Addressing climate change, and thus reducing drastically greenhouse gas emissions, will be one of the greatest challenges of the 21st century. The European Union is leading the way by committing to cut greenhouse gas emissions by 40% by 2030 (from 1990 levels). To reach this community-wide goal, each member state has been assigned a greenhouse gas emissions reduction mandatory target.
The problem however is that two other national mandatory sub-targets were set as well: a renewable energy production target and a renewable fuel use in transport target. For the UK this means that 15% of total British energy consumption and 10% of British transport energy consumption must come from renewable technologies by 2020.
Despite their good intentions, these sub-targets are counterproductive. They may lead to a costly overreliance on renewable energy at the expense of other more cost-effective alternatives. Indeed, the vast bulk of environmental levies, which are expected to rise from £6bn this year to £13.6bn by 2020, is used to subsidise the development of renewable energy. No other greenhouse gas emissions reduction policy can rely on such wholehearted support. This situation is regrettable as those underrated policies, some of which are listed below, could make a difference.
The above examples demonstrate that increasing renewable energy production is only one strategy, among many others, to drastically reduce greenhouse gas emissions. Renewable energy will certainly play an important role in decarbonising our economies, but the precise extent of that role should be defined by cost-benefit analysis.
National governments should be free to define the policy mix which enables them to reduce their greenhouse gas emissions in the most cost-effective way. If the European Union really wants to be serious about climate change it should scrap any provision, such as those sub-targets, that increase the burden on taxpayers’ shoulders without yielding any significant environmental benefits.