Energy spending needs to double

Europe-backed finance for carbon capture and storage may help seal a European Union climate-protection deal by October, according to Ed Davey, the U.K. energy and climate secretary of state.

“There would have to be an EU-wide solution to supporting new carbon capture and storage (CCS) in Poland or anywhere else as part of a package to tackle coal,” Davey said today in a phone interview. “So if a country was to go down this route, they would need financial support from the EU, but that would make sense because we are trying to promote new technologies.”

Russia’s annexation of Crimea has pushed energy security near the top of the EU’s political agenda as the 28-nation bloc devises plans to cut reliance on natural gas from Moscow-based OAO Gazprom. The bloc plans to decide in October on an energy and climate-change package laying out targets including reducing emissions 40% by 2030 from 1990 levels.

Davey didn’t say how the EU would pay for CCS, which involves trapping carbon-dioxide emissions from factories and power plants and pumping them underground for permanent storage. Poland, which relies on coal for more than 80% of its power, has suggested the bloc go slower on climate protection measures.

Annual spending on low-carbon technology and energy efficiency needs to double to about $790 billion by 2020 from 2013 levels to help the world keep temperatures from rising more than 2 degrees Celsius (3.6 Fahrenheit) from pre-industrial levels, the International Energy Agency said in a June 3 report.

Spending $1.4 trillion through 2035 on carbon capture will cut emissions and help provide power for electric vehicles, according to the IEA.

“As the International Energy Agency has shown, a low-carbon world by 2050 would be a cheaper world to achieve if we can get CCS to work in a commercially viable way and to do that you’ve got to deploy,” Davey said. “You can’t just do it in the laboratory. You have to deploy to understand how you can get cost reductions.”

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome