The Royal Society for the Protection of Birds are calling for a massive increase in the number of wind farms in the UK after a study found far more could be built without damaging wildlife.
Last Updated: 6:18AM GMT 24 Mar 2009
The conservation charity said climate change threatened many species with extinction, and there was an urgent need for renewable energy to tackle greenhouse gas emissions.
But despite the UK's "abundant" natural wind resources, it is lagging behind other European countries, with wind turbines providing just 2 per cent of the country's energy needs in 2007.
The Government must step in to provide a clear lead on developing wind farms more quickly without damaging wildlife or alienating communities, the RSPB urged.
A report from the Institute for European Environmental Policy (IEEP) said that the UK was far behind countries such as Denmark, where wind meets 29 per cent of demand, Spain, where it accounts for a fifth of power needs, and Germany where it meets 15 per cent of demand.
The report for the RSPB which compared the UK with those other countries said an effective planning system could ratchet up the amount of onshore wind farms without harming nature conservation.
It recommended measures including regional and local targets for developing renewable energy to ensure that local authority decisions reflect the national priority of building more wind farms.
There must also be a more planned approach to the development of wind farms by identifying areas where it would be appropriate to give new turbines priority and those where they would run serious risk of damaging wildlife.
The RSPB said mapping of the areas which would be sensitive for wildlife, for example places where there were large numbers of nesting seabirds or which were hotspots for a rare species of bird of prey, should form part of the process.
The report said wind farm developments should also provide benefits for local communities and wildlife to ensure that new schemes are accepted by the public and not caught up in controversy.
These could include cheaper energy in the local area, investment in local wildlife projects or even community-owned wind schemes.
And the Government must invest in skills and expertise in wind energy to provide local authorities with the information and support they need to ensure appropriate sites and schemes are given the go-ahead and to speed up development.
Ruth Davis, head of climate change policy at the RSPB, said the charity was promoting the development of wind power because the evidence of the increasing impact of global warming on birds was "truly terrifying".
"Left unchecked, climate change threatens many species with extinction.
"Yet that sense of urgency is not translating into actions on the ground to harness the abundant wind energy around us."
She said the solutions were largely common sense, including a clear lead from government on where wind farms were built and clear guidance for councils on how to deal with applications.
Currently many applications to build wind farms were dealt with on the basis of local politics rather than strategic aims to tackle climate change and boost renewable energy.
A more planned approach to where wind farms could go, including early engagement with conservation groups, would help guide development away from areas where they would damage wildlife, she added.
"We must reduce the many needless delays that beset wind farm developments.
"This report shows that if we get it right, the UK can produce huge amounts of clean energy without time-consuming conflicts and harm to our wildlife.
"Get it wrong and people may reject wind power. That would be disastrous," she warned.
Wednesday, 25 March 2009
Eco-towns plan undermined by official report
By Jim Pickard, Political Correspondent
Published: March 25 2009 01:43
Gordon Brown’s plans for a generation of 10 new “eco-towns” have been further undermined after their financial prospects were questioned for the first time by the government’s own advisers.
Only three of the proposals are sure to make a profit in the current property downturn, according to a viability study by the Department for Communities and Local Government. Some could need public subsidies of tens of millions of pounds to go ahead.
The Conservatives claimed the 270-page report – released by the department last week without any press release – was the “final nail in the coffin” for the policy.
The prime minister outlined his vision of the green conurbations, each with up to 15,000 homes, within weeks of taking office in the summer of 2007.
Not only would they help solve Britain’s perceived housing shortage, but also set new standards of environmentally-friendly design, he believed.
Since then, however, the number of possible schemes has dwindled from 57 proposals to a list of 15 last April – of which only eight schemes remain.
Some of the surviving programmes have been scaled back. There have been fresh delays to the programme with a consultation deadline extended from March to the end of April.
The government has always insisted the schemes had to be feasible without “recourse to public subsidy”. But the document says explicitly that two of the projects would need support from taxpayer money.
