, and we hear this a bit from pension funds and so on: is there a joined-up, whole of government approach towards this? Is HM Treasury, which some people might say is a little bit short-termist in its approach, buying in? Is the Bank of England buying into this? The Bank of England and central banks have a huge impact on climate scenario analysis, which is used by pension funds and financial institutions. They draw on those to base their investment policies. If I can make a final point relating to this, we need a joined-up approach: climate and energy policy, policy around decarbonisation, whether we are talking about clean energy incentives, and also on the supply side, financial regulation matters and the Financial Conduct Authority. At Carbon Tracker we engage with the Financial Conduct Authority. Right now we are talking to them about prospectus regulation. This is a bit of a technical issue but it still might surprise you if I explain it at the high level. If you are an oil, gas or coal company coming to market, you are looking to raise capital, perhaps for a new oil and gas development or something like that. You are not required by the financial regulation at the moment to declare in the prospectus materials the impact on the carbon budget. We are engaging with the FCA and others on whether an atmospheric viability test could be brought in as a standard piece of prospectus materials. That will be important for investors assessing the investment risk around this, or not.

You talked about positive signals from Government. Are you seeing positive signals from investors in the market as well? A few years ago the chief executive of BlackRock said it is greed or nothing, essentially. Is that still the sentiment now, still the strong signal of five years?

If I can again use this expression, there is a coalition of the willing of progressive investors out there. They have the capital. They get this, from the incentive side, the investment side, but also looking at climate risk. There are progressive membership associations like the UK Sustainable Investment and Finance Association, which represents trillions of dollars in assets collectively. A recent example is a Dutch pension fund that removed an asset management mandate from BlackRock, because of BlackRock’s approach globally to the energy transition, with signals coming out of the US and BlackRock being such a huge US investor. We are still seeing the positive signals, but they say to us, “We need more consistency and more joined-up work on decarbonisation and financial regulation”.

For all of you, if there are some big changes or recommendations you would make to us for the the financial system to be more climate friendly, what would they be? We have heard a couple from Richard. Are there any others from anyone?

I will pick up on that. A couple of years ago we launched a incubator called the New Capital Consensus. It is not answering how you move more finance into climate, but it asks, how do we make investment capital more productive, how do we make sure that the lender who has long-term objectives is aligned with the borrowers? Sometimes you see in the context of the UK’s financial system that you have the lenders and borrowers both on long-term objectives, but everybody else in the middle is incentivised to look at the short term. In a way there is a productivity of how you deploy financial capital in a more effective way, and that is not a question for this Committee, but it is a fundamental question. Any climate transition is a long-term investment, so we need to make sure that that objective is completely aligned.

Matt, do you want to come in? I have got a minute, so you have the last word.

I have one small addition. I totally agree with Richard’s point about information architecture disclosure. The Government’s manifesto pledge on transition plans needs to be delivered, and there is the set of actions within the transition finance market review that need to be delivered. One other connection I will make is that as every financer would say, it is not about the amount of money in the world, but about the fact that money goes to the least risky option. At the moment the cost of capital in many major markets—the IA did a wonderful finance investment report about a month ago—is approximately double what it is in other countries. You are not going to build the renewable infrastructure, the grids infrastructure required to get us where we need to be with climate targets. The City of London is a centre of expertise on these sorts of structuring instruments, guaranteed contracts, PDBs, first-loss mechanisms. I would like to see actual concrete actions that link not the £6 billion that came out in the ICF plan, which is the public money, but the other imitative £6 billion that was named about three weeks ago. Practically how will that be structured with the support of the City of London and institutions to drive delivery within the next two or three years? We do not have the time to sit around doing reviews and reports. Public finance takes at best four or five years from inception through to delivery. We have to get on with it now. That is a quick recommendation.

I will come to Ana first. I want to talk about climate action as a diplomatic priority. Can you tell me, preferably in a minute, does the climate feature strongly enough in UK diplomatic action?

Yes. It was really evident in the outcomes of COP in Glasgow for the launch of the political agenda. That was the shift in negotiations implementation, if I can oversimplify that. The UK is still seen by many countries as one of the leaders, and all the regulations the UK has put in the country are still seen as best practice. So, yes.

Thank you. Very well timed. Richard said earlier that there are very strong signals coming from DESNZ and Miliband about the direction, but that perhaps other Departments might be slightly more short-termist in their outlooks. I will ask Richard and Matt for their opinion. Is the delivery of international climate policy limited by it being just within DESNZ? Could it be changed or improved by being under the remit of the Foreign Office, the Treasury or split? What are your thoughts?

That is a pretty big question, isn’t it? How much do you want to reform Whitehall?

A lot.

This is very interesting seeing development going on here. Climate will increasingly see a reframing around energy security and economic security. This comes back to the whole of government approach—and this is a personal opinion, not a Carbon Tracker house view. It could be about perhaps even reforming the Treasury so you have integrated, built-in economic planning for the longer term, which will then treat systemic issues like climate in a holistic way, and it will really be ingrained in the Treasury or whatever. Another point is that when we were out in Santa Marta and talking to one or two other Governments, we were starting to see a little bit more of an economic planning approach around the transition, energy, economic security and climate. You can build transport into that as well, these other sectors. That is the path that we would go down.

Thanks. Matt, do you have any views on that?

Yes, a couple of views, and do cut me off when I hit the limit. There were some very positive signals by this Government when they came in. I fear that the impact of their international climate diplomacy has slightly mirrored some of the travails that the Government have had domestically. There was a lot of promise. People may remember the Global Clean Power Alliance missions on finance and supply chains. I speak very supportively of the civil servants working on them, because I work with a lot of them. There is a lot of great intent. There has not been enough pace of delivery and enough political backing at leader level and from the Secretary of State—by the Foreign Office, at Foreign Secretary level—to drive this through. There has not been enough delivery. There are some excuses there. There has been a lot of distraction from the war in Ukraine. There have been problems with the ODA budget. There have been mitigating circumstances, but there simply has not been the urgency and the seniority of delivery at the top political level since Labour came in. I am encouraged by the Chatham House speech by the Foreign Secretary yesterday, which named climate change as one of the four key issues to be addressed. Building our energy security through the green transition and building climate security in the world are named in the first priority. I am optimistic, but we need to see a doubling, if not tripling, of pace and intent over the next two years compared to what we have had previously.

I want to come now to how we engage with high emitters like China, the USA and India. There has been a lot of wider discussion in politics about our role as leaders and, “What about them over there?” I will come to Joeri first. How do you think the UK should be engaging with high emitting countries?

I am not an expert in international relations so I can’t give you the full overview of how to engage, but one avenue of engagement that works very well that I am familiar with is science diplomacy. It is the targeted development of collaborations between the scientific community in the UK and key scientific institutions in high emitting countries—China, India and so on—not only to open this channel for conversation but also jointly to look at solutions, typically in the energy transition sphere and the food security, energy security area. Through these domestic channels in high emitting countries, decision makers and Administrations can be influenced, because also in those countries the higher education sector has a quite strong voice in the political system in China or India.

I will try to be fast. To go back to what I was saying before about climate change and competition and access, in a way the UK has trade relationships with all these countries. I have been highlighting the interest and I think where there is alignment of national interests, and that is how the UK should focus on this engagement. I think that is the best and more pragmatic way of approaching it.

Thank you. Twenty seconds, Richard.

