The occasions of the previous yr have radically altered Europe’s power coverage. The objective of attaining internet zero earlier than 2050, confirmed 12 months in the past on the COP26 assembly in Glasgow, remains to be in place. But the rapid precedence throughout Europe, now, is to safe power provides for the approaching winter and to mitigate the financial and social affect of dramatic will increase in oil and fuel costs.
The short-term responses — extensions of the usage of coal and the seek for new native and imported sources of pure fuel — may recommend that the local weather agenda set in Glasgow has been deserted. However, that’s not the case. If something, power is now a way more rapid political concern than it was a yr in the past.
The power disaster sparked by Russia’s invasion of Ukraine has definitely offered a pointy reminder to European customers, and governments, that hydrocarbons nonetheless present greater than 80 per cent of the continent’s power wants.
But the sudden flip of occasions has additionally made the dangers of reliance on hydrocarbon imports manifestly evident. As a end result, the prospect of shifting to low-carbon sources of provide has grow to be extra engaging.
Wind and photo voltaic are, for now not less than, each cheaper suppliers of electrical energy than imported fuel. Using energy produced regionally additionally reduces the discomfort of dependence on unreliable buying and selling companions. The power transition and the reason for power safety have merged into one.
Not surprisingly, the expansion of funding in wind and photo voltaic provides of electrical energy is the dominant development.
Previously seen as a “bridge” to a decrease carbon economic system — as it’s a much less polluting fossil gas than coal and oil — fuel is considered the principal supply of power insecurity and has grow to be the first goal of the transition agenda.
Demand for it can’t be eradicated rapidly as a result of the infrastructure of power consumption from residence heating methods to industrial vegetation is entrenched. Even so, whole consumption has fallen. In the second quarter of this yr, Europe used 16 per cent much less pure fuel than a yr earlier. That stage is about to fall additional.
In the brief time period, new LNG services being constructed within the US and the Middle East will present extra provides to fill the rapid hole. But, in a shrinking market, Russia will battle to regain its dominant function as a provider even when the warfare in Ukraine ends quickly.
More tales from this report
A brand new, decrease carbon power combine is due to this fact rising in Europe — however at some value to the broader ambitions of the COP26 agenda. The urgency of the scenario over the previous six months has led to a reassertion of nationwide management of power coverage. Governments liable to be judged by their means to maintain the lights on and to guard customers from hovering costs can not afford to attend for consensus throughout 28 nations, not to mention for a worldwide deal.
Proposals from the European Commission for worth caps and customary buying preparations have been hindered by the necessity to transfer on the tempo of essentially the most reluctant member state. In Germany, particularly, nationwide help packages — securing provides and defending customers with worth subsidies — have transcended efforts to search out pan-European options.
The focus of nationwide insurance policies is inner and the associated fee is excessive. Thanks to Covid and power help packages, authorities debt throughout the EU has risen to over 90 per cent of GDP — and will likely be pushed larger by new packages being put in place. Rising bond charges are including to the prices of servicing the borrowing. In a local weather characterised by inflation and austerity, there’s little prospect of any critical response to the cries from rising economies for local weather justice. Nor, too, can we anticipate a rush to supply the brand new funding for power transition on the planet’s poorer nations that will likely be demanded at COP27 in Sharm el-Sheikh.
The temper in Europe is one in every of protectionism — a dedication to guard Europe’s industrial base from the dangers of excessive power prices and provide interruptions. The levers of this protectionism vary from the Carbon Border Adjustment Mechanism, which is able to put tariffs on imports from nations not assembly European local weather requirements, to maximising regionally produced power provides — which, within the brief time period, will embrace fossil fuels.
A interval of low financial development or, in some nations, recession, can solely reinforce the development. This method may set off an open commerce battle with nations similar to India, which resents Europe’s unwillingness to just accept that rising economies nonetheless produce far fewer emissions per capita than the EU. And such conflicts, sadly, will hinder makes an attempt to achieve new and tighter agreements on the local weather agenda.
The excellent news is that Europe will most likely decrease its emissions extra quickly than may have been anticipated a yr in the past. The dangerous information is that, for the second, little progress is probably going on international offers.
Climate coverage stays an essential focus for leaders throughout the continent. Optimists can solely hope that, as soon as financial stability is restored, they are going to realise that delivering a clear Europe in a grimy world achieves nothing.
The writer is visiting professor and former chair of the Kings Policy Institute at King’s College London
Climate Capital
Where local weather change meets enterprise, markets and politics. Explore the FT’s protection right here.
Are you interested in the FT’s environmental sustainability commitments? Find out extra about our science-based targets right here
