Over the last few days I have been at Sustentavel 2011 in Rio de Janeiro, the largest event in South America which focuses on sustainable development. There is a great deal of energy for this subject in Brazil, but perhaps even more so this year as Rio de Janeiro prepares itself for Rio+20. Many of the sessions I attended made mention of Rio+20 and sought to articulate what it meant for Brazil and the world, but more importantly what such a global event should seek to achieve.
Not surprisingly climate change figured in much of the discussion. In many instances there was a desire to broaden this into a discussion on water, food and energy and in the case of the latter to focus almost entirely on energy efficiency. The water-food-energy nexus is an important subject and much work remains to really understand it, especially because climate change worsens the stresses. My concern with the climate change discussion at Sustentavel was around the issue of energy efficiency. Not only is it important to remember that it’s only a component part of the CO2 issue, but in certain instances it can exacerbate the problem when not properly managed. As I pointed out in a post last year on Jevons Paradox, there is ample evidence to show that improved energy efficiency can lead to even greater consumption – and potentially higher emissions.
I was part of a panel on “The Green Race”, with the remit to the panelists to draw on lessons from the past that can guide us in the future. Personally I am very skeptical about “The Green Race” – rather I think of it more of an energy race where all the stops are being pulled out, i.e. maximize the potential of everything. I think this is more of what is going on in China today than a greening of the economy. There is no doubt that China is erecting a record number of wind turbines, but it continues to build coal fired power stations at a record rate as well.
In my presentation (see below for link) I argued that the lesson we are now learning is that over exuberance in policy development has a price to pay. The example I used is the EU-ETS, where we have seen the carbon price dulled and (most probably) costs driven up by a series of national and EU wide polices operating in the same space as the ETS. Examples include the Renewable Energy Directive, the UK Carbon Reduction Commitment and the upcoming Energy Efficiency Directive. Going forward, other countries looking at implementing carbon price policies need to learn from this and resist the temptation to over legislate. My key conclusions were:
- Reducing emissions needs to remain a clear and unambiguous objective.
- Carbon price mechanisms are effective and can deliver the necessary reductions.
- Layering of additional policies can add to the cost and weaken the carbon price signal.
- A clear long term policy framework is required.
- Complimentary policies can enable new technologies (e.g. CCS) and ready them for deployment.
- Constantly changing the framework undermines its purpose.
David Hone at Sustentavel 2011 (to view the presentation)