Rhein on Energy and Climate

In the last two years our perception about energy and climate policy has undergone profound change:

Global climate change has ceased to be the major concern. Resource and energy scarcities have become more urgent and concrete issues to address.

  • The hopes for concluding an effective international climate agreement have almost evaporated.
  • Instead, the major actors – EU, USA, China, India etc. – have started defining domestic strategies in view of securing their long-term energy supply and becoming technological & industrial leaders in the ongoing energy revolution.
  • The time horizon for action has been pushed forward to 2050. Energy policy requires extremely long lead times. 2020 is no more than an interim date on a secular road map.
  • The EU seems more determined than ever to go it alone if the international community proves unable to take rapid action against climate change.

By 2050 the EU wants to be a low-carbon society. This target is generally accepted; but there remain differences concerning the its precise definition and the policies to get there. For the European Council it means a reduction of EU green house gas emissions by at least 80 percent over 1990. This is in line with what the G 7 countries consider necessary to prevent the rise of global temperatures from exceeding two centigrade in the course of the century. The EU is so far alone to have made this the basis for its long-term energy strategy. To get there the European Commission pleads for a 30 percent reduction of EU energy demand by 2050 and a progressive transition to renewable energy sources. Some 20 percent of the 2050 energy demand might still have to be covered by fossil and nuclear power. These are ambitious targets that will require major policy changes in the next four decades.

Parts of European civil society are even more ambitious. They want green house gas emissions to come to a complete halt by 2050. Europe should be able to go for a zero-carbon society. Anti-nuclear groups want to achieve this objective without nuclear power, which should be technically possible by 2050. On the other extreme, influential segments of media and business oppose the Commission road map as being naïve, arguing that by going ahead on its own Europe risks undermining its international competitiveness.

The EU will have to live with this “divide“, but it must not prevent it from pursuing intermediate targets. The Commission climate road map of March 8th aims at reducing green house gas emissions by 40 percent until 2030 and 60 percent until 2040. To achieve these targets, the EU must urgently define policies in the four key areas accounting for most of European green house gas emissions: energy waste, buildings, power generation& transmission and transport. To that end, the European Commission has recently submitted policy outlines for higher energy efficiency, power transmission and transport. Europe will only succeed in its energy revolution by using less energy, in particular through higher energy efficiency. Europe can do with much less energy by insulating its buildings and enhancing fuel efficiency in heating, driving, power generation/ transmission/consumption etc.

At present, its energy efficiency record falls short of what is achievable ; the European Commission is therefore right in insisting on the progressive thermal revamping of public buildings and announcing mandatory energy efficiency targets if the situation will not have improved by 2013. Heating and cooling buildings accounts for up to 40 percent of EU energy consumption, in particular north of the Alps. By 2050, all buildings should therefore be largely emission-free. That is a pre-condition for reaching the ambitious energy and climate targets the EU is aiming at.

As a first step, the Commission has proposed member states to accelerate the overhaul of their public buildings to three percent of their stock annually. This should become part of a comprehensive strategy for the energetic overhaul of Europe’s building stock, including research and development, employment, training, financing and standards. To make all European buildings essentially carbon-free by 2050, the EU needs to launch a gigantic programme of thermal re-furbishing. Such an initiative would become an impressive employment programme and give an extraordinary boost to construction and material technologies. There is little disagreement about the need to make the power sector emission-free by 2050. This is a key element of the March 8th Commission climate road map for 2050. The differences concern the power mix by which Europe should achieve this objective: should it be completely based on renewable sources, essentially wind and solar; or should nuclear power and/or fossil power equipped with carbon capture and storage continue to play a role?

It seems unlikely that the EU will succeed in bridging these differences. The interests of member states lie too far apart; and the energy mix has traditionally been considered as “sacred”. Common sense therefore dictates to work on the hypothesis of an emission-free power sector in 2050 that will not be completely based on wind, solar, hydro and biomass. In the final analysis, the share of renewable electricity will depend on the development of relative costs of nuclear, CCS , wind and solar, taking into full account their external costs. The majority of member states are likely to retain some remnants of nuclear and fossil power.

In order to reach an emission-free power sector by 2050, the EU will have to take three crucial decisions in the very near future:

  • fix ambitious targets beyond 2020 for the share of renewables in the electricity consumption, say 45 percent by 2030;
  • accelerate the construction of high-voltage direct current grids, able to transport large amounts of wind and solar electricity across the continent, with a minimum of transmission losses. These are a pre-condition for the reliability of the future European power supply, essentially based on wind and solar.
  • invest in substantially bigger storage capacities for renewable power, especially through pump stations in the Alps and Scandinavia or underground hydrogen stores in Northern Europe.

Transport accounts for roughly one quarter of the European energy consumption. It is essential to reduce that consumption for becoming much less dependent on oil/gas imports and and reducing green house emissions. In its white paper of March 28th the European Commission calls for reducing EU C02 emissions from traffic by 60 percent until 2050.To that end, intra-city traffic should be freed from conventionally-driven vehicles, air carriers should consume more bio-fuels and less kerosene; and half of EU long-distance traffic should be by rail.

Such ambitious targets are only feasible if the EU

  • succeeds in making electricity generation 100 percent emission-free by 2050;
  • imposes much stricter fuel-efficiency standards on cars, trucks and aircraft beyond 2020;
  • makes gasoline and diesel substantially more expensive as part of a green tax reform by which member states will charge higher levies on the consumption of energy while lowering taxation on incomes, in particular lower ones;
  • invests massively in railways for long-distance passenger & goods traffic and subways/trams for metropolitan mobility.

To meet its ambitious energy and climate targets for the middle of the century the EU will have to decide on many bold actions in the coming five years. Setting out long-term scenarios may be intellectually challenging; but their proof will be in translating them into reality.

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