This week has seen two important meetings on climate change policy taking place in the EU. In Bonn, negotiators are trying to make progress on wide-ranging issues which could lay the foundations for the Holy Grail of a binding international agreement to be concluded at the major climate change meeting in Paris next year.
These are large, multi-stream negotiations, which are part of an ongoing international circuit of meetings between the annual Conferences of the Parties to the UN Framework Convention on Climate Change. This year’s is to be held in Lima, but it is the December 2015 COP21 in Paris on which so much is staked.
Europe has been taking the lead in emissions reduction policy for a number of years, so it is symbolic that such a crucial summit should be held in a major European capital. Unfortunately for those involved, the precedent of Copenhagen in 2009 was not an encouraging one. Widely touted as a last chance to come to a binding agreement to replace the Kyoto protocol, it singularly failed to deliver anything substantive.
Which is to some extent why the second of this week’s meetings, a gathering of the leaders of EU Member States in Brussels, was so important. This meeting has agreed climate change mitigation targets on emissions, renewable energy and energy efficiency for 2030 (EU leaders agree CO2 emissions cut). Of course, most of the hard grind went on at lower levels behind closed doors, but the political decision could only be taken after last-minute horse-trading had taken place.
On one side were countries such as the UK, seemingly willing to go for even more demanding targets, despite the modest success in meeting goals so far. On the other side are countries like Poland, which still rely heavily on coal to generate electricity and believe they would carry too much of the burden of EU-wide targets. In effect, those more willing to cut will partly fund the programme in central and eastern European Member States.
Agreement on the headline target of a 40% cut in carbon dioxide emissions gives a signal that the EU wants to stay in the vanguard of climate change policy. Any relaxation of the target would have been seen as a weakening of resolve and given the wrong signals to negotiators in Paris next year. There was a lot to play for.
The other key 2030 targets agreed at the Brussels summit were a 27% share of renewable energy and a 27% improvement in energy efficiency (from a 1990 baseline). This continues the pattern of making goals more detailed than necessary; setting the emissions target, putting in place a flat-rate, escalating carbon tax and allowing the market to decide the most effective way forward would have been wiser.
It could be argued that the efficiency is justified, at least as an aspiration, since simply using less energy is always likely to be an attractive option. However, the renewables target is indefensible, although almost inevitable given the current focus on wind and solar power, biomass and biofuels, plus the strength of the industry lobby. It is becoming increasingly obvious that picking ‘winners’ distorts the market and we all suffer the unintended consequences.
Take, for example, this story in the Daily Telegraph: Britain's energy paradox: why you'll pay to phase out coal plants... and also to keep them open. This reports that, on one hand, the carbon price floor is making it more expensive to burn coal, while on the other hand the ‘capacity market’ is being introduced to ensure there are enough conventional plants available to keep the lights on.
Peter Atherton, energy analyst at Liberum Capital, is quoted as saying “We have one set of market interventions trying to kill coal, but then we worry about the lights going out so we have another intervention trying to keep coal going. [It’s] difficult to make this stuff up.” Not that DECC agrees. A spokesman said "There is no paradox. The carbon price floor and the capacity market work together to ensure we move to low carbon generation in a way that keeps the lights on at peak demand at lowest cost to the consumer." At least he or she was paid to keep a straight face while saying this.
Germany has already suffered from such unintended consequences. The market is at times flooded with electricity from wind farms or solar installations when demand is low. The U-turn on closure of nuclear plants after Fukushima left a big gap which is now being filled by new generating plant burning locally produced lignite, the dirtiest fuel available, which is currently artificially favoured by the network of taxes and subsidies.
The juggernaut of climate mitigation and energy policy grinds on, ignoring the realities of life on the way. The challenging 40% emissions reduction target is decried as too low to keep on the path to an 80% reduction by 2050. The BBC’s Roger Harrabin says “Tackling climate change needs a transformation of the world's energy economy over decades - and experts say a 40% cut in 2030 leaves too big a task for the next generation of politicians…. Scientists and environmentalists will not be happy - but Europe's leaders have been under heavy pressure not to impose much higher energy costs, especially when the economy is struggling.”
In the unlikely event that a binding global deal is reached in Paris, it will not change the reality that these messy compromises pile up the costs without achieving the stated objectives. Politicians can congratulate themselves on reaching agreement on the headline figures, but this looks more and more like window dressing. If governments are as serious as they say about climate change, they have to promote gas over coal, invest heavily in nuclear and fund a massive effort to develop new energy generation and storage technologies.
Martin Livermore
The Scientific Alliance
St John’s Innovation Centre
Cowley Road
Cambridge CB4 0WS
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