Wednesday, August 15, 2007

An environmental time bomb?

Interesting piece by Andrew Bounds on the FT blog today, which makes a strong argument suggesting the EU will at some point have to make tough decisions on the binding biofuel targets leaders signed up to at the EU summit in March. Indeed, although the 10% target for biofuel use was greeted with enthusiasm by some commentators when it was agreed to, the gloss is sure to come off as the full social and environmental implications of these commitments becomes clear.

First of all, as Bounds notes, whilst EU leaders basked in the positive headlines, hugely important details of the agreement were simply kicked into the long grass for negotiation at a later date. Production, transport and processing of biofuels in itself requires a lot of energy – it’s not yet clear whether this is to be taken account of in the overall targets.

Furthermore, the tide of opinion on biofuels now seems to be turning faster than politicians expected, as the negative effects begin to be felt – food price inflation is already hitting the poor in many parts of the world, whilst deforestation to clear land for biofuel production is booming – especially in South East Asia.

Deforestation (which often involves clearance by burning) is, in environmental terms, a really big deal – despite being frequently overlooked, it is a major contributor to global warming – accounting for perhaps 20-25% of total of carbon emissions, which is more than the total from all vehicles, airplanes and ships. It is also leading to immense pressure on endangered species, such as Orang-Utangs.

The other major strand of EU policy that will feed into this debate is the effect the Emissions Trading Scheme will have. Open Europe’s recent report looks at many of the major environmental concerns associated with emissions trading, in particular the ‘import’ of vast numbers of ‘Kyoto credits’ (which act as a giant system of carbon offsets) into European carbon markets.

Reuters has a fascinating report describing how the demand for credits (which mostly comes from the EU ETS) actually creates “perverse incentives” for deforestation through encouraging project developers to fell rainforest, and then replant it in order to generate credits. These credits are then used by European firms to avoid having to reduce their own carbon emissions.

As we have long argued, EU environmental policy is often badly thought out and riddled with unintended, damaging consequences. All this makes us wonder whether the EU is sitting on an ‘environmental time bomb.’ At some point, the bubble of ambitious-sounding rhetorical green commitments will have to burst as the reality of flawed policy sets in.

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