Memorandum submitted by Our World Foundation
(U20)
A GLOBAL CLIMATE CHANGE/RENEWABLE ENERGY
PLAN
EXECUTIVE SUMMARY
The objective of a Global Climate Change/Renewable
Energy Plan is the transfer to a renewable energy sourced low
carbon society to mitigate climate change to prevent catastrophic
and perhaps irreversible impacts to our world.
The rapid transfer to a renewable energy low
carbon economy can be achieved by costing the renewable energy
plant required to provide all of a nation's energy and then putting
in place finance and policies to achieve this by 2050-60 supported
by energy efficiency measures.
The overarching statement of energy policy should
centre on "the pursuit of secure and competitively priced
means of meeting our energy needs, subject to the achievement
of an environmentally sustainable energy system". (PIU02)
A Climate Change/Renewable Energy Plan should
be implemented by national governments incorporating the following
measures:
1. A Climate Change/Renewable Energy Budget
". . . Increasing the share of renewable
energy sources in the energy mix of OECD countries will require
continuous and large government support." (WEO2001/IEA)
Developed nations' governments should establish
a Climate Change/Renewable Energy Budget. The objective is to
effect the transfer from a fossil fuel sourced society to a renewable
energy led world by the provision of financing for renewable energy
capital plant towards a target of 80% of a nation's energy to
be derived from renewable sources by 2050-60.
The Climate Change/Renewable Energy Budget should
be determined by assessing the estimated cost of the renewable
energy plant required to supply all of a developed nation's energy
supply—this cost should then be spread over 50 years so
that the annual Climate Change/Renewable Energy Budget comprises
2% of the total cost after deduction therefrom of the nation's
existing energy investment, after including fossil fuel externalities
and subsidies, and after deduction of the cost to be applied anyway
to the replacement of existing plant. Over the next 50 years all
existing plant will be replaced at least once in the UK. (PIU02)
The Climate Change/Renewable Energy Budget should
be applied to the funding or co-financing with the private sector
of sizeable renewable energy plant.
Joint ventures with the private sector should
include an option in favour of the private sector to acquire the
government's 50% share within a specified period. This would protect
the market interests of the private sector whilst enabling governments
to recoup their finance and long term create a rolling fund.
The Climate Change/Renewable Energy Budget would
be advantageous to industry as the future moves away from fossil
fuels towards cleaner, zero emission technologies as:
— A £2,000 billion global electricity
generation market for new plant is forecast over the next 20 years.
(Foresight/DTI/Near To Zero Emissions)
— The UK has an approx 10% share of
the present world market for power engineering and will need to
develop advanced systems to maintain and grow this share. (Foresight/DTI/Near
To Zero Emissions)
— "The UK would benefit from being
ahead of the game in moving to clean and low carbon technologies".
(Prime Minister Tony Blair/PIU02)
— With security of supply concerns
arising throughout the world governments and energy companies
will benefit from embracing the new technologies before they are
expanded and exploited abroad.
The Climate Change/Renewable Energy Budget could
be raised through various sources:
— through developed countries' Environment
Budget;
— through a "climate" tax
on fossil fuel sourced electricity and energy;
— through the transfer of fossil fuel
and nuclear subsidies to the Climate Change/Renewable Energy Budget;
and
— through redirecting public funds
to meet this global threat.
2. Governments to Provide the Necessary Regulatory
Framework Within Which Renewable Energy Technologies can Expand
and Flourish and to Rapidly Remove Barriers that Obstruct Such
Expansion
"Governments will shape the energy supply
landscape, playing a key role in . . . creating appropriate regulatory
and market frameworks and in encouraging technology development
and deployment." (WEO2001/IEA)
"Government should create powerful incentives
to create low carbon options that would put the UK in a favourable
position to move to a low carbon future". (PIU02)
For example if the current barriers to renewable
energy in the UK are not rapidly removed "it will not be
possible to make enough progress towards even the existing renewables
target". (PIU02)
Additionally:
— Over the next 20 years almost half
the power stations in England and Wales will need to replaced
(Welsh Assembly Report 2002) and all plant replaced at least once
by 2050.
