Rhein on Energy and Climate

The Copenhagen Climate Conference has been a water shed in the fight against climate change. Disappointment, indifference and frustration have annihilated the little hope that the endless series of preparatory UN conferences had generated.
Today, three months after Copenhagen, nobody seems to have a clue on how to reduce green house gas emissions sufficiently to prevent global temperatures from rising beyond two centigrade. Collectively Humanity seems unable to arrive at balanced reduction efforts; and individual actors like the EU appear no longer willing to go it alone because of the presumed costs of national climate policies and free-ride effects for non-cooperative parties.
Worse, the public mood has become agnostic about climate change: according to a recent poll in the USA the number of people believing in the reality of climate change has decline significantly during the last few years. Powerful lobbies exploit that change of mood to reject any political initiative for curbing green house gas emissions. It is therefore next to certain that the US Congress will not pass a credible climate Act before the end of the year and possibly even during this Administration. This will lead to a stalemate of the international efforts to curb emissions, as we have witnessed during the fatal eight years of the Bush Administration.
Too few people and hardly any politicians understand the basic physics of climate change. They have not fully grasped that it is irreversible! They believe humanity can “fix” climate change like any other damage, ignoring that it will be too late to act when the consequences will be fully visible.
In the last 25 years climate scientists have done a magnificent job helping us understand the interaction between human activity and the atmosphere. But they have miserably failed in teaching citizens the simple relationship between C02/ methane concentrations in the atmosphere and rising/falling temperatures on the planet.
The evident and urgent thing to do is therefore to teach the political class and our elites the basics of climate science. After all they have to defend their action against detractors of all sorts and to convince their voters that climate change is too serious to ignore it.
The second priority is to combat the prejudice that effective climate policy constitutes a cost for the economy and leads to a competitive disadvantage. This argument has been invented and skilfully manipulated by the sectors targeted by climate policy, in particular the power and automobile industries.
But American or European power plants do not compete with those operating in China, India or Australia; and caps on their emissions will push them to become more efficient by changing technology or moving towards gas, nuclear or wind.
A c on C02 emissions need not lead to higher electricity rates. Moreover, the impact of electricity rates on competitiveness has become negligible in economies concentrating on high-tech and services.
Curbing emissions from transport, through stricter fuel efficiency standards or higher petrol taxes does not affect international competitiveness either. If that were the case, Europe would be unable to compete with the USA, its petrol taxes being 10 times higher.
Taking actions to raise the energy efficiency of appliances, including electricity waste through standby modus, will enhance international competitiveness rather than impair it.
Last not least, the building sector offers a huge potential for improving energy efficiency, as the negative example of the USA demonstrates unfortunately.
This will save scarce resources and thus have a positive impact on overall competitiveness.
It is up to policy makers to refute the biased arguments about competitiveness coming from industries, which want to stick to their status quo. At least one third of climate policy targets should be reached through higher energy efficiency.
The erroneous argument about the “cost” of climate policy overlooks another crucial aspect: the diverging cost curves for fossil and renewable energies n the future. All energy experts agree that the cost of generating renewable electricity from wind and solar sources follows a declining curve, due to improved technology and economies of scale, while the cost of fossil energies is bound to rise due to increasing scarcity and rising production costs. It is therefore only a matter of years before renewable energies will become competitive with fossil sources.
A wise policy maker will anticipate that juncture in order to fully enjoy the competitive advantages, when the break-even point will have been reached. This has been the rationale behind the inducement schemes launched by Japan, Germany, Spain or the USA.
In conclusion, as long as the USA and China are not in a mood to seriously tackle climate change through an effective multilateral agreement, there is no point convening the parties of the “UN Framework Convention on Climate Change” (UNFCC). Another jumbo meeting in Cancun at the end of 2010 would be a waste of money and only cause unnecessary C02 emissions. The EU should therefore signal its reluctance to join a meeting that is not perfectly prepared and does not offer reasonable chances for a successful outcome.
In the absence of an international agreement the EU should concentrate on the home front. It should rapidly adopt the fuel efficiency regulation for light utility vehicles. It should go ahead with its cap and trade system for aircraft, due to enter into force in early 2013. It should define the broad contours of a trans-European intelligent grid system that will become indispensable for an efficient power supply based on renewable and nuclear power. It should define a more rational and coherent approach to nuclear power. It should redouble its efforts for building a trans-continental system of high-speed trains.
It should tackle the huge potential for enhancing energy efficiency of appliances and buildings.
All these actions, if handled intelligently, will contribute to making European energy use more efficient and secure. Europe can therefore go it alone and demonstrate to its citizens and the rest of the world that climate protection also makes economically sense.
BRUSSELS 15.03.10 EBERHARD RHEIN
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