Twenty seconds, and two things I will highlight quickly. When we have common ground around the science is an obvious one. The Chinese get climate risk, absolutely. The other one is finance again, and central banks working together, with networks between the financial systems. Again, there is a common interest here in addressing climate risk but also driving the low-carbon economy. There is a network set up, and I think we could do more with the high emitters like China, India and so on.

Based on some of the answers that came from the last session, I wonder whether the UK Government are led by some of the failures of COP in where things are in relevance and priority. There was a landmark commitment on phasing out fossil fuels at COP28, and then an absolute abysmal failure to achieve any commitment at all on a road map in Belém. If COP can’t deliver, what does that say to Governments, what does it say to nations, those who are parties to the willing and those who are not parties to the willing? Is there any way to establish how much damage has been done to the credibility and process of COP? Is there any way to rescue it? Joeri, I will come to you on that.

Something that has not necessarily been mentioned before is that the problem we are trying to solve is a collective problem that needs a global solution. That, of course, is why we go to COP and why solutions are being sought. We try to find solutions there. In that sense, the reaction and the transition from finding this global consensus towards coalitions of the willing is interesting, but it won’t be sufficient. It is only a first step towards building ultimately the global momentum needed to stop climate pollution in our atmosphere. We should not forget that when discussing how useful COP is. Maybe a multilateral, international solution is necessary.

Ana, do you agree?

To some extent. We are in a world where nobody wants to co-operate. I am putting it slightly bluntly, but there is this big rivalry. How do you find common ground when the appetite to co-operate and the trust is so low because countries are in wars and proxy wars, and all of that? This is not to say that we should not have the fora to try, but we also have to take a pragmatic approach to the fact that there are negotiation fora and implementation fora. André Corrêa do Lago said at Chatham House a couple of weeks ago that implementation does not need consensus. That for me sounded really obvious but I had never focused my mind on that. You can keep on implementing, especially if it links to a country’s economic transition that delivers prosperity. If it is aligned with the country’s interests, you can implement and do the partnership and form the alliances that work. For me there is the negotiation piece, so COP is needed for signalling, co-ordination, all of that, but you can implement with a coalition of the willing that is around solutions and co-operation.

When the signalling does not match the implementation—we are hearing about the finance signalling required from various institutions, including Government—doesn’t that mean that the implementation is weakened?

Yes and no. In a way, the world has a lot of mixed signals right now. In looking for certainty for climate or for whatever international co-operation, we are chasing something that is not going to be there. That is why I come back to talking about the sense of realism and pragmatism in what actually is relevant to this country’s interest, and then finding those alliances with large developing economies.

You are talking about consensus, and obviously at the moment any one country can veto, which means that the signals and narratives that come out of COP are limited, but you are saying that there could be an alternative. I will turn to Matt and Richard now.

This builds on what I said before. There is a real danger that the world’s press hang around until Friday and Saturday going, “They didn’t get consensus, it has failed”. There is not much interest perhaps, or there is little time to understand what else has happened, and that becomes the story of the COP. The negotiations are not going to break through every single year. It is too difficult and too complicated, but the implementation story is tremendous and we have to be stronger in saying it. The UN process is not the sole actor here. We have countries making sustained investments over 10, 20 years to bring down the price of green technology. We are now in a position where we can manufacture all the green technology we need to deploy over the next decade to achieve our targets. There are other political, trade and economic constraints that are getting in the way of that deployment. Over the period of the Paris agreement to move from a temperature outcome of 4o or 5o down to where we are now, which is probably low 2o, is an extraordinary achievement. It is hard to imagine operating a world of collective action where there is not a place that countries come together to take stock of progress. The other piece, and this is where you flit from the negotiations to the action agenda, is that very few economies can do this alone. The UK cannot do this alone. We need a stable, secure, investable clean energy supply chain, and we need to work with partners. We need a forum where we can make agreements about how we will trade together, buy and sell energy together and work on investment in critical minerals. We need to make the story clearer that that is being done around the negotiations at the COP.

Richard, you can answer on all of those things, but to add another layer on to it, are we saying that if one in 25 attendees at COP were from the fossil fuel industry, it is irrelevant? They are welcomed and they are going to keep coming. The fact that the UK said nobody in 2021 should come from the oil and gas sector is irrelevant, because the negotiation bit is just the front end and it is the implementation bit that is relevant, so we can continue to have 1,600 fossil fuel companies attending COP.

To take the last point first, it is a disaster. The amount of lobbying that goes on by fossil fuel companies seems to increase every year. If you wanted to reform the COP, one thing you could do is turn it into negotiations only so then you don’t have this sideshow. I think campaigning groups would say that it is a shame, as it would not give them the opportunity to engage with Governments. However, it would get rid of all that lobbying. Coming back to the earlier discussion, I will make two points quickly. COPs can send bad signals as well as good, and I go back to the Copenhagen summit in 2009, which I was unfortunate enough to be at. I was working for an investment bank at the time and it was a disaster, the negative signals that it sent to us at the bank. However, the final point I will make—and this comes back to our smaller coalitions of the willing—is that where I think the rubber really hits the road is in how you translate international policies and national plans, which will be backed up by policy measures. That is where the COP may still seem a little bit remote, whereas if we take Santa Marta and the process coming out of that, the idea is that countries will come forward with plans to transition away from fossil fuels. The French have already published such a plan, and I think we are hoping that other Governments will do that. It is also then about working with Governments in the global south, and oil and gas producers there, on how they manage the challenges of the transition. That brings in the investment angle as well. I think it is about the connection between international conferences and national plans to deliver.

Is the fact that effectively everyone has a veto part of the problem?

Yes, a consensus principle, absolutely.

I think it was well meaning because it meant that the low-lying island states and so forth ended up having as much weight as the petrostates but it has ended up with a very distorting impact. Is there any argument for a reform of that process?

You would think there is an argument for reform of that process, but at the same time the reason why the consensus rule is there is also because of fossil fuel lobbyists at the very start of the process. Shifting away from the consensus rule unfortunately requires consensus.

A bit like a Standing Orders moment. Go on.

It means in a hypothetical world this would make sense, but in the UNFCCC it will never happen because the rules of procedure need to be approved or agreed upon by consensus.

I have been reflecting on what you have all been saying about the communication from COP and what you were just saying, Richard, about the role at national level. We have taken significant evidence on a decline to a greater or lesser extent in public support, not just in this country but internationally, for climate action. What needs to change to arrest the decline and indeed reverse the decline?

I will have a go at that first. Is it right that support is declining? I have just been reading a report from SSE this morning, which is putting the case for clean energy and referring to recent opinion polling. About two thirds of the public support climate action.

The support on the face of it is high, but there is a slow decline in it.

I suppose then you have to bring it back again to what are the national policies. Above all, it will be about the cost of living, energy prices and so on, how the transition is—

Making it real for people?

Yes.

Are there any different thoughts on that?

I don’t see that this is moving out of the public eye, and the exceptional events we have had in the last month across Europe—the combined inferno of temperatures and the impact of energy across the economies—will change the calculus in people’s perception. The trick for this Government and other Governments is to take those two events, which are very high in the public consciousness, and do what Richard was saying. We have to say that new partnerships and new coalitions will make us more secure and make our energy affordable.

