Uchenna Izundu
OGJ International Editor
LONDON, Sept. 25 -- Energy efficiency and research and development into other forms of energy are crucial to address rising carbon emissions from foosil fuels, which will continue to play a major role in the world’s energy mix, urged Paolo Scaroni, chief executive officer of Eni SPA.
Speaking at the United Nations’ Leadership Forum on Climate Change in New York, Scaroni stressed that low energy prices had encouraged bad consumption habits and higher costs would curb this trend.
Caroni’s views on energy efficiency and research were supported by Helge Lund, chief executive officer of StatoilHydro, who also attended the forum that brought together policymakers, business leaders, and governments to discuss a global approach to tackling energy demand. They are preparing for the Climate Change Conference in Copenhagen in December where world leaders will discuss ways to adopt a new, shared, and comprehensive agreement to curb greenhouse gas emissions.
“Industry will show that it is taking its part of the responsibility to reduce emissions, and that it is important to establish a global, predictable, and long-term framework for carbon dioxide so that the solutions that are chosen are effective and implementable,” Lund said.
Lund is member of the UN expert group for climate and energy. StatoilHydro is the only oil company represented in the group.
According to International Energy Agency, fossil fuels will still account for 80% of the world’s primary energy mix in 2030. IEA estimates that rising global use of fossil energy is set to continue to drive up energy related carbon dioxide emissions from 28 billion tonnes in 2006 to 41 billion tonnes in 2030, representing a 45% increase.
Scaroni suggested introducing a small carbon tax to reduce energy usage. “By attributing a stable cost to CO2, a carbon tax immediately affects investment decisions. It would need to be accompanied by measures to off-set its effects on income distribution. Cap-and-trade-systems—complicated mechanisms which require many years of trial-and-error processes—could be integrated in time, with the aim of optimizing the effects of the carbon tax.”
Another option for the energy industry to address demand could be a complementary mobile excise tax on end-use energy products derived from fossil fuels. “Such a tax would be applied when product prices fall below the level that boosts [research and development] investment and energy efficiency. It would shelter environmental policies from energy-price volatility,” he said.
The key issue is resolving how developing nations, particularly China and India, could fuel their economic growth in a sustainable manner as pressure increases to find environmentally friendly solutions that are cost effective. According to the reference analysis by the IEA reference scenario Chinese CO2 emissions would leap by 4.4 billion tonnes in 2006-20.
Scaroni called for emerging nations to contribute to the system based upon their relative level of economic development, which would be determined with a shared index. “A carbon tariff should also be part of the scheme, to be applied only if emerging countries failed to respect their delayed deadline,” he added.
Contact Uchenna Izundu at [email protected].
US Government Accountability Office.