One, at St Austell in Cornwall, would have a development deficit of £60m to £190m, and could need “significant financial assistance from public sector sources”.
A planned community at Rossington in South Yorkshire would also need some form of subsidy to succeed.
Three more of the eight sites, Whitehill Bordon in Hampshire, Pennbury in Leicestershire and Ford Airfield in West Sussex, could end up with potential losses.
Typical was the comment on Whitehill Bordon, which was described as having the potential to generate “only a small financial buffer”.
The three schemes with no questions over their financial viability were Weston Otmoor in Oxfordshire, north-east Elsenham in Essex and Middle Quinton in Warwickshire.
The department said the report was only a snapshot of the current financial climate, which could improve. There would be no new “large-scale funding schemes” for eco-towns.
The report will raise further questions after a select committee last month said the eco-towns policy was in tatters.
Copyright The Financial Times Limited 2009
Published: March 25 2009 01:43
Gordon Brown’s plans for a generation of 10 new “eco-towns” have been further undermined after their financial prospects were questioned for the first time by the government’s own advisers.
Only three of the proposals are sure to make a profit in the current property downturn, according to a viability study by the Department for Communities and Local Government. Some could need public subsidies of tens of millions of pounds to go ahead.
The Conservatives claimed the 270-page report – released by the department last week without any press release – was the “final nail in the coffin” for the policy.
The prime minister outlined his vision of the green conurbations, each with up to 15,000 homes, within weeks of taking office in the summer of 2007.
Not only would they help solve Britain’s perceived housing shortage, but also set new standards of environmentally-friendly design, he believed.
Since then, however, the number of possible schemes has dwindled from 57 proposals to a list of 15 last April – of which only eight schemes remain.
Some of the surviving programmes have been scaled back. There have been fresh delays to the programme with a consultation deadline extended from March to the end of April.
The government has always insisted the schemes had to be feasible without “recourse to public subsidy”. But the document says explicitly that two of the projects would need support from taxpayer money.
One, at St Austell in Cornwall, would have a development deficit of £60m to £190m, and could need “significant financial assistance from public sector sources”.
A planned community at Rossington in South Yorkshire would also need some form of subsidy to succeed.
Three more of the eight sites, Whitehill Bordon in Hampshire, Pennbury in Leicestershire and Ford Airfield in West Sussex, could end up with potential losses.
Typical was the comment on Whitehill Bordon, which was described as having the potential to generate “only a small financial buffer”.
The three schemes with no questions over their financial viability were Weston Otmoor in Oxfordshire, north-east Elsenham in Essex and Middle Quinton in Warwickshire.
The department said the report was only a snapshot of the current financial climate, which could improve. There would be no new “large-scale funding schemes” for eco-towns.
The report will raise further questions after a select committee last month said the eco-towns policy was in tatters.
Copyright The Financial Times Limited 2009
US to review global warming health threat
Barack Obama reviewing suggestion that global warming is threat to public health – bringing possible end to George Bush's 'era of denial'
Associated Press
guardian.co.uk, Tuesday 24 March 2009 11.24 GMT
The White House is reviewing a suggestion by the US environmental agency that global warming is a threat to public health and welfare.
Such a declaration by the Environmental Protection Agency would be the first step to regulating carbon dioxide and other greenhouse gases under the US Clean Air Act and could have broad economic and environmental ramifications.
The Supreme Court two years ago directed the EPA to decide whether greenhouse gases, especially carbon dioxide from burning fossil fuels, pose a threat to public health and welfare because they are warming the Earth. If such a finding is made, these emissions should be regulated under the Clean Air Act, the court said.
"I think this is just the step in that process," said White House press secretary Robert Gibbs, noting the Supreme Court ruling.
But several congressional officials, also speaking on condition of anonymity, said the EPA is moving to declare carbon dioxide and other greenhouse gases a danger to public health and welfare and views them as ripe for regulation under the Clean Air Act.
