What makes a -30% target easier to meet

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So another report has been published which states that the EU should alter its 2020 GHG emissions target from -20% to -30% below 1990 levels. The Ecofys report believes that meeting the renewables 2020 target will ensure a -30% saving from 1990 will be achieved, made easier by the recession.

The report states ‘The cap of the Emissions Trading System will need to be adjusted if energy efficiency and renewables targets are to be met'. I can see the logic here, but surely it is a big ask, expecting the renewables target to be met at a reasonable cost. It seems to me that the conclusion of this report – that the EU can move to 30% easily – is based largely on this assumption.

To me it is like saying ‘we can meet any target, if all the measures needed to meet that target are put in place and actioned'. Surely the problem is rarely the targets, but measures put in place to meet those targets. For the UK, the renewables target is a good example, in terms of meeting a GHG target.

The same could be said for energy efficiency, which is surely the easiest nut to crack. Projected savings here are often at low or no cost to implement, yet why are energy efficiency measures not taken up as much as all the reports would have us believe. Is it that these efficiency measures are not fully costed, does the rebound effect play a significant part, or that efficiency measures installed today, become the less efficient pieces of kit tomorrow. Of course we shouldn't underestimate behavior and how difficult it is to change that.

I am starting to feel sorry for the EU ETS, as anytime something happens either to the economy, or other climate change policies, there are always calls to tighten the EU ETS target, with pundits stating it's not working. One thing this shows is having a basket of different policy instruments that claim to have the same aim – to reduce GHG emissions – that often pull in different directions doesn't work effectively to achieve this one aim at least cost. One could say that a renewables target is not a target to reduce GHG emissions, but a target to increase renewable energy generation. If the aim was soley to reduce GHG emission then surely we would just have a GHG emissions target and let the market decide the most cost effective way of achieving this.

Finally, the Ecofys report uses the argument that -30% is easier to meet because of the recession. The first fact is that once the recession is over and production returns to pre-recession levels, so will the GHG emissions, less an amount for ongoing abatement measures. So on this point, the tighter target isn't easier to meet because of a recession that takes place 10 years before a target needs to be met. Fact number two; all the companies I know lost a magnitude more money during the recession than they might have got from selling ETS allowances and therefore don't have a massive ‘war chest' to save for 2020 when the target becomes so tight, that either you buy allowances to cover the shortfall between target and emissions, or you cut production.

Rather than reaching for ambitious, but unachievable targets, the EU should adopt a policy mix that shows that growth and an economically sustainable transition to a low carbon economy are not mutually exclusive.

Author

Director of UK Steel

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