Rhein on Energy and Climate

Less than two months after the Copenhagen Climate Conference Congress the US Administration has taken three major decisions on its future energy policy:

A 10 percent increase of its nuclear capacity

President Obama has signed an $ 8 billion loan guarantee for the first two new nuclear reactors to be built in 30 years. The 2011 budget will provide for additional loan guarantees of some $ 54 billion, which should enable the USA to increase the total number of nuclear power plants from 104 to 124 and cover more than 20 percent of its electricity demand, compared to 80 percent for France, from nuclear reactors

A Trebling of Biofuel production

The Obama Administration aims at trebling the production of biomass from 8 billion tons in 2009 to 36 billion tons in 2022. In doing so it is following in the footsteps of the Bush Administration that had put a bet on biofuels as the alternative to fossil gasoline.

Producing biofuels from maize is not very energy-efficient, because it requires too much fossil energy for tilling the fields, harvesting, transporting the harvest to the distilleries and transforming it into the bio-gasoline. It is therefore not the ideal method for reducing the consumption of gasoline; the expected impact on C02 emissions will be marginal: they are expected to fall by 138 million tons per year, compared to total US emissions of more than 8 billion tons!

A Boost to Carbon Capture and Storage (CCS)

The new US Administration is determined to develop a comprehensive and coordinated federal strategy on CCS. By 2016 10 commercial demonstration projects should be operating.

There are increasing doubts about the commercial viability of CCS because of the rapid technological progress in power generation from wind and solar sources. A programme for 10 demonstration projects may therefore send the wrong signals to the US coal industries and utilities. They might find themselves reassured in their conviction that coal has a long-term future for US energy supply, though it should be phased out sooner rather than later because of its health and environmental damages in the coal mining regions.

Add to these three measures the tightening of the automobile fuel efficiency standards by 40 percent until 2016 and the investment packages for thermal insulation in private and public buildings that form part of the 2009 economic stimulus.

Taken together, these measures seem to indicate the desire of the Executive to send a signal to the Congress that the USA must continue its fight against climate change whatever the present stalemate on the climate legislation. The inclusion of carbon capture& storage and the boost to the nuclear industry constitute no more than adroit gestures to critical senators to also support the legislative package.

And last not least, Obama has signalled to the international Community that he is as much as ever committed to fighting climate change.

The President may still keep some powder dry!

He could instruct EPA to issue an administrative order to US power utilities to generate at least 25 percent of their electricity from non-fossil sources by 2020 and raise that percentage to 35-40 by 2030!

EPA could issue a similar order to the automobile industry for raising fuel efficiency by 60 percent until 2025.

EPA could issue stricter insulation instructions for all new buildings.

Maybe the USA is about to introduce a basic new approach into energy and climate policy.

We may have arrived at the crucial point where global and national emission targets will become irrelevant. International climate policy will be no more than an aggregation of national energy policies aiming at higher energy efficiency and lower C02 emission.

Ideally, the major players would exchange their experience with the most effective technologies and economic incentives. They might establish a secretariat with a loose coordination role.

However shocking it may sound, this bottom-up approach may be very effective provided the main countries discover that low-energy technologies serve their economic interests by creating jobs and new export potentials.

And we no longer have to quarrel endlessly about emission targets that nobody can really monitor!

The international Community seems too bruised from Copenhagen to make decisive progress in 2010 along the old track. Let it try with a hands-on approach and see how it operates. The non-committal “Copenhagen Accord” would be an umbrella for the multitude of practical policy measures to be adopted by the main emitter countries!

Brussels 17.02 10 Eberhard Rhein

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