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Europe has already started to make policies to dematerialise energy production

Can you make that a little more precise?

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Tue Jun 19th, 2007 at 08:17:45 AM EST
[ Parent ]
We have agreed to a 20% CO2 reduction (possibly 30%). Also a 20% renewables target and 20% energy efficiency increase by 2020, which, as at least someone from the German BUND (Friends Of the Earth affiliate) claimed, will in combination already come quite close to a 30% reduction. This means a real decrease in the total amount of material inputs we use (under the assumption that renewables and nuclear use less inputs, which by my understanding they do).

In addition, we have agreed to what will work out to a total fleet average of carbon dioxide emissions of 130 grams/km by 2012. That would be a 20% improvement over today's total average. This figure will probably be decreased again before 2020 (to, say, 100 g/km). The total amount of cars on the road is stagnating in Western Europe, I think. At least I know it is in Germany, it's even decreasing slightly. See e.g. this graph, which runs up to 2003 (hard to find good up-to-date info, last I remember is some lecturer mentioning this in 2005/early 2006). So this 20% decrease will likely translate into a real reduction of a similar percentage.

I tried to find some comparison of the data between the US and the EU and all I could come up with is this Pew Climate report (.pdf) from 2004. It shows that the US fleet average is around 258 g/km, which is pretty wild compared to what we have in the EU (163). But it's kind of disheartening to read that since 2002, we in the EU have only managed to cut 2 more grams, as it seems the industry was still on target to its voluntary target of 140 g/km by 2008 at that time. I blame this on the rise of luxury SUVs.

Real reductions of CO2 emissions - and thereby of fossil fuel inputs - in industry should kick in during the next phase of the emissions trading scheme in 2008. The Commission has pressured countries to come up with allocations that promise real scarcity.

Whether you see this as too little, too late or as promising but insufficient steps towards a real transition depends upon when the 'shock' will come and what the 'shock' will look like. If we get a plateau for oil during the next 20 years before oil production really drops, and prices just increase gradually due to increasing demand instead of shooting up, then the EU's policies are not so bad. If we get a sharp drop starting in the next 5-10 years, and global markets for all fossil fuels break down as each country tries to secure its own for its own economy (which seems to be the strategy of the Cheney cabal), then we are screwed.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jun 19th, 2007 at 10:47:47 AM EST
[ Parent ]
We have agreed to a 20% CO2 reduction (possibly 30%). Also a 20% renewables target and 20% energy efficiency increase by 2020

I guess that makes "Energise Europe 2020" obsolete.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Tue Jun 19th, 2007 at 12:31:17 PM EST
[ Parent ]
Heh. Yeah. But the goals could be better. And I don't know if putting up goals is such great politics. I suspect it delays action because of the rate of time preference, which could also exist in politics. We should rather have concrete action plans.
by nanne (zwaerdenmaecker@gmail.com) on Tue Jun 19th, 2007 at 12:42:49 PM EST
[ Parent ]
I am more concerned about the "sharp drop in 5-10 years" scenario. What can be done to prepare for that?

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Tue Jun 19th, 2007 at 12:44:58 PM EST
[ Parent ]
Your guess is as good as mine. But to guess...

We have to hope that there is a Democrat in the White House and that the US does not make a naked grab for resources that might be countered by China. We have to hope that our long-term contracts with Russia are worth the paper they're printed on.

It's too late for planting trees that we can use to heat our homes, I guess. But we should still plant more trees. Nuclear power plants take about 10-15 years to plan, run the legal procedure, and build.

What do you do? Draw up emergency plans. Think of ways to ration energy supply. No idea if that can be done. Try to secure critical systems, like hospitals. How do you do that? The aggregates run on oil. You might want to construct a separate grid for supply to such systems.

Right now I see no way to push through the kind of measures you would need to make a less drastic transition if we're facing a precipitous drop in supplies in an unfavorable political situation. Because the measures would have to be drastic right now. So, contingency planning and precautionary securing of the most critical systems that rely on energy may be the best that can be hoped for.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jun 19th, 2007 at 01:15:16 PM EST
[ Parent ]
It's too late for planting trees that we can use to heat our homes, I guess. But we should still plant more trees.