Renewable energy plant should replace retired
plant supported by the necessary frame work.
3. Governments to Impose a Climate Tax which
Funds should be Applied to the Climate Change/Renewable Energy
Budget
A Climate Tax should be imposed on fossil fuel
sourced electricity supplies in developed nations and should long
term be considered on all fossil fuel sourced energy supplies
to "dampen" demand (WEO2001/IEA) and to encourage energy
conservation . A "climate tax" rather than "carbon"
may be a preferable name for the general consumer's benefit particularly
if its imposition were supporteded by a high profile Climate Change
campaign making the consumer aware of the need for such a tax
as per the German Ecotax below.
At present transport fuel in the UK receives
such a "carbon" tax in the form of the fuel tax. This
generates over £24 billion pa to UK government revenues albeit
this is not applied to solve the environmental problem transport
emissions contribute to. Similarly energy and electricity, which
combined account for greater CO2 emissions than transport
should be so taxed and the revenues applied to The Climate Change/Renewable
Energy Budget.
As the Royal Commission for Environmental Pollution
reported in 2000—
". . . we favour a general carbon tax .
. . It should be applied upstream, when fossil fuels are first
purchased. This would give producers, distributors and consumers
of energy an incentive to switch to sources which produced fewer
emissions. It would also lead to higher energy prices downstream,
stimulating efficiency improvements and reducing consumption."
"We should prepare for the greater use
of economic instruments that enable the wider environmental costs
of carbon to be incorporated into market prices." (PIU02)
Additionally energy prices in the UK seem to
be at or even slightly below the OECD average. (PIU02)
The German Ecotax
In Germany an "Ecotax" was imposed
on electricity justified by the need to create funds to provide
pensioners with an adequate pension. A German utilities spokesman
affirmed this was not largely opposed by the national public for
the need to help pensioners was considered an overriding justification.
The German Ecotax generates over £6 billion pa.
The UK electricity market is worth £14.58
billion (DTI 2030)—if one applied a tax of 10% increasing
it to 20% this would generate approx £1.5 billion/£3
billion pa towards The Climate Change/Renewable Energy Budget.
To overcome the problem of fuel poverty utility
companies could have a privileged non-climate taxed supply for
these consumers. Alternatively one could examine the German model.
4. Governments to Phase Out Subsidies to Fossil
Fuels and Nuclear Power and to Reapply These Funds to the Climate
Change/Renewable Energy Budget
"A number of studies indicate that global
emisssions reductions of 4-18% together with increases in real
incomes, are possible from phasing out fossil fuel subsidies'.
(IPCC)
The UN estimates that more than $145 billion
pa is spent on fossil fuel incentives.
In the UK British Nuclear Fuels, wholly owned
by government, has had its capital plant costs supported by public
funds—£85 billion has in recent years been required
to cover nuclear waste costs alone, largely government's responsibility.
(House of Commons)
5. Governments to Work With the Existing Fossil
Fuel and Other Energy Companies to Ensure Existing Companies Capitalise
on the Expansion of Renewable Energy with the Support of the Climate
Change/Renewable Energy Budget to Convert Existing Industries
and Jobs
6. Governments to
Work with the Insurance and Investment Sectors to Generate Long
Term Investments in Renewable Energy
It is important that governments "provide
transparent consistent and long lasting signals to all participants
in energy markets. . . without long term signals these investments
will be not be influenced in the directions desired and changes
that may need to happen over many years will not come about".
(PIU02)
By governments establishing a credible transitional
Climate Change/Renewable Energy Budget coupled with the removal
of barriers and necessary policy actions a clear message will
be communicated to investment managers as regards the new growth
industry for investors.
Thereafter governments should work with the
insurance sector and investment funds to procure investment in
renewable energy plant, which investments would be secured by
governments legislating that increasing percentages of renewable
energy should be obtained by utility companies.
