南方财经全媒体记者 李德尚玉 李依农 巴库、上海报道
Keeping global warming within 1.5°C is increasingly challenging. Adair Turner, Chair of the Energy Transitions Commission, emphasized to SFC reporter, “We must do everything possible to minimize temperature rises”, in an exclusive interview
Climate change remains one of the world’s most pressing issues. As we stand in 2025, the outcomes of past climate agendas are still shaping the future of global green transitions. At last year’s COP29, nearly 200 nations made a breakthrough agreement. Developed nations committed to delivering at least $300 billion annually by 2035 to help developing nations cut emissions and adapt to the worsening impacts of climate change.
Looking ahead, Turner underscored the critical importance of collaboration between China, the UK, and Europe. “The global progress towards limiting climate change will depend crucially on the actions of the European Union, the UK, and China, and on the relationship between them,” he remarked, noting that such cooperation is essential to achieving an effective and inclusive green transition.
SFC Markets and Finance: What additional measures are necessary to achieve the temperature control targets of the Paris Agreement?
Adair Turner: Let me first say, I think it is going to be almost impossible now to limit global warming to 1.5℃, as we are already exceeding that level this year. It is, therefore, absolutely essential to ensure that the increase beyond 1.5℃ is as small as possible, but it is clearly very difficult to limit it to 1.5℃.
Reflecting on COP 26 in Glasgow and COP 28 in Dubai, there were some very big statements. COP 26 in Glasgow was where a large number of countries reconfirmed their net-zero commitments, and of course, crucially, that included China. And there were lots of other NDCs that came together at that stage. There were countries like Indonesia and India committing to net-zero target. It was quite exciting to see more and more countries committing to net-zero. Also in Glasgow, there was a commitment from the world to move beyond coal, that we have to move into an environment in which we take coal out of our energy system.
At COP 28 in Dubai, two major highlights stood out. There was a statement that we would transition beyond fossil fuels, that we had to head towards a world in which we did not use fossil fuels, or we used them in a very small amount. And there was also a commitment to the tripling of renewable by 2030.
The Energy Transition Commission, we have recently published a report on what we think should be in that NCQG, and we think the most important thing is to identify several very different categories of finance that was acquired, and I'd be very happy to talk further about that issue. But it's not an issue which you can sum up in just one figure. If you try to have just one figure before this financial flow, you will not understand what you're talking about, because you have to break it down into the elements, in order to have a sensible approach to finance.
SFC Markets and Finance: How would you define climate finance?
Adair Turner: I think when one is discussing climate finance, we have to distinguish three different categories of finance, of different magnitudes and with different balances of how they will be financed. We have to distinguish between investments in mitigation, which are not grants, they're not gifts. They are investing in the renewable, in the hydrogen, in the new ships, in the new aircraft required to get us to net-zero. This is where the really big numbers are. They are not grants, but they are the big number. And most of that money will have to come from the private sector. The investment of that sort is increasing very rapidly, but mainly in China, and in Europe and US, not yet in lower income developing countries. So the big issue on investment is how to get more flows from China, from Europe, from the US and from the rich Middle Eastern countries, into lower income countries. But they are flows of debt finance and equity finance. They are flows which will generate a return.
The second category of finance is finance to support adaptation, which are things like flood defenses, sea defenses, and most of that will be financed by each individual country, but poorer countries, low income countries, will need some help, particularly in the form of very low or zero-interest debt from richer countries.
And then there is a third category, which is loss and damage, where it was agreed at Sharm el-Sheikh, COP 27 that there should be some payments from richer countries to poorer countries to help with loss and damage. But the crucial thing is we have to distinguish between many trillions required for investment to produce a return primarily financed by the private sector, but with a big role, also for development banks, trillions, adaptation, hundreds of billions, and the need for low-interest or zero-interest funds, loss and damage grants, actual money given by richer countries.
I'm afraid that a lot of the discussions about climate finance are progressed at such a high level that people say things and talk about figures without specifying what is the money for and what form of the money are they talking about.
SFC Markets and Finance: What are the main challenges China faces in decarbonizing key sectors such as steel, cement, and transportation? How can the international community support China in accelerating this transition?
Adair Turner: China is, of course, a huge leader in many of the technologies and investments required to get to net-zero. China is deploying solar and wind faster than anybody else in the world, and it has brilliant companies producing solar photovoltaics and wind turbines, the best and the cheapest in the world. It is the absolute leader in battery technology, both in terms of the performance of the batteries, the energy density and the cost, and it is the leader in electric vehicles, and it is the first place in the world where electric vehicles have now become cheaper than internal combustion engine vehicles.
