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By Adam White, Research Coordinator at WWF European Policy Office’s Climate and Energy Unit
The worst form of inequality is to try to make unequal things equal.
When it comes to European targets for greenhouse gas emissions, renewable energy, and energy efficiency, every percentage point is closely modelled and examined. The esoteric target of 27% renewable energy is the product of European Commission analysis on contributions to reach the (inadequate) 40% emissions cut by 2030.
A separate review of Energy Efficiency, still in draft form, looked at energy savings of up to 40%, as called for by Parliament and NGOs, and while it did examine 28%, 30 and 35%, found greater benefits to the higher end.
Unfortunately, such dedicated number gazing sometimes clashes with politics, or circumstance, or – as in the case of the 2030 energy efficiency target – both.
The higher energy efficiency numbers are intimidating to a Commission that’s afraid of doing battle with difficult Member States, and contradict its earlier 2030 framework review (the one done prior to the recognition by all concerned that efficiency is crucial to energy security).
Never fear, because some Commissioners have cooked up a solution: simply ‘match’ the efficiency target to the renewables target – 27%/27%. Neat and parallel (and more than an echo of Commissioner Oettinger’s earlier 30/30/30 rhetoric). Sadly, it is just not as simple as that. However similar the numbers seem on paper – in reality they mean very different things.
The renewables target applies to the share of final energy use – the proportion of renewable energy we get when we switch on lights. On the other hand, the efficiency target applies to cuts in primary energy use below a baseline projection – so it reflects the reduction in the amount of fuel used in the EU compared to expectations absent the applicable policy.
These are completely different notions. 27% in no way equals 27%.
The renewable energy target and the efficiency target interact in complex ways. You can reduce the EU’s consumption of fuel, and therefore help to meet the efficiency target, by increasing renewable energy. This is because renewable energy technologies convert their energy inputs (sun, wind) more efficiently than traditional power plants convert coal and gas into electricity. The converse is also true, you can help meet the renewables target by boosting efficiency, since the less total energy you use, the easier it is for a higher proportion of that total to be met by renewables.
These are all considerations that the number crunchers pay close attention to, but which their bosses seem willing to overlook in the interests of symmetry and expediency. And like a heart bypass candidate who can’t resist another double cheese hamburger, the Commission has decided to ignore the consequences of their bad decision: a 27% energy efficiency target actually represents a slowdown of current efforts, and would put in jeopardy the improved health and billions of euros saved every year that efficiency delivers.
Interesting how a Commission which is almost 70% male, and 100% white is apparently only interested in equality when it comes to plucking numbers out of the air.
Ambitious energy efficiency targets will require significant investment from the private sector. Public authorities are learning fast from innovative financing mechanisms the EU is putting in place to achieve this.
Energy efficiency has traditionally been viewed as a public good financed by public sector grants. But the public purse can only do so much and the pressure is mounting.
Now, with rising energy prices and an increasingly urgent climate agenda, European energy legislation is driving ambitious targets including: renovation of public buildings; energy efficiency obligations for energy suppliers; and overall demand-side reduction.
Growing investment opportunity
Across all sectors, global energy efficiency investments totalled $300 billion in 2011 – a substantial and growing market opportunity for investors.
It is estimated that urban areas are responsible for 70% – 80% of energy consumption and carbon dioxide emissions in Europe. For this reason, various EU initiatives are encouraging towns and cities to take the lead in the fight against climate change.
To reach the EU’s 20:20:20 target (20% of EU energy consumption to come from renewable sources by 2020; a 20% improvement in energy efficiency; and a 20% reduction in greenhouse gas emissions compared with 1990), the required annual investment in the buildings sector alone is estimated at €65-100 billion ($89-136 billion) between 2011 and 2020.
Public authorities are generally called upon to lead investments. Across Europe, over 300 regions and 150,000 municipalities account for two-thirds (€178.9 billion in 2011) of the total public investment expenditure and have major powers in key sectors such as education, the environment, transport and economic development.
Grant support for public authorities in any Member State seeking to launch sustainable energy investments is available under the Intelligent Energy Europe programme (launched in 2003 and now subsumed into the EU’s €80 billion research and innovation programme Horizon 2020).
