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Tag Archives: climate policy

Green energy in the EU

By Dave Elliott

In January last year the European Commission (EC) suggested that the EU should cut carbon emissions by 40%. Although it’s conditional on other countries setting significant targets, it’s a bold target, leading the way forward. But sadly the EC faltered on setting ambitious specific targets for how to actually do it. It only raised the targeted share of renewables in primary energy to 27% by 2030, up from the existing 20% by 2020 target.

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A world of trouble

A World of Troubles

by Dave Elliott

With the typhoon disaster in the Philippines, Japan’s cut back on its climate targets and Australia abandoning its climate policy, the latest gathering of the Conference of Parties of the UN Framework Convention of Climate Change in Poland last October was a rather gloomy affair. The Fifth report from the Intergovernmental Panel on Climate Change had reinforced a key message from the basic science- it was now 95 % certain that climate change was caused by human activities, up from 90% previously. And the results were likely to be serious. The United Nations Environment Programme then issued a warning that if countries failed to take immediate steps to cut greenhouse gas emissions, the global temperature will be significantly more likely to rise above 2˚C.

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Get Climate Policies Rollin’: Diesel in Asia

By Felix Creutzig

The mismatch between insight on the need for climate change mitigation and implemented policies is amazing. Seemingly, this is a particularly hard global common good problem. So why not push much harder for pure win strategies. Pure win strategies often lack the intelectual appeal of a global cap and trade and, for being so nitty-gritty, put less glory on policy makers. But they can be valuable entry points for global cooperations. Here is
one example.

Diesel fuel reserves tax benefits in most Asian countries, and is favored in vehicle regulation. At the same time, pollution control is weak at best. At a result, vehicles powered by diesel emit tons of black carbon in addition to CO2. Black carbon is the third most gaseous contributor of climate change and has most of its climate impact on short time scales (more like 20 years), whereas CO2 remains in the atmosphere for more than 100 years in average. Black carbon and other diesel exhaust also pollutes the air breathed by billions of Asians, causing asthma and lung cancer.

Here is the strategy as developed by Minjares and Rutherford (both from ICCT, San Francisco) in the upcoming book “Low Carbon Transport in Asia” by Zusman, Srinivasan and Dhakal:

  •  Make particle filter in diesel vehicles
    mandatory. This can dramatically improve air condition for Asian city dwellers
    in the upcoming decades. Even more, this single measure can reduce GHG
    emissions by 14% on a GWP20 basis and by 4% on a GWP100 basis. Not the killer
    app, but considering the huge health benefits, this is a straight forward
    measure.
  •  Switch to carbon-neutral fuel emission standards
    (i.e. corporate average, not weight-based, and I would insist, also not
    size-based
    ). Asian countries can rely here, as well as for pollution control,
    on the well-established technological advance from OECD countries. No need for
    R&D investments here.
  •  Finally, tax benefits for diesel vehicles can be
    scrapped, and taxation can follow the GHG content of fuels only.

These measures require some institutional capacities, but not much financial resources from governments. That is probably where industrial countries or the Asian Development Bank can come in with support. But Asian countries profit most, besides climate mitigation, improving public health conditions drastically, especially for the poor, and raising tax
revenues simultaneously.

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The Hartwell initiative

“We advocate inverting and fragmenting the conventional approach: accepting that taming climate change will only be achieved successfully as a benefit contingent upon other goals that are politically attractive and relentlessly pragmatic. Without a fundamental re-framing of the issue, new mandates will not be granted for any fresh courses of action, even good ones”.

That’s the line adopted in the Hartwell report, by an international group of academics co-ordinated by the London School of Economics. They claim that ‘it is now plain that it is not possible to have a climate policy that has emissions reductions as the all encompassing goal’. They note that ‘in particular the ambitions for regional- let alone global – “Cap & Trade” regimes to regulate carbon by price, can be now seen to have been barren in their stated aims although profitable for some in unexpected and unwelcome ways.’

They say that in any case we shouldn’t just be focussing on climate change: ‘there are many other reasons why the decarbonisation of the global economy is highly desirable’. In the approach they would like to see ‘decarbonisation is achieved as a by-product of pursuing more pragmatic and popular primary goals, including expanding energy access, energy security and, ultimately, making energy less expensive and more abundant.’