So China has brilliant companies, I would say, LONGi, Envision, CATL, BYD, these are brilliant companies making great contributions to the world. But China's emissions are still rising.
The big challenge, or one of the biggest challenges, in China, is very large emissions in the steel and cement sectors of the economy, and this reflects also a big challenge in the Chinese economy.
China's economy has brilliant high-tech companies, it needs to reallocate resources to high quality green growth and also to the high-tech sectors. Now that is the stated strategy of the Chinese government, the Chinese government says that is what it is trying to achieve, but it has got to go faster on that re-balance. So part of the answer is a re-balance of the Chinese macro economy, which China needs to do in any case, for good economic management, is also hugely important to the global fight against climate change.
The second thing though, which China needs to do, in addition to less construction, less real estate, is to decarbonize the production of steel and the production of cement, and so far, there has been only limited progress on that, indeed, across the world, only limited progress. But we know the technologies which can lead to decarbonization of steel and cement. In the case of steel, we know that we can use hydrogen to produce steel rather than coking coal. And for instance, I have visited Hebei Iron and Steel outside Beijing last year, where they are beginning to do hydrogen direct reduction. I have also visited Baowu Steel in Shanghai and talked to the leadership there about them using hydrogen direct reduction. So the technologies are known, and Chinese companies are beginning to deploy the technologies, but they need to accelerate. And in cement, we know that we can apply carbon capture and storage to cement, but we need to do that.
So the question is not the technological capability, Chinese companies are very technologically capable. It is about the incentives. And the most important incentive is a carbon price. Europe and the UK are introducing carbon prices, applying carbon prices to our steel and cement sectors.
At the moment, up until now, they were sort of exempt from the European Emission Trading Scheme. But by 2032, all cement companies and all steel companies in Europe will be paying a carbon price of over 100 euros, say, 120 euros per ton. They will have to pay it, and that will drive decarbonisation of European steel and cement.
SFC Markets and Finance: What do you think about the two technical standards adopted on the first day of COP29 negotiations under Article 6 of the Paris Agreement?
Adair Turner: What was agreed at the beginning of COP29 was both the wordings for the Article 6.2 which is about intergovernmental purchases, and 6.4 which was for a voluntary carbon market.
I think it is useful that we have now at least agreed those articles, but they will not have a transformative effect. I think only a limited number of countries will meet their net-zero commitments using Article 6.2 purchases. For instance, the UK, at the moment, is intending to get to net-zero by 2050 without using international purchases, but getting to net-zero in ourselves.
As for 6.4, there can be purchases, but what is crucially needed now is a focus not on offsets, but on removals. When you buy what is called an offset, so you are a company in Britain, say, and you buy a renewable energy credit in India or Africa, that is useful, but that development might have occurred in any case, so you are not necessarily doing something which is additional. If you pay someone to actually remove CO2 permanently, whether by direct air capture, or by reforestation, or by a technology called Biochar, you're actually creating negative emissions. So at the Energy Transition Commission, we believe that one of the most important things is now to create both a supply and a demand for actual removals, where we are seeing, for instance, reforestation projects paid for by companies which are making voluntary commitments to do that.
What Article 6.4 provides is a framework to make sure that when we have those trades, we don't end up with double counting, right? That if one country or one company buys those credits and says, I've done something good, I've reduced my emissions, you can't have somebody else also claiming that they've got an emissions reduction.
So Articles 6.2 and 6.4, they're really no more than creating an agreement on how we proceed in a way that doesn't fool ourselves by double counting these emissions. But to us, the most important thing now, is to develop a serious market in removal credits. Because in addition to reducing overall emissions across the world, if we are to limit to 1.5℃, we will need removals as well.
SFC Markets and Finance: The trend of green protectionism has raised concerns, especially with mechanisms like the EU's Carbon Border Adjustment Mechanism . How can the international community achieve fair climate goals while avoiding the creation of green trade barriers?
Adair Turner: Europe is going to apply by 2032 a high carbon price to its steel companies, its cement companies, its chemical companies. And if Europe applies that carbon price, and other countries do not apply an equivalent carbon price, then we will achieve nothing. All that will happen is that emissions and activity will move from Europe to elsewhere, and it will be unfair competition to European steel companies or cement companies which are attempting to reduce emissions.
