EUROPE’S plans for tackling global warming by driving down emissions of carbon dioxide may have backfired in Germany, where they have encouraged energy companies to build coal-fired power stations instead of gas-fired stations, which emit less CO2.
Launched in 2005, the European Union’s Emissions Trading System sets a limit on the combined emissions from Europe’s power stations, which gradually declines each year. To encourage clean energy production, European nations issue pollution permits to their individual generators, which they can trade, allowing clean stations to sell any unwanted permits to “dirty” ones.
But a new analysis led by Michael Pahle of the Potsdam Institute for Climate Impact Research in Germany shows that when the German government issued permits in 2005, its allocation rules encouraged a “dash for coal”.
Pahle, whose results appear in Energy Policy (DOI: 10.1016/j.enpol.2011.01.027), says that the mistake in 2005 was to allocate permits according to demand from existing technology, which meant coal-fired generators got the lion’s share. Auctioning the permits or prioritising allocations to the cleanest technologies available would have encouraged investment in gas-fired stations.
The policy resulted in the building of coal-fired power stations with a combined capacity of almost 12 gigawatts – about one-third of peak German demand in 2008. Together, these will emit about 54 megatonnes of CO2 per year, which Pahle says is roughly double what would have been emitted if gas-fired stations had been built instead.
The European Commission, meanwhile, says that despite the dash for coal in Germany, the carbon trading scheme remains successful overall, with a fall in CO2 emissions in 2009 of 11 per cent across the EU compared with 2008.
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