They also claim that we have focussed too much on carbon. So for example they want vigorous and early action on non-CO2 climate forcing agents like black carbon and tropospheric ozone. But their main overall concern is to rebuild public trust via successful improvements in energy efficiency and new energy innovation which clearly cut costs. So they want to develop ‘non-carbon energy supplies at unsubsidised costs less than those using fossil fuels’ and advocate funding this work by ‘low’ hypothecated (dedicated) carbon taxes.

However they say that there is a way to go: renewables are still mostly expensive, ‘except under the best of circumstances, i.e. when located at optimal sites; close to existing transmission lines; displacing peak generation rather than base load, and serving a constituency willing to pay higher prices’. In passing, they manage a dig at ‘the chilling history of European and particularly British wind-power, recently’, which has ‘led to poorly-chosen wind facilities that have performed much less well than promised, with serious financial and social consequences because they also distort overall portfolio investment decisions in significant ways’

Clearly they see carbon taxes, as being better than government subsidies, which is evidently what they see as being the basis of the EU approach. In fact, at present, RD&D apart, there are not many EU government subsidies – the UK’s RO, the Feed In Tariffs in the EU, and even the EU Emission Trading System, are all in the end supported by extra charges levied by supply companies on consumers – not by taxpayers.

While the authors clearly don’t like subsidies, really though their fundamental objection to current climate policy is much wider. They say ‘energy policy and climate policy are not the same thing. Although they are intimately related, neither can satisfactorily be reduced to the other. Energy policy should focus on securing reliable and sustainable low-cost supply, and, as a matter of human dignity, attend directly to the development demands from the world’s poorest people, especially their present lack of clean, reliable and affordable energy. One important reason that more than 1.5 billion people presently lack access to electricity is that energy simply costs too much’.

This sounds a little disingenous- there will be precious little dignity if climate impacts turn out to be as bad as expected. Carbon and other emission have to be dealt with- and fast. What the Hartwell report is claiming is that it is no good focussing on emission targets, in part since, as was stated in an earlier comment from the team quoted in the report “It is a characteristic of open systems of high complexity and with many ill-understood feed-back effects, such as the global climate classically is, that there are no self- declaring indicators which tell the policy maker when enough knowledge has been accumulated to make it sensible to move into action. Nor, it might be argued, can a policy-maker ever possess the type of knowledge – distributed, fragmented, private; and certainly not in sufficient coherence or quantity – to make accurate ‘top down’ directions.”

So do we just leave it to the market? The authors seem to think so, in terms of choosing which way to go: ‘Driving cost reductions must be the explicit purpose and primary design of deployment policies. Achieving consistent reductions in the unsubsidised cost of clean energy technologies must be the measure that determines which technologies will fly and which will stall in the long term’. But it can’t, they say, just be left to the free market: ‘since much of the energy technology revolution will require…basic RDD&D investment, public funding on a long-term basis is essential; and that is why an hypothecated tax is so important’.

A bit confusing since later they say ‘innovation activities will of necessity be sponsored initially by the public sector’ i.e. a short-term input. But what they are adamant about is that the carbon tax must not try ‘to alter short-term consumption behaviour’. They were clearly chastened by the spectacular failure and withdrawl of the ambitious Carbon Tax proposed for France by President Sarkozy. Theirs would be lower and just for technology push. But then it sounds like they hate government dictats of any sort, and only accept government intervention and support grudgingly, since the private sector won’t fund much R&D.

Overall, the carbon tax aside, their approach seems to have much in common with that adopted by the US and China at COP 15 – a free market technology-led approach, with no binding emissions targets, or government edicts. That may not be too surprising when you look at some of the sponsored of the report- who include the Japan Iron and Steel Federation, and the Japan Automobile Manufacturers Association.

Leaving conflicting ideological views on markets aside, of course more needs to be done across the board – the Kyoto approach was marginal at best. However, it’s not clear the Hartwell approach is any better. A carbon tax would increase consumer energy bills, and most studies suggests that, although, in time, the transition to renewables will reduce prices, initially it may not.

Some have also seen the reports emphasis on non-CO2 emissions as odd. Dr Bill Hare, from the Potsdam Institute for Climate Impact Research, commented that ‘The paper’s focus away from CO2 is misguided, short-sighted and probably wrong’.

