As is well known by now, the EU MEPs voted against the specific backloading proposal that was put before the Parliament. However, the Parliament also voted against the outright rejection of the proposal, which means that the Parliament formally has no position on backloading, possibly leaving the door open for a reformulated attempt at passage. I won’t dwell on that as it probably requires too much speculation and intrigue even for a blog.
The situation the EU finds itself in is spelled out in more generic form in the new Shell New Lens Scenarios. The scenarios tell stories about the future, but these are built around a series of paradoxes and pathways, with the latter illustrated below.
When the financial, social, political or technological capital encourage early action, it can result in effective change and reform. Room to manoeuvre exists and a new pathway forward is forged. But when such capital proves inadequate to withstand the stresses applied, behavioural responses delay change, causing conditions to worsen until ultimately a reset is forced or a collapse occurs. This is a trapped transition.
The EU seems to be getting quite good at the latter, with the New Lens booklet giving the example of the EU handling of the financial crisis as a Trapped Transition Pathway;
The “can” keeps being “kicked down the road” while leaders struggle to create some political and social breathing space. So there is continuing drift, punctuated by a series of mini-crises, which will eventually culminate in either a reset involving the writing off of significant financial and political capital (through pooling sovereignty, for example) or the Euro unraveling.
Similarly for the EU ETS. While backloading was never the complete solution to the problems faced by the ETS, it could have given it enough momentum to see through a series of much needed reform measures, paving the way to a more robust and economically efficient climate policy framework. Instead, the Parliament has “kicked the can down the road”, setting up the conditions for further crisis later on. This in turn could do real damage to the ETS, leading to a very negative outcome, i.e. Write-off & Reset or Decay/Collapse. Many of those who opposed the backloading amendment argued that it was better to wait for the full structural reform discussion, but that discussion has no formal schedule and is unlikely to commence before the full debate on the 2030 roadmap. Even then, opposition will rear its head again and the structural reforms required could well be watered down.
The vote attracted quite a bit of media attention, with many articles and significant commentary. Perhaps strongest of all was The Economist, which spoke of “profound consequences” that will “reverberate round the world”. The Financial Times took a different view in its editorial, effectively arguing that the backloading itself was akin to “kicking the can down the road” and instead called for the structural reform to start in earnest and “end the system’s absurdities”. This included border carbon adjustments, long term targets (of the 2050 variety) and dealing with the surplus of allowances.
I have and continue to be an advocate of emissions trading and carbon pricing, but it is looking increasingly unlikely that these systems will ever effectively trigger the one essential response to rising CO2 emissions, which is carbon capture and storage (CCS). There are too many other vested interests which continue to suck the life out of an ETS, including competitiveness concerns from participants, renewable energy targets, energy efficiency mandates, developing country needs and environmental justice to name but a few. These are all important policy desires, but they need to find their home elsewhere and not in the space occupied by an emissions trading system.
In the end if the ETS approach doesn’t deliver CCS in particular, then some form of mandated requirement could be imposed instead.
One of the early signs of madness is an indulgence in compulsive displacement activity, which could not be a better description of the whole Cap & Trade process. The aim of displacement activity is of course to avoid facing up to reality, and that reality being that the world -with a few exceptions- has already moved away from the direction you would like it to take.
All the latest science suggests that CO2 has a low climate sensitivity, a fact not lost on the majority of governments & policy makers. Instead, you appear to be arguing for new laws to impose CCS on those governments still ‘living the green dream’ in disregard of it’s obvious economic impacts re: competitiveness.
The ETS is fundamentally flawed, unlike schemes based on reducing sulfur, nitrogen or particulates. In the latter schemes, the value of the credit is tied into a tangible asset which can be weighed, traded and is even useful. But for carbon, there is no equivalent asset, so the intrinsic value of the credit is zero: the only way it can have a value is if there is a mandated base price for the credit, such as the Australian approach, or the failed EU approach. However, that is simply equivalent to a tax, as everybody would be trading at the floor price, and a carbon credit would just be fiat currency, whose value is set by the EU.
CCS in principle gets round the problem of lack of tangible asset, but the cost of removing the primary unavoidable product of combustion (as opposed to small contaminants) is so hopelessly high that to impose it by mandate would bring economic disaster through hopelessly high energy prices.
I think the time has come to bury the lunacy of the Climate Change Act and all the EU racketeering in carbon credits that begat it.
By all means raise taxes on commodities (like we do with motor fuel), but do it honestly rather than by pretending we are “saving the planet” or by creating a racket based on indulgences .
I think that the primary message from EU parliament is that they don’t see carbon emissions as a primary problem. They realised that stable economy is much more important. After all the cause of falling carbon prices is not oversupply of allowances but lower than expected carbon emission. Europe needs to fix its economy first and that will be a hard journey we haven’t started yet. Perhaps EU parliament begins to realise that.
I worked on the two main international programmes on CCS in the 1990s. The amine route means you lose a third of your energy and a lot more in pumping losses.
You can save far more CO2 emissions by decentralising power generation to dwellings with fuel cells and Stirling engines, about 35% compared with central generation bearing in mind the windmills actually increase emissions when you factor in all the losses.
What’s more, by making 10 million UK homes independent of the grid and able to sell standby power in the day whilst keeping the waste heat, the playback is 3 years and you destroy the grid oligopoly; central generators and the Mafia.
Alec,
That may well be the case, but if CCS isn’t delivered then CO2 in the atmosphere just keeps accumulating as we use fossil fuels, albeit more slowly under your scenario,
David
If we accept the conjecture that human activity significantly alters the atmospheric concentration of CO2, and that we should aim to get this process under proper management, what is the target level of CO2 concentration and on what basis is this figure arrived at?
Roy,
If you have a flick through some of my recent posts you will see that there is quite a bit of discussion about measuring progress against a trillion tonne accumulation of carbon from 1750. This has quite a bit of academic work behind it and seems to be a rational approach. Of course it is unlikely we will contain emissions within such a budget, but it is a useful measure nevertheless.
David
Roy, as David is unwilling/unable to reply I’ll answer your question. The current fossil fuel reserves are around 1trillion tons of carbon and burning all if this would take us to the concentration of less than 600ppm of CO2 in atmosphere. The current concentration is 400ppm and preindustrial concentration was 280ppm. During ice age around 10000 years ago it was around 180ppm, dangerously close to the survival limits of photosynthetising plants (circa 150ppm). Millions of years ago the concentrations were much higher (2000-5000ppm) but plants were effective in removing CO2 to the point when they become starved. The starving plants were unable to grow at non-optimum temperature destabilising the biosphere and making the Earth prone to the glacial cycles.
Therefore, burning all proven reserves of fossil fuel has potential to raise CO2 concentration to 600ppm (approximately by 50% compared to the current level and 100% compared to preindustrial) and likely increasing global temperature by approx. 1degC (2deg C compared to pre-industrial).
It is likely that we can utilize more fossil fuel than are proven reserves today so the CO2 concentration can raise further. However, it should be noted that climate sensitivity to CO2 is not linear but logaritmic. Therefore to get another 2deg C raise (4degC above preindustrial level) we would need to burn another 3Trillion tons of carbon to get to 1200ppm CO2 concentration. This concentration is great for plants and no harm to people and most other species. We would need to burn 4T tons of carbon from now while the current proven reserves is 1T only. Proven reserves is enough oil to keep us going for about 40years and enough gas and coal for about one hundred years.