Taking steps to minimise climate change now is cheaper than adapting to later problems created by inaction, argues the climate minister, Martin Lidegaard (Radikale), who wants to start the groundwork for the new climate deal that is expected in 2015.
Climate change is no longer up for discussion according to Lidegaard. A recent report by the Intergovernmental Panel on Climate Change (IPCC) confirmed with 95 percent certainty that climate change is real and is a result of human activity.
“The IPCC report is another political wake-up call,” Lidegaard said. “[Climate change] is one of the greatest challenges that my generation of politicians has ever had to face and unless we do something about it soon, it will become too expensive or even impossible to solve.”
Denmark a green leader
Lidegaard was convinced of the dangers of climate change long before the IPCC’s latest report and last year drafted policy that committed Denmark to cutting CO2 emissions by at least 80 percent by 2050.
But Denmark’s transition to renewable energy will be pointless and costly unless the rest of the world gets onboard and commits to transitioning away from fossil fuels.
Thus far, success on this front has been limited.
Vital new climate deal
While 83 countries signed the Kyoto Protocol, many major emitters either pulled out or managed to avoid binding emissions targets.
There is hope, however, and a new treaty is expected to be signed in 2015 that will come into effect by 2020 and pick up where Kyoto left off.
Lidegaard wants to get as much of the groundwork done as possible before the 2015 conference in Paris, where the treaty is expected to be finalised. He fears last-minute negotiations that could weaken the vital deal.
Roadmap to 2015
By the end of 2013, Lidegaard wants to secure the $100 billion of financing for the Green Climate Fund (GCF) that will help finance green technology for developing countries.
In 2014, Lidegaard wants countries to increase their ambition for reducing carbon emissions before 2020 – a move he says is vital if the world stands a realistic chance of limiting the average global temperature increase to less than two degrees.
“2013 is the year of finance, 2014 the year of ambition, and in 2015 we will sign a whole new agreement,” Lidegaard said.
While the US and China have both recently admitted the need to reduce their carbon emissions, there are reasons to be pessimistic about whether the 2015 deal will result in binding targets for all the world’s major emitters.
For example, energy companies with vast fossil fuel reserves waiting to be extracted and sold and will likely lobby strongly against any climate deal that limits their business.
Lidegaard argues that the only strategy is to prove to energy companies and governments that it is just as stable and energy efficient to transition to renewable energy as it is to keep on burning coal, oil and gas.
“You can never convince an oil company not to extract oil, but we should be able to convince utilities on the demand side that if they want to deliver safe, clean and affordable power and heat to their customers over the next 30 to 40 years, then they need to find a more balanced way to invest in their future capacity,” Lidegaard said.
He pointed out that over the next 20 years Europe will have to renew 80 percent of its power capacity.
“So we have to make a decision: are we going to lock ourselves into coal for the next 40 years or are we going to lock ourselves into local resources and energy efficiency?” Lidegaard said.
“If we have smart and efficient grids, then wind is already competitive to coal. And given the risk of being locked into the fluctuating and increasing prices on the fossil market, the advantage is definitely on the side of renewables.”
Expert: Lidegaard is ambitious
Professor Gert Tinggaard Svendsen from the department of political science at the University of Aarhus is an expert in climate policy and legislation.
He argues that Lidegaard’s hope of getting countries to make commitments before the 2015 climate conference is overly ambitious.
“The big problem with these negotiation are the free riders who pretend to contribute and work hard but who actually just get other countries to do the work for them,” Svendsen said. “Getting all the countries to make an agreement beforehand is optimistic.”
Svendsen argues that a climate deal can only be successful if it gets as many countries to sign up as possible. Otherwise businesses will simply move to countries with cheaper, and dirtier, energy – a problem known as carbon leakage.
“Politicians need to set the right economic incentives so that jobs don’t just move to where the energy is cheapest,” Svendsen said. “We all need to tax brown energy and help brown energy producers in the transition.”
Convincing governments and energy companies to invest in green energy is challenging given the abundance and cheapness of fossil fuels like coal and shale gas.
But Svendsen argues that energy companies could be encouraged to make the switch if the economics of inaction now are presented to them properly by, for example, pointing out that transitioning to green energy now is cheaper than waiting and dealing with a far worse future climate.
Green energy solutions are also a potentially enormous market that could stimulate economies that are struggling to recover from the economic crisis.
“Countries need to see that there is something in it for them. It costs money to reduce CO2 and lobby groups will fight against it. But there are potentially huge future markets in green energy," Svendsen said. "Look at how much the Chinese are investing in green energy. It’s not because they are altruists, but because they want to save money and export the technology. If we don’t act, the Chinese will get the first mover advantage.”