Rhein on Energy and Climate

President Obama will enter history as the most committed and successful US President in the fight against Climate Change. His goal is to reduce greenhouse gas emissions by 17 per cent from 2005 to 2020. He will do essentially by exploiting the executive powers of the Environmental Protection Agency (EPA), against tenacious resistance of the Congress.

The EPA has introduced increasingly stricter fuel-efficiency standards for passenger cars which have turned American gas-guzzlers into modern cars with low fuel consumption, comparable to European and Japanese ones.

It is engaged to do the same with heavy-duty trucks in the next few years.

Even more important, it has started tackling emissions from power plants.

The USA has already achieved big progress in reducing CO2 emissions by switching from coal to shale gas.

In parallel, the EPA is presently engaged in issuing rules for reducing CO2 emissions from new and existing coal-fired power plants, which will have a deep impact on power generation in the USA.

New coal-fired power plants will have to reduce their C02 emissions to no more than 0.5 tons per MW electricity generated compared to 0.8-0.9 tons per MW for the most efficient power plants currently in operation. That requires a big efficiency jump through investing in technologies like combined cycle (power +heat) or carbon capture and storage (CCS), which is, however, still expensive and unproven.

Investors will therefore be likely to shun away from coal-fired power and rely even more on shale gas as the main feed-stock for electricity generation, certainly as long as shale gas remains as cheap as during the last few years.

The same standards becoming also applicable to existing power plants many old ones which are no longer suited for refitting will be decommissioned in the coming years.

Imposing a cut of CO2 emissions from coal-fired power plants by roughly half through improved technology constitutes a courageous act by the US Administration.

Hopefully, it will set an example for the rest of the world. Indeed, coal still accounts for some 40 per cent of global inputs for electricity generation. It is the single major source of C02 emissions and Humanity will increasingly turn to coal as oil and gas reserves will deplete in the course of the century.

The 20 biggest emitter countries should therefore urgently get together and explore the most suitable ways of following the American example and introduce similar fuel emission standards. That would be a giant step in the fight against climate change.

Eberhard Rhein, Brussels, 12/3/2014


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