Climate change returned to the agenda of the World Economic Forum in Davos this year. And I expect the all-too-familiar placatory phrases will be back as well: it is very
urgent and very
serious; it is getting worse, and “we”
or “the world”
must act now.
Business leaders will say that governments need to do more. Political leaders will say that the role of the private sector is crucial. Everybody will 'agree' that it would be great to have robust carbon pricing and the phasing out fossil fuel subsidies, but nobody will address the real reasons why it’s not happening. Then each will outline how they themselves are already doing a lot, because it’s always somebody else who needs to do more.
We’ve heard it all before.
But this time Davos will also provide a convenient platform for José Manuel Barroso, president of the European Commission (EC), to tout the EC’s new proposal for Europe’s climate and energy policies up to 2030. The package, launched today (22 January), will be sold by Barroso in Davos as a sign of European leadership.
I wish this were true, as a European citizen who wants a clean energy future. But it’s not. The package renders the EC an Emperor proud of its new clothes - but nakedly lacking in ambition.
The proposed targets aren’t enough to drive transformational change in the EU’s energy sector. On the contrary, they seem designed to please those heavy industry and utilities companies that have been calling for low climate targets and no binding national renewable energy targets – which is what the commission is now proposing.
The climate target doesn’t reflect the urgency of climate change or the EU’s fair share of the global effort. With all the surplus emission allowances in the European Emission Trading Scheme, the proposed 40% target could signify just 33% real emission cuts. A fair contribution from the EU would be at least 55% cuts by 2030, which would put Europe on track to decarbonize its economy by mid-century.
Meanwhile, the proposal for a meagre target of at least 27% for renewable energy would actually slow down the modernisation of Europe’s energy system. In addition, despite calling the EU-wide target for renewables binding, the Commission is actually suggesting to discontinue binding renewable energy targets at the member-state level at a time when Europe’s energy system needs them most. So far these targets have been a success in advancing clean, domestically-sourced energy in Europe. In the midst of the worst recession in a century, 1.2 million jobs have been created or maintained and fossil fuel imports cut, building resilience in European companies.
Households are no longer just passive consumers, but increasingly active producers of their own clean energy with solar panels. Europe is now ready to take the clean energy revolution to the next level, but the lack of long-term policy certainty has led to a slump in renewables investments. The renewables industry has been calling for a 45% binding target for 2030, but all they are getting from the commission is business-as-usual.
Why is this? The rapid cost cuts and deployment of decentralised renewable energy has freaked out the big and influential utilities - including GDF-Suez, RWE, Eon, ENEL and Vattenfall - who are becoming the dinosaurs of the energy world and now want renewable targets to be discontinued to protect their fossil assets.
Betting on old business models, large European utilities built a massive 85 gigawatts of new fossil fuel plants during the last decade, while peak demand lowered and renewables blossomed. Now much of this capacity is already generating losses, while renewables are lowering wholesale energy prices. Utilities want to shift the burden of their own strategic mistakes to consumers, renewables investors and taxpayers.
Not everyone agrees with these strategies, however, which are a recipe for stagnation. Over 70 energy companies and associations, such as Dong Energy, EnBW, Alstom and Vestas, want binding renewable targets alongside binding climate targets. Some of them have warned that the EU should reduce its exposure to volatile fossil fuel prices, which is still the main driver of EU’s energy prices.
Luckily, it’s not a done deal with the targets. The EU governments can and must fundamentally improve the 2030 package when they meet in Brussels this spring, with higher ambition and binding national targets for renewables.
Prolonging the necessary transition away from centralised production and fossil fuels would only keep Europe stuck in the past, digging its own grave.
Instead, Greenpeace urges EU leaders to speed up the transition to a smart, clean and distributed energy system by backing progressive and binding 2030 targets.
What we expect from all those political and business leaders attending Davos this week is a little less conversation and much more action. No more greenwash and feel-good partnerships, but transformational political leadership and business models that free us from fossil fuels.
Senior political advisor for Greenpeace