In Germany, space and water heating in buildings accounts for almost a third of total final energy consumption. Because over 90% of its 22m buildings are fuelled by oil and gas, that makes the sector emissions very intensive. The government’s ambition is to have a "nearly climate neutral building stock" by 2050. But although those emissions have fallen by 44% since 1990, progress has largely stagnated since 2011. Freja Eriksen at Clean Energy … [Read more...]
Carbon Tax: “laboratory” Europe shows U.S. it has no effect on aggregate jobs, growth
The issue of carbon taxes is under debate in the U.S. Congress. The fear is a new tax will destroy jobs and hinder growth. Will it? Meredith Fowlie at the Energy Institute at Haas says the U.S. should see Europe as a very useful carbon tax laboratory experiment: half the countries have some sort of tax, the other half don’t. She’s pulled together evidence to answer the simple question: does a carbon tax affect aggregate employment and growth. Her … [Read more...]
Electric utilities: pathway to a costs and pricing revolution
The 20th century method of setting electric utility rates are being made redundant by the new technologies of the modern age. It’s currently a three-step process - determining the revenue requirement, deciding how to divide costs among ratepayers, then designing the rates themselves. It uses traditional categories: generation, transmission and distribution; cost classifications (energy-related, demand-related, customer-related); customer/rate … [Read more...]
The Six Energy Paradoxes that slow the sector’s progress
Gerard Reid at Alexa Capital takes a high level look at what he sees as six systemic problems faced throughout the energy sector. They can be found at every level, across all technologies and markets. He calls them the Six Energy Paradoxes. All of them are acting as a serious drag on progress, Transition or not. Take the Market Efficiency Paradox. Utilities should adjust their prices to meet changes in energy supply and demand. Higher supply or … [Read more...]
U.S. Presidential Election: for the first time, climate is a top priority
Another climate action “first” this year will be the 2020 U.S. Presidential election. Never before has climate change featured as a top priority for American politicians and voters, says Arnault Barichella writing for the IFRI Centre for Energy & Climate. It’s thanks to the growing evidence of human-caused global warming in collision with a current President who calls it all a hoax and has been rolling back the regulations of his predecessor. … [Read more...]
Can emissions trading work without Article 6 of the Paris Agreement?
Article 6 of the Paris Agreement creates the framework for mechanisms that will allow nations and sub-national actors to trade emissions. Executed correctly, it must raise ambitions and reduce total emissions. It must also ensure there is transparent and accurate accounting for emissions, with no double-counting. It made little progress at December’s COP25. This was partly due to some countries “insisting on accounting loopholes”, writes Isabella … [Read more...]
Is Germany’s emissions drop thanks to the EU ETS, not Berlin?
The good news is that 2019 saw a big decrease in Germany’s emissions, meaning a 35% reduction since 1990. It was only 30.8% by 2018, so the acceleration was thanks to a sharp drop in coal use. But emissions rose in transport and buildings, making the 2020 target of 40% more daunting. Add to that the slump in wind installations (permit problems) and the planned nuclear exit by 2022 (will more fossil fuels be needed to fill that big gap?), … [Read more...]
CCUS, nuclear, industrial heat, hydrogen, smart grids: “large unit” innovation needs more support
How do we accelerate innovation across all technologies? Simon Bennett at the IEA breaks down the task into “small unit” and “large unit” challenges. The first is easier and moves faster. Thanks to their small size and unit cost, heat pumps, EVs and solar panels benefit from mass production, mass deployment (100,000 to 100m units/year globally) and large customer markets with fierce competition. They can also easily leverage other fast-evolving … [Read more...]
Don’t wait for international agreements. Sector-wide action can accelerate the Transition
December’s COP25 in Madrid showed how difficult it is proving to get agreement between nations on how to ramp up the deep decarbonisation the world needs. David Victor at the University of California, San Diego, writing for Rocky Mountain Institute, accepts that international consensus is never going to be easy. Instead, he recommends that individual sectors take control of their destiny. His co-authored report “Accelerating The Low Carbon … [Read more...]
Peak Energy by 2030: Efficiency gains will make the Transition affordable
We can’t afford the energy transition? Next time you hear that from someone, perhaps you can show them this. Sverre Alvik at DNV GL explains that, according to their latest Energy Transition Outlook, although annual global energy expenditure will have to increase from $4.6tn in 2017 to $5.5tn in 2050, its share of growing world GDP will almost halve from 3.6% to 1.9%. That’s because continuing energy efficiency gains are making sure that total … [Read more...]
Most “sector leader” German DAX firms will miss the Paris target
By how much would the earth warm up by 2050 if every company were to operate as emissions-intensively as yours does today? It’s a fascinating way to measure whether you are doing enough, or whether you are leaving the hard work to someone else. The fintech "right. based on science" has created a model that tries to answer these questions. They have used it on the 30 companies listed on the German DAX index by calculating the future emissions of … [Read more...]
How will we pay for the European Green Deal?
The European Green Deal (EGD), announced on December 11th, sets a 2050 target to make the continent become the first to achieve carbon neutrality. It’s a long-term plan – not yet law – to re-design all EU instruments and includes 50 specific policy initiatives. But nobody yet knows how much money is needed, who will pay (or lend) it, and who will get it. So tense discussions will now begin between the likely payers (such as Germany, the … [Read more...]
Decarbonising light duty vehicles globally: consumer choice, technology, policy pathways
The MIT Energy Initiative (MITIE) has completed a 3-year study of “Mobility of the Future” to plot a decarbonised pathway for light duty vehicles (i.e. cars) globally. Wide in scope and detail, it covers government policies, consumer choices and technologies, combining their multiple and complex impacts to make their assessments. Kathryn Luu at MITIE reviews the final 220-page report. For consumers, cost, convenience, and — increasingly — carbon … [Read more...]
The coalition for an EU-ETS carbon price floor is reaching critical mass
The EU Emission Trading Scheme (EU-ETS) is bound to play a major role for ratcheting up climate policies in both the EU and its member states. After a prolonged period of low prices that questioned the ETS’s viability, the recent price run upwards in the wake of a major reform has sparked confidence that from now on “everything goes in the right direction”. But this confidence is misguided and ignores major risks for the scheme, argue Michael … [Read more...]
COP25: the “easy wins” are coming to an end. What now?
Lola Vallejo at IDDRI says the impressive wins we’ve seen so far in clean electrification are merely the easy “low hanging fruit”. Other big sectors like transport, buildings and industry have barely started to transition. As COP 25 convenes in Madrid this week, the world will want to know what promises will be made - via each country’s self-imposed enhanced Nationally Determined Contributions (NDCs) - to meet the Paris goals, because the current … [Read more...]
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