Going back to something you said earlier about how you are not worried about the United States’s attitude, we have the United States saying, “Drill, baby, drill” and very obviously trying to reverse and rubbish any sense that there is a need to take climate action, and they are not the only people doing it. There are significant political powers in the UK doing it, and around the world. How worried should we be about this?

I am not sure I said we shouldn’t be worried about the US. The remark I made was that the UN process has continued with episodes of US support and lack of support. We have been here before and we can continue. To go back to the arguments we were making previously, the increasingly radical foreign policy positions that the US is taking and has taken are forcing countries to find security in new partnerships and new arrangements. This was the central point, going back to Carney’s speech: we are not powerless. We have to act and we have to act through alliances and make things happen.

Joeri, in 30 seconds?

I see that there might be a dip but maybe in the perception, not necessarily in the drivers and the needs. This dip is also the symptom of a wider problem where evidence-based narratives are being undermined by factless stories, and very often decisions do not focus on long-term security and the prosperity of communities but rather serve other gains. At least I hope it will come back to bite.

Okay, so optimism from three of you. Ana, the final word.

The whole point about how you connect climate into everyday life is the reindustrialisation story for the UK. The UK was the inventor of the industrial revolution, and you had all this creativity. I migrated here because of this, but now there is a missing story. You are in the process of clean transition. Can the UK reinvent itself and think about what are the next generation of green industrial policies that will transform this country and inspire people with more jobs in the most deprived regions? That is the story that is missing that connects climate to everybody’s daily life, and then also goes wider for a specific Government who have stories that mobilise people.

Thank you all very much for your evidence this afternoon. Witnesses: Katie White OBE MP, Rachel Kyte CMG and Matt Toombs.

Welcome back to this afternoon’s session of the Energy Security and Net Zero Select Committee and our inquiry into international climate policy. This is the ministerial session. Please introduce yourselves, starting on my left.

Hello. I am Matt Toombs, International Climate Director in ESNZ.

I am Katie White. I am the Climate Minister.

I am Rachel Kyte. I am the Special Representative on Climate.

Thank you very much for being here. The session we have just had looked at the challenges facing the multilateral system with COP, and lots of questions have come out it. One of the points made was a lack of urgency and a lack of delivery in a serious manner from the Prime Minister down, and including from Ministers in the Department. How do you respond to that criticism?

Chair, if I can clarify, the criticism is towards the Government and not towards the UNFCCC process?

The criticism is towards the Government.

I think that is a little unfair. Can I put at the heart of this my boss, who, wherever you sit within the House and your position, would see has met this agenda with a huge amount of energy and leadership and determination? Britain has always been a leader on tackling climate change, and I give credit to the last Government for what they did on tackling climate change under COP26 and domestically, but since we came into power we have absolutely supercharged this agenda in multiple different ways. This Prime Minister has been attending the COP process. We announced a very ambitious NDC target. We have been doing a huge amount of domestic work, such as Clean Power 2030, and reordering the grid queue, but we have also been looking at different ways to engage. I am honoured to be joined by Rachel Kyte today alongside me. It was the Secretary of State, alongside the former Foreign Secretary, who appointed Rachel Kyte as a Special Representative on Climate and Ruth Davis as a Special Representative on Nature. They are internationally renowned on their agendas, and I think that is another demonstration of the seriousness with which this Government takes this agenda.

I note you didn’t make claims of any delivery in the last two years. That was a substantive part of the criticism.

In terms of—

Lots of things have been announced, lots of talk but a lack of delivery.

I think that that is an unfair challenge. We have put ourselves right at the heart of the agenda again. Britain, at the end of the last Government was certainly not at the heart of the negotiating table. There has been progress on forests. The Forest and Climate Leaders’ Partnership is something that we have been working on. We work constantly with our multilateral partners. Rachel has been attending the Santa Marta conference, which I am sure we will come on to, which is another area where we have been moving things on. We have seen that electrification, for instance, was at the heart of the London Climate Action Week the week before last. Electrification was at the heart of that agenda, and we have seen that over the last two years. The numbers of electrification projects going across the world are incredible. Therefore, it is a bit unfair to say that we have not been delivering. I am sure that we will want to do more, and we can talk about that, but we have been putting in a huge amount of effort and there has been delivery.

Unfortunately, the Secretary of State session is not happening, so we are asking you questions that we might have asked him. Domestic policy was the other part of what we heard in the first session. It is not just about what happens at COP or through the multilateral system, but domestic policy has been slow. We are still waiting for the implementation of things like the warm home plan, for example. I am surprised that you mentioned forests, because the finance there was not as anticipated from the UK Government. How do you respond to what the UK Government have or have not done?

As I say, we can always look at how we can go further and faster, and we were looking at that. On forests and the progress we have made, the Forest and Climate Leaders’ Partnership is a completely separate track. There is a lot of activity going on in forests. It is an area that has been transformed in the last decade on international climate change. On ICF money—I am sure that Matt will want to come in—we have already delivered £11.6 billion under the last ICF, and we have announced the next three years of money that we will be working on. We are far more co-ordinated across Government, and in the UK we have secured £100 billion of investment in the last two years. You know well, Chair, that we have reordered the queue, we have overturned the onshore wind ban and this summer we will see plug-in solar in stores.

One other question from me. The defence investment plan suggests a cut in the DESNZ budget. Do you know yet what will be cut?

We are working through that. It is a responsibility of everybody in Government to make sure that we meet the necessary increase in investments in defence. DESNZ had a good settlement at the comprehensive spending review. We are all willing to play our full role in meeting those defence investment plans, and we are working through how to make sure we do that in the most efficient way in the Department.

Have you as a Department made the case that energy security is national security and therefore your budget should be protected?

There was always going to be robust discussions, but we want to make sure that we are balancing that. However, your wider point on energy security being part of the mix is absolutely crucial and is a core part of our agenda. I also launched a climate security taskforce the week before last, which I am doing with the Security Minister, to look at how we improve resilience in the face of climate change.

The UK has always been very proud of its leadership role in international climate. Have we managed to restore our leadership in that after a period of wobble? If so, how? Where is there further work to be done in restoring our climate leadership internationally?

Excellent question. I will start off and then I might hand over to my colleague. Thank you for your leadership on this agenda over the last couple of decades—I am trying to remember how long ago this is. Same page, a little while ago. I was not at the COPs as much when we were in opposition, so the officials and Rachel might want to comment more about how the UK’s position has been improved. Certainly what came up in all the conversations that I had when I attended the COP last year was the central role of the UK in leading on this agenda, not least because of the experience that we have across the board. I mean experience—we have a very experienced Secretary of State. We have an excellent team of officials. We have now appointed these special representatives, who are the best in the world. We have put ourselves forward in doing that. Having an ambitious NDC was really important to make sure that we were delivering at home, which gives us that credibility to do that, and the same on the finance. Obviously we made difficult decisions on the ODA cuts, but we prioritised climate within that. Of course there are always opportunities to go further. We have various different forums that we work in, whether it is the Powering Past Coal Alliance or the Global Clean Power Alliance. There are lots of different areas. We are looking constantly at how to improve those and how to make sure that we show leadership in the areas where we are leaders. There are also opportunities for others, because this is not just the UK on its own. There are multiple leaders across the world.

I accept that, but, Minister, if I was somebody looking to ask how we will assess properly the UK’s leadership, I would say that they have cut climate aid, so it is difficult. They have cut climate aid out of ODA. What is the full engagement with the factories of the world—Malaysia, Indonesia and so forth—on electrification? This should be a trade priority issue, not just a climate issue. You set up a forest fund but you did not put any money in.

