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Opportunities & Challenges As Europe Sets New Emission Goals

The European Commission wants to build a “low-carbon society” and by 2050 hopes cut domestic emissions by up to 95 percent. To achieve this admirable but obviously difficult goal, the EC has issued marching orders to all segments of the society — individuals, businesses, local governments, and other organizations — to implement policies that restrict the use of high-carbon items and encourage the adoption of low-carbon emission products.

If you manufacture or sell products to the EU region, your company will be affected by this new policy, which offers both profitable sales opportunities as well as enormous compliance challenges. The EU's “transition to a low-carbon society” could boost sales for manufacturers of electric and hybrid vehicles but crimp revenue for companies involved in oil exploration, production, and distribution.

The EU's policy is spelled out in “Roadmap for moving to a competitive low carbon economy in 2050,” which “shows how the sectors responsible for Europe's emissions — power generation, industry, transport, buildings and construction, as well as agriculture — can make the transition to a low-carbon economy over the coming decades.”

I welcome these plans with caution. Renewable sources such as wind power, solar power, hydro–electric power, tidal power, geothermal energy, and biomass are all viable alternatives to fossil fuels. I understand that they will help to reduce greenhouse and other gas emissions and help to diversify energy supply to reduce reliance on fossil fuel markets, in particular oil and natural gas. The issue here is that half of Europe’s electricity consumption is from fossil fuel, and transitioning to alternate supplies is going to be both costly and challenging.

The EU acknowledges the difficulties ahead but insists it is determined to pursue the low-carbon emission policy, which, for businesses, means you should immediately start looking for ways to benefit from it, while at the same time avoiding some of the negative implications. The commission is not emphasizing any negative developments from the policy, though. As far as the EU is concerned, the move towards a low-carbon society would actually be more beneficial than disadvantageous to Europe's economy.

It states: “The transition would give Europe's economy a boost thanks to increased investment in clean technologies and clean energy.”

Yes, there is a bucket load of money to be spent realizing the low-carbon society dream. The EU says it expects a great portion of the money set aside for reaching this goal to be spent on electricity generation. 270 billion euro, or 1.5 percent of European GDP, would be spent annually, on average, over the next decade. The efforts would also add 1.5 million new jobs.

The EU makes its case as follows:

    The key driver for this transition will be energy efficiency. By 2050, the energy sector, households and business could reduce their energy consumption by around 30 percent compared to 2005, while enjoying more and better energy services at the same time.

    More locally produced energy would be used, mostly from renewable sources. As a result, the EU would be less dependent on expensive imports of oil and gas from outside the EU and our economies would be less vulnerable to increasing oil prices. On average, the EU could save 175 billion to 320 billion Euros annually on fuel costs over the next forty years.

    The transition to clean technologies and electric cars will drastically reduce air pollution in European cities. Fewer people would suffer from asthma and other respiratory diseases; considerably less money would need to be spent on health care and on equipment to control air pollution. By 2050, the EU could save up to 88 billion [Euros] a year.

That's the plan, but how will it work in practice? Each EU country is required to develop a national action plan to meet its own targets and set specific objectives for electricity, heating and cooling, and biofuels. Thus, these plans will reflect national circumstances, such as the availability of renewable energy sources in each member state.

To spur investment in the sector, the EU expects to provide public financing and encourage private investors to get involved. I fully expect many companies in the high-tech area to provide some of the investment, considering the plan is being backed by the European Investment Bank and the European Bank for Reconstruction and Development, and dedicated funding will be provided to support the EC's next Multiannual Financial Framework.

Why is the EU going for a mixture of private and public financing? It believes this would help “overcome initial financing risks and cash-flow barriers.”

There are opportunities here for high-tech companies. Get involved.

24 comments on “Opportunities & Challenges As Europe Sets New Emission Goals

  1. mfbertozzi
    April 15, 2011

    Anna, I like a lot your article; it summarizes very well european “as is” and “to be” picture, but I agree with you: we need to still keep a prudent approach, also recently European Govs economic contributions for green activities faced in some countries an urgent stop due to current crisis and issues to solve in supporting current political situation in Northern Africa.

  2. Ariella
    April 15, 2011

    This is certain to have a significant impact on the global economy.  It may set a trend for countries outside Europe, as well.

  3. Anand
    April 16, 2011

    Anna,

     Thanks for your article. I really appreciate European Commissio's decision to build “low-carbon society” by 2050. Steps like this gives us hope, hope that earth will be free from pollution one day. I hope other countries take cue from this and start implementing measures to realise the dream of pollution free earth.

  4. Eldredge
    April 16, 2011

    I am also cautiously optimitic. I am not confident in the economic viability of some of the available energy alternatives, although the ever increasing cost of oil will help that sitution. It will be interesting to see how this works out.

  5. Susan Fourtané
    April 17, 2011

    Imagine if this could be set as a trend to follow by other parts of the world, by the year 2050 the planet would be a much better place for the future generations and not the mess it is today. 

    Very good article, Anna. 

    -Susan 

  6. Anna Young
    April 17, 2011

    Anandvy, that is exactly the point. It is all part of the global climate change initiatives, Carbon emission free society means taking extra steps to reduce reliance on fossil fuels consumption – which means cutting back on petrol and diesel usage by seeking alternatives such as electric cars, cycling to work and so on. Producing renewable energy sources such as Wind power, solar power to name but few. All of which are considered to be kind to the environment and cheaper. Hence it is a global thing.

  7. Anna Young
    April 17, 2011

    mfbertozzi, thank you for your comment. Yes I agree.

