The two main conclusions drawn by The Economist article – that binding renewables targets don’t work and that the EU should put all its eggs in the carbon market basket – don’t stand up to scrutiny.
There’s very strong evidence that the existing binding targets on renewables have proved fit for the job. Research shows that they have contributed to nearly half of the carbon savings achieved by the EU between 2008 and 2012, and also helped bring down the production costs of clean energy technology, with solar panel and wind turbine costs falling by 80% and 29% respectively. What’s more, 2013 turned out to be a record-breaking year for renewables in Europe, as wind became the main source of energy generation in Spain, Portugal generated 70 per cent of its electricity from renewables during the first quarter, and Germany set a new record for combined wind and solar energy output. 1.2 million people are now employed in the renewables sector, with half a million more jobs expected if the EU adopts binding targets for 2030.
All these gains are at risk of being wiped out if the EU fails to send a clear signal to investors that renewables are the future. The clean energy target tabled by the European commission last week, which is binding on the EU as a whole but not on individual member states, is a weak compromise carrying no legal force. The day after the announcement, news came from China that the country doubled its rate of solar installations in 2013, building more solar panels in one year than any country has before – a loud wake-up call if there ever was one. On top of this, China has begun deploying its own climate policies, including caps on coal consumption and pilot carbon trading programmes.
But the irony of the article is that it advocates shoving all EU climate policies into a carbon market – which is precisely the initiative that has failed most badly. Greenpeace supports the EU carbon market, but this supposed ‘flagship’ scheme has suffered from an oversupply of emission allowances, causing a record-low carbon price. Research from the German-based Öko-Insitut shows that a glut of questionable offset allowances from China and India has caused this oversupply – not EU renewables policy.
By contrast, as identified by Imperial College London, renewable energy targets and carbon markets can mutually reinforce each other. Specific support for renewables in the form of a binding target does bring certainty to the need for delivery which a carbon price does not, thus lowering financing costs and maximising the benefits of climate action. And the scale-up of renewable technologies that the EU target has created has driven down the costs of production. These costs could drop even further with a binding renewables target, while encouraging the development of other promising technologies, such as ocean and geothermal energy.
So far, EU climate and energy policies have been successful in decoupling economic growth and carbon emissions. EU GDP has increased by 40 per cent since 1990, while emissions have dropped by 18 per cent. This trend will only continue if the EU adopts a credible and binding renewables target for 2030, combined with an effective carbon market.
Head of communications - Greenpeace EU
For more myth busting on renewable energy, see our mythbuster.