Copenhagen's red herring
Copenhagen may not have been the failure it was made out to be. It was enough, it seems, to spark China and India into such a frenzy of low carbon investment that the EU is being urged by its largest economies to increase its emission reduction targets just to keep pace.
That’s quite a turn on the conventional response to Copenhagen, but it was explained by Chris Hyhne, Norbert Röttgen and Jean-Louis Borloo – the environment ministers from the UK, Germany and France respectively – who this week published a letter in the Financial Times, the very heartland of the conservate business world.
In it, they said Europe should increase its 2020 emission reduction targets to 30 per cent below 1990 levels from the current 20 per cent target, not just because they are clearly inadequate to meet the agreed task of attempting to limit global temperature rises to 2c, but because the EU economy would lose its competitive advantage if it didn’t.
“The current target of a 20 per cent reduction now seems insufficient to drive the low-carbon transition,” they said. “The recession by itself has cut emissions in the EU’s traded sector by 11 per cent from pre-crisis levels. Partly as a result, the price of carbon is far too low to stimulate significant investment in green jobs and technologies.
“If we stick to a 20 per cent cut, Europe is likely to lose the race to compete in the low-carbon world to countries such as China, Japan or the US – all of which are looking to create a more attractive environment for low-carbon investment.
The fact that the race to a green economy has been the main game behind the positions adopted by China, the US and others, has not been much of a secret. The leading developing nations might have appeared recalcitrant at Copenhgen, but they knew what they were doing.
As HSBC’s Nick Robins outlines in his article published in Climate Spectator this morning, the assumption that industrialised nations are leading the way in the transition to a low-carbon economy is no longer valid. The biggest investor is China, and South Korea, Japan and India are not far behind.
Which is why the EU ministers are so desperate to act, and to wake up conservative business leaders, who have recently been congratulating themselves on limiting the ambitions of the emissions reduction target, to the reality of the situation.
The ministers said a higher target would have a direct impact on the carbon price and send a strong signal to the private sector, on which the EU will rely to build a low carbon economy.
The foundations were there. The EU’s early leadership had enabled it to build global market share of 22 per cent of the low carbon goods and services sector, but the rest of the world was catching up.
“The Copenhagen commitments, though less ambitious than we had hoped, have triggered widespread action, notably in China, India and Japan.”
The ministers said the impact of the recession meant that achieving a 30 per cent reduction would cost only €11 billion more than the original cost of achieving a 20 per cent cut.
Furthermore, it was increasingly likely, because of supply constraints, rapid growth in consumption in Asia, and the impact of the Gulf of Mexico oil spill, that oil prices would rise further, possibly to $US130 a barrel according to one scenario painted by the International Energy Agency, and this would further reduce the costs of hitting an increased target, and may mean that the direct economic effects of hitting the 30 per cent target by 2020 actually turn positive.
The ministers said the real threat to energy intensive sectors was not a carbon price, but collapsing demand in the European construction and infrastructure markets. One sure way to increase demand, they noted, was through incentives to boost investment in large-scale low-carbon infrastructure – a voracious user of steel, cement, aluminium and chemicals.
“Ducking the argument on 30 per cent will put us in the global slow lane,” the ministers said.
One wonders where it would put Australia, which seems incapable of producing the policies that would enable it to reach its own modest target of a 5 per cent cut in emissions.
For that reason, a higher target in Europe may be a blessing for Australia. It would increase pressure on Canberra to lift its own target to at least 15 per cent. Then, it would no longer be able to fudge at the margins.
Comments on this article
Copenhagen Municipality is an
Copenhagen Municipality is an administrative unit which covers the central part of the actual city of Copenhagen. It is a fairly small part of the actual city which falls within the municipality both because it covers a confined area and because the enclave of Frederiksberg is an independent municipality. Thanks.
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Only if it really is development
David Edmunds suggests we are against development but I'm unconvinced. Wind power, for example, has been harnessed for at least 5 centuries and is actually a mature technology. It's failing, still, is that you can't make the wind blow according to human needs. Useful baseload system batteries or capacitors would be development and could make wind marginally more useful but it is still and always will be low density and unreliable power.
Solar, too is limited by the fact that incoming solar radiation to surface averages just 342 Watts per metre squared. There is no getting around it being low density power.
With regard to China's renewable power, many of the constructed windfarms are not actually connected to the grid (locals refer to them as "sunbathing" because they just stand idle) and are only built to gather greenhouse certificates. China's baseload electrical capacity increase is coming from a massive construction campaign of coal-fired generation, some nat-gas and new nukes. Note the amount of hydrocarbons China is buying around the world.
That the world is decarbonising is true in that increasing efficiency means there is less embedded carbon per $GDP but that does not mean anyone is really moving away from carbon-based energy.
Development is great, as long as it is genuine development rather than warm & fuzzy "feel goodery".
Technology Development
I am always amazed that there are people who believe that some particular technology development is entirely impossible or will destroy the economy. It was thus when cars replaced horses, when electrical lighting replaced gas, when people started flying places, and so it is with clean energy generation replacing coal.
It is going to happen. It is a pity that the response of so many conservative Australians is to let the opportunity to be involved in the transformation pass us by, because of nameless fears.
Comparing apples to oranges!
Let's be clear reducing emission targets is not the same thing as "low carbon investments". Studies by power engineers have shown that investments in wind energy actually increase CO2 when these become a significant percentage of generation capacity (over 3-5%) due to the fact that the rest of the system runs less efficiently because it has to compensate for the extreme volatility of the output of wind generation.
Below is a link to study on the lack of effectiveness on wind
http://dialogue.usaee.org/index.php?option=com_content&view=article&id=9...
China's rate of decarbonisation is slowing...
For those who think China is "going green" (or "low carbon") perhaps check out: http://www.nytimes.com/2010/07/05/business/global/05warm.html?_r=1&pagewanted=print
Anthropogenic CO2 emissions are going to increase for a long time to come despite any eco-chondia-driven economic suicide by the West. The only useful response is adaptation and that requires the maximum availability of reliable, affordable baseload power. Forget carbon hysteria and get on with building coal-fired and/or nuclear power stations.
If atmospheric carbon dioxide is actually a problem we are going to have to adapt to it. If not then a "no regrets" course wasted the least effort. Either way Australia has abundant readily accessible coal and no reason not to use it.
Copenhagen's red herring
I find this analysis to be simplistic and misguided. China may be investing in renewable energy technology but to assume that they intend to power their economic growth with it is probably not correct. They have made it clear that they will not accept emission targets and I would suggest that their continued heavy investment in coal and nuclear generation means that they fully understand that it is not possible to run a modern economy on wind and solar. Their investment is most likely because they believe that they can sell this useless technology to the developed nations who still appear to have an economic death wish.
China using ALL available low-carbon tools
And don't forget China is also planning an extra 70,000 MW of nuclear generation capacity by 2020.
http://en.wikipedia.org/wiki/Nuclear_power_in_China
How is China investing?
China is the major producer of CO2 and they are not slowing down. See http://www.wikinvest.com/concept/China%27s_Coal_Power_Pollution and http://www.capitalvue.com/home/CE-news/inset/@10063/post/1202723. Looking at Bejing maybe their strategy is to block the sun out. Do you mean they are building wind and solar generation equipment to sell to the western world? If so can the western world make it cheaper than China? Please more fact and detail less polemic.
Australia's target
Correct me if I am wrong, but I note that most of the targets mentioned in this article refer to reductions below the 1990 level.
Australia's target, from memory, is 5% below 2000 levels, ie an increase above 1990 levels. Pitiful and mean.
The amazing China
If you are in any doubt that China is surging ahead in green innovation, have a look at these graphs on the explosive growth in patent filings for Chinese solar and wind generation technologies:
http://cleanip.com.au/2010/04/09/wind-solar-patent-filings-in-china/
At least domestically, China is leaving the rest of the world behind.
Also, if interested have a look at this article on clean IP in china:
http://cleanip.com.au/2010/03/22/renewable-energy-technology-in-china-protect-and-profit/