Such a finding "will officially end the era of denial on global warming", said Ed Markey, a Democrat whose Energy and Commerce subcommittee is crafting global warming legislation. He said such a finding is long overdue because of the Bush administration's refusal to address the issue.
Many business leaders argue as did President George W Bush that the Clean Air Act is ill suited to deal with climate change and that regulating carbon dioxide would hamstring economic growth.
"It will require a huge cascade of (new clean air) permits" and halt a wide array of projects, from building coal plants to highway construction, including many at the heart of Barack Obama's economic recovery plan, said Bill Kovacs, a vice-president for environmental and technology issues at the US Chamber of Commerce.
But Abigail Dillen, an attorney for environmental group Earthjustice, dismissed the dire economic warnings from business groups about carbon dioxide regulation.
"It's to their interest to say the sky is falling, but it's not... The truth is we've never had to sacrifice air quality to maintain a healthy economy. The EPA has discretion to do this in a reasonable way."
An internal EPA planning document that surfaced recently suggests the agency would like to have a final endangerment finding by mid-April. But officials say regulations would involve a lengthy consultation process.
When asked about the EPA document on Monday, Gibbs emphasised that "the president has made quite clear" that he prefers to have the climate issue addressed by Congress as part of a broad, mandatory limit on heat-trapping emissions.
Associated Press
guardian.co.uk, Tuesday 24 March 2009 11.24 GMT
The White House is reviewing a suggestion by the US environmental agency that global warming is a threat to public health and welfare.
Such a declaration by the Environmental Protection Agency would be the first step to regulating carbon dioxide and other greenhouse gases under the US Clean Air Act and could have broad economic and environmental ramifications.
The Supreme Court two years ago directed the EPA to decide whether greenhouse gases, especially carbon dioxide from burning fossil fuels, pose a threat to public health and welfare because they are warming the Earth. If such a finding is made, these emissions should be regulated under the Clean Air Act, the court said.
"I think this is just the step in that process," said White House press secretary Robert Gibbs, noting the Supreme Court ruling.
But several congressional officials, also speaking on condition of anonymity, said the EPA is moving to declare carbon dioxide and other greenhouse gases a danger to public health and welfare and views them as ripe for regulation under the Clean Air Act.
Such a finding "will officially end the era of denial on global warming", said Ed Markey, a Democrat whose Energy and Commerce subcommittee is crafting global warming legislation. He said such a finding is long overdue because of the Bush administration's refusal to address the issue.
Many business leaders argue as did President George W Bush that the Clean Air Act is ill suited to deal with climate change and that regulating carbon dioxide would hamstring economic growth.
"It will require a huge cascade of (new clean air) permits" and halt a wide array of projects, from building coal plants to highway construction, including many at the heart of Barack Obama's economic recovery plan, said Bill Kovacs, a vice-president for environmental and technology issues at the US Chamber of Commerce.
But Abigail Dillen, an attorney for environmental group Earthjustice, dismissed the dire economic warnings from business groups about carbon dioxide regulation.
"It's to their interest to say the sky is falling, but it's not... The truth is we've never had to sacrifice air quality to maintain a healthy economy. The EPA has discretion to do this in a reasonable way."
An internal EPA planning document that surfaced recently suggests the agency would like to have a final endangerment finding by mid-April. But officials say regulations would involve a lengthy consultation process.
When asked about the EPA document on Monday, Gibbs emphasised that "the president has made quite clear" that he prefers to have the climate issue addressed by Congress as part of a broad, mandatory limit on heat-trapping emissions.
Wind power jobs hopes soar with rumours of factory deal
Published Date: 25 March 2009
By MOIRA KERR
WIND turbine workers in the west of Scotland are expecting an announcement this week securing 98 jobs and possibly creating hundreds more.
