Sluggish Economy Prompts Europe to Reconsider Its Intentions on Climate Change
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Version 0 of 1. The European Union, which for years has sought to lead the world in addressing climate change, is tempering its ambitions and considering turning mandatory targets for renewable energy into just goals. The union’s policy-making body is also unlikely to restrict exploration for shale gas using the disputed technique known as hydraulic fracturing. A deep and lasting economic slowdown, persistently high prices for renewable energy sources and years of inconclusive international negotiations are giving European officials second thoughts about how aggressively to remake the Continent’s energy-production industries. The details are still being negotiated in Brussels, but officials said the European Commission’s energy and climate proposal will probably include a binding target of reducing emissions by 35 percent to 40 percent by 2030. Some officials wanted to make the new targets for renewable energy nonbinding. But opposition this week appears to have turned the tide in favor of having a binding renewable target — although it would be applied across the European Union rather than to individual nations, according to an official briefed on the negotiations. An intense lobbying effort is underway, with advocates from various groups picking apart aspects of the package. Jens Tartler, a spokesman for the German Renewable Energy Federation, which represents the wind and solar industry, called an absence of binding goals for renewables “totally disappointing” and said it would “contribute to a marked reduction in the pace of expansion of renewables.” But even some in the renewable-energy industry say that the package that is emerging is the best that could be hoped for given the difficult economic environment. “Of course people say we should be doing more, but we are moving in the right direction,” says Tom Murley, who runs funds with $1.15 billion in investments in renewables at HG Capital in London. The proposals are being influenced by fierce debates over the place of nuclear power in Europe and the costs to governments, businesses and consumers of subsidizing the growing share of renewable energy. Europeans are also witnessing a shale gas revolution in the United States, which has prompted a debate over whether Europe should tap into its own potential shale reserves. The extensive new supply of natural gas in the United States has led to sharp reductions in emissions as utilities switch from dirty-burning coal to cleaner-burning gas for electricity generation. A few months ago, the oil and gas industry worried that the European Union would use the energy paper to kill off shale gas drilling with a slew of new regulations and added costs. Instead, the commission appears to be settling for nonbinding recommendations that governments like Britain and Poland, which are most aggressively pursuing shale gas, might be able to further water down. The exploration of shale already faces headwinds as deposits in Poland are proving difficult to develop and as environmental groups move against the industry’s efforts to drill in their communities. Germany, which has pushed for the energy and climate targets, has been struggling with the realities of shifting its energy mix. Germany’s plan, backed by Chancellor Angela Merkel and opposition parties, to close its nuclear power plants and build up renewable energy is running into problems. German consumers are being hit with rising electric bills, and businesses worry that energy costs are putting them at a disadvantage with competitors in countries like the United States. Even so, German politicians were expressing their fears about the proposals from Brussels. “Europe must remain a leader in climate protection. For this we need clear, distinct goals for climate protection, renewable energy and energy efficiency,” Barbara Hendricks, Germany’s environment minister, said in a statement issued jointly on Wednesday with Sigmar Gabriel, the country’s energy minister. Energy policy has always been thorny for the European Union because of the widely differing economic and political problems of its big member countries. For example, France sees nuclear power as important, while its neighbor Germany is phasing it out. Eastern European countries like Poland are heavily dependent on coal, a leading source of emissions. With Europe experiencing its worst economic crisis in decades, environmental concerns have slipped down the political agenda as the Continent’s economies struggle to generate badly needed growth. In 2007, the European Union agreed to targets including a 20 percent reduction in greenhouse gas emissions from 1990 levels by 2020, an increase in the share of energy consumption produced from renewable resources to 20 percent and a 20 percent improvement in energy efficiency. Europe has achieved most of that first goal, with estimates that it has overall reduced emissions by about 18 percent. But, with 2020 looming, it feels obliged to adopt a new strategy because of the huge financial investments it would take to reach the mandated level. This time, the current emissions cap will be extended to 2030. The proposed cuts of 35 percent to 40 percent would still be among the most ambitious in the world. However, while European nations will still be setting individual targets for carbon emission cuts, they will probably not be ordered to hit specific levels for renewable energy, according to officials briefed on the talks. Instead they will have the flexibility to decide on their own path to a lower carbon economy. There is likely to be an increased target for renewable energy — around 25 percent to 27 percent — for the European Union as a whole, without specifying national objectives. The officials drafting the policy, which will still need to be negotiated by member countries and the Parliament, are in part trying to address industry and consumer complaints about electricity costs in Europe, which have risen about 40 percent since 2005, compared with a decrease in the United States. European businesses, though generally in favor of the European Union sticking to one target, still worry that the commission is not doing enough to remove a disadvantage European companies face compared with those in the United States. Markus J. Beyrer, director general of BusinessEurope, an industry group in Brussels, said the European Union was once again in danger of taking too advanced a position. “We think the targets discussed are too ambitious,” he said. “We don’t think we should engrave everything in stone.” |