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On 12 December 2015, nearly 200 countries signed up to a new binding climate agreement. The aims are to reduce greenhouse gas emissions and limit global warming to a maximum of two degrees, with one-and-a-half degrees as the target value. This agreement is seen as a next step in the process of moving the global energy supply away from a strong dependence on conventional fossil fuels towards a more sustainably generated and carbon-neutral energy mix.
These new commitments come on top of the existing arrangements already made between countries in Europe, for instance. Despite far-reaching measures beyond anything seen before, the new agreement still does not go far enough to meet the set climate objectives. According to the Intergovernmental Panel on Climate Change (IPCC) of the United Nations, the current agreement will limit the increase in temperature to about three degrees – considerably lower than the previously expected six degrees, but also substantially higher than the set target of two degrees. For this reason, it is imperative that this agreement is followed in the years ahead by further worldwide steps to meet the agreed international objectives.
The principal aim of the climate agreement is to phase out global carbon emissions. As it happens, carbon is not just the object of the climate policy (reduction), but also the instrument of that policy. So far, much of the responsibility for the energy transition has been placed on the shoulders of politicians and the energy industry. However, according to the International Energy Agency (IEA), 40% of the measures to curb the rising temperature must come from a widely overlooked part of the agreement, i.e. energy efficiency.
Carbon can play a key role in the energy transition. As a measurable variable, it can be used to set targets and drive progress – provided that an effective carbon emissions pricing system is put in place. Using carbon as a control mechanism will make it easier to find the right balance between the diverse interests of climate, economy and security of supply, both at national, organisational and consumer level.
In this analysis, which looks into various ways of reducing carbon emissions, the energy transition, as so often, takes centre stage. Energy transition is about the road that needs to be travelled from a fossils-based to a renewables-based energy system. Smarter use of fossil sources – and ultimately making this form of energy entirely redundant – hinges on a mix of ideals, economics and technology. Economics and technology jointly form the realistic and robust framework within which the ideals can thrive. All three are necessary parts of the mix.
The greatest potential for carbon reduction in the coming decades lies in the alternative use of fossil energy sources, pending the day they can be phased out altogether. In line with the Roman adage of festina lente (make haste slowly), it is crucial to move swiftly, but with due deliberation. The ideal of a low-carbon energy system is the common objective of many players, including ABN AMRO and TNO, the Netherlands Organisation for Applied Scientific Research. The financial and technological knowledge and experience of both players can help to accelerate the journey towards the ideal.
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