So that is why you need a CBAM, any country which takes a leadership position in applying a carbon price to its own industry, must introduce a CBAM, as long as other people don't have a carbon price. And it is not protectionist, because if you look at the economic position before you had the carbon price and the CBAM, when you had neither a carbon price nor a CBAM, and you introduced a carbon price and a CBAM, the competitive position after you introduced both is exactly the same as the competitive position before you introduced both. It is a way of keeping competition fair, that's what a CBAM is.
So what should the rest of the world do? What do I hope China does? I hope China says, Okay, now we must decarbonize and we must have a carbon price. And I have now had many discussions with Chinese industry, and indeed, with Chinese policy makers, where I've heard Chinese policy makers say, in response to the CBAM, we must accelerate our progress to have a serious carbon price ourselves. We must treat this as a stimulus to China to decarbonize its industry. And that is exactly the response we want.
The idea of the CBAM is not to raise any revenue, and indeed, my own proposal is that any revenue that Europe or the UK gets from the CBAM, we should devote to climate finance to the lowest income countries, to illustrate very clearly to the world that the purpose of the CBAM is not to raise money. Ideally, we don't want to get any money from the CBAM, right? Because the ideal response is, everybody else introduces a carbon price. If everybody else introduces a carbon price, we will get no money from the CBAM.
So the objective is that of this tariff is not to raise any revenue, but in the period where we do, unfortunately receive revenue because other countries don't yet have a carbon price. We should devote that money to climate finance.
SFC Markets and Finance: How can China and the UK collaborate in specific areas to promote a more inclusive green transition?
Adair Turner:I think not just China and the UK, I would say China and the UK and Europe. And I think this will be hugely important, in particular with the US, having under Donald Trump, somebody who does not believe in climate change, and who will pursue a very protectionist policy against all countries in the world, I think in that environment, it is very important that the European Union and the UK maintain close relationships with China. Now we will continue to disagree on many things, we have different political systems and we have different points of view on several international issues, but we have to continue to cooperate on climate change.
And indeed for the whole world, in a period where we will not get leadership from the US on climate change, the global progress towards limiting global climate change will depend crucially on the actions of the European Union, the UK and China, and on the relationship between them, so this is hugely important for the world.
China is a huge technological leader in a lot of the major technologies. That is brilliant. But of course, Europe and the UK would like also to develop their industries in EVs, in batteries, etc. And so what we have to accept is that Europe and the UK will want some of the value added and employment to be in Europe and the UK, not just in China. they won't want just to import Chinese EVs or batteries or solar PV. But we need to do that in a way which is still keeping us open to flows of trade and investment and ideas. And if great Chinese companies want to invest in Europe and the UK and to create employment and value added in the UK or in Europe, in solar PV or batteries or EVs, we should encourage them to do so.
So in this environment, with America having made a political choice which is bad for progress on climate change, there are a set of ways of making sure that while respecting the European desire not just to import Chinese goods, but to develop European supply chains, that we can do that in a way which is still maintaining significant flows of trade, investment, ideas and cooperation. And that is, I think, a hugely important priority looking forward, because without that, we will very significantly increase the cost of the energy transition.
I think the other thing to say is that Europe, but also Japan and Australia and other countries around the world, and Canada and the US, if they are willing to do it, should be working together, is to unleash a technological revolution in places like Africa, where very cheap solar photovoltaics and batteries now create the opportunity for Africa, never to build a fossil fuel based electricity system, but to have cheap electricity from sunshine and wind. But what it requires is a combination of the low cost technologies which China has helped create, with finance from all the way around the world, and we should be working together in order to achieve those flows of finance into Africa, and into Pakistan and to other parts of the world, to drive the revolution which is now possible.
SFC Markets and Finance: Will developed countries promote an open multilateral framework to prevent climate actions from becoming trade or technology barriers, while fostering the free flow of green technologies in global markets, including China?
Adair Turner: Let's be clear, nothing which is agreed at COP or is said at the WTO will constrain the US administration of President Donald Trump. I mean, we just have to live in the real world as it is. So we have to maintain as much openness and free trade and as investment flows as we can. And as I mentioned earlier, I think it is crucially important for the UK and EU to say, well, America has made their choice, and that is their right to make it, but we are going to make our choice, and this choice is going to have some policies to make sure that we develop our own domestic supply chain, but it is still going to be, broadly speaking, open to trade and open to investment. That is what we need to achieve. But we need to achieve it in an environment where I am absolutely sure that America is going to increase tariffs.
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