In recent years, world energy markets have undergone revolutionary changes - the emergence of the BRIC economies, the growing importance of distribution infrastructures and renewable sources in parallel with roller-coaster developments in the price and availability of oil and gas, the final emergence of effective limits to greenhouse gas emissions – still, most key challenges for the global energy system remain open.
Limiting to 2 degrees the increase in average temperature of the atmosphere requires an energy revolution that will dramatically reduce carbon emissions, keeping CO2 concentration below 450 ppm.
The global economic crisis offered a great opportunity to curb indiscriminate growth in use of fossil fuels. The overall balance of energy sources is rapidly changing.
A growing concern for energy independence and productivity works in favor of renewable energy and lesser dependence on fossil fuels – the tragic accident in Fukushima plays an ambiguous role in this context, further complicating the picture.
According to the Eurostat report covering 2011, renewable sources (2009) cover 9% of European consumption, an almost twofold increase of almost double over the 5% in 1999. In Italy, renewables account for 9.7% of consumption, in Spain 9.5%, in Germany 8.5%.
This will not be enough: in order to achieve the goal of 450 ppm in 2030 the overall contribution of non-fossil energy sources must reach 32% vs. 19% in 2007.
This implies new investment of the order of U.S. $ 10.5 trillion in energy and energy-related infrastructures.
State incentives have played a vital role in promoting growth of renewable sources - and sometimes they distorted markets.
However, in the new context dominated by the pressure to contain public debt, any further development will depend on a reasonable "worth" of greenhouse gas emissions saved over the use of fossil fuels.
Giving an economic cost to pollution stimulates the development of clean sources.
This was the founding motion of the Kyoto Protocol, whose rules have created the European CO2 market.
The overall delay in establishing a new regulatory framework post-2012 threatens the efforts of those who wish to protect the biosphere from climate change generated by human activities.
At Quadra we believe that the current institutional context of negligence towards the issue of the price of CO2 is a temporary phenomenon, due to persistent economic and financial distress which forces great democracies to focus on short-term issues.
The emergence of the first unmistakable signs of the emergency global climate will force leaderships to address seriously the issue of survival of the biosphere and the means to assure it, first of all a reference price for greenhouse gas emissions.
The temporary lack of a serious global basis for determining the price of CO2 emissions threaten the development of renewable sources, but we are convinced that this is a short-term condition that preludes to a rude awakening.