To deal successfully with climate change and with the energy crunch at the same time we need some challenging economic, regulatory and fiscal changes.
Without overcoming the present all encompassing superficial "green" thinking it will be impossible. First of all, we must insist that there is no pure technological fix. There is no magic wand nor one invention that will help us confront the twin headed energy-climate monster. Confronting serious social conflict and political controversy will be unavoidable in order to proceed. Business as usual with just a few technical adjustments, some eco-marketing and an occasional solar panel are useless and only divert us from the real debate.
We need a complex system of government policies, regulations, research funding and tax incentives, creating a system for innovating, generating, and deploying clean energy, efficiency, and productivity. As well, we desperately need an ethic of conservation and a new culture of sufficiency that often questions many basic premises of our societies. We must learn that conservation is not necessarily the opposite of consumption. In order to consume more we must conserve more.
To start with it would seem that the economic crisis has come to our rescue by sinking oil prices and reducing CO2 emissions. In 2008 world CO2 emissions will retreat around 3%. Indeed, the economic depression of the 30´s made emissions go down 35%. Our present recession has indeed made energy demand sink and with it many countries might even have an easier time in meeting their Kyoto targets. But of course this ignores much of the South (and part of the North) that suffers energy poverty and totally overlooks the need for structural changes in our way of producing and consuming energy for us to be prepared for the next economic upswing. What the crisis does tell us is that our climate crisis is intimately entwined with our insatiable consumption patterns, the very force that until now has been the cornerstone of economic growth. We urgently need a way out of this destructive logic and into a "sustainable physical de-growth" that is compatible with a vibrant economy.
According to some voices the fight against climate change should be set aside until our economy improves. This is totally mistaken and counterproductive. On the contrary, at the centre of our very response to the economic crisis should be a "green new deal" that regulates and channels public and private funding into clean development and industrial reconversion. Millions of new jobs can come from the green restoration of homes, from the building of public transport, from the massive extension of intelligent electricity grids and the retroffiting of dirty and inefficient industrial base.
Tackling our energy-climate crisis is also about tuning our economy into real innovation, goods and services. This is because the financial speculation behind our current crisis had over-heated the economy while over-heating the climate. Junk loans created loads of literal junk by fueling spending beyond real means. Toxic banks emitted toxic gases by promoting risky overconsumption that was not backed up by any reality. Orienting our economy to be carbon-conscious implies financial regulation that restricts irresponsible spending and fiscal policies that internalise hidden environmental costs.
Many have been overjoyed over the last few months as the price of oil has plummeted due to dwindling demand. Nevertheless, for renewable sources and energy efficiency measures to really take off by attracting massive investment we need a price floor on oil to guarantee a degree of stability for investments in alternatives. We cannot allow the price context for renewable energy to be constantly fluctuating on the unstable market price of oil. When oil goes under 100 o 80 dollars a special floating climate tax on an EU level should be considered that prevents the price of oil from falling further and that provides badly needed public revenue for supporting economic recuperation for a post-carbon society across Europe. This could also be a way of solving the EU´s lack of no strings attached revenue and liberating itself from a constant renegotiation of financial perspectives with member states. The proposal for a universal carbon tax has been supported by many of the worlds leading economists and the United Nations. It would be a way of helping the South make to jump to clean technologies and, as well, could provide financing for Millineum goals.
We should also be cautious with some possible false and bothersome "friends" of the climate-energy fix. Nuclear, agrofuels and carbon capture are three of them.
Nuclear: A massive switch to nuclear power would take all our investment power and innovation power to build hundreds of new nuclear plants which would lead us to economic ruin and would perpetuate a highly centralised and dangerous source of energy that simply has too many problems and risks to be given much attention. The nuclear option is even less viable in the context on our economic recession due to their cost and their capital intensive-labour poor nature when compared with other sources of energy.
Agrofuels for transport: This is the last resort to save the conventional internal combustion engine on the part of car manufacturers in deep trouble. Hybrid and electric cars are much more promising in reducing C02 along with tax measures against high carbon cars and strong promotion of public transport. According to most studies many agrofuels make little or no dent in reducing climate change gases but, at the same time, can have very negative impacts on forests, farmlands and foodprices.
Carbon capture and storage: Our present coal power plants must be much cleaner than at present but the promise of the still immature technology of CCS is being used as a catch-all marketing spin to fool people into more and more coal power plants and irrational mining operations. Serious risks and technical problems remain and CCS might work environmentally and financially but we will not know for at least ten years.
One of our biggest challenges is distributing our electricity in an efficient and intelligent manner. Most of our present regulators and power utility operators follow a perverse and inefficient system. In our present system the more energy they sell the better. The more power lines and power plants built mean more energy and more clients. More investment is the result of greater consumption and there is little incentive for energy conservation. The more over- supply of energy the more money they make. For example, Spain produces around triple the amount of average energy consumed each year. They produce to serve peak demand of consumers instead of orienting demand to the times of when more production. It is generally a lineal, one way process on the grid. There is practically no feed back: very little energy contribution from consumers and practically no information is flowing on the energy consumption patterns of the consumer toward the regulators.
Practically no useful economic dialogue exists between users and providers on the advantages of saving, efficiency and renewable production. We desperately need a "decoupling" of consumption and the profits of energy suppliers. Energy auditors under a EU or national guidance could establish compensations for achieving efficiency and savings for consumers. They should subsidize change in appliances, climatisers and light fixtures. It should be noted that the cost of generating each new kilowatt of electricity is more than five times that of saving one. Especially important is the great void that exists in the integration of information technology and our daily energy system. An IT and electricity convergence could reduce energy consumption radically in the building sector that represents 40% of our electricity consumed. IT could match electricity needs with the time when the energy is available. Why can´t a washing machine or other appliances work when the electricity is available? Why can´t we make flexible an important part of energy supply and demand through IT and a modulated pricing system? This would save a great deal of CO2 and eliminate the need for hundreds of new power stations.
Our homes can be the centre of our fight against climate change. The production of cement in the world produces around as much CO2 as all the passenger calls in the world. The standards for building homes (materials, energy efficiency, life-cycle analysis) should be as important as the CO2 emissions of cars. Many of our buildings can be net energy producers as opposed to great consumers as at present. This demands a clear tax structure to promote new bioclimatic designs, a new materials economy low in carbon, an intelligent and informed exchange of electricity between homes and the grid.
Laws and regulations are primordial. For example, each Californian produces half the emissions as his or her fellow American. This is not due to personal choice but to policies on CO2 emissions of cars, efficiency norms on appliances, machines... This means billions in savings and has had a positive effect on the economy.
Closer to home the difficulties of pushing a rational climate policy is becoming evident. The tremendous campaign against stricter car emission standards in the EU on the part of some member states and car manufacturers has been successful in markedly weakening the future EU Directive. It is just the reflection of the lack of political will on the part European politician to take the energy-climate crisis seriously. As I write these lines the EU council is backtracking and watering-down key elements of the whole EU climate-energy package that should guide us toward the 2020 objective of 20 to 30% CO2 reductions.
We must break the strong myth in Europe and the world that the right to pollute is the right to progress. At the same time we should strengthen our ties with the South, especially the Mediterranean region, with clean energy integration and technology transfer projects that create common purpose and economic viability. It is possible to save the economy and the planet at the same time if we have the courgage to propose a reorientation of our economy toward crucial environmental and social objectivees.