Insurance companies have a vested interest in
mitigating climate change as insured losses increased 13.9 fold
between the 1960s and 1993-2002 (Munich Re) partly due to population
growth, increased wealth, and urbanisation in vulnerable areas,
and partly due to climate change.
Insurance companies are essentially asset management
or investment companies with annual premiums of $2.2 trillion—with
vast funds the power exists to command and control the stock markets.
If insurance companies were able to invest in
companies building large renewable energy plants it would have
a very significant impact on the necessary transfer to a renewable
energy sourced society, which would ultimately reduce future climate
change impacts and consequent losses.
"Investments were part of the problem and
hence could be part of the solution. All investment managers should
modify their investment policies to take account of the potential
direct and indirect effects of global warming." (Chartered
Insurance Institute UK)
The insurance sector is probably the only sector
that has the collective might to do something about climate change
due to its omnipresence and size but at the present time it chooses
to be silent . . . Pressure from a more informed public could
turn the tide. (Chartered Insurance Institute UK)
7. Governments to Produce Overall Decadal
Energy Targets to 2050-60 with 80% of Energy to come from Renewable
Sources by Then
It is our energy from fossil fuels that has
caused approx 75% of anthropogenic global warming in the last
20 years. (IPCC) Electricity generation uses approx 16% of total
energy whilst carbon dioxide emissions from electricity contribute
approx 28% to total carbon dioxide emissions in the UK. (DTI)
Hence a 10% or 20% electricity target constitutes
only a 2.8% or 5.6% CO2 emission reduction target in
the UK.
It is therefore preferable to set overall energy
targets alongside CO2 reduction targets as well as
electricity targets with utility/industry companies legally obliged
to procure these percentage of electricity/energy from renewable
sources or be subject to a penalty once the framework and funds
exist to ensure delivery of the targets. In other countries outside
of the UK where land use change contributes approx 25% to total
emissions—primarily from deforestation—there should
be similar land use targets.
Targets should be within a clear schedule of
decadal targets to 2050-60 by which time 80% of energy should
be generated by renewable energy sources to prevent potentially
catastrophic climate change impacts.
Governments in the developed world should similarly
set energy reduction targets.
NB It is not enough to speak only in terms
of CO2 emission reduction targets for some developed
countries, whose populations are little expanding, may be able
to reduce some emissions through energy saving measures and a
partial expansion of renewables. But this is not enough for if
the developed world can not set the lead in a clear attempt to
transfer significantly from fossil fuels to renewable energy sourced
supplies, the developing world may not do so and may rather expand
using fossil fuels.
8. Governments to Support the Transfer to
Alternative Transport Fuels
Transport emissions are one of the fastest growth
areas in carbon dioxide emissions. They are projected to increase
by 75% on 1997s CO2 levels by 2020. (UNEP Special Report(SR))
Aviation emissions are projected to grow even
faster at 3% pa. (UNEP SR)
In the developing world transportation energy
use is projected to grow significantly with per capita motorisation
expected to more than double between 1999 and 2020. (IEO/EIA)
The Climate Change Renewable Energy Plan should
set clear targets for fuel efficiency and development of low and
zero carbon fuelling options: (PIU02)
Fuel cells and hydrogen as an energy source
must be supported as the transportation fuel of the future with
clear targets set by national governments and market frameworks
within which they may expand. The development of biofuels should
also be utilised in the interim.
Reduction in aviation demand should be brought
about by an aviation tax (PIU02) which funds should be applied
to The Climate Change/Renewable Energy Budget.
9. Governments to Impose Mandatory Renewable
Energy and Energy Saving Measures Into Building Regulations
Approx 25% of the UK's CO2 emissions
originate from energy used to heat/light homes and run household
appliances. (Energy Savings Trust (EST))
The Climate Change/Renewable Energy Plan should
encourage governments to introduce strict mandatory Building Regulations
in all member countries, which ensure that all new build or renovated
homes satisfy stringent energy saving measures.
