Rhein on Energy and Climate

The international discussion on climate change policy has unduly focused on alternatives to fossil energies. As wind, solar, biomass, heat pumps geothermal etc continue to be substantially more expensive than oil or coal, politicians have been made to believe that fighting climate change is an expensive undertaking.

Whatever the outcome from Copenhagen the priority for the coming 20 years should be to fully exploit the huge potential for higher energy efficiency.

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The EU, which has already reached relatively high energy efficiency standards, aims at raising them by 20 percent until 2002 compared to 1990 levels. The USA should easily be able to raise its energy efficiency by at least 30 percent until 2020, considering its colossal waste of energy, which is reflected in its per capita C02 emissions being twice as high as in the EU.

Australia, Canada, Russia and most OPEC states, which have enjoyed extremely low energy prices, should be able to do the same.

Raising energy efficiency requires investments to switch to automobiles with low fuel consumption, low-energy lighting, and low emission buildings etc. Most of these investments are so cost-effective that they will reduce C02 emissions while producing an operating profit to the investor. According to a recent McKinsey study one third of emissions reductions will actually save money!

There are, however, obstacles to change lamps, heating installations or thermal isolation of buildings. Governments therefore have to step in and impose efficiency standards.

The EU has done so increasingly in the last few years for new and existing buildings, automobiles, electric appliances and lighting.

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In the latter case, it has imposed a rather draconian mandatory phasing out of incandescent lamps by 2015 latest.

It would be critically important for all OECD countries to streamline their efforts for higher energy efficiency. The IEA has undertaken in-depth studies on technologies for energy savings and renewable energies. It is time for the OECD countries to get their act together and play a role of catalyst of catalyst for emerging countries.

This would be the greatest service they could achieve for the world climate in the next 10 years. The new EU Commissioner for climate action should come forward with appropriate initiatives in the course of 2010.

Brussels 05.12.09 Eberhard Rhein

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