Let me take this back, because we have played a role in setting up the TFFF, which is what you refer to, which is a key amount. That remains under review. You will understand, like everybody else, that we are not making big investment decisions now, but that remains under review. It is an important part of our ecosystem to meet the forest challenge. We do a huge amount of bilateral engagement, including, as you all know, on trade. I spend a lot of time with my DBT colleagues on trade to make sure that this is at the heart of it, for the economic opportunities and to manage the risks around that. We do a lot of work on that, to make it central. I hear you about reducing aid. You know that that was a very difficult decision in the context that we faced, but we did prioritise climate and nature within that. Rachel, do you want to come in?

If we think about our leadership first of all, you are right that when this Government were elected, all eyes were on us because people externally saw that the Laboup Party had put climate clearly in its manifesto, and what would that mean. The first thing that came out of the block was an extremely ambitious NDC. The Government came early with that to try to set a bar for others to reach towards. It had that effect. Not enough countries have filed their NDCs and not enough countries’ NDCs were ambitious enough, but you could reasonably make the point that if we had not come out early and hard, it would have made things very much more difficult, and the UN would tell you that. We went into the COP negotiations at the end of 2024, where the big discussion was going to be on a qualified goal of finance that needed to be achieved. We went in there with a very ambitious position, and it was our arithmetic that helped other countries get to a strong position as well. You could reasonably make the point that if we had not gone in strongly with good arithmetic, we would have come out with a lower number. The number that we reached was not a big enough number, objectively, for the world, for which many countries are critical and many NGOs would be critical, but would not have got to the number that we got to without us. Leadership also displays itself differently. It is now about coalitions of the working and the willing, because we cannot enjoy a global consensus because of the withdrawal of the United States. We are leading the methane coalition that will try to implement the goals by 2030. On forests, we have not yet made a decision to invest in the TFFF, but we were instrumental in the design of the option, and the decision to invest is still under review. We have now set up a coalition with Singapore and Kenya, driving countries that want to build their carbon markets. We are now at 13 countries. Therefore, the way in which we are demonstrating leadership has changed as circumstances have changed.

Are these effective? There is a various number of diplomatic milestones between now and Antalya. How will the UK government engage in those milestones to be able to maximise ambition and delivery at Antalya?

I will make two points. In the climate negotiations now, there is not that much to negotiate. Everything has been negotiated and the rulebook has been negotiated. It is about the action agenda. The question is how we demonstrate that these transitions are under way and how we talk about the things that still remain to be talked about, not negotiated, but which are difficult. Between now and Antalya, we need to have a much better offer, together with all other developed countries, on how to finance the costs of adaptation. This is a flashpoint, and we are doing work on that within FCDO with DESNZ and DEFRA. Secondly, we need to go in there with a response to the energy transition crisis, which has been made more real by the Strait of Hormuz. There the question again is how you marshal investment finance behind energy infrastructure in the countries that now need to pivot away from fossil fuels much more quickly than they used to. We have a lot to say about that. I will point you to another point of domestic leadership, which has an international impact: the UK taskforce, which is co-sponsored by the Treasury and FCDO but is led by the private sector. That taskforce is now working through the obstacles to getting private finance, in particular British asset owners and British insurers, investing in the green infrastructure in developing countries. These are the things that we need to turn into deliverables that give people hope that the action agenda is moving forward.

I want to talk about leading by example and helping capacity building. There have been a lot of developments in the UK energy sector. Are we using that knowledge and experience to support capacity building for other countries’ energy transitions?

I will start off, but Matt or Rachel may want to come in as well. Absolutely. I know from your constituency that you are embedded in the nuclear sector, which has had a revival under this Government, which is fantastic. For instance on small modular reactors, we have the deal now with Sweden, which is great, and we are working with Czechia as well. There is a trial as to how we can work across Europe to accelerate that transition, but work together to do that in the most effective way and to make the best use of our supply chains. That is one example of doing it. I recall being at COP last year and there was an incredible representation from UK businesses that were there doing a huge number of deals. SSE announced its £33 billion of investment in the grid upgrade, and the City of London was also there because we are number one in the world at green finance. We are looking at how we can do that most effectively, where there are country action plans, which is a way of how we can work together to support countries to facilitate their transition. Quite a lot of the time now, and certainly at the FCDO conferences that I take part in, heads of mission or whoever are asking for access to our expertise more than anything. We saw at London Climate Action Week that one of the reasons why we are doing so well in this is because we have a unique cocktail mix of skills, legal or financial. We have the capital and we have the engineering capacity and we are delivering a lot of this on the ground. That is a great opportunity for us.

Can you give me some examples of what would be in a country action plan?

Yes. Matt, do you want to step in on the country action plans?

Yes, certainly. One of the things that we are doing with our new approach to international climate finance, which we have set out in the strategy that was published just a few weeks ago, is not just looking at the ICF, the ODA spend, but looking at all of the other Government levers that we can deploy at the same time. That includes UKEF, BII, our guarantees for the multilateral development banks, various different things. One example in a country action plan is that we are directly supporting the World Bank’s Energy Sector Management Assistance Programme, which is doing offshore wind work with Brazil. That is an example where it is a UK strength, we get to link in with UK opportunities to support Brazil and Brazil is looking to develop that directly itself for its energy transition.

Embedded in the free trade agreement that we signed with India is a partnership to help it build out its options for wind in the states of Gujarat and Tamil Nadu. Korea is asking for help in how to decommission its coal, in particular in light of the insecurity around gas. We have a conversation going on with Pakistan, as it has gone hard into solar but it was hit by the Strait of Hormuz and it is indebted to China for its coal plants. I could go around the country, but the request is for help from Ofgem and NESO as well as from officials. On nuclear, we are one of the go-to countries now because we have a stable, safe, effective regime for the management of civil nuclear power. More and more countries, as they think about nuclear as part of their mix, want our technical assistance. People want what we have, they want to know what has worked and what has not worked as we have developed our transition.

You have told me about deliverables for other countries. How about deliverables for British people? We have heard some evidence that there could be waning support for action on climate change. Whether the recent weather has brought home the impacts of climate change a bit more, I do not know. What deliverables are the British people seeing from climate action and are we communicating those well? Are you communicating them well to the British public?

Let me take that in three parts, one on the support. I know that in this place—and I have had this conversation with many of you—I do not think that Parliament often reflects what is going on in public. If you look at all of the public polling, the support for tackling climate change is way higher than you would believe from the small but loud voices within Westminster. If we take it back, people are trying to politicise elements of this debate, whereas most people want to protect the people and the places they love. They can see right now that it is pretty hot in here and pretty uncomfortable. We are in the middle of the third heatwave that we have felt in this country. The implications are clear: that we are not set up for this new normal. Therefore, I slightly refute that there is not public support, although I totally take on board that some of the political support is not meeting that. That is a challenge. I have been totally honest about that and how we build bridges on this and work together. On the benefits for the UK public and the reason why we are acting in UK interests, let’s start off with the risks and the security implications of this. This is a massive risk to our way of life, not only the discomfort that we are feeling now and people’s schools closing and all of the day-to-day things, but with fundamental risk to our food system, water system and energy system. They are fundamental risks. At the same time, the flipside is that this is a big opportunity for us. We have talked about the unique cocktail that we have of skills and expertise in this country. We also have quite a good geology and geography as a windy little island—although we could do with a bit more in here—to make best use of that opportunity. There are also co-benefits, the health benefits of shifting and upgrading our system to this cleaner energy system with clean air, more public transport; there are so many different co-benefits. When I think about the reasons why we are doing this, it is for now and also for future generations. It is about growth and resilience. I did not say about what we were doing. We are trying everything we can. I am sure that you have seen my enthusiasm for this online. We did Energising Britain, five events on Monday in various parts of the country—Bristol, Birmingham, Bradford, Manchester and London. We are also working with others, because I am fully aware that while we want to take that responsibility as Government, there are other actors, faith leaders, online influencers, who people are far more interested in, sadly, than they are in us.