Governments should also aim to develop domestic
energy generators at cost effective prices—ie domestic wind
turbines which if they could be produced in sufficient quantity
could become mandatory additions to new build homes as part of
Building Regulations.
Similarly once small combined heat and power
plants are on the market (micro CHP) these should also become
mandatory energy appliances in new build homes.
10. Governments to Legislate for Energy Efficient
Technologies Including Lightbulbs
Governments should legislate to phase out traditional
appliances in place of energy efficient one or alternatively heavily
tax traditional appliances to make them more expensive. The tax
could be applied to further reducing the cost of energy saving
goods and long term increased demand would also reduce costs.
This should be similarly so with energy efficient light bulbs
which use only approx 25% of the energy of traditional light bulbs
and last up to 12 times longer. (EST)
Additionally and prior to such legislation governments
should undertake a national advertising campaign delineating the
emission and cost savings benefits of energy saving goods coupled
with low cost supplies to attract the consumer.
11. Governments to Secure the Support of Other
Countries Towards a Global Climate Change/Renewable Energy Plan
Global warming and climate change can only be
solved on a global level.
Governments that are leaders on the international
stage should particularly utilise this position to create necessary
change.
Governments should seek to secure the support
of other countries—both developed and developing nations—to
A Global Climate Change/Renewable Energy Plan.
The concern would also be to ensure the developing
world expands using renewable energy technologies rather than
fossil fuels—with 72% of increased CO2 emissions
projected to come from the developing world to 2020 (IEO/EIA)
this is critical. Developing countries will require foreign investment
to expand their energy infrastructure and industries (WEO2001/IEA).
If the developed world through the Climate Change/Renewable Energy
Plan can gain financial support for these countries in the development
of renewable technologies rather than fossil fuels then the projected
emissions may be contained.
12. Governments to Ratify The Kyoto Protocol
and to Significantly Increase the Emission Reduction Targets as
Renewable Energy Expands
The Climate Change/Renewable Energy Plan should
seek long term to ensure the Kyoto Protocol imposes significant
CO2 emission reduction targets both in the developed
and developing world and make Contraction and Convergence part
of its means of implementing equitable reductions.
However only if renewable energy can be sufficiently
and rapidly expanded and begin to supply large portions of the
world's energy may such governments be then willing to commit
to legally binding significant CO2 reduction targets.
Otherwise the fear of an encroachment on economic growth would
casue such significant commitments to be avoided.
13. Governments to Instigate Debt-For-Climate-Change/Renewable-Energy-Plan
Swaps
Climate change is projected to make large sectors
of the developing world increasingly prone to drought, famine
and extensive flooding, which is and will continue to impact to
an escalating degree on the lives of millions of impoverished
people, who are already struggling to survive. Already 183 million
EXTRA people are already being affected by the increase in disasters
as were affected in the 1960s (OFDA/CRED Data).
The Climate Change/Renewable Energy Plan should
instigate debt-for-Climate Change/Renewable Energy Plan swaps
whereby developing countries' debts are not only cancelled to
the benefit of those developing nations but are also tied in with
an agreement on the part of the developing country to join the
Climate Change/Renewable Energy Plan. (Debt-for-nature swaps proposed
by Tom Lovejoy) This would involve the developing countries making
a commitment to long term transfer to renewable energy sources
with the support of investment from developed countries and for
a proportion of future energy growth to expand using renewable
energy rather than fossil fuels.
14. Governments in the Developing World Should
Not Be Compelled to Generate The Climate Change/Renewable Energy
Budget But May Consider Applying Subsidies to the Fossil Fuel
or Nuclear Industry to a Climate Change/Renewable Energy Budget
Long-term such nations should also set renewable
energy targets to effect the transfer from fossil fuels and nuclear
energy to renewable energy technologies.
