Limits on Car CO2 Emissions and the Rebound Effect

Peter Sain ley Berry is out to get my goat with his latest column in the EUobserver:

Making cars more efficient will not necessarily curb our emissions

Just the title is false. Making cars more efficient will curb our emissions. Not as a matter of logical necessity, but as a matter of empirical fact.

Sain ley Berry gets out the usual argument made in this context, known among economists as Jevons paradox and among greens as the rebound effect:

Moreover, the reason that vehicle emissions are increasing is not, surely, that people are buying bigger cars, but that they are buying more cars and driving them further. This may be because, relative to everything else, fuel prices have fallen in Europe since the 1950s, and the capital cost of vehicles has tumbled.

Improving car emission performance will reduce motoring costs even further. We may emit less carbon per kilometre, but overall there will be more cars and more kilometres. It does not necessarily follow that if emissions per kilometre fall, then total emissions will fall. This is particularly true if a big car is substituted by two smaller cars.

There is an extensive body of research on the increase of use that happens as a result of efficiency increases, especially with regard to Europe and the US. For driving cars the rebound effect is 10%, possibly lower, at the low end, and 30% at the high end. This means that 1 unit of energy efficiency increase will result in 0.9 to 0.7 units of reduction of consumption.

The opposing argument made by Sain ley Berry, that the only thing that will work is an increase in the cost of fuel, is exactly wrong. Driving (not the same as fuel consumption) is highly price-inelastic. An increase in fuel prices will mainly be useful to get people to change to fuel-efficient cars, not to get them to drive less. Unless you start talking about price increases of 100% and above. Now, I would like those. I would also like a pony.

In general, Peter Sain ley Berry discusses the measure to set mandatory CO2 limits for cars on its own merits (and gets most things wrong right there). The measure, however, is not taken in isolation. It is part of a comprehensive strategy to reduce carbon emissions and to increase resource efficiency throughout the European Union. It relates to a large set of different EU policies (for instance on emission levels for other forms of pollution), national policies (fuel taxes, road taxes) and local policies (congestion charges, or even simple parking fees) that directly regulate cars. The measure would still make sense in isolation. It makes even more sense in the actual context.

One of the most interesting results of the mandatory CO2 limits will be the technological change it will spur. It is very difficult for high-end manufacturers to meet the limits without shifting to hybrid vehicles (reduced performance is a bad sell, I reckon). Hybrids can be a stepping stone towards all-electric vehicles (or fuel cell/electric hybrids for all I care) and thereby contribute to a carbon-neutral future.

Rebound effect and cars reading:
De Haan, P.; Mueller, M.G.; Peters, A. (2006): Does the hybrid Toyota Prius lead to rebound effects? Analysis of size and number of cars previously owned by Swiss Prius buyers. Ecological Economics 58 (3), pp. 592-605.
Grotton, F. (2001): Energy Efficiency and the Rebound Effect: Does Increasing Efficiency Decrease Demand?. CRS Report for Congress, National Library for the Environment (link).
Schipper, L. and M. Grubb (2000): On the rebound? Feedback between energy intensities and energy uses in IEA countries. Energy Policy 28 (6-7), pp. 367-388.

(Cross-posted to the European Tribune)

Merry Solstice

The light turns once again but I'm not off for the holidays yet...

And welcome to Schengen dear fellow Europeans! One more step towards unity.

The Picture Gordon Brown Wouldn't Be In

This was last Thursday, at the signing of 287 pages of article amendments and protocols.


Can you spot anyone?

The Story of Lisbon and Treaty Consolidation

Last Monday I went to a talk by Jo Leinen in the Humboldt University. Leinen is chairman of the Committee on Constitutional Affairs of the European Parliament. The topic was the Reform Treaty and the future of Europe. In due time, you should be able to find his speech here (it will be in German).

I had the opportunity to ask Leinen about this consolidated versions problem Ralf Grahn has been going on about. Short story: the Reform/Lisbon Treaty is completely unreadable because it consists entirely of amendments to the two European treaties. No version of the treaties including the amendments (a 'consolidated' version) has been officially released.

