Will Europe cut greenhouse gases by 30% by 2020?
Last Friday the pro-environment business organisation the Aldersgate Group convened a meeting to discuss the EU proposals to cut greenhouse gases (GHGs) by 30% by 2020. Currently the EU is committed to a 20% reduction. What would be the consequences, both environmental and economic of going for the higher target?
A heavyweight panel met in the headquarters of Band of America Merrill Lynch in the centre of London. Chaired by Andrew Raingold, Aldersgate's Executive Director, the panel members were: Guy Turner from Bloomberg; David Kennedy, Chief Executive of the Committee on Climate Change, which is the UK Government's advisory panel on tackling and preparing for climate change; Abyd Karmali, BoA Merrill Lynch; and Neil Johnson from DECC (the UK government Department of Energy and Climate Change).
Guy Turner opened with a clear presentation of the costs of moving to a higher target based on Bloomberg research. The net cost would overall be small in terms of the total EU budget: "In the simplest scenario, [Bloomberg] estimate that a change from a 20% to a 30% emissions reduction target for the EU as a whole would result in an additional cost of Euro3.5bn per year up to 2020."
Panel: L-R, Neil Johnson, David Kennedy, Abyd Karmali, Guy Turner, Andrew Raingold. Photo by Amy Parton
This equates to $4.5bn at today's exchange rates. Though this is a large sum, the costs of fossil fuels like natural gas, coal, and oil are rising continuously and in 2020 more renewable energy may actually be cheaper so this could be a bargain, although it is impossible to predict.
Abyd Karmali explained that the effects of the EU trading scheme and other factors had meant that no coal-fired power stations had been built in the EU since 2005 and financial organisations were scrambling to invest in biomass or to convert existing power stations to use the fuel.
David Kennedy agreed that the move to a 30% GHG reduction by 2020 was possible. It would mean a large number of electric vehicles on the roads and further electrification of the railway system.
Neil Johnson said, "The UK is making the case for a 30% target this year in EU negotiations." He then talked about the political difficulties. Some of the less-developed parts of the EU such as Poland are reliant on old, dirty, coal-fired power stations. So they are not in favour of a higher commitment, unless they can receive sufficient subsidy. One of the audience called this "Stuffing their mouths with gold." As the EU negotiates as a bloc, then unless these objections are overcome, the 30% target will not be instituted but Johnson was hopeful that with sufficient incentives the tail-enders could be brought on board.
Julian Jackson (left)in the audience as Doug Parr of Greenpeace asks a question about nuclear power. Photo by Amy Parton
There was a vibrant question-and-answer session afterwards. One questioner suggested that biomass was not a particularly good way of removing carbon from the atmosphere, as growing trees usually takes too long for it to be effective, although other participants thought that fast growing trees were a good way of capturing carbon. Nuclear power and the revenue impact of subsidies was also discussed and it could have gone on much longer but the event had reached its time limit.
The general conclusion of the meeting was that it is the political difficulties in moving to a higher target that are the obstacles, not the technical or financial aspects.
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