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Last October, the European Community decided that it would freeze its
emissions of carbon dioxide at 1990 levels by the year 2000. This sounds
like good news; carbon dioxide is the main gas that contributes to global
warming at present. But it turns out to be not much of a promise. A study
by the European Commission has shown that emissions are likely to stabilise
by 2000 through ‘market forces’ anyway. In other words, if people are given
a choice, they will use more efficient technology and burn less fossil fuel.

But the Community further pledged to cut its carbon dioxide emissions
substantially after 2000. That is an important and difficult promise, for
it demands active measures to cut back on releases of carbon dioxide. But
the pledge may mean less than it appears at first sight.

The Commission has yet to define what is meant by ‘substantially’, both
for the Community overall and for each member state. A decision by European
Commissioners and energy ministers is expected in the autumn. Meanwhile,
a recent study by environmental group shows that so far, the Community is
not really trying to cut back.

To find out what the various pledges will mean, the Commission last
year contracted teams of scientists in each member country to come up with
a least-cost means of meeting both energy needs and various carbon dioxide
limits between 1995 and 2010. The study, called the CRASH programme, was
based on a set of computer models. They combine predicted fuel prices, energy
demand, legal constraints such as those on pollutants from power plants,
predictions of road traffic levels, costs of changes in energy use and supply,
and numerous other factors. The results are detailed pictures of how a country’s
energy sector can be changed, the cost – and how much carbon dioxide will
result. Most importantly, the analysis demands no changes in overall lifestyle.

The CRASH models achieve this by emphasising demand for services rather
than demand for energy. If services can be provided with less energy, the
models can incorporate increased energy efficiency. This approach is known
as ‘end-use analysis’, a relatively recent import from the US. There, despite
official opposition to carbon dioxide-saving measures, energy utilities
have favoured this analysis. By improving the efficiency of the equipment
its consumers use, an electricity company can supply more services without
having to generate more power. This analysis has shown how Sweden could
phase out nuclear power, meet its demand for energy services, and still
freeze its carbon dioxide emissions (‘Energy answers for North and South’,
New ÐÓ°ÉÔ­´´, 16 February).

Nuclear power played a limited part in the CRASH models. The teams assumed
that there would be no new nuclear power plants in Denmark, Germany, Greece,
Italy, Holland and Portugal. They allowed France to meet only 75 per cent
of its electricity demand with nuclear energy – roughly the same proportion
as now – and assigned a maximum for new nuclear capacity of 3900 megawatts
each to Spain and Belgium, and 7175 megawatts to Britain. These are realistic
limits; no more capacity is likely to be on stream by 2010.

The models showed that efficient use of energy would contribute more
to meeting needs and cutting carbon dioxide cheaply than any other option.
The teams also cal-culated the costs and effects of other approaches to
the carbon dioxide problem: changing to sources of renewable energy likely
to become economic in the next 20 years; switching from coal and oil to
natural gas, which produces less carbon dioxide per unit of energy; and
introducing more efficient plants for burning fossil fuels.

The modellers assessed the different courses of action by comparing
the various course of action with two possible baselines. One predicted
the carbon dioxide emissions if present patterns of energy use simplycontinue,
with no increases in efficiency or changes in fuel. Another took account
of increases in ‘end-use’ efficiency that are likely in any case, as people
adopt new equipment simply to save money.

Under such market forces alone, the models predict that carbon dioxide
emissions in the Community as a whole will stabilise at 1990 levels by the
year 2000, then grow by 1.6 per cent by 2010. This increase in emissions
is about 10 per cent less than it would be without people choosing efficient
technology in order to spend less on energy. On the basis of these models,
the Community’s promise to stabilise carbon dioxide emissions by the year
2000 will be fulfilled with little extra effort.

But cutting carbon dioxide emissions further is another matter. As a
test case, the CRASH teams determined which mix of energy sources and efficiency
would provide the required energy services by 2010, with 10 per cent less
carbon dioxide emissions, at the least cost. They modelled this by obtaining
the most energy possible from the cheapest energy source, then doing the
same with the next-cheapest, and so on until needs were met. The modellers
included means of saving energy as well as producing it.

Political will

This section of the analysis required positive action to promote changes
beneficial to the climate. They did not detail what form such government
intervention might take. Taxes on carbon dioxide emissions, subsidised prices
for efficient equipment, and tax breaks for using natural gas or efficient
cars are all being considered by the Commission.

For the Community as a whole, the least costly mix of options to cut
carbon dioxide emissions by 10 per cent included some ‘end-use’ efficiency
beyond improvements driven by the market alone. This produced a reduction
in carbon dioxide emissions of 1 per cent, but it means again that governments
would have to intervene in some way to encourage energy-efficient goods.
More government help was needed for solar water heating, domestic heating
with biomass, photovoltaic electricity, and more efficient cars and washing
machines.

More efficient fuel burning, with combined heat and power plants that
use ‘waste’ heat as well as direct power, lopped off another 2.7 per cent.
The biggest savings, 4.5 per cent, resulted from replacing oil and, especially,
coal with natural gas. Usingrenewable energy cut another 1.5 per cent. Small-scale
water power and wind energy plants, more efficient electric cookers and
burning waste for fuel paid for themselves without government incentives.