What happened at those five events? I thought you were going to tell us.

Sorry, I was cantering through, Chair. We had five events that were based around the local net zero hubs. It was about celebrating a lot of the work that is going on within communities and providing a space for those communities, businesses and groups to learn from what they had been doing, what others could learn from them and how they could connect and reflect. I was in Bradford at the football club. I learned of a low-carbon chippy in Sheffield and a low-carbon ice cream shop. You always get the best things in Yorkshire. There were low-carbon boats in Bristol. In Manchester, there were various faith leaders involved. It was an array of community organisations coming together, because there is a lot happening up and down our country that does not often get shown in the true light it deserves.

Rachel, you have managed to answer some of my questions ahead, so we might get some time back. I want to talk about Santa Marta. You have talked about it a bit, but what have you learned from our participation in that first global summit that we can apply going forward?

You could regard the fact that 57 countries turned up to what was somewhat of an experiment as a sign of a new coalition of the working. These are 57 countries that want to see how we can speed up the transition away from fossil fuels. What I took away from that—and this is where the criticism comes from—is that the atmosphere at the COPs has become quite toxic in different parts of the debate. It was very clear from different countries that were in Santa Marta that having an opportunity to be able to talk frankly about what is hard in this transition is very much needed. It was a safe space to share examples from country to country and to ask for the help that is needed. It has helped us, as the UK, work out the taxonomy of countries that are facing different challenges in their transition. For example, in the week before London Climate Week, we invited to Wilton Park a number of developing-country net producers of fossil fuels. These are the Nigerias, the Gabons, the Cameroons of this world. They face a particularly difficult transition because their receipts from selling oil and gas will diminish just at the time that they need to invest more in diversifying away from oil and gas. They have a particular set of issues that we can help them with, and they would like us to be thought partners in that. That may be different from a different set of countries. What I took away from Santa Marta is that this is an avenue of dialogue that is very much needed. It is not in competition with the COP and I hope that more countries join.

Are we better placed to make change through a coalition like that than the broader UNFCCC?

We have to do both. It is not either/or, it is both. However, we should be mindful of how complicated these transitions are and that you have to meet countries where they are and you have to meet them in the moment that they are in.

Is there a risk that you create two groups, the coalition that are willing and working and the others, or is the hope that you create some FOMO, so that they want to come and join you at some point? How do you make sure that you do bring everyone on this journey? We cannot do it without every single country being involved.

No, you cannot. Every country has signed up to the Paris agreement, with one exception. Everybody knows what point on the horizon they are aiming at. How they get there and how quickly they get there is what is at stake. Different countries face different transitions. For the international community, the challenge is how we muster the support and muster the finance to be able to help them move through that transition as quickly as possible. If for some countries, finding a place to discuss the specific issues that they face is useful, fine. Another country might not want to do that. However, it should be open to all. It is not a treaty, it is a voluntary activity. It is a club at the moment and we have lots of examples of where clubs have helped. Maybe some of the ideas that come out of the club get transferred into the treaty or into a legal framework, but that is not what is at stake at the moment.

Can I follow up? It is on the coalition of the willing and opportunities. It is interesting that we have had this conversation. We have been quite honest about the fact that the situation has changed quite significantly since Paris and the fraying of the global consensus, but no one has quite mentioned the long tail of the impact of the Strait of Hormuz. Since the UK Government is hosting the G20 next year, is there an opportunity to start convening the biggest powers to start saying that we agree that homegrown energy is obviously the cheapest energy and the best way to do it, but we will still have to collaborate and co-operate, particularly those of us who have some of those big challenges? What are the Government planning on doing to use that platform that we currently have coming towards us to focus the minds of the big economies globally on the reality that we are now facing with an energy crisis, which offers the opportunity to escalate and accelerate our shift away from the fossil fuels that are causing so much distress and risking and exposing so many economies to significant impacts?

I think that you are absolutely right, and Rachel mentioned it. We are not just in the face of a climate crisis, we are in an energy crisis. This energy crisis is as big as the 1970s and Ukraine put together. It is enormous, and you are absolutely right to look at the long tail of that and what the implications are now and in the future, whether it is energy and food prices, or everything else across our economy. It has given a shock to the world and reminded us of the global interdependence of so much of the systems and societies that we have set up for ourselves. We have looked at how we can boost electrification. We are looking at further and faster in the UK and we are exploring all that. On a local level, that is why we are doing the plug-in solar as quickly as possible, but what are all the ones to protect consumers now in the run-up to winter? You asked about the G20. Absolutely. I cannot envisage a G20 in the UK where energy does not play a role, given the international situation as it is right now. How that looks and how it is led will be defined in the coming months.

Before I come to Claire, who has some questions on interactions between local and national climate actions and how the Government engage with business, I will ask you some questions about dispute settlement mechanisms. The West Cumbria mining lawsuit is the first case under ISDS against the UK since 2006, and it is the first one brought in response to a climate policy. The investors behind the coalmine are using the UK’s investment treaty with Singapore, such is the nature of ISDS, to sue the Government because of the High Court’s decision to quash the coalmine plan in West Cumbria. What is your response to the increasing concerns, not just this in case but other examples, that the use of investor-state dispute settlement by those defending the status quo is a threat not just to UK climate policies or our international leadership on them, but to the energy transition?

On any trade agreement on international trade, there is clearly a quid pro quo. We are engaging in a deal with countries and we are always looking at how to balance that most effectively to protect our interests but gain access to other markets. I am fully aware of the growing interest in ISDS. We did, as a Government, withdraw from the Energy Charter Treaty in 2025, and whenever we have a trade agreement, we are highly conscious of what the implications are, but it is not all one way, and we look at how we protect our own interests as well as ensuring that we can deliver our climate change targets and the commitments. Matt, do you want to add anything to that?

There is a 20-year sunset clause as part of exiting the Energy Charter Treaty, and we are looking at the options around this and in discussion with DBT.

Does that clause cover existing free trade agreements? Are you saying that those can be overturned or that the ISDS provisions in them end after 20 years? Is that what you have just said?

The Energy Charter Treaty itself has a 20-year sunset clause.

Free trade agreements don’t, do they?

No.

Okay, so investors are still going to be able to use existing investment treaties like the one I described. The concern is that public funding could be taken away from investment in the energy transition by the use of ISDS. Is there an answer to this?

I think it is about balancing risk at all times but on each free trade agreement we ensure that we look at what the risks are around any exposure, as you would expect us to do. We are looking and there are different sections that we can write to the Committee about how we have managed on each of them. As I say, it is a balance of risk and trade, which is becoming an increasingly prevalent issue in the international space.