Ambitious leverage goals
Grants amounting to €148 million are disbursed via the European Local Energy Assistance (ELENA) facility (administered by the European Investment Bank, Germany’s KfW, the European Bank for Reconstruction and Development and the Council of Europe Development Bank) and the Mobilising Local Energy Investments (MLEI) facility –administered by the European Commission’s agency for small and medium-sized enterprises (EASME).
This grant support is conditional on projects achieving a minimum leverage (EU grant to total investment) of 1:20 and 1:15, respectively. So far, €81.2 million has been provided to 56 projects.
Achieving this leverage requires local and regional authorities to negotiate a steep learning curve. New kinds of partnerships with financial institutions will be crucial to scaling up sustainable energy investment programmes, and combining public and private funding.
Building renovation is essential
Thorough renovation of buildings involves long payback periods but is essential to achieve the maximum savings potential – and reach the EU objective of reducing buildings’ energy consumption by 80 % by 2050. In support of this goal, the Commission is designing new ‘off the shelf’ financial instruments, including renovation loans, aimed at combining public and private money to finance investment in energy efficiency or renewables.
“It’s going to take a historic level of public-private cooperation to meet the EU’s 2020 targets,” said a recent report from the Energy Efficiency Financial Institutions Group (EEFIG), which includes high level representatives of the European Commission’s DG Energy, UNEP Finance Initiative, financial institutions and investment funds.
In its first report released in April, the group concluded that, in order to attract private capital such as pension funds, insurance or real estate trust funds, the energy efficiency investment market “needs to transform” – to become more predictable, well-understood and standardised.
According to Paul Hodson, head of the energy efficiency unit at DG Energy: “Energy efficiency is today at the crossroads. Either it will become a mainstream investment area, or we risk losing the vast potential to invest into measures that not only contribute to the fight against climate change, but also bring economic benefits.”
The Commission is now undertaking a review of energy efficiency policy, he notes. “We are convinced that this will help to transform the market as needed – and as called for by market participants.”
From 2014 to 2020, another pot of EU public money – upwards of €37 billion earmarked for the ‘transition to a low-carbon economy’ – is available through the European Structural and Investment funds. The Commission is pushing Member States to replace grants with revolving loans or guarantee funds (for residential retrofit) and energy performance contracts for public and commercial buildings.
Optimal strategies for developing the energy efficiency investment market are under discussion within EEFIG but, as coordinator Peter Sweatman points out: “We’re working with 51 people representing 30 institutions to deliver a consensus view on financing energy efficiency. We have our work cut out for us.”
During the last 50 years global energy demand has risen at an unprecedented pace and is expected to continue rising further in the wake of growing world population and prosperity.
These trends are not sustainable. The energy resources (coal, oil, gas, uranium) are finite and burning them is bound to accelerate climate change to a point of no return destroying the basis of human livelihood.
Climate scientists and almost all governments on earth share this basic assessment. But while scientists urge for action to be taken politicians are wavering in the face of powerful fossil energy lobbies and industry pressing for low energy prices.
Fortunately, tenuous signs for a change are appearing in the two most polluting countries, China and USA, on which the success of any international action hinges.
China has placed the fight against energy waste, air pollution and climate change among the top priorities of its Five Year Plan 2011-15. It is determined to increase its overall energy efficiency; and it envisages stepping up research and pilot projects for carbon capture and storage which is vital for continuing to burn coal with which it is amply endowed. But though the government is to be congratulated for finally acknowledging the seriousness of climate change its actions continue to fall far short of what is needed. Chinese green house gas emissions will therefore keep rising for at least 20 more years.
USA, the second biggest emitter of GHG has made great strides under the Obama Administration, thanks to circumventing a hostile Congress by executive action in the form of technical standards. CO2 emissions have begun to fall from exorbitant levels of 17 tons/per capita, due to increasing switch from coal to gas as the major fuel in power generation and stringent fuel consumption standards for passenger cars.
Driven by concerns about their security of supply, both countries will press for higher energy efficiency, in particular in buildings, and more power generation through renewables – wind, sun, hydro and biomass. But neither is ambitious enough and postulate largely C02 free energy by the middle of the century.
Only the EU, the third biggest energy consumer and CO2 emitter, can so far boast of an established record against climate change. Until 2020 its CO2 emissions will be down by 20 per cent over 1990; and it is set to reduce them by 80-95 per cent until the middle of the century. No other country has so far announced similar ambitions. But with a share of only some 12 per cent of global emissions it does not carry enough weight for preserving the climate.