15. Each Country in the Developed Which is
Part of the Climate Change/ Renewable Energy Plan Should be Matched
with a Country in the Developing World in a Pairing Scheme Whereby
Both Countries Benefit
There is a need for greater international unity
to combat climate change.
Each developed nation should be matched with
at least one (or more) developing country to establish a mutual
responsibility towards one other (or more) nation whereby the
two countries assist each other towards a renewable energy led
future.
The partnerships should result in:
— the provision of technological information
and personnel;
— the provision of investment information
and personnel to faciliate investment; and
— matching of NGO's in both countries
to raise awareness amongst the general public about climate change
towards the expansion of renewable technologies and the conversion
of the public and business in both countries to green electricity
and energy supplies.
16. Governments to Unify in a Global Population
Stabilisation Plan
A key requirement of the Climate Change/Renewable
Energy Plan in seeking to stabilise emissions is to stabilise
population growth—Even our current population is increasing
its energy use by approx 2% pa and hence increased population
growth will only exacerbate this.
Since 1960 world population has increased by
one billion every 13-14 years and is projected to rise from 6.1
billion to 9.3 billion by 2050 (UN)—an increase of approximately
50% in 50 years.
The increase in population will be largely due
to population growth in the developing world which is projected
to rise from 4.9 billion in 2000 to 8.2 billion in 2050 based
on fertility continuing to decline however if this did not occur
the popluation of the less developed regions would reach 11.9
billion. (UN)
With high fertility and low mortality however,
the worst case projection is that world population would be 13.3
billion people by 2050 and 22.7 billion people by 2100. (IIASA)
17. Governments to Unify in a Global Anti-Deforestation
Programme
Land use change especially deforestation accounts
for 25% of the carbon dioxide (CO2) emissions causing
global warming. (IPCC)
A global movement should be initiated by world
governments to stop the mass deforestation of our world—The
national restriction of deforestation in countries where deforestation
predominates could also be incorporated as a necessary criteria
in debt-for-Climate Change/Renewable Energy Plan swaps as well
as a necessary restriction and criteria for countries seeking
foreign investment. At the same time tree planting programmes
should be instigated at school level and beyond internationally.
(Gore)
18. Governments with Business and NGO's to
Raise Awareness Amongst the General Public/World Community with
Regard to the Severity of Climate Change, Its Cause, Impacts and
Solutions Under Art 6 UNFCCC
Since a global change to renewable energy will
require the support of the mass public, their awareness of the
severity of the crisis, its causes and solutions is critical.
This has to be conveyed in simply understood language.
As one of the biggest global industries in the
world with annual turnover of $1 trillion + pa, the energy industry
is ultimately dependent on its market—The choice and voice
of the consumer can affect its profits and therefore affect its
decisions.
"Oil companies have one inalienable imperative—respect
for their customer base"
Rodney Chase, Chairman, World Business Council
For Sustainable Development
If the global public and consumer can be made
aware of the severity of global warming and climate change—they
may then be prompted to transfer to cost effective green electricity
and energy supplies and so stimulate a market led expansion of
these products as well as energy efficiency technologies.
As BP affirmed their expansion of renewable
energy ultimately depends on the "consumers" needs'
and choices.
Such a campaign should be of five years duration
to ensure the message is conveyed and sustained.
SUMMARY
Global carbon dioxide emissions are projected
to rise by 70% from today's levels by 2030 (IEA) which would constitute
nearly a 90% increase on 1990's levels. At the same time with
a continuation of current government policies renewable energy's
contribution to global primary energy is projected to actually
fall from 13.8% today to 12.5% by 2030 (IEA) for although renewable
energy sources are growing, overall energy consumption is increasing
even faster.
Unless stronger government action is taken we
will not mitigate climate change in time—before developing
countries expand their economies increasing their energy consumption
through the use of fossil fuels or before certain feedbacks are
triggered which may escalate global warming.
It is hoped that in 2005 when the UK leads the
EU and G8 a Global Climate Change/ Renewable Energy Plan may be
implemented to begin to effect critical change.
1 October 2004
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