Not to answer your question, but adjacent to that, we are active participants in a number of fora now that are looking at the interrelationship between international climate agreements and treaties and the World Trade Organisation in international trade agreements, where ISDS is absolutely one of the big issues. This has been an area that has never meshed together and where up until a couple of years ago people still were having difficulty bringing the conversations together. I think that we are now at the point in the transition where these conversations must come together. It is complicated and difficult diplomacy but we are in the middle of that conversation.

Okay, because the UK-Gulf Co-operation Council agreement has been signed quite recently and it still includes an ISDS that enables investors to sue the UK Government for compensation on grounds of climate incompatibility with trade. We have had evidence saying that our position as a country—this Government’s position of being prepared to sign these sorts of free trade agreements—means that our position has been entrenched as Europe’s leader in propping up the corporate court system and benefiting claims of our fossil fuel investors. Do they have a point?

We are central to holding up the legal system internationally and the rule of law internationally, and I think that is of benefit to us as well. People know that we stick to our contract, we stick to our word, so we want to make sure that at the same time we are balancing and managing the risks and the exposure. The Gulf agreement was in line with modern standards but we must make sure that we are considering this, and, as Rachel said, there is a big, broader conversation about how trade interrelates with climate policy.

I think you are right, it is in line with modern standards but is that not the problem? Isn’t it time we had a break from modern standards?

We are exploring options as part of these wider conversations but I do not want to give the Committee the sense that we are at the brink. We are at the beginning of these conversations. For anybody who has had the pleasure of going to the UNFCCC and seen the complication of it, adding the WTO with the UNFCCC is not necessarily a marriage made in heaven, but how do we pull out those necessary to ensure we evolve any system? I think each of these systems needs to make sure they are looking at evolution so that they are keeping pace with the reality of where we are.

I think you had already started to answer this question, but I wanted to talk about the interaction between local and national actors. You had already talked about the events that were held, and they sounded like good networking opportunities for the people involved and highlighted some good ideas, but how do you ensure that the ideas and actions that you get from these subnational organisations inform your decision making and what you do?

Sorry, just to clarify, are you talking about in the UK context?

Yes, in the UK.

I will have the pleasure of going to the LGA conference tomorrow in Bournemouth, but that is to chair a group working with councils across the country and from across political parties to make sure that they are key to being involved in policymaking. All of us know that our communities and our constituents will do things differently, and we want to make sure that the plans are making the best use of place-based approaches. What happens in Leeds in a landlocked constituency is very different from what happens in Grimsby on the coast. There are different opportunities and different risks, so we want to make sure it is appropriate but we are also learning from each other. I chair that regularly. I am going to see them tomorrow in Bournemouth. Also, our Secretary of State has a regular meeting with the Mayors to make sure that he is working through policy at all times to make sure that we are iterating, learning and reflecting, and where we can accelerate we do.

Given we assume the new Prime Minister is very keen on place-making, the initiatives that cities and the rural local authorities are making, there were lots of declared climate emergencies back a few years ago. How are you incorporating their ideas into your decisions and their actions on climate adaptation as well?

The climate emergency declarations were really useful at the time in moving forward and almost raising an alarm that people and communities were concerned and committed to doing that. I think we are now more in a delivery phase, and different councils are doing that in different ways. We want to strike the balance of learning from each other but not making the perfect the enemy of the good, because otherwise we could just spend our time in stakeholder meetings. As well, a lot of the time the councils are way ahead in how they are delivering, so we need to make sure that we hear about where the friction points are or where we need to unlock impact, whether that is on heat networks, which my colleague Minister McLuskey leads on, or whether it is around reordering the queue. That was reordered and 700 projects were granted this year. This morning I was at an electrification of transport meeting with colleagues from DBT and DFT, with a cross-sector look at what was happening in different places. We had a great example in Glasgow at the bus station where, when the electric buses are out, they are using the bus station to make sure that other people are charging at that time, so they are sweating their assets together. We have various structural ways within the Department to interact with councils, the local net zero delivery group and the mayoral roundtable, but also we work with colleagues across the House to make sure we are listening at all times and to learn from the best. There are organisations such as C40 that share best practice examples from here and across the world.

We have had some evidence suggesting more use of deliberative democratic approaches such as citizens’ assemblies and panels. Is that something to consider?

There was a climate change assembly and, forgive me, I cannot remember exactly what year it was. It was probably five or six years ago, 2019, and then we had the people’s assembly on nature as well. I think it was really helpful. It is interesting, I met with the Korean delegation the other day and they have just got a climate change assembly that they are doing as the first part of deliberative democracy. I am open to all different ideas of how to do this. I think it is making sure that people are aware of what we are doing and how we are doing it but also focusing on delivery. I am also conscious of where our weaknesses are. I said before that we are not the most trusted voice as Government, so how do we work with others to deliver on that? Rightly there will be a scrutiny on how we are spending our money, so I want to make sure that we get maximum value for money in doing that, but I will continue to listen to international colleagues such as the Koreans to see if that is a good way of doing it and learning from that. As I say, I think the climate change assembly and the nature assembly were very helpful at the time. We should be open and curious to all different ideas of bringing people with us on this journey.

Would a locally determined contributions framework be useful to help local authorities reduce greenhouse gas emissions and line up with the national objectives? If the answer is yes, how do you think that will work with councils who are rapidly cancelling their climate emergency declarations?

I think what you are referring to is the Local Government Association having this target. Targets are useful to a point. We are working out if that is the right way of moving forward, and if it is helpful, great, but it is under consideration. On your second question about working with people who have a mixed reaction, your next-door neighbour has a very good experience of this because the mayor in Hull is contradictory in what he says about not wanting net zero but he does want all the green jobs that are behind it. We think underneath there is a lot of support for the delivery. Regardless of your opinion on climate change, of which you would be in a minority scientifically under my people to not understand what is happening, this is an energy security and an economic opportunity. I am hopeful we can work with these people, frankly, for the benefit of their constituents and their communities to take advantage of the opportunities for their health and wealth.

Moving on to businesses, we have heard that businesses want to be listened to and want a clear, consistent policy so they know where they stand. That should not be surprising to anyone. How do you balance supporting businesses with ensuring accountability?

That is an excellent question. I think businesses have an absolutely key role and we have a constructive relationship with businesses, whether it is working within the UK or internationally. We want to have high ambition and also look at how to simplify things for business because sometimes with the best of intention we have added up various well-intentioned initiatives, which I think can make it confusing. We have a manifesto of commitment on transition plans and we have been working closely with the City on how that might look to ensure that particularly for the biggest companies, not for the smaller companies, those transition plans, which many of them have, are credible and add up to delivery. On small businesses, we work closely with the Federation of Small Businesses. They sit on the Net Zero Council and we have the UK hub to look at how we can support small businesses to make it as easy as possible to take advantage. We want to look at how small businesses can be at the forefront of electrification and the shift over to save them money and to play their part in energy security and tackling climate.

InfluenceMap’s analysis of corporate lobbying by the fossil fuel and energy sectors showed that the UK was comparatively weak in its transparency rules and it relied too much on voluntary corporate reporting, so there is a transparency gap. Do you recognise that characterisation of the situation and do you think that the voluntary corporate lobbying reporting framework is robust enough to maintain investors and the public confidence on climate and energy policies?