And insulate, insulate, insulate (but beware so that you do not create to bad ventilation at the same time). Heating is mostly a function of heat loss, with good enough insulation the excess heat from your electronic appliances and yourself will be enough.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Jun 20th, 2007 at 08:01:35 AM EST
[ Parent ]
There's few Coal left in the EU, Oil has peaked and Natural Gas is peaking now.

What will be difficult is not to reduce the CO2 emissions by 20% - we are totally dependent on imports to continue current trends.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Tue Jun 19th, 2007 at 01:45:04 PM EST
[ Parent ]
What is the EU primary energy production potential?

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Tue Jun 19th, 2007 at 05:00:59 PM EST
[ Parent ]
I detect a grave lack of faith in the miracles of free trade in this thread...

No, but seriously, I think a lot of the consequences of peak oil when it occurs worldwide depend upon whether the oil trading system survives. Basically that's the question of whether everyone accepts prices that increase manifold or if some countries try to limit trade to take possession of the oil (and gas, and coal) for themselves, at a lower price.

Although it would be nice for the EU to move towards a much higher degree of energy independence right now, no more sudden moves in that direction are going to happen until the energy markets send price signals that are high enough (What's high enough? Let's start with $100 oil. But in real terms that used to be more and our exchange rate is also much better than it was two years ago. So maybe $125 oil.). Or until the markets are destroyed.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jun 19th, 2007 at 06:37:44 PM EST
[ Parent ]
Bingo!

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Tue Jun 19th, 2007 at 10:55:07 PM EST
[ Parent ]
is nothing - it's just a symbolic level. But in practice, it's only 50% above current levels, which are 250% above what they were a few years ago. So $100 oil won't make a material dent in our behavior. $500 oil might, for a while.

What matters is not the absolute level, but how fast it changes - changes that we notice (i.e. overnight 50% increases, or steady 20% per year increases) make us change our behavior.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 20th, 2007 at 05:52:15 AM EST
[ Parent ]
So you're saying that people don't consume like rational economic actors...
by nanne (zwaerdenmaecker@gmail.com) on Wed Jun 20th, 2007 at 07:39:59 AM EST
[ Parent ]
Economic actors act, at best, on expectations. So it's all about managing the expectations. Psychological barriers like $100/barrel tend to be repellers: prices will "resist" approaching them from below and then race away once they are above.

And I don't think Jerome's point implies people are not rational. What he's saying is that it's the rate of change of the price that matters, not the price. And that makes sense. If you're going to buy a car that you'll have to fuel for the next 10 years, it probably matters more what the rate of inflation for fuel is than the absolute price level. Again, expectations.

Because, despite textbook economics always happening at a single point in time, or at equilibrium (which is just a single point in time, too, the point at infinity), time considerations at various time scales are essential to economic actions. And economic games are not only played once, but are repeated over and over again, which also changes the optimal strategies.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Wed Jun 20th, 2007 at 08:39:17 AM EST
[ Parent ]
 
Economic actors act, at best, on expectations

Now there's a good point.

We are led to believe that Joe Public, suppliers and all the rest work (or rather make their wage claims) on expectations of FUTURE inflation.

My view of the real world is that most people are interested in the rises in prices they have recently experienced as opposed to those they EXPECT to happen ion the future...

But what do I know....

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Jun 20th, 2007 at 03:13:21 PM EST
[ Parent ]
Well, yes.

The simplest (zeroth-order) expectation one can have is that things will remains as they are.

The first-order approximation is that trends will stay as they are. But what trends are today depends on what the state of affairs has been in the (recent) past.

Anything more sophisticated is too complex, and probably not worth the extra effort.

So, if people have experienced inflation recently, they will assume inflation will stay constant. They can't assume both that prices and inflation will stay the same, and they choose the assumption that the trend will stay constant. And their expectation is based on recent past experience.

But expectations it is. People don't buy houses because they are more expensive now than a year ago. They buy houses because they expect them to be more expensive a year from now than they are now. And they expect them to be more expensive next year because they were cheaper last year.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Wed Jun 20th, 2007 at 03:21:47 PM EST
[ Parent ]
Sure people buy assets because they see prices going up.

But do people ask for wage increases because they see prices increasing in the future or because their purchasing power has been reduced by x% this past year because energy prices went up, food got more expensive etc etc.

I think we are looking at chalk and cheese here (as between capital and revenue expenditure), not for the first time.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Jun 20th, 2007 at 03:59:11 PM EST
[ Parent ]

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