THE EU'S RESPONSE TO GLOBAL WARMING IS A COSTLY MISTAKE
July 6, 2010
New research shows that the European Union's (EU) "20/20/20" policy, which aims to cut greenhouse gas emissions to 20 percent below 1990 levels by 2020 (and ensure 20 percent renewable energy), will cost hundreds of billions of dollars but yield only tiny benefits. The United Kingdom alone will be hit to the tune of an annual $44 billion, says Bjorn Lomborg, author of "Cool It: The Skeptical Environmentalist's Guide to Global Warming."
As a cost-benefit analysis by the climate-change economist Richard Tol shows, any single regional carbon-reduction scheme will have a very small effect on emissions and temperature rises across the globe. That's not an argument against ever implementing one: but it means that it's crucial that the numbers stack up, explains Lomborg.
- The European Union recently stated that it would cost $59.3 billion a year to meet its emissions target; that figure is implausibly optimistic.
- Averaging out the best-regarded economic models shows that, even if politicians got their policies exactly right, the cost would come to at least $137 billion a year.
And Europe has not got it exactly right, says Lomborg:
- Instead, it has made things worse, by introducing additional red tape, complication and constraints -- in particular, that 20 percent renewable-energy target.
- This is expensive because popular "green" energy sources such as wind and solar power cost more than replacing coal with gas.
- As a result, the real cost of EU policy is likely to be as much as $258.5 billion.
In his study for the Copenhagen Consensus Centre, Tol assessed the net economic benefits of this policy. Using the conventional estimate that one ton of carbon dioxide is likely to cause about $7 of damage, he found that the total benefit of the EU policy was just $8.64 billion. In other words, every euro spent is likely to generate just three cents' worth of benefits. According to Lomborg, his own research shows that by the end of this century, the EU's approach will reduce temperature rises by approximately 0.05 degrees Celsius -- almost too small to measure.
Expensive, poorly conceived carbon emission plans such as the European Union's will cause major economic damage and political strife, while doing little to slow global warming. Europe must change course, says Lomborg.
Source: Bjorn Lomborg, "The EU's response to global warming is a costly mistake," Telegraph (UK), July 2, 2010.
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