EU Commission Roadmap: An 80% to 95% Reduction of Greenhouse Gas Emissions by 2050
On March 8th, the European Commission adopted “A Roadmap for Moving to a Competitive Low Carbon Economy in 2050” in which it proposed an 80% to 95% reduction of GHG emissions by 2050 from a 1990 baseline. The Commission thereby confirmed the European Council’s “Low Carbon 2050 Strategy” announced at its February Summit.
In order to reach this ambitious long-term target, the Commission recommended achieving transitional reductions across all GHG-intensive sectors: 20% by 2020, 40% by 2030 and 60% by 2040. The Commission nevertheless observed that the EU should be in a position to reduce up to 25% of its total GHG by 2020 provided (amongst others) that:
In order to reach this ambitious long-term target, the Commission recommended achieving transitional reductions across all GHG-intensive sectors: 20% by 2020, 40% by 2030 and 60% by 2040. The Commission nevertheless observed that the EU should be in a position to reduce up to 25% of its total GHG by 2020 provided (amongst others) that:
(i) the EU reduces its use of primary energy by 20% by 2020; and
(ii) the EU reaches a 20% share of its overall energy consumption in renewable energy by 2020 (for more information on these two energy objectives, see Commission’s Communication of 31 January 2011 titled: “Renewable Energy: Progressing towards the 2020 target”).
Parallel to these generic targets, the Commission also proposed sector-specific reductions. For instance, the Commission suggested GHGs from the agricultural sector be reduced by 36% to 37% for 2030, and by 42% to 49% for 2050. A reduction by 2050 of 54% to 67% of GHGs originating from the transport sector was also recommended. The Commission also advised a reduction by 2050 of 83% to 87% of GHGs in the industrial sector.
This roadmap draws increased political attention to agriculture as an important source of climate change concern. The Commission indeed estimated that, by 2050, the agricultural sector would generate one third of EU’s total GHGs) due to increase in global population and demand for related products.
The roadmap, which in no way was meant to represent hard law, encourages the EU (in addition to the present EU’s investment of 19% of its GDP in 2009) to dedicate 1.5% of its total GDP to investments, private and public, in low carbon energy sources and low carbon infrastructure. The Commission noted in its roadmap that higher fuel efficiency is a key factor in reversing the process of GHG increases. Therefore, the consumption of sustainable biofuels, especially in the transport sector (primarily aviation and heavy duty trucks) should be prioritized. This strategy would result in lowering Member States’ reliance on energy imports and their exposure to oil price instability.
The Commission will use this roadmap as a policy document to encourage further international negotiations on a global climate change agreement and to reinforce EU’s cooperation with its “Neighbourhood Partners” towards the adoption of initiatives for the promotion of a low carbon economy. The roadmap will also stimulate further dialogue with economic sectors that contribute significantly to GHGs within the EU. We will provide further updates on the Commission’s actions as they are available.
Ethanol's Fall and the Oil Price Floor
Earlier last week, I wrote about a recent study that demonstrated how cellulosic ethanol carries fewer public costs than corn ethanol primarily because it releases fewer fine particulate emissions. In part because of its attractive emissions profile, I suggested the future of cellulosic ethanol looked rosy.
Of course, that future depends on demand for ethanol of any kind. And that appears to be very much in question.
The New York Times wrote later this week about how collapsing demand for ethanol has set off a wave of plant closings and bankruptcies in the industry:
“Bob Dinneen, president of the Renewable Fuels Association, a trade group, estimated that of the country’s 150 ethanol companies and 180 plants, 10 or more companies have shut down 24 plants over the last three months.”
When oil was at $145 a barrel, ethanol demand far outpaced the amount needed to satisfy federal mandates for ethanol blending. But now, with oil trading under $40, demand has vanished. New production mandates set by Congress just one year ago seem unattainable as well.
Senator Jeff Bingaman of New Mexico, the chairman of the Senate Energy and Natural Resources Committee, has said Congress may have to "reconsider" the mandate because oil and gas prices have plummeted and ethanol no longer looks like a go-go fuel.
What can we learn from the ethanol industry’s latest sudden turn? We have said it before; we now say it again: We simply must have prices for oil and gasoline that more closely reflect the fuels’ cost to society. All thoughtful economists, including most of the majority backing the stimulus package, agree that until oil costs are high enough, most national energy and climate policies won’t get off the ground.
The government must step in and set that higher price for oil. It can do it through a carbon cap-and-trade plan or a gas tax.
How do we prevent high gas prices having a disproportionate effect on any segment of society? The revenues of any scheme should go to ease the taxpayer burdens and to subsidize green energy technology, in that order, given the state of the economy today.
Our collective energies should go to designing the best and fairest price support under oil and other carbon-based energy sources, not rolling back biofuels mandates.
People Power
Ethanol has taken its lumps in recent months, after Congress blessed it with mandates in 2005 and 2007, but if you are looking for a low carbon, Middle East independent, sustainably produced bio-fuel, it is going to be hard to beat cellulosic ethanol. Now, there's a new reason to prefer ethanol made from switchgrass and other biomass: it inflicts less harm than comparable corn ethanol mixtures. It emits smaller amounts of fine particulate matter, according to a new study from researchers at the University of Minnesota.
