As the world gears up for the UN Climate Change extravaganza (UN Framework Convention on Climate Change or UNFCC) in Copenhagen in December 2009, achieving a serious accord to establish post-2012 commitments that could slow or halt global warming increasingly appears a mirage. This was foreshadowed in the failure of last week’s preparatory meeting in Poland.
This despite all the bold promises of the EU March 2007 summit, replete with binding pledges to reduce greenhouse gas (GHG) emissions by 20 percent, have 20 percent renewable energy by 2020, and so on. What is particularly ironic is that all the other actors oft derided by the Europeans, are moving more in a green direction. In recent months two major emitters, India and China, have begun to set climate change goals. And on top of that, after eight years of resistance by President Bush, there was consensus from both U.S. presidential candidates on the need for legislating binding “cap-and-trade” GHG emission targets for the U.S., as President-Elect Obama has promised. Moreover, there is growing acceptance by the U.S. private sector — including the energy sector — and a marked shift in opinion polls that suggests a growing desire of the American public to address climate change.
So why the grim prognosis? Well, the short answer is simply that good intentions are not enough. In the real world, Europe’s emission trading system has been less than a sterling success. Handing out free permits has led to a lot of fraud, and the net effect — despite all the Europosturing of greenness — is that not only has the EU not met its Kyoto GHG emission reduction targets, but net emissions have actually increased in recent years — by 0.8 percent since 2000. And even as the EU appears to be revising the much abused system of doling out emission credits for a new Emission Trading System (ETS), the European Parliament’s environment committee heard Germans and Italians lobbying for exempting certain industries or giving them free emission allowances.
The arguments for wriggling out of new commitments — that in the face of the global financial crisis and recession it would cause too much pain — scream out in bold neon lights why this is an unlikely moment for governments to take the bold steps many would like. Indeed, if Kyoto signatories can’t even meet current targets, one may ask what is the point of proclaiming new targets and commitments? Nonetheless, EU governments are still struggling to reach final agreement on a climate change agenda this month and then turn them into law before the June 2009 EU Assembly elections. Many expect Europe to keep its cards close to its vest until it sees what is likely to come out of the Copenhagen UNFCCC meeting.
Paved with Good Intentions
But it is a given that despite an increasing greening of China and India, both leading GHG emitters, they will not sacrifice economic growth. Period. They will cooperate in terms of more energy efficiency, and deploying new clean energy technologies. But it is almost a certainty that in Copenhagen, they will not commit to hard, binding targets or any targets that put economic growth at risk.
As for the U.S., though President-Elect Obama displays a good understanding of the climate issue, its urgency and is surrounded by greener-than-thous advisors and has developed ideas to address it, it is difficult to see Congress passing such legislation in the midst of a recession that is expected to last through 2009 and perhaps beyond. Just as energy prices have started to drop sharply to $40 a barrel, how to you tell Joe the Plumber that his gas and electric bills will have to be increased by 20 percent to meet climate targets?
The large question all this raises is why is there such a yawning gap between intentions of governments genuinely concerned about climate change and real world actions? The answer is that unfortunately, there is no free lunch. Assigning a value to carbon, whether through a cap-and-trade system or a carbon tax (which most economists seem to view as more efficient) means that somebody has to pay. Usually that means the consumer in the form of higher energy bills or higher gas prices at the pump.
Europeans have tried to regulate their way out of climate change, or proclaim lofty goals like 20 percent renewables by a date certain and later, blink at them. The problem is that most climate science models tell us that regardless of how green we try to be, we can not really put much of a dent in reducing GHG concentrations in the atmosphere with current technologies. There is, for example widespread support for clean coal technology and carbon sequestration. But such technologies would raise the price of coal and at present, are not cost competitive.
Coal Still King
Given the enormous amounts of coal in the world, this may be the most important single issue in regard to climate change. The U.S. gets about 50 percent of its electricity from coal; China consumes roughly one-third of the world’s coal, and India also has large coal reserves. If the cost of clean coal technology becomes more competitive, if carbon capture and storage works on a large scale, this would be a huge step in the direction of stabilizing GHG concentrations in the atmosphere.
The reality of coal spurs hopes for renewables. Wind, solar and others are steadily becoming more commercially competitive, coal can still turn out electricity for 3-4 cents a kilowatt-hour. Though wind is nearly down to competitive levels, more research and development will be required before solar, whose prices have been dropping exponentially over the past three decades, is cost competitive.
Placing a value on carbon, it is argued, sends market signals that facilitate new, noncarbon-based energy technologies. The good news is that there are a number of important new technologies on the cusp of commercialization that will accelerate the transition to a post-petroleum-based economy. The bad news is that bringing many of these new technologies to market is taking longer than many hoped.
But over then next 24 months, we will likely see plug-in hybrid autos on the market, autos that can get up to 100 miles per gallon. A new generation of electric cars may not be more than a few years behind. Within the next decade commercial stationary fuel cells that can power homes and offices — and perhaps put energy back into the grid — may be readily available and at competitive prices. And breakthroughs in cellulosic biomass — producing ethanol from wild grass, algae and other non-food sources — could create a large-scale ethanol at prices competitive with $60-$80 a barrel oil. While I would not bet the mortgage on it, this could well begin to take place within the next decade. Then there is nanotechnology applied to solar energy, nano-solar that could dramatically lower the cost of solar energy.
These and other clean technologies are just over the horizon. The timing of their commercialization will be critical. But in the interim, you can hold all the grand conferences and make all the bold pledges you want, but absent these new technologies we will only see baby steps towards mitigating GHG emission. Stabilizing GHG concentrations in the atmosphere, necessary to halt climate change is probably a century long problem. But accelerating the pace of reaching such a goal will require massive R&D and global cooperation, particularly among major players – U.S., EU, Japan, China, India, Brazil.
For all the reasons mentioned above, don’t get your hopes up that the Copenhagen UNFCCC meeting will make much of a difference. At best, it will be another baby step in the right direction; at worst, a pretentious charade.
Robert Manning is a Senior Advisor to the Atlantic Council. The views expressed here are solely his own, not those of any U.S. government agency.