Both USA and EU owe their relative success to the setting of medium and long-term targets and taking concrete measures. That distinguishes their approach from the UN-directed efforts which continue to lack precision of the targets and fail to prescribe concrete measures. Moreover, there is no political drive without which policies cannot be conceived and implemented. This is normal for assemblies grouping some 200 states with totally different levels of energy consumption and representing fundamentally different views on the future.
In order to achieve a positive outcome from the decisive Paris Climate Conference in November 2015 participant countries need to change the modus operandi of their future negotiations. UN Secretary General Ban Ki Moon might have made a beginning by calling a restricted high-level meeting of heads of government from the main polluter countries at the margin of the September 2014 General Assembly.
To ensure a successful result in Paris the leaders of the countries responsible for 80 per cent of global emissions must agree on a cooperative strategy to keep global temperatures within a two degree Celsius rise over pre-industrial levels.
A group of climate and energy research institutes from 15 major emitter countries has translated the “two centigrade target” into the necessary reductions of green house gas emissions. The result will come as a shock for policy makers: average per capita green house gas emissions must not exceed 1.6 ton by the middle of the century. Only the poor, mostly African, countries can still indulge in rising emissions. Most other countries including EU, Japan, China and Russia will need to reduce them by around three quarters and some 20 countries like United Arab Emirates Canada, Australia, USA with very high per capita emissions by even 90 per cent until 2050.
This will be a huge challenge for every country and Humanity. It is therefore crucial to provide for an equitable burden sharing among Humanity, which per capita green house emissions, reflect better than any other yardstick.
At the Paris conference, the parties should focus on two conclusions:
The UN Secretary General will appoint a special representative for the preparations.
This procedure will replace the annual climate conferences, from which the necessary policy changes cannot emerge, due to increasing level of bureaucratisation, too many participants and lack of political commitment.
Future climate policy will be more differentiated by countries, and the UN should be empowered to fix policy guidelines and monitor implementation.
The following guidelines might inspire national and global policy makers:
The World Bank, in conjunction with regional Development Banks must become the global financing and technical assistance agent for implementing the challenging structural changes towards a non-fossil society. To that end it should be in charge of managing the $ 100 billion annual International Climate Fund that the developed countries have pledged to establish by 2020.
Eberhard Rhein, Brussels, 12/7/2014
For years Bavarian politicians have been pushing for highway user fees for non-German cars. Now they may have come closer their goal. On 7 July, the German transport minister (CSU) has presented his plans, which should be turned into legislation before the beginning of 2016.
They foresee the introduction of mandatory vignettes for passenger cars (€10 for 10 days, €20 for two months, €100 for one year) for using the complete German 600,000 km road network.
Though non-German cars are the target of the operation German cars will also be formally subject to the fee. But de facto they will not pay for the vignette as its price of some €100 will be deducted from the annual vehicle tax, which might be a violation of the EU non-discrimination principle.
Independent from the EU implications, highway user fees are not an optimal method of financing the construction and maintenance of highways.
Unless it is done electronically, which will be possible only on the main highway axes, the collection is expensive, especially when applied and differentiated to millions of cars. In Germany the government expects to raise some €600 million of fees the collection of which may cost up to €200 million, a huge amount.
The most cost-effective way of charging highway users the cost of road construction/maintenance is through fuel taxes. They charge vehicles according to the wear and tear including air/noise pollution they cause.
It is by far the cheapest and most productive method of financing the road infrastructure. Germany raises fifty times more (€40 billion per year) through through fuel taxes than through the planned highway user fees. It would only have to increase the average tax rate per litre fuel by 5% to obtain the extra fiscal revenues the government hopes to achieve by putting in place a new bureaucratic machinery.
A substantial share of non-Germany road users would also pay fuel taxes during their stop-overs in Germany and thus contribute to what the German transport minister has unfortunately called the “equity gap”.
In conclusion, Germany will not become more popular with its neighbours by this absurd proposal, which will at best create a few thousand unproductive administrative jobs.
If it were to pass the many obstacles of the German political and legislative machinery the EU competition guardians should prevent it from ever becoming a European reality.
