Time for plan B
Europe must rethink its approach to tackling climate change, according to a new report from leading think tank Policy Exchange. The report says European climate policy does little to persuade other countries, especially China and the United States, of the need to sign up to ambitious carbon reduction targets.
The report – Climate Change Policy:
Time for Plan B, insists that while the EU should retain its existing 2020 emissions reduction target and its high level of ambition on longer-term decarbonisation, there needs to be a stronger focus on lowering the costs of climate mitigation at global level.
The research calls for a greener, cheaper approach focused on promoting technological advances that will make it less costly for all countries to reduce emissions, through investing in low carbon technologies with long term global potential contribution to mitigation in ways designed to maximise long-term cost reductions.
The report recommends abandoning the EU’s 2020 renewable energy target. The target mandates an unnecessarily expensive route to meeting carbon reduction goals and distorts spending in favour of rapid deployment of immature technologies. EU policy should treat all low carbon sources on an equal footing. A previous Policy Exchange report – 2020 Hindsight – showed that the 2020 renewable target was not a least cost route for the UK to meet its target of an 80% carbon reduction by 2050.
It also recommends that EU and UK policy should place a greater emphasis on low carbon research, development and demonstration (RD&D) to promote innovation rather than the deployment of chosen low carbon technologies to meet short-term targets.
The level of investment in each technology should reflect that technology’s long term global potential contribution to mitigation, and be designed to maximise long term cost reductions. This would mean orienting support away from offshore wind deployment, which is favourable to UK geography but limited in global reach (and hugely expensive), and towards RD&D support for technologies including carbon capture and storage (CCS) or solar PV, which have much larger global technical potential.
The International Energy Agency has identified a global shortfall of RD&D investment in CCS of up to $17bn/year.
The author of the report is Boaz Moselle who is a former Managing Director of Ofgem and an economist specialising in energy markets. As a consultant he has provided advice to governments and corporations in many countries on a wide range of energy policy, competition and regulatory matters, including renewable generation, energy efficiency and security of supply.
He says: “The debate about tighter EU 2020 targets has proven to be a sideshow. Major global players, crucially China and the US, have been largely unmoved by the EU’s commitments. Choosing expensive decarbonisation options tells other countries decarbonisation will hurt their economy and drive business overseas.
Plan B climate policy emphasises the importance of fostering innovation and reducing costs through research and development across the whole range of low carbon technologies in reducing their costs, and making decarbonisation more appealing to the wider world.”
The report also assesses the evidence and finds a glaring shortfall in understanding of the costs of adapting to a warmer climate. Investing in improving knowledge about the costs and benefits of adaptation measures could avoid the wasteful mistakes seen in mitigation policies.
Simon Moore, who is the editor of the report and joined Policy Exchange in August 2010 as a Research Fellow for the Environment and Energy Unit said: “Europe should step up efforts to adapt for the warming effects of greenhouse gas emissions already released into the atmosphere, as a rise in global average temperatures of at least 2°C appears unavoidable.”