Ministers are understood to be preparing a statement on the Vestas wind turbine factory in Kintyre.There have been unconfirmed reports that the Danish company Welcon and investment fund Evo Energy are to take over the plant at Machrihanish, near Campbeltown, in April.It is believed that Alex Salmond, the First Minister, may make a flying visit to the plant tomorrow to join invited guests as the announcement is made.A source said yesterday: "They are making the official announcement on Thursday about the new company taking over from Vestas. I know someone who has been invited."Vestas have 90 staff but I understand the new company may have 300-400 eventually."Another source in Campbeltown, who did not want to be named, said: "I have heard Alex Salmond is coming on Thursday for the announcement about Vestas."A Scottish Government spokesman refused to confirm or deny the announcement, or if Mr Salmond would be visiting Campbeltown.He said: "All we can really say is that we are optimistic, given the amount of work that Scottish Development International and Highlands and Islands Enterprise, the local council and ministers have put into it, that there is a bright future for the plant, but there are no other details." Argyll Lib Dem MP Alan Reid said: "I am delighted at the Scottish Government's comments. "It now looks certain the factory has been saved. This will secure a large number of jobs in Machrihanish for many years to come and will be of great benefit to the environment because of the renewable energy the wind turbines will generate."
By MOIRA KERR
WIND turbine workers in the west of Scotland are expecting an announcement this week securing 98 jobs and possibly creating hundreds more.
Ministers are understood to be preparing a statement on the Vestas wind turbine factory in Kintyre.There have been unconfirmed reports that the Danish company Welcon and investment fund Evo Energy are to take over the plant at Machrihanish, near Campbeltown, in April.It is believed that Alex Salmond, the First Minister, may make a flying visit to the plant tomorrow to join invited guests as the announcement is made.A source said yesterday: "They are making the official announcement on Thursday about the new company taking over from Vestas. I know someone who has been invited."Vestas have 90 staff but I understand the new company may have 300-400 eventually."Another source in Campbeltown, who did not want to be named, said: "I have heard Alex Salmond is coming on Thursday for the announcement about Vestas."A Scottish Government spokesman refused to confirm or deny the announcement, or if Mr Salmond would be visiting Campbeltown.He said: "All we can really say is that we are optimistic, given the amount of work that Scottish Development International and Highlands and Islands Enterprise, the local council and ministers have put into it, that there is a bright future for the plant, but there are no other details." Argyll Lib Dem MP Alan Reid said: "I am delighted at the Scottish Government's comments. "It now looks certain the factory has been saved. This will secure a large number of jobs in Machrihanish for many years to come and will be of great benefit to the environment because of the renewable energy the wind turbines will generate."
State intervention vital if Britain is to meet its green energy targets, says former BP boss
• Browne says markets need new strategic direction • Consumers will have to pay more for renewables
Alan Rusbridger and David Adam
The Guardian, Wednesday 25 March 2009
Britain must revert to greater state control of energy markets to hit ambitious targets on renewable energy and climate change, according to the former head of BP.
Lord Browne of Madingley warns that market mechanisms are failing to deliver the necessary growth in clean energy. Crucial offshore wind projects could be cancelled unless there is an urgent rethink of energy policy, he says.
In a speech tonight at Cardiff University, Browne will say: "Competition has been the guiding star of UK energy policy since the 1980s and it worked well while there was a surplus of energy infrastructure capacity. But price competition is now failing to deliver the new, more diversified infrastructure that we urgently need to bolster energy security and meet our climate change targets.
"I remain convinced that the market is the most effective delivery unit available to society. But the market will need a new strategic direction and a new framework of rules, laid down by government."
Under EU efforts to combat global warming, Britain must generate 15% of its energy from renewable sources by 2020. The bulk of this is expected to be met by the electricity sector, and ministers have announced plans to build thousands of offshore wind turbines off the UK coast.
In an interview with the Guardian in advance of the speech, Browne, president of the Royal Academy of Engineering, said there was a real risk that many of these windfarms would not be built, because of high costs, falling power prices and more expensive credit. His words echo the concerns of others in the industry.
"We must fundamentally rethink the objective of energy policy in this country," Browne said. He compared the current need for urgent investment and new infrastructure with efforts to develop North Sea oil and gas fields in the 1970s and 1980s. "High oil prices provided a strong market pull. But governments also gave industry a helping hand, creating generous tax incentives and regulations, and helping to build strategic infrastructure," he said. "There's even more cause for government intervention today. That's because energy security and climate change mitigation are public goods. They would not otherwise be recognised by the free market."
One option, he suggested, would be for the government to direct state-controlled banks to lend money for green infrastructure projects, as is being done in Ireland. "Policymakers must be frank - the cost of supporting renewable energy will be borne by consumers who pay a little more for their delivered energy."
Browne said the UK risked being left behind in the global race to develop a low-carbon industry if ministers relied on market mechanisms such as carbon trading to drive change. "A lot of people say carbon trading, the European emissions trading scheme, will take care of this. In theory it can, but in practice it won't."
The scheme is supposed to encourage companies to trade the rights to emit carbon dioxide, with cleaner firms selling pollution permits to dirtier rivals - thereby setting a price on the emission of carbon. It has been dogged by a surplus of permits, the price of which has fallen to near €10 from €30 last summer.
Analysts say the price drop reflects a slowing demand for permits as recession-hit companies scale back production and cut their carbon emissions. But it could also indicate companies have sold large amounts of surplus permits to raise cash.
Browne said of the scheme: "Eventually I'm sure it will be terrific. Right now it needs to work side by side with simple regulations and simple incentives to get investors to invest in the right way."
He said the recent decision by Shell to stop investments in wind, solar and hydro-electric power reflected a move "back to basics" for oil and gas companies. "I read it as a pure business decision," he said. "Oil companies have a tremendous number of things they've got to do in developing oil and gas. That's where their expertise is and that's probably where they're focused."
He said the large utility companies and independent firms might be better placed to develop renewables. "It's about focus. When telephones went from landlines to mobiles, the people who did the best in mobile telephones were not the people who did best in landlines. A new breed of people came up and dominated that industry. It may be the case with renewables too."
On the controversial plans by E.ON to build a new coal-fired power station at Kingsnorth in Kent, Browne said that the pragmatic need for a diverse energy supply should triumph over environmental concerns. "I think there's a practical reality here. From everything I've seen it looks like it does need to be done."
He said the price of carbon would need to be much higher than today to realise carbon capture and storage, where pollution could be trapped and piped to underneath the North Sea. "It is expensive, it is very expensive. In the long term we may find a way of capturing the carbon and putting it back in the ground. Right now that looks like a really big challenge with no solution. But it may have a solution."
He said it was vital that environmental policy was at the heart of government. "It's essential that we do not compartmentalise climate change as an issue. Environmental integrity should be made a tangible part of other social priorities, such as economic prosperity and national security. This will require a new approach to policy across all levels of government and all government departments."
Risky investment
The financial crisis has hit numerous firms in the renewable power sector:
Shell pulled out of the British wind sector last year. It believes only biofuels, and carbon capture and storage make sense, alongside oil and gas.
E.ON The economics of the world's biggest offshore wind farm project are "on a knife edge", warned the chief executive of one of the companies behind it.
Centrica planned to invest in 1,500MW of offshore wind capacity but is now reviewing its investment plans.
BT is trying to develop renewable energy projects to generate its own green power, but it says government rules for on-site renewables are threatening its schemes and it may not go ahead without a change in regulation.
Alan Rusbridger and David Adam
The Guardian, Wednesday 25 March 2009
Britain must revert to greater state control of energy markets to hit ambitious targets on renewable energy and climate change, according to the former head of BP.
Lord Browne of Madingley warns that market mechanisms are failing to deliver the necessary growth in clean energy. Crucial offshore wind projects could be cancelled unless there is an urgent rethink of energy policy, he says.