It is a really good challenge. In my experience in the Department since last September I think we have more external meetings than any other Department by quite a country mile, but I do not see that skewed in any particular direction. It is also quite difficult for companies such as Equinor that are involved in drilling but also offshore floating wind. It is not as binary as saying, “These are in the fossil fuels industry and those are in the renewables industry”. I take the wider point and I will take that back and reflect, but it has certainly not been my experience. Rachel, is there anything you want to draw on on the international side?

Internationally, the way that the UK managed COP26 is the gold standard on how to manage special interests by business. Ethiopia will host the COP next year, so COP32, and they have come to us for advice on how they manage lobbying interests. There was a lot of reporting about how much fossil fuel interests were lobbying in Belém and it was much easier for business of all kinds to interact in Belém but the numbers that were published were inaccurate. I went through the raw data and saw that every single member of British business was put down as a fossil fuel interest because they were business, but that included the Standard Chartered Bank and SSE and Octopus. I do not think those are fossil fuel interests. It is an important thing to keep an eye on. The bigger problem now internationally is the degree of misinformation and disinformation and the way that that corrupts the atmosphere around negotiations, with perhaps an oil executive going into a negotiation wearing the badge of Mauritania, which happened in Egypt, or things such as that.

We heard from the first panel that one option would be to make a COP only about negotiations and to remove that whole scope for lobbying.

I think that since 1992 there has been a remarkable opening up of the negotiations on all kinds of issues to interested stakeholders, which includes business and also includes NGOs. In the WHO there was a very strict rule around the negotiation for the tobacco treaty which forbid any tobacco companies from being in the room. That is one way of doing it but there are other ways of doing it. The opening up and allowing civil society into the room, allowing science into the room and not just having diplomats sitting behind a closed door, has been a good thing for the world. Going forward, the idea that we are going to go back into a small room with a certain kind of diplomat negotiating is not a good thing. I think we are right to be alert and there should be guardrails put in place but I do not think we should make these kinds of things exclusive. The Secretary-General has said climate is everything and everything is climate. How we negotiate these complex issues such as trade and investment where climate is now a driver of what we want to see means that we must find ways to allow all voices to be heard.

We will move on and I will move on because I have to leave, but Melanie is going to take over in the Chair. [Melanie Onn took the Chair.]

Okay, so Claire has done her questions. Chris, I think we are coming to you next.

Don’t I look like a Bill?

Thank you. That is an excellent question, and I understand that while we are meeting the Environmental Audit Committee is quizzing my colleague on biodiversity collapse. We know that climate change and nature loss pose a challenge to many of our fundamentals—energy, water and food. There is some excellent work going on across Whitehall, but we want to make sure that we are pulling this together and working across Whitehall, which is why I am doing it with my colleague, the Minister for Security. We also want to challenge ourselves, so we have pulled together a collection of experts from military, academia and science to look at our preparedness. We have set about three different meetings over the next year, but we will be working with the team to look at our preparedness on these issues and where there might be further risks for the UK, what will be their priorities in meeting those risks and where there might be gaps in the analysis.

It is a good challenge. I know that you raised adaptation in the House yesterday, and I think received the answer from the Secretary of State. Adaptation has been a poor relation of mitigation and as we sit here in a pretty uncomfortable space, I think we are all aware that we need to look at how to adapt the UK more effectively. The Committee on Climate Change, as you know, is an independent organisation that gives us advice, and the Government can take that advice or not. This taskforce that we have set up is the first of its kind but it is time limited. We will see how we get on in a year to look with these individuals across the piece at all of our preparedness and resilience around food, water and energy and how that interacts with the military, because they have been doing a fair amount of work themselves, to make sure we are pulling in all of the work across government so that we are prepared. I am sure there will be interaction and we will be able to outline more of that in due course.

As you will know, this adaptation at the moment sits within DEFRA, so we will be working across government but DEFRA is the responsible Government Department for that. It is a hefty report that I think you might have with you—

It is a hefty report, so they are working through that at the moment and, as ever with reports from the Committee on Climate Change, the Government will issue their response. I do not want to speak on behalf of DEFRA and I do not think they have come to their conclusion of what bits of that advice they will take. We have never taken the advice 100%, so it is which bits of the advice we will take and how we think that is factoring in. At the moment in DESNZ, for instance, with heat pumps, we are already making sure that on the boiler upgrade scheme you can do cooling and heating at the same time. We are looking at how to future-proof our elements of it but the response will come from DEFRA.

Of course.

Absolutely.

Well, thank you for the opportunity and the challenge of changing your views, which I think might be long held. There is quite a lot in that. I absolutely agree with you that the public expects more for adaptation, and as we sit here very uncomfortably in this room getting hotter and hotter, we see the impact on productivity, we have seen schools closing and at the same time if we go back a few months we have had floods. This is about crops, this is about parents. We know we must adapt to the changing climate. You have been around this place for a lot longer than most of us and are well aware that I would make sure that any big announcements on a very in-depth and detailed report that came out a matter of weeks ago were well considered across government. Of course as soon as we have a robust, thoughtful, appropriate and commensurate response we will report on that. I agree with you it should be a commensurate response. What I disagree with is that we should not be doing anything on mitigation. I will not want to play a role in the idea that we would hand this country over less resilient for future generations. Playing our full part means mitigation and adaptation.

Can we make sure that we have relatively short responses? We have one more question and we are going past the 5 pm limit. Just check in your diary.

Thank you. I think we are okay. I agree with you that we need to make more investment in this. Of course I am not going to come here and make a huge commitment about our fiscal investment on this today. You have been around this place for far longer and you that that would be an ill thought through decision. We need to make sure we have a proper, thought through, commensurate response and that it is backed up with numbers. It would be irresponsible of me to come here today and to not have done that across government yet. I will be working closely with my colleagues to do that at pace because, as you say, we are suffering the consequences today.

When we know we will report to the Committee. As soon as possible.

Obviously it is above my pay grade to make machinery of government changes and announcements or decisions today—way above my pay grade. I agree that we need to make sure we are working across government. We have been doing that with me sitting here with my colleague from the FCDO. I work very closely with DEFRA colleagues as well, and the taskforce we announced is with the Cabinet Office. We need to make sure that we are working as a team and there are various things we have done since we came into office that show how we are trying to improve that. I am sure there is more room for improvement and I will continue to push on that but thank you for the suggestion.

Sir Christopher, thank you. You are straying into some questions that I wanted to ask. Do you want one more bite of the cherry?

I think the British public want investment in adaptation and mitigation. There are areas where we agree but I beg to say I am a little more ambitious for this country and for our future.

Thank you. On the point about governmental coherence and Departments working together, there has been significant criticism, particularly from the ICAI, which has found blurred responsibilities between FCDO and DESNZ. We have had overlapping programming and weakened portfolio coherence, because there has been limited co-ordination. Have any changes been made at a portfolio level to try to address those issues?

I will start off but both of my colleagues probably have quite a lot to say on this. We have a regular ODA board meeting, which is between myself and Minister Creagh and Minister Chapman. We have set that up since we came in and I think it has been working very effectively. We now have a strategy that we work on together, which we published. Matt, can I ask you first and I am sure Rachel has something to add?