Extra nuclear capacity – up to the limits set in the models – accounted
for 0.3 per cent out of the 10 per cent reduction in carbon dioxide emissions.
A deliberate increase in nuclear power beyond current plans was found to
be cost-effective, compared to other options, only in France and Britain.

Transport is the trickiest sector in Europe’s energy plans, largely
because the volume of road transport is expected to increase enormously
after 1993. The single European market will increase emissions, partly through
boosting economic growth, but also through cheaper road haulage caused by
the deregulation of international lorry traffic. Last year, Germany calculated
that it would need to implement every improvement in efficiency likely to
be available in the automotive sector by 2000 just to keep carbon dioxide
emissions from transport constant.

The CRASH team found that to cut carbon dioxide emissions by 10 per
cent by 2010, the oil consumed by all forms of transport must drop by 3
per cent. This implies government policies to promote less road transport,
not just more efficient cars and lorries.

In May, 17 European environmental organisations published the results
of a study called Global Warming and the EC Budget, analysing how the Community
spends its money in the light of its pledges on carbon dioxide. The study
concluded that transport is the area with the sharpest contrast between
what Europe must do to keep its promises on carbon dioxide, and what it
is doing.

Transport generates 22 per cent of the Community carbon dioxide, but
its transport policy takes little account of these emissions. There are
no plans, for instance, to favour rail over road in the period of economic
growth expected in the single market. ‘So far, road has won over rail in
EC transport spending’, says Tony Long of the World Wide Fund for Nature
in Brussels.

Last year the Community adopted a plan to spend 120 million Ecu ( £84
million) on Europe’s transport infrastructure. Most will be spent on roads.
On top of this, the Community earmarked 4.6 billion Ecu of its structural
funds to be spent on transport between 1989 and 1993. Of this, 80 per cent,
3.6 billion Ecu, went to roads; of the rest, which was to be spent on rail
transport, 64 per cent went on one project, a high-speed train in Spain.

The difficulties with transport highlight the problems to be faced in
all areas of policy if the Community’s pledge to cut emissions is to be
successful. As budgets in various sectors are renewed, they will have to
be brought in line with goals for carbon dioxide. Some areas require coordination
across the Community. One member state alone, for example, cannot set minimum
standards for energy efficiency for refrigerators, if by doing so they keep
out models produced by other members. Such policies must be set soon, or
product development and the replacement of equipment will not begin in time
to meet the carbon dioxide deadline, says Ralph Hollo of the Dutch Foundation
for Nature and Environment.

But in the European research programme, being renewed this year, little
change is apparent. Of 5.7 billion Ecu in the 1990-1994 Framework programme,
only 814 million Ecu, 14 per cent, is for energy research. Of that, only
19 per cent, 154 million Ecu over four years, is for non-nuclear energies
and energy efficiency. And between 20 and 30 per cent of that fraction is
for work on ‘clean’ burning of fossil fuels, to cut down on the sulphur
that leads to acid rain, rather than limiting carbon dioxide. Meanwhile
nuclear fusion, which the Commission says will not be a source of energy
for 50 years, if then, receives more than half the proposed budget for energy
research.

When the Commission has tried to act consistently with its own carbon
dioxide policies, it has been frustrated by member states. The SAVE programme,
a framework of directives to promote energy efficiency, was given only 35
million Ecu by energy ministers in May. The first directive, setting efficiency
standards for boilers was blocked by Britain (This Week, 17 August).

Improving the situation will depend both on the strategy for reducing
carbon dioxide that the ministers choose this autumn, and on the extent
to which this decision is reflected in Community and national budgets. But
the choice of a strategy is now stalled, as member governments squabble
about how to slice up the energy pie.

The Community is a microcosm of the problems that face world efforts
to write a climate treaty. Some countries are poor and want to develop more
industry, and take up a greater share of the accepted carbon dioxide emissions;
others are rich, produce more than their share of carbon dioxide, and can
afford to cut back more.

Talks now revolve around finding a formula for allowing some countries
to increase emissions, and others to freeze or cut, while the Community
as a whole meets its objectives. If the economies of Greece, Portugal, Ireland
and Spain grow 2.5 per cent per year faster than their neighbours in order
to catch up with them, by 2000 their carbon dioxide emissions would increase
20 per cent. If, instead, their emissions grow 15 per cent, they can be
balanced by a 5 per cent cut in emissions from the most advanced economies,
Denmark, Germany and Holland.

The question remains how to put pressure on markets and energy industries
in order to achieve these goals. The only firm decision emerging from the
discussions now under way in Brussels is for a tax on fuel, based both on
the energy it produces – a means of promoting energy efficiency – and on
the amount of carbon dioxide it produces – a means of promoting the use
of natural gas. The figure now gaining favour, according to Community officials,
is $10 per barrel of oil, or its equivalent.

But the response to the abrupt jump in the price of oil in the 1970s
showed that such taxes are most effective if they are used specifically
to support R&D for energy efficiency. They have far less impact if they
disappear into the general government kitty, but one member state, Britain,
insists that this is what must happen. It says the EC has no right to levy
taxes, nor to tell member states how to use their tax revenues.

At present, Europe’s prospects for keeping its promise of substantial
cuts in carbon dioxide emissions in the next century look bleak. The scientists
of the CRASH programme may have shown that Europe has the technology to
cut its greenhouse gases, but the Community has a long road to travel before
it develops the political will to do it.