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A thin veil of doubt seems to be clouding the EU's commitment to its testing targets for the reduction of atmospheric carbon emissions. The commission has just launched a consultation intended to create a framework for climate and energy policies to 2030, and within all the climate change jargon have crept some new phrases such as "security of energy supplies," "competitiveness," and even the risk of "policy fragmentation."
The last time it went through this process was toward the end of the last decade when the European Commission hailed its "20-20-20" targets of reducing greenhouse gas (GHG) emissions by 20 per cent from 1990 levels, of raising the share of renewable energy to 20 per cent, all to be achieved by 2020.
In a green paper published today, the commission pats itself on the back for doing well – it says emissions were 16 per cent below 1990 levels in 2011 and the share of renewables was 12.7 per cent in 2010. It now needs to set some targets for 2030, and in theory these must lead to its long-term road map of reducing carbon emissions by 80 to 95 per cent by 2050.
This paper isn't brave enough to question the absurdity of the EU's 2050 ambition, even though the commission is well aware that consumption of coal in Europe is soaring due to its cheapness. But it does seem to be asking some good questions about whether the implied target of 40 per cent less GHG emissions by 2030 is sensible, and how it can be achieved cost-effectively.
The commission hints at the gargantuan problem of eliminating a huge piece of the hydrocarbon economy, when the only alternative energy technology currently available is the intermittent power of windmills and a bit of solar: "Mobilizing the funds necessary to cover the capital costs for significant up-front investments will, however, be a challenge."
The EU is now admitting that "a number of challenges were not addressed" when it drew up its optimistic 2009 targets. Among these were the failure to consider how the EU would link all those wind turbines effectively to the grid and how to create the incentives to invest in (uneconomic) renewables and allocate resources in a liberal market economy. Perhaps the biggest challenge is what to do about the EU's carbon-trading system, which is supposed to put a price on CO2 by creating a market for permits to emit carbon. Unfortunately, the price today is piffling, encouraging power companies to use cheap coal while America burns gas and cuts U.S. carbon emissions.
"The low carbon price is not providing investors with sufficient incentive to invest and increases the risk of 'carbon lock-in'," says the commission. To change that, EU states need to restrict carbon allowances to create a shortage, but in the current economic climate the commission has not a hope of agreeing more economic burdens on industry.
There is a glimmer of light, the beginning of a realization that the global carbon chase has much of the wild goose about it. One wonders if, in 10 years time, the commission will have the courage to say so, assuming it is still there.
Carl Mortished is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights.
Carl Mortished