‘Cap and trade’ incentives may slow global warming

ON Jan 22 we learnt that, after heated debate between factions, the European Commission pledged that by 2030 it would cut greenhouse gas emissions by 40% compared with 1990 levels, and produce 27% of its energy from renewable sources by the same date.

EU aims are set higher than those of any other region on the planet.

It is now accepted by 95% of scientific authorities that human activity is the cause of global warming; despite lobbying by vested interests, only 5% of scientists now gainsay the evidence.

For those interested in ensuring a sustainable planet for their grandchildren the commitment to source 27% of energy from renewables is seen as laudable. At present oil remains the first source of energy, providing 32% of the world primary consumption; meanwhile we still source 28% of our energy from burning non-renewable lumps of the planet itself, i.e. coal.

But while wind and wave power may offer sustainable renewable energy, biofuels decidedly do not. Much promoted by well-intentioned environmentalists, including Al Gore, they are now seen to be not only destructive to the ecology and the environment but to be responsible for widespread starvation.

According to Bjorn Lomberg, director of the internationally respected Copenhagen Consensus and a former director of the Environmental Assessment Institute, biofuel policy costs billions of euro annually and causes more than 30m people to go hungry.

Studies show that biofuel crops ‘colonise’ land previously used for food production with the result that ‘new’ land for growing food is taken from other areas. Forests are often the source and are burnt down, thus leading to enormous CO2 discharges. Processing of the biofuel crops engender yet more CO2. Balanced against these factors, the reduction in emissions resulting from the biofuel produced is minimal.

In the EU, farmed biofuels replace 5% of fossil fuels used in transport. This should reduce emissions by 5%. However, a 2013 study by the International Institute for Sustainable Development found that 92% of the CO2 discharges saved from transport-industry biofuel was released into the atmosphere elsewhere by the deforestation, fertilisers and fossil fuels used in the biofuel processing.

Lomberg calculates that EU biofuel production will retard global temperature peaks between now and 2100 by only 58 hours.

The cost of biofuels to the EU is €7bn pa. Each ton of CO2 emission we avoid costs €1,400. On the ‘cap and trade’ system the cost would be less than €6 per ton. In this system, the ‘cap’ sets a limit on the level of emissions allowed to a business concern and imposes fines if it exceeds that allowance. The ‘trade’ permits concerns that reduce their emissions to below the set limits to trade, i.e. sell, the balance they accrue to concerns that need them because they have exceeded their limits. ‘Cap and trade’ thus creates strong financial incentives to invest in cleaner technology.

Environmental watchdogs have estimated that biofuel crops in Europe take up enough land to feed 100m people; in the USA the areas are greater still. Also, the use of food land for biofuels makes food more expensive, meaning the poor can less afford it.

Yet, despite the obvious immorality of using land to grow fuel rather than food in a world where, it is estimated, almost billion people go to bed hungry, biofuel programmes have been heavily subsidised in various countries, including Ireland.

Supported by tax cuts and subsidies, biofuel land generates high profits. Lacking similar subsidies, food land and the food grown on it becomes more expensive, and unaffordable to the poorest. In Ireland, to its credit, a tax relief scheme designed to foster the biofuel sector was ‘switched off’ in May 2012, as reported by John Hearne in this paper.

Lomberg insists that renewable energy has a long way to go in terms of significantly reducing carbon emissions and consequent global warming. Wind turbines, he says, cost 10 times the estimated benefits in terms of emission cuts, and solar panels close to 100 times.

It would seem that until new renewable sources are developed — wave energy may be significant — ‘cap and trade’ conservation incentives may be the best hope of slowing global warming for now.


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