In a speech tonight at Cardiff University, Browne will say: "Competition has been the guiding star of UK energy policy since the 1980s and it worked well while there was a surplus of energy infrastructure capacity. But price competition is now failing to deliver the new, more diversified infrastructure that we urgently need to bolster energy security and meet our climate change targets.
"I remain convinced that the market is the most effective delivery unit available to society. But the market will need a new strategic direction and a new framework of rules, laid down by government."
Under EU efforts to combat global warming, Britain must generate 15% of its energy from renewable sources by 2020. The bulk of this is expected to be met by the electricity sector, and ministers have announced plans to build thousands of offshore wind turbines off the UK coast.
In an interview with the Guardian in advance of the speech, Browne, president of the Royal Academy of Engineering, said there was a real risk that many of these windfarms would not be built, because of high costs, falling power prices and more expensive credit. His words echo the concerns of others in the industry.
"We must fundamentally rethink the objective of energy policy in this country," Browne said. He compared the current need for urgent investment and new infrastructure with efforts to develop North Sea oil and gas fields in the 1970s and 1980s. "High oil prices provided a strong market pull. But governments also gave industry a helping hand, creating generous tax incentives and regulations, and helping to build strategic infrastructure," he said. "There's even more cause for government intervention today. That's because energy security and climate change mitigation are public goods. They would not otherwise be recognised by the free market."
One option, he suggested, would be for the government to direct state-controlled banks to lend money for green infrastructure projects, as is being done in Ireland. "Policymakers must be frank - the cost of supporting renewable energy will be borne by consumers who pay a little more for their delivered energy."
Browne said the UK risked being left behind in the global race to develop a low-carbon industry if ministers relied on market mechanisms such as carbon trading to drive change. "A lot of people say carbon trading, the European emissions trading scheme, will take care of this. In theory it can, but in practice it won't."
The scheme is supposed to encourage companies to trade the rights to emit carbon dioxide, with cleaner firms selling pollution permits to dirtier rivals - thereby setting a price on the emission of carbon. It has been dogged by a surplus of permits, the price of which has fallen to near €10 from €30 last summer.
Analysts say the price drop reflects a slowing demand for permits as recession-hit companies scale back production and cut their carbon emissions. But it could also indicate companies have sold large amounts of surplus permits to raise cash.
Browne said of the scheme: "Eventually I'm sure it will be terrific. Right now it needs to work side by side with simple regulations and simple incentives to get investors to invest in the right way."
He said the recent decision by Shell to stop investments in wind, solar and hydro-electric power reflected a move "back to basics" for oil and gas companies. "I read it as a pure business decision," he said. "Oil companies have a tremendous number of things they've got to do in developing oil and gas. That's where their expertise is and that's probably where they're focused."
He said the large utility companies and independent firms might be better placed to develop renewables. "It's about focus. When telephones went from landlines to mobiles, the people who did the best in mobile telephones were not the people who did best in landlines. A new breed of people came up and dominated that industry. It may be the case with renewables too."
On the controversial plans by E.ON to build a new coal-fired power station at Kingsnorth in Kent, Browne said that the pragmatic need for a diverse energy supply should triumph over environmental concerns. "I think there's a practical reality here. From everything I've seen it looks like it does need to be done."
He said the price of carbon would need to be much higher than today to realise carbon capture and storage, where pollution could be trapped and piped to underneath the North Sea. "It is expensive, it is very expensive. In the long term we may find a way of capturing the carbon and putting it back in the ground. Right now that looks like a really big challenge with no solution. But it may have a solution."
He said it was vital that environmental policy was at the heart of government. "It's essential that we do not compartmentalise climate change as an issue. Environmental integrity should be made a tangible part of other social priorities, such as economic prosperity and national security. This will require a new approach to policy across all levels of government and all government departments."
Risky investment
The financial crisis has hit numerous firms in the renewable power sector:
Shell pulled out of the British wind sector last year. It believes only biofuels, and carbon capture and storage make sense, alongside oil and gas.
E.ON The economics of the world's biggest offshore wind farm project are "on a knife edge", warned the chief executive of one of the companies behind it.
