Mixed-up messages on cutting carbon

In the relative quiet of summer, with many politicians and policy makers off working on their tans instead of their portfolios, Shell’s Climate Change advisor David Hone was still hard at it.  He shrugged off the tempting call of sand and sea and took the opportunity to blog about the US cutting CO2 emissions without EU-style binding targets and timetables to do so.

The Shell man correctly notes that the fall in US emissions are indeed driven by economics rather than policy.  But, to my mind at least, he implies incorrectly that market forces are a sufficient tool for cutting emissions.

For a start, I don’t think any serious proponent of the urgent need to tackle climate change would say that the pain of the recession was worth the gain of emissions cuts.  Furthermore, while greater vehicle efficiency in the States is to be welcomed, the latest Annual Energy Outlook of the US Energy Information Administration makes some worrying projections out to 2035, including that all transport energy consumption will only fall with “extended policies”, but even then only by about 7%.

However, it is the final cause of the US’s emissions cuts that is potentially the most problematic of all.  It is well known that the massive exploitation of US shale gas resources have led to dramatic price falls, which in turn mean that gas has displaced coal as the cheapest generation fuel.  In that context, the EPA air quality regulation and expected greenhouse gas regulation noted by Mr Hone are much easier to get passed.  This new glut of gas fired power generation may be better than coal today, but we have to think about tomorrow, and, hopefully the many tomorrows after that.

Max-ing out on gas today might save US emissions now, but unless you have a strong plan for switching it off, potentially before the end of its economic life, then you are risking lock-in to what is still a polluting fossil fuel.  When that gas comes from shale-beds, with the associated potential for methane emissions, a switch to gas starts to look even less attractive.  With commercially viable CCS still far from being a proven option, this year’s medicine could easily become next year’s poison.  What’s more, gas prices could rise again, bringing coal back into the mix in a way that puts severe pressure on that newly passed legislation.  Look out for lobbyists in search of loopholes.

The situation is even more worrying when you look at the global perspective…  climate change is, after all, a global problem and a ‘fix’ in one place is not necessarily a fix everywhere.  Cheap gas in the US might be effectively displacing coal there, but the modern day coal barons have not just shrugged their shoulders and shut up shop.  Of course not, in in globalised world they simply looked for another market.  This American coal, cheaper because of competition in the US, is now finding a more lucrative market in Europe, where it can now undercut gas and displace it as the cheapest fuel. So what may be perceived as good for America, is not necessarily good for the planet, or for Europe.

If ever we needed a reminder of the hugely urgent need for action far beyond that which can be delivered by economic drivers alone, Andrew Simm’s recent blog gives a sobering summary of the situation.  As he so succinctly puts it; “The problem is that where climate change is concerned, gallons matter more than miles per gallon.”  We have to make absolute reductions in energy consumption, starting now.  Is that really possible in an economic system driven by the demand for incessant growth?  We need fundamental change if we are to break the cycle that is digging us ever deeper into the mire.  Ideas on how to do this will not be found in the offices of those who benefit so greatly from the status quo.  

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