  8. Ariella
    April 17, 2011

    I know of a few people who bicycle to work.  The problem is — even if one lives within a distnace that makes it doable — the roads are generally very unfriendly for cyclists. There are very few bike paths, and the bit of road to the right is sometimes taken up by parked cars.  But if people would do it, they would not only save gas but gain exercise, as well — a double bonus.

  9. itguyphil
    April 17, 2011

    Any time I've spoken about this cause, people always come back with:

    “Are there going to be showers at work?”

    They compare it to organizations that have gyms onsite equipped with showers, etc.

  10. Adeniji Kayode
    April 17, 2011

     

    Anna:

    This is an excellent article. I believe this is a global thing and it's going to be a global thing.

    EU while creating more opportunities for high tech companies is on the other hand keeping the environment clean and dependency on oil as the major source of energy will drastically reduce too. It's just a matter of time, if one can start, others (the rest of the world) will soon embrace it too.

     

     

  11. The Source
    April 17, 2011

    Anna,

    Thanks for sharing your perspective on this report, which I though was very insightful.  High Tech manufacturers should always have issues concerning the environmental impact of their operations at the top of their agenda.

    I was also delighted to learn in this report that the EU is fostering greater collaboration with other nations to assist them in their plans to improve the low carbon emission agenda.

    The report says:

    “The EU with little more than 10% of global emissions will not be able to tackle climate change on its own. Progress internationally is the only way to solve the problem of climate change, and the EU must continue to engage its partners.”

    It goes on to say:

    “A number of Europe's key partners from around the world, such as China, Brazil and Korea, are addressing these issues, first through stimulus programmes, and now more and more through concrete action plans to promote the “low carbon economy”. Standstill would mean losing ground in major manufacturing sectors for Europe.”

    This is progress.

  12. Ariella
    April 17, 2011

    pocharels, It wouldn't cost as much to put in some showers and a locker room as it would to install a full scale gym. Another advantage for companies is that employees would be exercising on their own time when coming in and leaving, rather than using time in the middle of the day. Plus, they would take up fewer parking spaces and be less likely to be delayed by traffic.

  13. mfbertozzi
    April 18, 2011

    Thx Anna. There is another point. Apart outside factors, we are assisting to delicate circumstantes in EU from political point of view. In several countries polls are reporting people would come back to the vote soon in order to renew Govs and maybe to promote EU separation, then a global long-term plan it could be very difficult to keep alive without impredictable changes.

  14. hwong
    April 18, 2011

    HP has been really ahead of the game when it comes to being green. Its Palo Alto office installed men's urinal that doesn't require flushing yet very sanitary based on the design.

    http://www.charlestlee.com/funny/how-do-no-flush-urinals-work-the-answer/

     

    Perhaps Europe can mandate these to be installed at all the men's rooms. That would help save a ton of water.

  15. Susan Fourtané
    April 19, 2011

    pocharle – Many companies have showers and saunas for the employees in the Nordic and Scandinavian countries. And the companies not necesarily have to be big. Small companies with just a few employees have showers and saunas, too.

    Some employees go to work by bicycle during the whole summer as a way of exercising, saving in transport pass and also helping the environment. Telecommuting is becoming more and more common, too. 

    -Susan

  16. itguyphil
    April 19, 2011

    We need to get some of those CEOs on the boards of some American companies!

  17. Susan Fourtané
    April 20, 2011

    pocharle – You would need the sauna and exercise culture in the employees, too.

    -Susan 

  18. mfbertozzi
    April 20, 2011

    I can confirm what Susan reported and I would say it is a matter of “global culture” and “people attitude”, not limited to logistics and facilities provided by companies.
    Going further, I would highlight telecommuting is not so common especially in Central – Southern Europe otherwise it could be basically first step in energy saving and emissions reducing. Govs there, could promote more and more that way to work.

  19. Susan Fourtané
    April 20, 2011

    Ariella, — The difference is that in Europe the roads and sidewalks are in better condition and they are cyclist friendly. There are European cities -Helsinki is just one of them- where not only the bike paths do exist everywhere but also they are 100% respected. 

    There is a bike culture in Europe that serves and promotes exercising and cutting carbon emissions. And believe me, there is a differece in the air. When you have been in polluted cities you feel it immediately. 

    -Susan 

  20. Susan Fourtané
    April 20, 2011

    mfbertozzi, — It is true that Telecommuting is more common in Northern Europe than in Central-Southern Europe but it's still an increasing tendency.

    In a recent poll 22% of the respondents answered they telecommute. 

    -Susan

  21. mfbertozzi
    April 20, 2011

    Exactly Susan, trend is going as you reported, Govs could speed up ramping behaviour.  According to Jato report dated March 2011, Southern Europe is holding 1st position in the rank as region with highest ( CO2 g / Km ) emission due to traffic congestion, in addition to  lack of adequate facilities also to support and promote telecommuters (very low penetration of dsl access and broadband).

  22. itguyphil
    April 20, 2011

    I think having the option would bring about the desire.

  23. mfbertozzi
    April 21, 2011

    Yes, it is, for those reasons from my point of view, Govs have to intensify the commit in helping the possibility to provide options.

  24. Anna Young
    April 21, 2011

    Ariella, I hope so too. Locally it has significantly impacted the economy here in the United Kingdom, through various measures introduced by the government in a bid to reduce Carbon emissions. Such measure includes ‘car sharing schemes’, congestion charges, this applies to motorist travelling to the hearts of London, measures such as ‘A no parking zones’ and provision of bicycle racks and sheds. In effect, it has reduced the cost of paying expenses to staff members in most organisations and has increased revenue for the government via congestion charges levy and no parking zones schemes – this is just to name a few steps taken by the government and organisations to cut back on air pollutions.

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