Published on May 1st, 2012 | by Zachary Shahan2
Report: Stronger EU CO2 Target Would Benefit Country that Blocked It, & Cost EU Citizens a Few Cups of Coffee on Average
May 1st, 2012 by Zachary Shahan
Research released by Bloomberg New Energy Finance (BNEF) at the end of last week noted that, on average, stronger EU policies would cost “no more than the equivalent of a few cups of coffee.” Furthermore, some countries, including the country that blocked this stronger target, would actually see a net economic benefit. And this is all just in the short term, of course.
The point of the research was to try to determine exactly how much an increased EU CO2 reduction target of 30% by 2020 (from the current 20% by 2020) would cost — such a target was knocked down by Poland last month.
“Our analysis shows that increasing the 2020 target to 30% from the current 20% would result in an additional cost of €3.5bn on average per year for the EU as a whole, from 2011 to 2020,” Guy Turner, head of carbon and power research at Bloomberg New Energy Finance, said. “This is equivalent to 0.03-0.04% of EU GDP, or €7 to €9 per inhabitant per year. Clearly, a more ambitious policy would not be nearly as painful as some countries fear.”
Notably, some of the less affluent countries (including Poland!) would benefit from such a policy. Here’s more info on that:
Some countries stand to receive an economic benefit from any move to a 30% target, specifically Belgium, Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania, Slovakia and Slovenia. These countries benefit by being able to sell surplus carbon allowances to other EU countries that are short of them. The first group will have those surpluses because its members will be able to make use of more low-cost abatement opportunities, such as energy efficiency improvements, and because of the structure of the proposed targets that take into account differing levels of national income across Europe. Some of these countries would benefit by up to 0.5% of GDP.
So, the country (where I live) that blocked this improved target would have actually benefited economically from the change. Irony?
Think Poland would change course on this with the new information? That would be nice, but I’m skeptical, given that Polish electricity predominantly comes from a rich and powerful coal industry.
For more detail, read the BNEF report [PDF].