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UK industry says govt green target may raise costs

UK industry says govt green target may raise costs
LONDON - British industry last week said greater use of renewable energy like wind power, called for in a report to ministers, could push up costs and make UK companies less competitive in world markets.
But environmentalists said the report\'s targets on green energy were not ambitious enough. \"If the cost base to industry increases as a result of a shift towards green power that will damange Britain\'s global competitiveness,\" said Ruth Lea, head of the policy unit at the Institute of Directors (IOD). \"It is a worry that Britain, but not the U.S., will be taking on board environmental costs,\" she told Reuters, highlighting the different approaches both governments are taking in tackling global warming. The root-and-branch review of Britain\'s long-term energy needs called for a near tenfold increase by 2020 in the amount of electricity to be generated from renewables to 20 percent of the energy mix. The shift towards greener energy would form part of the UK\'s strategy to cut greenhouse gas emissions, blamed by many scientists for contributing to global warming. U.S. LOOKS TO DIFFERENT ROUTE In stark contrast, the United States last week called for a gradual reduction in greenhouse gas emissions setting goals and incentives for cuts based on U.S. economic growth. The U.S. plan to \"slow, stop and then as science justifies, reverse\" emissions sees cutting so-called \"greenhouse gas intensity\" - the ratio of emissions to U.S. gross domestic product (GDP) growth - by 18 percent over the next 10 years. Britain aims to cut emissions by 23 percent in absolute terms by 2010 on 1990 levels. The UK goal is in excess of targets agreed in Bonn last year as part of the 1997 Kyoto protocol. Washington pulled out of the pact last year saying its Kyoto target of a five percent reduction would damage its economy. The U.S. Department of Energy forecasts a 47 percent rise in greenhouse gases from 1990-2020 assuming no regulatory changes. Chris Hewett of the Institute for Public Policy Research think tank rejected the U.S. stance. \"Britain has proved that you can cut emissions and still have a very healthy economy. There is no inextricable link bewteen CO2 emissions and economic growth.\" But the IOD\'s Lea warned British consumers might end up paying the price. \"If it is the case renewables will be undercutting fossil fuels in years to come, that will be great. But if the cost is higher it will be industry and the consumer who pays,\" said Lea. According to UK government reseach advances in green energy technology will see the cost of wind power undercutting electricity from fossil-fuelled power stations within 20 years. The government-commissioned energy review also said the country should keep an open mind about nuclear power and should not worry about having to rely on imported natural gas. Energy Minister Brian Wilson said the report stressed renewables and energy efficiency, but also kept the option open of investing anew in nuclear and cleaner coal. MUTED GREEN ENTHUSIASM Mark Johnston of Greenpeace called the review \"timid\", while Nick Goodall of the British Wind Energy Association said, \"this (20 percent by 2020) target is far too modest - companies are already gearing up to generate this much from wind energy along.\" By keeping the nuclear option open it was a \"heavily disguised love letter from number 10 (Prime Minister Blair\'s residence) to the nuclear industry,\" said Johnston. \"The target on renewables has not been so much increased as extended,\" said the green campaigner referring to the current target of 10 percent renewables by 2010. At present only 2.8 percent of power is classed as renewable. The PIU report also recommends strict reductions in emissions through efficiency gains, setting a target of 40 percent savings over the next 18 years. \"We are pleased there is a clear recognition that energy efficiency is the most cost effective way of delivering carbon cuts,\" he said. The PIU also review said the risks of relying on imported gas can be managed through enhanced diplomatic activity, highlighting the fact 70 percent of the world\'s gas supplies can be accessed from Europe. Worries about security of supply have increased as Britain edges towards becoming a net importer of the fuel in the next coupleo of years. By 2020 the country is set to be 70 percent dependent on imported gas which provides 40 percent of its electricity. Story by Matthew Jones REUTERS NEWS SERVICE
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