Researchers compared the total environmental and health costs of producing corn-based and cellulosic fuels, primarily studying their impact on air pollution and air quality. They estimated the health costs represent about 71 cents per gallon of gasoline burned. Corn-ethanol fuel carries additional cost of between 72 cents to $1.45, depending on how it is made. Cellulosic ethanol by comparison clocks in between 19 cents to 32 cents, again depending on how it is made.
"Our work highlights the need to expand the biofuels debate beyond its current focus on climate change to include a wider range of effects such as their impacts on air quality," said lead author Jason Hill, a resident fellow in the University of Minnesota's Institute on the Environment.
Another plus the authors don’t mention: cellulosic biofuels require less intensive cultivation than monoculture corn and thus produce less fertilizer and pesticide runoff into rivers and lakes.
As the study's authors point out, those are costs borne not by producers or consumers of the fuels, but by the public. Another reason why lawmakers in Washington need to put R&D money not just into bio-fuels, but into the right types of bio-fuels.
Food vs. Fuel and Impacts on Climate Change: Biofuels Under Siege
Concern about world food prices and shortages is causing law makers in both the EU and the US to consider either a moratorium or a cutback in biofuels production. In particular, ethanol produced from corn is being blamed as a significant contributor to the world food crisis. [summary]
International concerns over world food prices and shortages has recently triggered a major fuel-or-fuel debate. A UN official said recently that massive production of biofuels is “a crime against humanity” because of its impact on global food prices. In its April 7 cover story, Time Magazine, blasted the impact increased biofuels consumption may have on climate. While US Department of Agriculture economists point to a large array of factors contributing to the current constriction in basic food commodities like corn, wheat, and rice, citing regional drought, larger population demand, and increased cost of production because of rising fossil fuel costs, the attention biofuels has attracted means a rough passage for biofuels and may portend badly for their future use.
The Time Magazine article indicts biofuels for “dramatically accelerating global warming” because of clearing of tropical rain forests for cropland for sugarcane, soybeans, or other fuel crops. The article says the US’s increased production of corn for ethanol has caused farmers to plant fewer acres of soybeans. This, in turn, has caused the world-wide commodity price of soybeans to increase, “spurring a dramatic expansion of Brazilian agriculture, which is invading the Amazon at an increasingly alarming rate.” According to Time, deforestation accounts for 20 percent of all current carbon emissions. A Rhode Island-sized area of Brazil was deforested in 2007 alone.
What is most interesting is the intensity of the reaction of UN entities. Concern for food supply has led to what some feel is an overreaction to the role biofuels production may play, as compared to drought, cultivation and transportation costs, and demand. The UN’s Special Rapporteur for the Right to Food Jean Ziegler has warned that the world is headed “towards a very long period of riots” and conflict stemming from food shortages and price increases. He went on to say that in recent months, rising food costs have sparked violent protests in Cameroon, Egypt, Ethiopia, Haiti, Indonesia, the Ivory Coast, Madagascar, and Mauritania. In Pakistan and Thailand, army troops were deployed to prevent seizure of food from fields and warehouses, while price increases led to a general strike in Burkina Faso. Ziegler called on the International Monetary Fund to change its policies on agricultural subsidies and to stop supporting programs aimed exclusively at debt reduction. He went on to say that “international market speculation on food commodities must cease.”
While Mr. Ziegler’s views may represent an extreme in the current food debate, both he and Time Magazine raise (and at the very least exemplify) issues about biofuels development that must be addressed in the coming months if the promising role biofuels may play in addressing climate, security, and oil dependence is to be realized.
The first is question of whether US biofuels production is causing world food prices to rise dramatically. World Bank President Robert Zoellick seems to thinks so. At a news conference on April 11, he said that demand for ethanol and other biofuels is a "significant contributor" to soaring food prices around the world. The World Bank has projected that food prices will stay high or go even higher over the next couple of years, with biofuels a major factor in keeping them high. "Biofuels are no doubt a significant contributor," Zoellick says. "It is clearly the case that programs in Europe and the United States that have increased biofuels production have contributed to the added demand for food."
The second question that has been raised is whether the impact of biofuels on the environment may outweigh their benefits. In addition to Time’s concern about global warming, just last week the U.S. Environmental Protection Agency (EPA) felt compelled to address these impacts after a period of relatively benign acceptance of biofuels’ potential environmental impacts. Among the issues are the increased impacts of nitrogen compounds on the environment stemming from use of nitrogen-based fertilizers and higher nitrogen emissions compared to conventional gasoline. According to Inside EPA, “adding to the concern is the expanded renewable fuels standard (RFS) that Congress included in the recently enacted energy law, which boosts the prior RFS of 15 billion gallons by 2012 to 36 billion gallons by 2022.”
We will address the food-or-fuel issue in future blogs, including the promise of fuel from cellulosic ethanol production, favored by the President and leading environmental organizations alike. Cellulosic ethanol feedstocks, such as pine slashings and switchgrass (the fast-growing plant made famous in the President’s State of the Union two years ago), do not directly compete in food markets. The promise of cellulosic ethanol remains bright, as organizations such as 25X25 have recently begun to reemphasize.