Eberhard Rhein, Brussels, 8/7/2014
Wenn ein Projekt zu Wahlkampfzwecken ausgeheckt wird und Ausländermaut heißt, dann ist sein oberstes Ziel kaum die Völkerverständigung. Immerhin, das hat Verkehrsminister Dobrindt, CSU, verstanden und den ursprünglichen Titel flugs in Infrastrukturabgabe geändert. Hilft aber nichts, denn so dumm wie in den PS-protzenden Sprüchen vieler Autolenker sind weder Niederländer noch Österreicher. Da das Mautvorhaben die bestehende Verkehrspolitik in der Europäischen Union aus den Angeln heben will, kann man nachvollziehen, dass sie gegen die Pläne klagen wollen.
Denn Dobrindts Ankündigung von gestern, die Maut nicht nur auf Autobahnen zu erheben, sondern für alle Straßen, ist ein Taschenspielertrick. Ebenso die Aufteilung in zwei Gesetze und das Einbeziehen der Schadstoffklasse und des Hubraums. Es macht die Sache nur komplizierter – aber nicht besser. Denn es bleibt beim Grundproblem der Vermischung von Steuer und Abgabe. Die war der EU-Kommission von Anfang an ein Dorn im Auge.
Darüber hinaus hat Dobrindt noch den Ländern Appetit gemacht, denn wenn alle Straßen einbezogen werden, bekommen auch die 16 Finanzminister in den Bundesländern ein paar Millionenbröckchen ab. Dobrindt meint, da werden sie schon mitmachen bei dem üblen Spiel. Kann aber sein, dass Dobrindt aller Welt bis zu den Landräten hinab nur den Mund wässrig macht und am Ende weniger Geld hereinkommt bei der Chose als versprochen.
Denn so kompliziert das Vorhaben klingt, so hoch ist der Verwaltungsaufwand – für In- wie Ausländern. Bei uns geht es ums Verrechnen von Kfz-Steuer und Abgabe; bei den durchfahrenden Nachbarn werden Polizei oder Zoll nachprüfen müssen, ob die auch die richtige Vignette gekauft haben, und dann eventuell nachkassieren. Mit freier Fahrt für freie Mitbürger in Europa hat das nichts zu tun. Allein schon die Lösung per Vignette – im Zeitalter von Apps und Telesystemen sozusagen die Steinzeitvariante – verrät viel über die Geistesverfassung der Befürworter.
Was notwendig wäre und europarechtlich auch möglich, leistet dieses System jedenfalls nicht – nämlich diejenigen je nachdem abzukassieren, wie viele Kilometer sie hierzulande fahren.
Trotzdem bin ich mir sicher: Herr Dorbrindt wird sich in Berlin eine Mehrheit organisieren für diese Maut. Die CSU inszeniert dazu bereits eines ihrer Bauerntheaterdramen. Dann ist Brüssel an der Reihe und hat – logisch – auch den schwarzen Peter, vor allem bei den CSU-Wählern, wenn es die Sache einkassiert.
So funktioniert Politik, die sich von latentem Rassismus leiten lässt. Sie gibt Vollgas, wird im Europa des 21. Jahrhunderts ausgebremst und macht sich dann aus dem Staub. Dabei lernen bereits Fahrschüler bekanntlich: Vorausschauend Fahren verhindert Unfälle und Stress. Politik fährt hingegen zunehmend nur noch auf Sicht, soll heißen von Wahlkampf zu Wahlkampf. Leider!
… Es ist ein Irrsinnsprojekt, das sich die CSU da im vergangenen Jahr auf die Fahnen geschrieben hat. Es war ja ursprünglich eine populistische Idee für den Bundestagswahlkampf…
(In) Deutschland ein völlig neues Mautsystem für Pkw-Fahrer zu installieren macht keinen Sinn. Der Verwaltungsaufwand dafür ist immens. Zu Recht sprechen die Grünen von einem bürokratischen Monster… Insgesamt zahlen die Autofahrer über 50 Milliarden Euro an Steuern und Abgaben jedes Jahr; und davon werden nur 20 Milliarden wieder in den Straßenbau investiert. Das zeigt, das Geld ist eigentlich vorhanden, aber es wird für andere Dinge ausgegeben.
