Climate change and EU policy -
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1 Climate change and EU policy - why has so little been achieved? Bruegel Energy and Climate Exchange October 4 th 2012 Professor Dieter Helm Author of The Carbon Crunch: How we are getting climate change wrong and how to fix it. Yale University Press, 2012
2 The Questions What are the causes of global warming? Facing up to some inconvenient facts Why has so little been achieved? Recognising current failures How do we make progress? Delivering effective climate mitigation 2
3 An ever-upward path Atmospheric CO2 (ppm) th Source: October US 2012 Department of Commerce National Oceanic Professor & Atmospheric Dieter Helm Administration (NOAA) 3
4 What causes global warming? The role of coal China Population growth Carbon consumption, not production What is likely to happen before 2020? 4
5 Historical coal burn vsatmospheric CO 2 (mt & ppm) Coal consumption (million tonnes of coal equivalent) Coal consumption Atmospheric CO Atmospheric CO2 (ppm) Source: US Department of Commerce National Oceanic & Atmospheric Administration (NOAA), BP statistical 5 review of world energy 2011
6 World coal demand scenarios to 2035 (mt) Million tonne es New policies Current policies 450 scenario Source: OECD/IEA World Energy Outlook 62011
7 Population growth the projections Source: United Nations 7
8 What is likely to happen before 2020? By 2020: China X 2 GDP India X 2 GDP GWs new coal (if 12 th 5 year plan implemented in China) No further action following Durban 8
9 Why has so little been achieved? Kyoto is production-based Europe has been de-industrialising Currentrenewables are expensive and contribute little Nuclear is reducing across Europe (especially in UK and Germany) + being replaced by coal in Germany 9
10 EU Climate Change Package It all adds up to 20!!!! World leadership offering 30% at Copenhagen And then. Nuclear exit More coal 2050 Roadmap and 2030 targets 10
11 Europe: an unviable position Competitiveness Consumption of carbon Costs Current renewables cannot make much difference to global climate change land & shallow sea areas just not big enough Energy efficiency good idea but does not necessarily reduce energy demand 11
12 How do we make progress? Carbon pricing Carbon consumption and border adjustments Coal gas substitution And then. Enormous scope for new technologies future renewables 12
13 Carbon taxes v. EU ETS A carbon tax alternative Carbon pri ice EUR EU ETS futures prices 0 Source: Bloomberg 13
14 Coal gas for the transition Fossil fuel emissions Coal (average) Fuel oil Natural gas Approximate CO2 emissions: grammes of CO2 per KwH of electricity generated Source: International Energy Agency "CO2 emissions from fuel combustion highlights 2011" 14
15 The new technologies future renewables, active grids and more Next generation solar Smart Meters Storage and batteries Electrification of transport Biotechnologies Nuclear: PRISM, Fast-breeders 15
16 Conclusions European leadership has failed has probably made matters worse Durban will probably lead to 450ppm ++ EITHER: Change tack now Admit defeat 16
17 17
18 European Energy Policy, in: The Oxford Handbook of the European Union Edited by E Jones, A Menon, and S Weatherill, OUP, August The UK s new dash for gas, Prospect, 20 th September Trade, climate change and the political game theory of border carbon adjustments, with Cameron Hepburn and Giovanni Ruta, May 2012, Grantham Research Institute on Climate Change and the Environment, Working Paper No. 80. Surprise the oil price isn t higher, Prospect, April The sustainable borders of the state, Oxford Review of Economic Policy, Volume 27 no 4, winter What next for EU energy policy?, in Green, safe, cheap: Where next for EU energy policy? edited by Katinka Barysch, Centre for European Reform, The Economics and Politics of Climate Change, Helm, D. R. and Hepburn, C. (eds), (new edition 2011), Oxford University Press. 18
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