Centrica planned to invest in 1,500MW of offshore wind capacity but is now reviewing its investment plans.
BT is trying to develop renewable energy projects to generate its own green power, but it says government rules for on-site renewables are threatening its schemes and it may not go ahead without a change in regulation.
BP's Browne says UK should support carbon trading
Reuters
Published: March 25, 2009
LONDON: The UK needs to revert to greater state control of energy markets if the UK is to reach its renewable energy targets, former BP head Lord Browne said in an interview in Wednesday's Guardian.
He said that the carbon trading scheme needs the support of government incentives if it is to produce a low carbon industry in the UK.
"A lot of people will say carbon trading, the European emissions trading scheme, will take care of this. In theory it can, but in practice it won't," he told the paper.
"Eventually I'm sure it will be terrific. Right now it needs to work side by side with simple regulations and simple incentives to get investors to invest in the right way."
Browne, who is President of the Royal Academy of Engineering, suggested that one options would be for the government to direct state-controlled banks to lend to green infrastructure projects.
Published: March 25, 2009
LONDON: The UK needs to revert to greater state control of energy markets if the UK is to reach its renewable energy targets, former BP head Lord Browne said in an interview in Wednesday's Guardian.
He said that the carbon trading scheme needs the support of government incentives if it is to produce a low carbon industry in the UK.
"A lot of people will say carbon trading, the European emissions trading scheme, will take care of this. In theory it can, but in practice it won't," he told the paper.
"Eventually I'm sure it will be terrific. Right now it needs to work side by side with simple regulations and simple incentives to get investors to invest in the right way."
Browne, who is President of the Royal Academy of Engineering, suggested that one options would be for the government to direct state-controlled banks to lend to green infrastructure projects.
It looked as if there was some good news
The Times
March 25, 2009
David Wighton
Europe's economy may be on its knees, but at least the downturn could postpone the day when we are washed away by the melting polar ice caps.
Carbon emissions fell about 3 per cent last year within the European Emissions Trading Scheme (ETS), the carbon trading market that covers the heaviest polluters, and greenhouse gas emissions are expected to fall further as economies contract this year.
New Carbon Finance, a consultancy, has estimated that the recession will mean ultimately that Europe produces 7 per cent less carbon by 2020.
What has been bad for business turns out to be a virtuous cycle for carbon reduction: falling consumer demand means lower industrial output, which means less demand for electricity.
The recession will go a long way to helping industries within the ETS reach the European Union's target of cutting carbon levels 20 per cent by 2020 (compared with 1990 levels).
New Carbon Finance estimates that the cost of achieving this target has fallen by 50 per cent, or €157 billion, because fewer companies will be buying pollution permits and therefore the price of carbon will drop.
But there is a snag. From an environmental point of view, lower carbon prices are a concern because they remove some of the incentive for companies to invest in new technology.
So, what initially appears to be one of the few silver linings to this recession could make long-term carbon reductions even harder to achieve.
March 25, 2009
David Wighton
Europe's economy may be on its knees, but at least the downturn could postpone the day when we are washed away by the melting polar ice caps.
Carbon emissions fell about 3 per cent last year within the European Emissions Trading Scheme (ETS), the carbon trading market that covers the heaviest polluters, and greenhouse gas emissions are expected to fall further as economies contract this year.
New Carbon Finance, a consultancy, has estimated that the recession will mean ultimately that Europe produces 7 per cent less carbon by 2020.
What has been bad for business turns out to be a virtuous cycle for carbon reduction: falling consumer demand means lower industrial output, which means less demand for electricity.
The recession will go a long way to helping industries within the ETS reach the European Union's target of cutting carbon levels 20 per cent by 2020 (compared with 1990 levels).
New Carbon Finance estimates that the cost of achieving this target has fallen by 50 per cent, or €157 billion, because fewer companies will be buying pollution permits and therefore the price of carbon will drop.