Yes, absolutely. As the Minister said, we have this new ICF4 strategy that is looking at, as I mentioned earlier, how we use ODA but also other levers. Those other levers are quite often held in different Departments, so FCDO looks over the work of UKAF or BII, or the mutilateral development banks or other areas, and that is firmly connected to what we are looking to do with ICF. We are also looking, within our climate finance, to streamline and focus on a smaller number of programmes and to do that in a very integrated way. The ICAI that you mentioned did a report into energy transitions and finance for energy transitions, and some of the work that highlighted are things that we are working on directly between DESNZ and FCDO, joining up our activity on how we do energy programming in a fully integrated way.

From my perspective, the co-ordination at the ministerial level has pulled officials together and given a single point of direction, which I think is helpful. I was appointed by the Secretary of State for DESNZ and the Foreign Secretary. My counterpart, Ruth Davis, was appointed by the Secretary of State for DEFRA and the Foreign Secretary. When we see that things are not as co-ordinated as perhaps they should be we can raise a red flag as well so it gives an extra line of defence.

Are you confident that the ICAI will not be damning the co-operation and co-ordination between Departments on this agenda?

I think we feel confident we have improved the position. I do not want to pre-empt any outcome but we have definitely made inroads on this and we will continue to endeavour to do that. As Rachel said, having these special representatives has been pretty game changing from my position.

Can I follow up? It is not only the ICAI who found this. We found this as a Committee. Getting you three in front of us was quite hard. It goes to the point that Sir Christopher Chope and Melanie Onn have mentioned that if net zero and climate change is a corporate responsibility for the whole of government, I would suggest that the Government respond accordingly to make sure that government officials are accountable to the appropriate Committees, of which we are certainly a central one. Can you convey that to your seniors?

Absolutely. I would love to hear directly where the challenges were, because I understood this was rescheduled on a couple of occasions and I was up here a month ago. Obviously we are lucky enough to have Rachel Kyte with us, who is travelling at times but made this a priority as soon as we said. I apologise if there has been any challenge, and I appreciate the feedback and I will definitely take that on board.

It just suggests that the mission board approach might be somewhat under strain from a Whitehall-siloed approach.

Thank you. I want to move on to finance. Earlier in this session, Minister, you said that the UK is number one in the world in green finance and we had some evidence in the first panel, particularly from Carbon Tracker, that I suspect did not reflect that feeling at all. There were questions about signals coming from a whole-government approach not really being there, that there was a lack of consistency in policy application and speed of policy application. There was a concern about funding from things such as pension funds not being brought forward quickly enough. There has been £43.4 billion raised since 2021, £21 billion in ICF funding, the National Wealth Fund is doing a three to one levering of funding, but the Climate Change Committee says we still need £50 billion to £60 billion in annual capital investment every year to meet the 2050 target for net zero. It does not really scream number one in green finance, does it?

Let me just break that down because there is an interaction here. We are investing in the UK domestic sector. Wind turbines in Grimsby is one area. It is also how we sell this as a growth opportunity and then there is the ICF. When I was talking about UK green finance, apologies, I probably should have been clearer, it was about the City of London predominantly and those green financing opportunities. The carbon markets are one of them, but also the services that we provide with professional services and dealmaking. That is in Edinburgh as well, not just in the City of London. It is number one in how they define it. Matt might be able to tell me exactly who the person was who defines. There is a register, and if not we can come up with—

We have the Green Finance Development Index.

It is not the development piece. The development is obviously spending overseas aid as much as development. There is an interrelation, but when we talk about green finance it is as a sector of our economy and that we are number one in the world. Apologies if I was not clear on that.

When was the last time that you had a conversation with the Bank of England or with pension funds about releasing capital?

I know the Pensions Minister is in regular contact with them. I was at the stock exchange the week before last talking to them when I was opening the stock exchange around the green economy mark and they were looking at where those opportunities were in the UK and internationally.

I had about 10 meetings during London Climate Action Week on this point. I think what Carbon Tracker was talking about is something that is fundamental in the effort on climate action, which is how to align all forms of finance behind the Paris agreement or behind 1.5o and adaptation. This requires incentives to assets and asset owners in the global north to take more risk, or to take appropriate risk, and invest in developing countries and emerging markets. For example, we are talking to the pension board in India, which is reforming their pension industry to create their ability to invest in their own green transition and they would like to see more British pension funds and British asset owners, including insurers, investing in India’s green transition. The discussion there is what are the signals and reforms that the UK should be undertaking and what are the signals and reforms India should be undertaking. If that happens, you should be able to see a flow. Remember that this is a political discussion and a technical discussion inside Treasury across government, and there are different stakeholders in the UK that do or do not think that that is a great idea. We are fully engaged in every aspect of that discussion. A large part of that is through the taskforce on emerging market investment that I mentioned earlier. This is complex stuff that goes to the fiscal signals that Treasury sends to the City and to British asset owners and to long-term investors. We involve Carbon Tracker in some of our work, for example in the work that we were doing on how to help other countries make their energy transitions. We involved Carbon Tracker because they have done some very important analysis of how the bond markets are reacting to different signals in the energy markets. I think Carbon Tracker provides us with an important nagging impetus. They are constantly pushing us and that is a good thing. That conversation is fully engaged across DESNZ, FCDO and other parts of government and I think how the Treasury wants to approach this going forward will be very important.

A minor technicality point that was also raised in the previous session was about FCA regulations, in particular fossil fuel projects seeking finance not required to disclose their ESG commitments and therefore potentially investors going in blind not realising or resisting investing, decreasing the amount of funding and flow that is coming through. Is there any discussion or will there be any discussion with Treasury about changing the FCA regulations?

Carbon Tracker has raised this with the Treasury. They have raised it with me, the FCDO, the Bank of England and others, so all of the actors involved are engaged in the discussion around this. I will have to get back to the Committee on exactly where that stands at the moment but this is under active discussion.

As a final point I want to ask about the DESNZ ICF budget. We say that we are committed but we have seen the budget cut by over 50% at the last estimate compared to last year alone. How do we maintain UK commitments and credibility with other partner countries given the huge cuts to the bilateral ICF spending?

We spent £11.6 billion on ICF in the last five-year budget. We have committed for only three years in this next budget, so we have committed for a shorter period and that was for £6.6 billion. As I say, we fully spent our last ICF, and Matt can come on to exactly how we are monitoring to make sure that this round will be spent. We are also looking at how we can leverage wider investment. We think the BII will be a good way of doing that and we are working closely with them to make sure we are leveraging that wider point. We have the overseas development aid cuts. We prioritised climate within that. In looking at different pots, for want of a better word, some of those have taken a bigger hit than others but overall nature and climate has been protected more than other areas in the overseas development aid cuts.

That is absolutely right. On the division between Departments, DESNZ maintains a similar proportion of ICF going forwards as we had under the previous ICF period. It is not a disproportionate effect to DESNZ. It is a similar effect as we have seen to other parts of ICF.

Can I give a couple of examples of how it works?

Would you accept, though, that the spending review has reduced the ODA budget for Energy Security and Net Zero from over £600 million in 2025-26 to an annual average of £256 million over the spending review? That is a 56% cut. Is that accurate?

I think those numbers are accurate but when you look at the ICF over the whole period compared to the ICF going forward for the next period, the DESNZ share stays similar as a proportion of that as it did under the previous period, so relative to FCDO and others.

With the whole pie reduced? A smaller pie?

Yes.

Right. I think that is it. We will close the session. Thank you very much for your time and for staying longer.