Rhein on Energy and Climate

Without a radical change of energy policy by the two major emitter countries of green house gases Humanity will not succeed in reducing C02 emissions to the levels required to stabilise the global climate.

Both countries squander energy in ways unimaginable for the average European. This goes for all sectors of energy consumption, but in particular for buildings and transport. Appeals to citizens or technical standards alone will not do, due to lack of enforcement. Consumers must feel the pain of high and rising prices, which must pinch in order to induce energy users to change consumption habits, insulate buildings and drive fuel-efficient automobiles.

Both countries also lag behind Europe, Japan and Brazil in the use of renewable energies and nuclear power. Because they can draw on very cheap coal and fossil fuels businesses lack incentives to switch from fossil to alternative sources.

China’s objective to cover 15 percent of its energy needs from non-fossil sources by 2020 is too modest. It could reach far more ambitious targets if it used effective price/cost incentives. Gasoline and fuel taxation are quasi non-existent in both countries. China even continues to subsidise gasoline, diesel and fuel. None taxes coal, their major input for electricity. None has introduced a system of carbon caps and trading comparable to the EU.

Without a dramatic change of their energy policies both countries will fall far short of reducing emissions by 50 percent (China) or 80 percent (USA) by 2050. Their ineffective climate policy annuls the positive effects from more ambitious efforts in other parts of the planet, in particular in Europe, and will create havoc for humanity.

From 2005 to 2020 China aims at reducing its C02 emissions per unit of GDP by 25-45 percent. That looks like an ambitious climate target. But in a global perspective it is totally unsustainable. To keep its emissions constant its GDP should not rise by more than 45 percent. But on the basis of the past and expected growth rates, its GDP is likely to treble until 2020.

The USA is more likely to take effective action; it is engaged in the most ambitious Legislation ever tried that would commit the country to reduce its emissions by at least 80 percent at the horizon 2050.

Political courage and leadership is needed in both countries.

The Chinese leadership should take its political responsibilities for the long-term future of its citizens at least as seriously as its short-term legitimate concerns for improving living conditions.

President Obama should make a profound restructuring of the US energy system the overriding priority during the second half of his Presidency.

Brussels 23.07. 2010 Eberhard Rhein

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