Jo Leinen stated that the Portuguese Presidency of the Council would have published a 'Fließtext', but that this was blocked by the UK on behest of Gordon Brown, and by the Netherlands. Presumably, according to Leinen, because it would show that the treaty was very similar to the 'Constitution'.

I can't say whether Leinen meant a continuous/flowing version of the Lisbon which would make it readable, or consolidated versions of the treaties. I think he meant the latter. But Leinen is a politician, so when he uses a slightly different word you can never be sure. Either way, shame on the UK and shame on the Netherlands.

Jo Leinen intends to release and publish a consolidated version in German, in January. Professor Ingolf Pernice, who plays the host for the Humboldt University, mentioned that a German student of the university of Leipzig had published a consolidated version in German. This version (both treaties in one file) can be found here.

With consolidated versions also existing in English, Swedish, Spanish, and French we have only 18 languages to go...

Where does Bali lead us?

Willy de Backer of 3E Intelligence has some more thoughts on the Bali compromise.

I'm not completely as pessimistic. We might yet work out a good deal in Copenhagen when a Democrat enters the White House.

But don't cheer too early on this one.

Bali: A Climate of Futility

It looks like the world will fail to convince the US to actually do something about climate change. Big surprise.

I had a chat about this with a staffer in the German Federal Ministry of the Environment a few months ago. I tried to convince her that talks right now would not work and that we should wait until 2009, when there is a new US president. She thought that we need to work on an agreement now because otherwise the schedule for a post-Kyoto agreement might get too tight.

This is the broader line and thereby the broader folly of the German negotiating strategy, and presumably that of quite a few other countries: assuming that you can get anywhere at all with the current US administration.

Stating that we have to make decisions now is something that might work for the Germans in the context of the European Union. But internationally, it just doesn't.

Germany and the EU can do little until the Bush administration is gone. What they should do is sort out a few minor issues where this is possible; build up support for a common position with other countries in order to have a stronger position to negotiate with the next US administration, and keep on working on ways to circumvent the US federal government.

Late Update: The final deal is a bit better than what I'd expected. The US did not succeed in completely derailing the talks. But it did not agree to any binding targets either. So what we have coming out of this are a few small improvements and a 'roadmap' which can hopefully lead to something when this US administration is gone. The concrete targets that were kept in the agreement were moved to a footnote in the preamble. Legally, the preamble means very little, and symbollically, a footnote is not the best place. Read the report in the NYT to get the full picture.

No Referendum in Denmark

With the - unsurprising - news in that Denmark will not hold a referendum on the reform treaty, it looks inceasingly certain that Ireland will be the only country to do so.

Some details from the Danish decision:

According to the constitution, a referendum must take place if a legal review establishes that sovereignty is transferred from Denmark to the EU. However, Rasmussen says a Ministry of Justice review of the final treaty text, agreed by EU leaders last October, has found that the document does not transfer sovereignty from Denmark and that the government is therefore not obliged to call a public consultation.

This relates to an issue I've blogged about before: the reform treaty really is different from the 'Constitution' in a number of important ways. When UK Prime Minister Gordon Brown makes that exact claim to evade the responsibility of holding a referendum, he has a point.

This statement by Rasmussen is a bit to cheeky, though:

Rasmussen said he did not know whether his decision would influence the political decision-making process in other countries. "Each country has a sovereign right to make its decision based on constitutional requirements, traditions and customs. We have made our decision based on Danes' traditions and customs," he said.

I'm sure pressure from Germany and meetings with Brown on the issue had nothing whatsoever to do with Rasmussen's decision.

Denmark will, however, hold a referendum on another EU-related topic, namely to overturn the opt-outs it negotiated 15 years ago on the Treaty of Maastricht, including the opt-out on the Euro. So not all eyes will be on Ireland.

