WWF head: Sustainable energy could save $4 trillion by 2050

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Jason Anderson, the head of WWF's EU climate and energy policy, explains why binding targets and a backloading of carbon credits are needed to decarbonise Europe's economy by 2050.

Jason Anderson, the head of WWF's EU climate and energy policy, spoke to EurActiv's Arthur Neslen.

What 2030 targets do you see as the minimum necessary to keep the EU within the trajectory for a world that warms by no more than 2 degrees?

WWF thinks the EU should learn from the successes and failures of past and current policy. Time and again, indicative targets and voluntary agreements have failed and been replaced by binding targets (think renewable energy and cars). The Energy Savings target is non-binding and on course to be missed. So let's start from the realisation that within the arsenal of policy measures the EU has, binding targets are useful. Some have suggested the EU only needs a carbon target supported by the ETS.

Of course we should take the Effort Sharing Decision into account, so in fact a GHG-only approach is already split in two. But to complement these, we need other measures: they will cut costs and ensure outcomes. The IEA has stated that carbon pricing needs to be flanked by other measures, and the WWF paper 'On picking winners' points out that any carbon price high enough to both green current production and provide a stimulus to innovation would be politically intolerable. We risk introducing the same offsetting loopholes that are now crippling the EU ETS. It would also guarantee windfall profits to greener actors. Having binding renewables and efficiency targets create the kind of investor certainty that a carbon price has difficulty reproducing. That's why we advocate continuity of a multi-target system.

What concrete possibilities for moving to a low carbon economy by 2030 does your new report pinpoint, and how can these best be utilised?

Our analysis takes a global approach to the sustainable production of energy for all - achieving full access to energy worldwide using only renewable energy by 2050. This approach would save $4 trillion by cutting fossil and nuclear energy costs. Within that framework, the EU could achieve at least 38% energy savings, 40% renewables and 50% GHG cuts by 2030 - we say 'at least' because within the global approach the EU really ought to be moving out ahead as a wealthy region with high technology development potential.

How do you think that the weakening of political will for such action that has accompanied the economic recession can best be addressed?

There's a shift underway as people realise that the parts of the economy that have a lot of growth and employment potential are exactly the ones we need to cut carbon emissions. President Barroso said recently that 'Building a low-carbon economy is essential to prevent climate change from reaching dangerous levels. It is also a huge opportunity to boost prosperity and get us out of the current crises.' We fully agree. At the same time, the real impacts of climate change are starting to sink in, with everything from wildfires in Australia to record arctic ice melt to hurricane Sandy - the underlying reason for our need to act hasn't gone away while economics have dominated the headlines. The convergence of these two phenomena - urgency and opportunity - mean that the only thing lacking is a leadership willing to take up their responsibilities. 

Given the unfortunate carbon content of Europe’s current energy mix, how can we decarbonise without some usage of nuclear power?

There are many analyses, including our own, showing how decarbonisation can be achieved with nuclear phased out. It's not a technical issue. In fact, the notion that we would rely on a large amount of nuclear - especially new nuclear - as a decarbonisation strategy, is really just asking for trouble. First, our energy transition is not easy, no matter what. We need the public to be engaged. Proposing nuclear energy is a really good way to erode public confidence and support. Secondly, unlike renewable energy, nuclear energy keeps getting more expensive. It has negative learning effects. Cost overruns in France and Finland right now do not bode well for the future of nuclear - a future we do not in fact need. 

How much shale gas do you think that Europe can responsibly exploit before 2030 – and what role do you see for gas in the low carbon transition more generally?

Gas has a couple of advantages, but they should not be overstated, and it should not overstay its welcome. In the near-term, coal-to-gas switching is important, especially as there is coal that is being run in the absence of a meaningful carbon price while cleaner gas sits idle - that's perverse. But decarbonisation scenarios including those of the European Commission show the absolute amount of gas use declining steadily. This is because efficiency and renewables gain ground heavily. That's as should be, because gas is still high-carbon. It is lower carbon than coal, but nowhere near low enough to be a long-term solution. It will be essential for balancing variable supply for the coming decades, certainly, but with reduced operating hours.

The problem with including shale gas is that this simply unlocks another huge pool of carbon we can't possibly expect to burn and stay within safe limits to global warming. As the IEA has said, most carbon is unburnable. So which bits get used and which don't? That's as much a serious financial concern, or ought to be, among fossil fuel companies, which are wildly overvalued. The other problem from a carbon point of view is that the jury is still out on whether the footprint of shale gas is really any lower than coal. More research is needed, but there are some worrying studies about leakage rates. Then of course there are the very real problems with surface infrastructure, pollution and possible interference with the subsurface that are causing a lot of concern. We wouldn't want shale gas exploitation in Europe if all of these negatives mean we're just moving backwards rather than forwards.

Which member states do you see as the best friends of the planet at present?