And underlying it all is a belief that technical fixes are the answer, while social and behavioural change is likely to be hard. The latter is clearly true, but that doesn’t mean we shouldn’t try to do both. Technical fixes may well work in the short to medium term , but is it really realistic to expect continually reducing costs, and perhaps more importantly, continually expanding energy use, long term? Energy efficiency and renewables can allow us to expand energy use up to a point, but there are limits. We also need to start thinking about sustainable consumption.

The Hartwell Paper: A new direction for climate policy after the crash of 2009

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Climate Targets

With the climate conference in Copenhagen in December seen by many as the make-or-break event, the EU position is relatively clear- a 20% by 2020 cut in emissions (from 1990 levels), unless a good global agreement can be reached, when the target would be raised to 30%.

The UK is amongst the leaders in pushing for high targets. The Budget in April set what was claimed as the world’s first carbon budget, as required by the new Climate Change Act, with a legally binding 34% reduction in emissions by 2020. The government said it will ‘increase the level of ambition of carbon budgets once a satisfactory global deal on climate change is reached’. Longer term, there is a firm commitment to an 80% cut by 2050.

While welcome, all that will mean very little if the US and China don’t come up with decent targets. The good news from the USA is that, after years of denial under Bush, the US government now sees greenhouse emissions as a major issue: the Environmental Protection Agency is now regulating them. And progress is being made on national targets. Against strong opposition, the House of Representatives has just voted 219 to 212 to bind the US to cutting carbon emissions by 17% from 2005 levels by 2020 and by 83% by 2050. It also agreed that a national carbon ‘cap and trade’ system should be established and to a 15% 2020 target for electricity from renewables. However this has still all to be passed by Senate- where opposition is likely to be even stronger.

The opposition has already led to watering down of targets. For example, the draft US Clean Energy act called for a 20% cut on 2005 emission levels by 2020, and for the US to get 25% of its electricity from renewables by 2025. The fossil lobby wanted just a 6% cut by 2020 and lower renewable targets. Even so, the emission level now agreed by the House of Representatives (17%) is a significant compromise and the 15% target for electricity from renewables is an even bigger compromise, especially since it seems 12% could be allowed in some regions with poor resources, and energy efficiency gains may be allowed as a substitute for some renewables.

In any case, even if finally passed into law through Senate, these are just paper targets. The crucial thing is the proposed new US Carbon trading system – a key element in translating the targets into reality. Indeed, although much was made of the £150 billion over ten years that Obama allocated to renewables and other green energy projects earlier this year, as part of the US Economic stimulus package, much of that funding will only materialise if the carbon trading system goes ahead. This may explain why the very large stimulus allocation (around 10 times current support levels) was not fought much by Republicans- they may have been waiting to block it at source by opposing the Carbon trading system. If that is proves to be the case, the fear is that the new proposals won’t get through in time for the USA to make a clearly positive contribution at the Copenhagen conference.

While this may be a problem, it seems that the simple fact that Obama is now taking the US into climate negotiations has been enough for the Chinese to engage in the process more fruitfully – and that in turn has helped Obama, since one of the main reasons for opposition to the Kyoto protocol in the US was that it didn’t apply to newly developing countries like China, whose emissions were expanding rapidly. They have actually recently overtaken the US. But China now seems to be thinking in terms of, if not absolute cuts, then at least a commitment to the reductions in the growth of its rapidly expanding carbon emissions.

Su Wei, a leading figure in China’s climate change negotiating team, said that officials were considering introducing a national target that would limit emissions relative to economic growth in the country’s next 5-year plan from 2011.’China hasn’t reached the stage where we can reduce overall emissions, but we can reduce energy intensity and carbon intensity.’ i.e. carbon emissions/GNP. Whether an agreement will be reached on that before the Copenhagen conference remains to be seen.

The stakes are high- for Obama and for the world. The EU is pushing hard, and, whatever might be happening at home, the USA seems to be bending over backwards to get a global agreement. It has proposed that developing nations like China should not be required to commit to specific emission targets, but should be asked to commit to boosting energy efficiency standards and improving the take-up of renewable energy. And there are positive signs, with talk of China being able to go beyond the current target of getting 15% of all energy from renewables by 2020, to 18% and possibly 20% – on a par with the EU and well ahead of the USA.

We may make it yet.

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