But there is a snag. From an environmental point of view, lower carbon prices are a concern because they remove some of the incentive for companies to invest in new technology.
So, what initially appears to be one of the few silver linings to this recession could make long-term carbon reductions even harder to achieve.
Carbon prices
Published: March 24 2009 09:31
Idle factories, fewer fume-belching smokestacks. So it’s no surprise that prices of carbon emissions permits have plunged in line with prospects for the world economy. More surprising is their recent rally. In Europe, prices of permits that allow cement factories, power plants and other big polluters to spew greenhouse gases under the European Union’s carbon cap-and-trade scheme have jumped 40 per cent from their mid-February nadir.
Over the same period, the FTSE Eurofirst 300 index of European stocks has shed about 7 per cent. Some perspective is required. In spite of their recent jump, at just under €12 per tonne, EU allowance prices remain near the all-time low of €8.20 reached last month – and well below the €30-per-tonne highs of last summer. Back then, forecasters were expecting only a mild economic slump. The outlook has darkened.
Nonetheless, analysts expect the market for EU carbon allowances to stay “long” this year. European companies should still emit enough greenhouse gases for them to be forced to buy permits to comply with emissions rules – but only just. New Carbon Finance, a carbon market consultancy, says allowance prices could fall as low as €6 per tonne before recovering next year.
Cheap permits will give companies little incentive to invest in clean technologies in the near term. However, a drop in output should make it easier for countries to hit their long-term emissions targets. Targets set by the EU early last year, for example, call for reducing emissions by 20 per cent from 1990 levels by 2020. NCF reckons that the recession could make the total cost of meeting that target just half what it would have been based on last year’s more bullish outlook for growth. Given that cost has been a key obstacle to winning broad international agreement on emissions targets, the recession may have a silver lining after all.
BACKGROUND NEWS
Prices of European carbon allowances have risen 40 per cent in recent weeks, confounding expectations of a continued slide. The permits, which allow cement factories, power stations and other big polluters to emit greenhouse gasses under the European Union’s emission trading scheme, fell to €8.20 per tonne last month – down about 75 per cent from the highs reached last summer, before the recession hit.
Idle factories, fewer fume-belching smokestacks. So it’s no surprise that prices of carbon emissions permits have plunged in line with prospects for the world economy. More surprising is their recent rally. In Europe, prices of permits that allow cement factories, power plants and other big polluters to spew greenhouse gases under the European Union’s carbon cap-and-trade scheme have jumped 40 per cent from their mid-February nadir.
Over the same period, the FTSE Eurofirst 300 index of European stocks has shed about 7 per cent. Some perspective is required. In spite of their recent jump, at just under €12 per tonne, EU allowance prices remain near the all-time low of €8.20 reached last month – and well below the €30-per-tonne highs of last summer. Back then, forecasters were expecting only a mild economic slump. The outlook has darkened.
Nonetheless, analysts expect the market for EU carbon allowances to stay “long” this year. European companies should still emit enough greenhouse gases for them to be forced to buy permits to comply with emissions rules – but only just. New Carbon Finance, a carbon market consultancy, says allowance prices could fall as low as €6 per tonne before recovering next year.
Cheap permits will give companies little incentive to invest in clean technologies in the near term. However, a drop in output should make it easier for countries to hit their long-term emissions targets. Targets set by the EU early last year, for example, call for reducing emissions by 20 per cent from 1990 levels by 2020. NCF reckons that the recession could make the total cost of meeting that target just half what it would have been based on last year’s more bullish outlook for growth. Given that cost has been a key obstacle to winning broad international agreement on emissions targets, the recession may have a silver lining after all.
BACKGROUND NEWS
Prices of European carbon allowances have risen 40 per cent in recent weeks, confounding expectations of a continued slide. The permits, which allow cement factories, power stations and other big polluters to emit greenhouse gasses under the European Union’s emission trading scheme, fell to €8.20 per tonne last month – down about 75 per cent from the highs reached last summer, before the recession hit.
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