Our most recent survey of member state action - the Climate Policy Tracker - makes clear that every member state needs to do much more to be on track with the 95% GHG cut goal by 2050. Ranked on an A-G scale like efficiency labels, they were all D-G. So while there are some leaders and laggards, there are no stars. Some, like Denmark and Germany, made the choice a long time ago to invest not just in renewable energy deployment, but in the whole value chain. This has put them on top of the global league tables on innovation that is serving them well both economically and environmentally. It gives them the confidence to take bold decisions about long-term goals. And while it has had its difficulties, the Climate Change Act in the UK has shown that having a piece of forward-looking legislation in place, backed by independent analysis, keeps the pressure on politicians to take climate into account. But there are examples of positive action everywhere, from building efficiency schemes in Poland to carbon taxes in Ireland. If the best examples were reproduced across the EU, member states ratings on our scale would double immediately.

Which are not – and what is your strategy to leverage their key ‘pressure points’?

Obviously Poland has made headlines as trying to block EU momentum on climate and energy with 'vetoes' on Council conclusions, but it would be unfair to single them out. Other member states and the leadership of the Commission are not backing up their positive rhetoric with the necessary political clout to carry forward needed measures. Poland has also fallen foul of informal Council procedures on unanimous opinions that are nowhere in the Treaty. Of course circumstances differ around Europe, which is why European climate and energy policy is so differentiated. There are many measures to assist countries with extra flexibility and funding. This includes in the new Multi-annual Financial Framework. Less enthusiastic countries in Europe should already be recognising what President Barroso noted: economic health and climate action are two sides of the same coin, and a European approach offers great advantages. 

How significant do you find the noises coming from Poland expressing sympathy for an energy efficiency target?

Poland is making efforts on efficiency and has a lot to gain from extending them. In fact, because there are so many opportunities for carbon reduction in Poland, it is a bit perverse that they're not more enthusiastic about greenhouse gas and ETS improvements as well. The whole EU system has been designed to benefit those countries who can make cuts more cheaply - there's trading in the ETS, trading under the effort sharing decision, cooperation foreseen on renewables... With more ambition on GHG cuts for 2020 and beyond, supported by targets including a binding efficiency target, not only would countries like Poland see the benefit of reduced inefficiency, they could attract investment and use income for further measures.

If the UK Conservative Party is re-elected with a governing majority, what effect do you think it would have on Europe’s ability to meet its decarbonisation objectives? 

In principle, decarbonisation isn't about party. There are plenty of conservatives who understand the economic and environmental benefits. But those who want to change the relationship with Europe should understand the benefits they might forego. In an increasingly competitive energy market, with a common system of carbon caps, European cooperation makes sense. One country making its own rules rather than working to improve common approaches could create a downward spiral that negatively impacts every member state, including the UK. And there's a lot of room for independent member state innovation under a targets approach. It is when you reject targets and start meddling with loophole-ridden measures, as seen with the energy supplier obligation in the Energy Efficiency Directive, that you introduce as many problems as you solve.

Energy intensive industries and some EU member states often argue that robust 2030 emissions targets will place an impossible burden on them. Do you think this is true?

Energy intensive industries have been having a tough time in Europe, largely independent of climate measures. We ought to turn the story around and ask how a new programme of industrial innovation spurred and partially financed by climate action can help them build low-carbon facilities, while at the same time meeting the growing demand for building renovations, windmill towers, and all of the other growing needs. So far, the protections granted the sector mean that the ETS has been a cash cow for them, instead of a stimulus to help them cut high-carbon energy use, and thereby cut their energy bills. If there were a real price for carbon, with some of the revenue recycled into innovation and deployment in industrial sectors, it could help unlock private investment.

How grave a threat do you think that carbon leakage is in reality – and what can be done about it?

So far analyses indicate the carbon leakage threat is limited to very specific cases, all of which, in addition to many sectors which don't need protection but get it anyway, are granted exemptions in both European and national policy. What ought to be done is to revise the 'carbon leakage list' under the EU ETS to take account of its faulty assumptions that extend protection too broadly.

What are the three most vital pieces of EU regulatory action that could help us to decarbonise effectively by 2050?

First we need to see the backloading proposal improved and approved: that means 1.4gt tonnes rather than 900mt. Is this vital to the planet on its own? No, but it's vital to the credibility of the ETS and the further political process. 

Second, backloading should be followed by structural measures including the retirement of 2.2 billion excess tonnes and a strengthened linear reduction factor of 2.6%

Third, Europe needs to put forward a post-2020 package of climate and energy legislation that will use a binding multi-target approach to lock in necessary gains. It should put us on the pathway to 2050 decarbonisation of 95%, the upper limit of the goal already agreed.

These are regulatory measures. But there are many other things the EU can do to facilitate upward coordination in the very important debates around energy market design, demand and supply forecasting, renewable energy support schemes, and many other areas.

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