If it’s cheap and plentiful—even low in carbon-dioxide emissions—much of the continent wants no part of it.
As austerity bites into European living standards, sparking revolt at the polls, “growth” has become the politician’s mantra. But to be competitive, European countries require a secure, plentiful and competitively priced energy supply. Unless Europe radically rethinks its obsession with carbon-dioxide emissions and the anti-fossil fuel energy policies that flow from it, growth is likely to remain elusive.
European Union law mandates that the 27 member countries on average cut their C02 emissions 20% by 2020, compared to 1990 levels. The goal after that is to cut emissions by between 80% and 95% by 2050. In May 2010, a study by the European Commission’s energy department estimated the 20% cut would cost 48 billion euros ($66.3 billion) a year. The Commission’s draft Energy Roadmap for 2050 is frank: “There is a trade-off between climate change policies and competitiveness.”
There is indeed. The consultancy Verso Economics has calculated the opportunity cost of the United Kingdom’s subsidy system for renewables to be 10,000 jobs between 2009 and 2010 alone. A report by the Energy Intensive Users Group (which represents energy-intensive British businesses) and the Trades Union Congress cited steel making, ceramics, paper, cement and lime manufacture, aluminum and basic inorganic chemicals as industries facing up to 141% in additional energy costs by 2020 as a result of C02 emissions-reduction schemes. EIUG Director Jeremy Nicholson notes that “the current policies do seem to be angled towards creating a market for overseas competitors.”
Emissions-free solar and wind energy, on which the U.K. plans increasingly to rely, are expensive. The government estimates that a planned offshore wind farm project ringing the coast will cost £140 billion, or £5,600 ($8,972) for every household in the country. Conventional energy could provide the same amount of energy at 5% of the cost.
The U.K.’s Department of Energy and Climate Change commissioned a report (led by Prof. John Hills of the London School of Economics) to examine the issue of “fuel poverty,” defined as when fuel bills take up more than 10% of household income. It found four million of England’s 21.5 million households fall in this category and the number could rise to 9.2 million by 2016, equivalent to 43% of all homes in England. One of the key factors are green taxes and levies expected to add up to £200 ($306) to bills by 2020.