TCS Daily

Europe's Rising Emissions

By Carlo Stagnaro - June 29, 2005 12:00 AM

How is Europe responding to the challenge of global warming? With more global warming. That may seem incongruous given all of the EU's Kyoto hype, but take a look at the latest report from the European Environmental Agency on EU greenhouse gas emissions.

In it we learn that between 2002 and 2003 emissions have increased by 53 million tons, i.e. 1.3 percent, in the EU-15 after having fallen for two years in a row. Basically all of the reductions achieved in 2001 and 2002 have been lost. According to the EEA, "The emission increase in 2003 was mainly caused by an increase in power production using coal. The colder weather in the first quarter in several EU countries, also contributed to an increased use of fossil fuels to heat homes and offices." This tells us two important things: on the one hand, despite their environmental rhetoric, European countries aren't able to promote non-carbon based fuels; on the other hand, a colder winter (are we talking about global warming?) drove emissions up, whereas in 2002 a warm summer resulted in less emissions.

It seems that there is a sort of built-in mechanism that pushes emissions up in cold periods and pulls them down in warm periods. Of course that is obvious as you look at the market itself: people seek a comfortable environment, purely and simply, which may mean they have to heat their houses. Now, a mandatory reduction in European emissions means that (assuming humans have no control over climate, which is a very easy assumption) we have three possible scenarios:

    1)     As global warming believers claim, we're going to face warmer average temperatures. 
            There is evidence that, if that is the case, most of the warming will occur in relatively 
            colder places and periods. Then, people will consume less energy for heating 
            and emissions will decline naturally. It follows that we don't need any specific 
            climate policy.

    2)     Contrary to what global warming believers claim, temperatures are going to decline 
            on average. Then people will consume more energy for heating and emissions 
            will increase. However, if that occurs the entire case for global warming is undermined, 
            since there would be no warming at all to address.

    3)     Temperatures will continue to fluctuate but their average will not significantly 
            change in the short or medium run. Accordingly emissions will fluctuate, too, but 
            again there would be no special reason to cut emissions.

Looking at Europe in general it seems clear that it will be almost impossible to meet Kyoto targets in 2008-2012. Figures from the EEA show where EU is and where it would like to be five years from now if it followed the path to Kyoto.

An honest observer may draw two conclusions:

The short-run trend is towards more, not less, emissions. Emissions declined for decades until the early 1990s, then fluctuated around a mean value until 1998 (ironically, the year after the climate treaty was conjured up), and then started to rise again. This tells us that, regardless of their intentions, EU climate policies have been a failure. This year a new "cap & trade" mechanism has entered into force - yet it is not likely to result in significant reductions, because the price of quotas is very high and is converging towards the cost of sanctions. The trend is even clearer if you look at just carbon dioxide, which according to the EEA accounts for some 80 percent of all GHGs emissions in the EU.

Ironically the report on European emissions was released just a few days after British Prime Minister Tony Blair met U.S. President George Bush and asked the United States to ratify the climate treaty. If you can't keep a promise, you have no credibility in asking others to do the same. Most important, Europeans should be happy that the EU is not pursuing Kyoto with the necessary strength. If it did so, their only hope would be global warming, so that warmer temperatures makes it less necessary to burn fossil fuels to heat their houses.


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