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Can politicians lead a global transition to a low-carbon economy of the future? I have my doubts.

More than 12 years after the adoption of the Kyoto Protocol on December 11, 1997, no measures have been implemented to effectively reduce global emissions of greenhouse gases. Despite the perceptible surge of green enthusiasm among world leaders. It looks like all key players have recognized the importance of fighting rising average temperatures since everybody is talking about climate change, emissions, efficiency and renewable energy. The world community seems to have gotten serious about climate change since the Earth Summit in Rio in 1992 which led to the Kyoto Protocol and finally to the Copenhagen Summit last month. However, the sad truth is that while in the 1990s, global carbon dioxide emissions were increasing at about 1 percent per year, emissions were growing at around 3.4 percent per year between 2000 and 2008 - when the Kyoto Protocol was already in effect. Why? Well, the Kyoto Protocol did not demand any emissions reductions from developing nations, neither was it ratified by the United States, then the biggest emitter of carbon dioxide in the world.

Rio did not save the climate, neither did Kyoto nor Copenhagen. So how about the summit in Mexico later this year?

To be honest, I doubt that world leaders will be able to achieve much more in Mexico than they did in Copenhagen. And even if a binding treaty could be achieved, it is questionable whether that would have any measurable effects on global emissions of greenhouse gases.

Hardly any country can be expected to work towards major reductions in its emissions output “only” to help fighting climate change. Given difficult economic circumstances in many regions of the world, few governments will be able to convince their people to accept imposed limits on emissions of a gas that nobody can see or smell. Another issue is that even if a couple of major industrialized countries were able to bring down their emissions by 20 percent until 2020, the growing emissions of emerging economies would nullify these savings immediately.

Consequently, we need a new approach to come anywhere near the reductions necessary to avoid the unmanageable consquences of rising average temperatures.

People need to realize that climate change is not the only reason why a new strategy for energy generation and use is needed.

First, saving energy makes sense to whatever country, industry, party you belong. Saving energy means reducing costs, increasing profits and gaining competitiveness. There is enormous potential for efficiency increases throughout all sectors of the economy. Avoiding costly overcapacities by shrinking peak demand and increasing off-peak demand through real-time pricing mechanisms can help to stabilize the electricity grid, enable the integration of renewable energies and avoid the construction of unnecessary power plants.

Second, renewable energy  as well as increased efficiency can help net-oil-importing countries to ship less money abroad. Domestic energy generation is always superior to imported energy since money can be kept local. Money kept local translates into local jobs and local tax revenue.  

Third, new energy technologies will inevitably be the next great global industry. Given growing populations, rapidly expanding middle classes in emerging countries, increased living standards and growing resource demand in tandem with ever scarcer resources will make the 21st century an era of high energy prices. Any technology helping countries and companies to save expensive energy and produce more without having to import more energy will sell in huge quantities. Leading the development of new energy technologies will result in massive investments, job creation and  growth.

 Without doubt, the long-term trend in energy prices is up. This means we will spend more and more money on oil imports and we will lack this money elsewhere.

Understanding the numerous benefits of embracing new ways of producing and consuming energy apart from reducing emissions is important. The infrastructure decisions we make today will determine the energy use and emissions of tomorrow and the coming decades. Investing in smarter and more efficient technologies today will save money, energy and emissions tomorrow.

Promoting emissions reductions for the sake of trying to protect the polar bears and penguins does not work. Promoting selfish energy policy aimed at generating as much energy as possible at home and using it as efficiently as possible to gain a competitive advantage over foreign competition and the OPEC cartel is the right approach.

This entry was posted on Monday, January 25th, 2010 at 12:52 PM and is filed under Economy, Energy, Environment, myVIEW. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.