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The Mouth of Truth carved from Pavonazzo marble, in the portico of the church of Santa Maria in Cosmedin in Rome, Italy
POLICY
2 December 2014 17:30

Truth is “the first casualty” in the energy and climate debate – a report from the Spectator Energy Forum

Simon Evans

12.02.14

Simon Evans

02.12.2014 | 5:30pm
PolicyTruth is “the first casualty” in the energy and climate debate – a report from the Spectator Energy Forum

Yesterday Carbon Brief attended a provocative event on energy hosted by right-leaning magazine the Spectator.

The tone of the event was set by the titles assigned to panel discussions including “how broke is the UK energy market” and “does Europe have a credible energy policy”

The whole thing was best summed up by Marcus Trinick, partner at law firm Eversheds, which hosted the event. Trinick said:

“There is no such thing as objective truth in energy policy. Truth is the first casualty of the discussion. Everyone has a position.”

Here’s a summary of some of the discussions that took place.

Predictions are hard, especially about the future

The broadly unforeseen yet transformational impacts of the north American shale revolution were cited frequently at the event.

This is a good example of how hard it is to  predict the future of energy. But the failure to accurately predict the future signified different things to different people. For Aldo Flores-Quiroga, secretary general of the International Energy Forum, it suggested that assumptions on energy futures should always be discussed and questioned.

These assumptions have recently been converging around a shared set of ideas, he said. For instance the idea that future increases in energy demand will be driven by rising Asian consumption and that rising demand can be met by unconventional oil and gas supplies. Yet the evidence around the profitability and productivity of shale gas was unclear, Aldo-Quiroga suggested.

Aldo-Quiroga also questioned the value of oil price projections. Predicting where oil prices will go in future is “futile”, he said.

“I know it’s the business of traders and investors to bet on prices but I don’t know why people do these very long-term projections.  There are too many moving parts, we just don’t know what will happen.” 

Policy versus the market

For other participants the failure to predict the shale revolution suggested that governments should step back from energy policy interventions, in particular giving support to renewable energy sources. Often this argument was combined with a somewhat contradictory plea for governments to invest in shale gas.

Policymakers have consistently failed to get the answers right on energy policy said James Ball, independent director of US gas firm Cheniere Energy. For instance, he criticised EU targets to expand renewable energy as part of efforts to decarbonise the economy.

These targets had resulted, Ball said, in “very little material growth in reliable renewables and a huge increase in coal imports”. Ball did not say what he considered to be reliable renewables. Overall however, UK renewable electricity output is up fivefold in a decade and across the EU as a whole now tops 25 per cent of total electricity supplies.

Flores-Quiroga argued that recent growth in EU coal imports was more a result of market forces, with low coal versus gas prices. This illustrated the limits to government policy, he said. Others might argue it illustrates the limits of the specific policies implemented rather than a limitation on all possible policy approaches.

The International Energy Agency also cites market forces as the main driver of European coal trends, adding that low carbon prices have contributed. The IEA suggests the recent EU coal renaissance will be temporary and that Europe remains ahead of trajectory towards its 2020 emissions reduction target.

Gas versus the carbon budget

Ball was one of several participants at the Spectator event to advocate gas as a better alternative to renewables. He said Europe should have set a target to cut emissions and that the “natural market drive of gas” would have filled the gap “until renewable technology is economic”.

An EU study recently found onshore wind to be cheaper than gas. But it faces other, non-economic barriers.

Patrick Heren, chairman of the Physical Commodity Markets Association made a similar pitch on gas, arguing against “dirigiste” government intervention in energy markets. He said renewable subsidies should be reviewed and that “above all” governments should invest in shale gas.

The problem with this argument is that there is a very limited window of perhaps twenty years in which gas can act as a bridge towards a decarbonised future, if the world is to limit climate change.

This issue was well illustrated by Richard Nourse, managing partner at investment fund Greencoat Capital, who presented a graph of the remaining carbon budget if we want a likely chance of limiting warming to two degrees above pre-industrial temperatures.

Another event participant sceptical of renewables and apparently willing to discount the implications of the remaining carbon budget was Peter Atherton, head of utility sector research at investment firm Liberum.

Atherton is well known for his scathing views on UK energy policy in general and renewables in particular. He said the cost of decarbonising the UK electricity sector could not be financed at a cost the public was willing to pay. He said the solution was to delay decarbonisation targets.

Delaying action makes tackling climate risks more, not less expensive according to the Intergovernmental Panel on Climate Change. The alternative is to accept that delaying action is very likely to mean exceeding the carbon budget compatible with limiting warming to two degrees, since that budget will be used up in around 28 years at current rates of emissions. Consequently delaying climate action means accepting more than two degrees of warming.

The deficit model of shale gas opposition

Another recurring theme at the event was frustration with opponents of fracking. Carbon Brief heard similar sentiments at a UK-Canada energy summit held earlier this month. At the Spectator event Ball gave a clear summary of this view, arguing that the EU had failed to replicate the US shale gas boom because of “simple, ignorant NIMBYism”.

Ball conceded that there were a lot of other barriers such as geological conditions. But his focus was on public opposition and his perception that these opponents were “ignorant”.

The implication that opponents would come round to fracking if they had the “right” information is reminiscent of the so-called deficit model of science communication. The theory is that the public lacks the knowledge to make informed decisions. If only they had the requisite understanding, they might reverse their opposition.

The problem is that decades of research have shown the deficit model to be incorrect. Alberta’s chief energy regulator told Carbon Brief earlier this month that it was no surprise there was fracking NIMBYism in parts of the US, given regulatory failure to prevent problems related to fracking and water supplies. The spread of social media meant it was easier for publics around the world to share knowledge of this, he said.

The climate change knowledge deficit?

Event chair Andrew Neil seems sympathetic to the climate skeptic cause, and indeed another notable feature of the Spectator event was the frequent, casual expression of sceptical views on climate change. A typical comment from one participant was “I’m sitting on the fenceâ?¦ there’s so much uncertainty about how the climate will change”.

This might also illustrate the way truth is the first casualty in energy policy debate. It’s as if the world’s governments hadn’t just signed off on a statement saying that global warming was “unequivocal” and that without action warming this century would reach four degrees.

As the preceding section suggests, however, providing more or better information is unlikely to change these sorts of attitude. Yet they musn’t hold sway if public support and political will on tackling climate change are to win through on the road to the Paris climate talks next year.

Main image: The Mouth of Truth carved from Pavonazzo marble, in the portico of the church of Santa Maria in Cosmedin in Rome, Italy. Credit: Anibal Trejo/Shutterstock.com.

Update 3/12: We extended the quote on long-term oil price projections.

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