3E Intelligence

The grandstanding of EU leaders on the adoption of the climate and energy package cannot hide that Europe’s and the world’s political elites have succumbed to short-term economic fears and have postponed the necessary start of the transition to a new energy regime. Let’s hope and pray the climate/energy leadership role will now be taken up by the incoming American administration.

The deal French President Sarkozy clinched on the climate/energy package confirms once more that our politicians excel at setting apparently ambitious but in reality hollow rhetorical targets and then fail miserably when it comes to working out the real policy measures to reach these targets. By introducing exemptions from the auctioning system for carbon allowances and increasing the “hot air” carbon offsets that can be bought outside of the EU, the package has in reality become a Swiss cheese full of holes. Who honestly believes that with this dilution of the package, the 20-20-20 targets will still be reachable? I would not have minded the early Christmas presents to the industry if the EU leaders would have said at the same time where and how they were going to compensate to deliver the “triple 20” goods by 2020. But then again, who of the leaders present at the European Council will still be around in the next ten years. “Après moi, le déluge”?

That said, I do not doubt European industry feels “encouraged” by the EU’s climate deal (see EurActiv) but, in the long run, this might well become a Pyrrhic victory if Europe loses its first-mover advantage to the US in the coming years. Or do I have to read the EU industry’s getting cold foot over the climate policies as a statement to President Obama? “Yes you can, but we cannot”? Let’s look at the impact of this on our industry’s competitiveness in ten years.

The outcome of the Poznan COP-14 summit does not raise many hopes for an international agreement in Copenhagen next year either. Of course, we now have a work plan for the negotiations but the conference failed to bring developed and developing countries closer together as there were no agreements on the adaptation fund and the necessary measures to counter deforestation (see Washington Post). For a full analysis of the Poznan summit, read the IISD’s COP-14 final report.

All this short-sightedness and political backtracking indicates that our so-called world leaders have yet to grasp the full urgency and seriousness of the energy challenge we are facing. This is all the more dramatic as the time we have to catapult ourselves on a path to a sustainable future is becoming increasingly short. Even with oil prices as low as they are now, the International Energy Agency’s recent World Energy Outlook 2008 has provided all the worrying facts which should ring policy-makers’ alarm bells over the climate/energy crisis as much as over the current economic turmoil. With decline rates of over 6.7%, the mega-oil fields which are the life-blood of our economies are getting closer to peak production every day. Even IEA’s Fatih Birol now predicts peak oil for 2020 (which knowing him is probably a bit diplomatic for saying “it is already here”) in an interview with Guardian journalist and climate activist George Monbiot. And the World Energy Outlook’s predictions on global warming are as dire as if they come with a potential global temperature increase of up to 6 degrees under the IEA’s Reference Scenario.

So is postponing the low-carbon energy revolution an option? Not really but then again, as Nicholas Stern said in Poznan: “The human race has an incredibly well developed capacity to screw up, and we may miss this chance”.

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