Without
early investment signals, Europe faces a ‘lost decade’ of climate and energy
policy inaction between 2020-2030, culminating in a mind-bogglingly expensive
sprint to decarbonise in the last two decades before 2050, according to a new
report by the European association of electricity producers, Eurelectric.
The Eurelectric
report, titled ‘Power Choices Reloaded’, models three decarbonisation scenarios
– a reference scenario of current policies, a cost-optimal ‘Power Choices
Reloaded’ scenario, and a ‘lost decade scenario’.
“We estimate that the full ‘lost decade’ perspective would
cost two percentage points of GDP per annum throughout the time period until
2050 above the costs of optimal decarbonisation,” the report’s author, Pantelis
Capros, told EurActiv.
“It is barely realistic to decarbonise so quickly after
2030,” he added.
The ‘lost decade’ scenario involves delays to the roll-out of
electric vehicle infrastructure, energy efficiency in buildings, grids,
renewables and limited access to investment funds.
Europe’s climate
policy is currently in crisis, with its centrepieceEmissions Trading
System stagnant, UN climate talks talks stalled,clean technology trade
warsthreatening, and a‘re-industrialisation’ agendagaining ground
that aims to knock climate change off the EU’s policy perch.
“The reality today is a mixture of economic crisis, morosity
in financial resources and concern about impacts on [energy] prices,” Capros
said. “The consensus is negative but one must consider the new opportunities
for activity, growth, jobs, substituting for imported fossil fuels, and a way
out of the current crisis.”
Yet as things stand, the renewable energy industry and
infrastructure planners alike now routinely complain about a lack of clear
signals feeding through to investor uncertainty, and funding bottlenecks.
At the same time,
carbon dioxide emissions are rising, hitting a new high of over 35 billion
tonnes last year, and stumbling over the400 parts per million tripwireat
the Manu Loa observatory in Hawaii on 10 May.
As such, the new study by Europe’s electricity association
will stir unease in Brussels about the long-term direction – and cost – of its
emissions reduction strategy.
“Carbon-neutrality by 2050 requires a radical transition
through continuous investment by the power sector into new generation assets,
new storage, smart technologies and new grids,” the report says. “But the case
for investment and research in the power sector depends crucially on the
strength of the carbon signal that European policy is giving to the economy as
a whole.”