Wenn die Bundesregierung tatsächlich die zum Teil maroden Straßen und Brücken in Deutschland auf Vordermann bringen will, dann sollte sie entsprechend im Haushalt umschichten – oder aber die Kfz-Steuer erhöhen. Dafür bräuchte man keine neue Bürokratie. Man muss sich auch darüber klar werden, dass die Maut, wenn sie erst einmal eingeführt ist, auch steigen wird wie alle Abgaben, die der Staat erfindet.
Deshalb – nur wegen des Ärgers über die ausländischen Autofahrer auf deutschen Straßen und wegen eines populistischen Wahlkampfversprechens der CSU eine Maut einzuführen macht keinen Sinn. Man kann nur hoffen, dass Dobrindt mit seinen Plänen scheitert.
A new report by the Belgrade-based NGO CRTA shows that the Serbian government is supporting the Kostolac coal power plant and mines with loan guarantees and potentially VAT exemptions. Propping up the already dominant coal sector, however, will likely further increase Serbia’s vulnerability to extreme weather events. Increasing Serbia’s energy efficiency and renewables generation would be the wiser choice.
by Pippa Gallop, cross-posted from the Bankwatch blog
Since 2006 when the Energy Community was founded and its member countries committed to adhere to EU legislation on state aid, the Serbian government has provided several forms of support for the Kostolac lignite power plant and mines company, part of state company Elektroprivreda Srbije (EPS), and is now planning to provide further support by approving loan guarantees in the National Assembly for the construction of the 350 MW Kostolac unit B3.
The state support for Kostolac outlined in the new report (pdf) is just one example of how Serbian state authorities are systematically propping up an already almighty coal industry. If plans for a new energy strategy for Serbia are anything to go by (discussions are ongoing about the blueprint for the energy sector for the period 2015-2025), Serbian authorities also plan to continue with this kind of support for the dirtiest of fossil fuels into the next decade.On a path prone to disaster
Serbia, as a member of the Energy Community, has committed to abide by the EU’s complex rules on subsidies and it is not yet clear whether the support outlined above is in line with these. But in any case, as a candidate country for EU accession and a member of the Energy Community, Serbia needs to increase its energy efficiency and reach a renewable energy target of 27 percent by 2020. This implies a decrease in the percentage of coal in the energy mix.
But these are not the only reasons to pursue such a path. Serbia, like all of south east Europe, is vulnerable to natural disasters, including those exacerbated by climate change such as floods, heat waves, cold waves, droughts and forest fires. This May’s tragic floods – which claimed at least 51 lives and led to the evacuation of nearly 30,000 people from flooded towns and villages in Serbia alone – propelled the issue into the global headlines, but extreme weather events have been increasing in frequency for years already.
Among others, between 2000 and 2010 eight serious flood events affected 51 290 people and killed four (pdf), while a 2012 drought led to the loss of 45 percent of Serbia’s maize crop (pdf).
With each disaster costing huge amounts of money to clear up, Serbia, like other countries in the region, needs to be quicker in recognising its self-interest in slowing climate change and making its infrastructure more resilient to extreme weather events.
In this respect, lignite power stations are problematic in both cause and effect. On one hand, coal is the biggest contributor to climate change (IEA, pdf). At the same time, coal power plants are vulnerable to extreme weather, as the recent Serbian floods showed, in which two pits of the Kolubara open cast lignite mines were completely flooded – with estimated costs of EUR 100 million – and electricity generation was cut by 40 percent at the height of the floods. While a mammoth effort to stop the Kostolac B plant from being flooded was ultimately successful, here too it was a close shave and could easily have resulted in generation capacity being shut down.
At the other end of the scale, coal power generation is also extremely water-intensive and – like hydropower and nuclear – vulnerable to drought. Some countries have started to recognise this problem (pdf) however in south east Europe the discussion so far on drought has centred almost exclusively on hydropower.
The positive flip-side is that non-hydropower renewable energy is both a climate change mitigation tool and an adaptation one, since it is decentralised and with the exception of biomass has no CO2 emissions during operation, and energy efficiency measures are better still. Yet Serbia, along with its neighbours, consistently treats these as a side salad rather than the main dish.
After the recent floods it is high time for Serbia to think again about its energy strategy – a new one of which is currently in its draft stages – and avoid tragedies recurring again in the future. But as money often ends up being the defining factor in what goes ahead and what doesn’t, CRTA’s new report (pdf) gives every reason to re-think state support for the coal sector whether or not Serbia opens up its draft energy strategy for discussion again.