Public Services Petition

The European Trade Union Confederation has set up an online petition to legally protect public services in the EU (via). Here's the petition:

Public services are essential for social, economic and regional cohesion in Europe. Such services must be of high quality and accessible to everyone. Until now, the only options put forward for developing public services have been privatisation or liberalisation (namely in sectors such as Energy, the Post and Telecommunications). It is time to find different solutions!

For this reason, we are calling on the Commission to propose European legislation on public services designed to:

• Give priority to the general interest embodied in public services;
• Ensure that everyone has access to public services;
• Strengthen public services in order to guarantee citizens’ fundamental rights;
• Guarantee more legal security so as to allow the development of sustainable public service missions;
• Give public services a firm legal basis and thus immunity from ideologically motivated free market attacks.

In the end, I don't know what the exact right mix and interaction of 'public' and 'private' is for services like garbage disposal or telecommunications, but I think some degree of liberalisation can work. I'm more negative on the post and on energy, where I think liberalisation won't bring benefits to society, just more costs. I agree with all the points of the petition but the last, because I don't know if we should legally determine what can be liberalised and what can't. We just need a more sensible policy.

The EU, however, is on a single-minded, unreflective drive to liberalise as many public services as it can. It's good to push back a bit.

The petition has almost 520,000 signatures at the time of writing, and is aiming for 1,000,000.

Go sign.

Afghanistan 4Evah?

As expected, the Dutch government has decided to prolong the Afghanistan commitment by another 2 years. This report in Radio Netherlands Worldwide has some frustrating lines:

Foreign Minister Maxime Verhagen said he believed the Dutch presence was vital to increasing security in Afghanistan and preventing the Taliban from regaining power. The minister added that radicalisation among Muslims also had to be resisted. He illustrated this with a comment by an Afghan soldier, who told him "he would prefer to fight the Taliban than have them in his front garden".

Mr Verhagen went on to say that human rights were "one of the cornerstones of Dutch foreign policy". He said this included the rights of women and children, and to education and healthcare, adding "Afghanistan mustn't be allowed to return to the Stone Age".

This fear is not entirely without justification. Despite the Dutch presence, since 2006 the strength of the Taliban in Uruzgan has increased. Only around the provincial capital Tarin Kowt and the village of Deh Rawod is it relatively safe. Large areas of the province are under Taliban control.

It's dispiriting to see that the Dutch perception of the war in Afghanistan is not that different from the American attitude towards Afghanistan and Iraq.

This perspective says that because the Dutch are in Afghanistan with good intentions such as 'helping the people', 'defending human rights', 'promoting democracy', the Dutch presence must thereby automatically be benign. At the same time, the enemy does not need to be understood. It can simply be labelled. Just call them barbaric people who will lead Afghanistan to the stone age and you have your 'moral clarity'.

It's hard to come up with politically viable criticism of such a rhetoric-inspired view of reality. Because such criticism amounts to saying that we really are not as exceptional as we think, and saying that we need to understand the Taliban will have to come with profuse qualifications of how their movement is, indeed, morally repugnant in many ways.

But here's the deal. Any armed conflict is about power. If it is really more about ideology than power, it should still be possible to make it about power. The current power arrangement in Afghanistan is inherently unstable for reasons I tried to explain before. Providing a stable arrangement for power can most easily be done by giving the Taliban a sizeable share. Ideally this would be embedded within the existing political process. However, that process may need to be made more realistic.

There is little chance of this happening. So this quote is probably correct:

Wim van den Burg, president of the Dutch association for military personnel AFMP, is resigned to the decision: "First we were going to stay till 2008, now it's 2010. But the arguments for staying now will still be valid then."

... and we will end up staying again.

Marking the Days

I have often wondered what the purpose of the various 'days' we have proclaimed is and whether we will one day have three 'days' every day. On that last problem, I think the market will provide. On the far bigger problem this 'day' is about, only for the well to do. I guess the purpose is to stop and reflect. Here's a video to help you out.

Galileo

Hey! We're going to have our own satellite positioning network.

Good news. I hope it will breed more good news on Europe and space.