Rhein on Energy and Climate

President Obama has done what many citizens across the world following the preparations for the Copenhagen Climate Conference had hoped for: take the lead.

He has invited the heads of government of the 16 main emitter countries of green house gases and the UN Secretary General to a meeting at the White House, April 27-28th, meant to “generate political leadership” on climate policy.

The meeting in Washington will be one of a series of high-level preparatory meetings of the “Major Economies Forum on Energy and Climate” that meets in parallel the formal UN preparations for Copenhagen.

Obama and his advisers have realised the risk of failure in Copenhagen without political leadership by those 17 countries that account for three quarters of global green house gas emissions.

Happily, the 17 world leaders should agree on the following basic conclusions:

  • Addressing climate change must become a top priority for every country.
  • The price of fossil energy must rise substantially. It is the primary role of energy/climate policy to reduce the price differential between fossil and alternative energies.
  • The 17 countries will rapidly put in place the appropriate instruments:

-abolish all subsidies on fossil energies:
-impose higher excise taxes on gasoline and fuels;
– introduce cap and trade systems for C02 emissions from utilities and energy-intensive sectors;
-impose strict fuel efficiency standards for automobiles and buildings;
-subsidise solar and wind power.

  • Higher prices on fossil energy are no obstacle to economic development.
  • Each of the 17 countries will rapidly define its long-term strategy for progressive phasing out fossil energies. They agree to submit these to their partners of the “Forum on Energy and Climate”, which will become permanent machinery for exchanging experience on energy technologies and policies.
  • In view of arriving at a productive outcome in Copenhagen, they will, in the autumn, undertake a consistency check of their policy intentions up to 2020.
  • They acknowledge that the technologies for enhancing energy efficiency and shifting towards alternative energies are widely available or in the process of development in both industrialised and emerging countries.
  • They also agree that the funding of the huge investment efforts – estimated at $ 1000 billion annually – necessary for the transition towards the low-carbon society will be forthcoming from private investors if governments offer the right incentives and guarantees.
  • But international finance institutions should assist private efforts and focus their finance on energy efficiency and renewable energies.

Agreeing on these conclusions would help focus the preparation for Copenhagen on down-to-earth policy measures instead of never ending disputes about abstract reduction targets for green house gases, which nobody is likely to take seriously. But are all 17 heads of government ready to face up to what they have to do at home!?

Brussels, 01.04.09 Eberhard Rhein

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