Guest essay by Eric Worrall
Why does the EU want to loan €1.5 billion for a new gas pipeline, when they should be topping up the utterly inadequate global investment of US $300 billion / year for the last four years into renewables?
The EU wants to fight climate change – so why is it spending billions on a gas pipeline?
February 10, 2018 4.03am AEDT
Professor & Director, Global Sustainability Institute, Anglia Ruskin University
Over the past few years there has been exponential growth in clean energy investment – while fossil fuel assets are increasingly considered to be risky. Yet, on February 6, the European Investment Bank, the EU’s long-term lending institution, voted to provide a €1.5 billion loan to the controversial Trans Adriatic Pipeline (TAP).
The TAP is the Western part of a larger Southern Gas Corridor proposal that would ultimately connect a large gas field in the Caspian Sea to Italy, crossing through Azerbaijan, Turkey, Greece and Albania. And while gas might be cleaner than coal, it’s still a fossil fuel.
So how does the EU’s support for this major project fit in with its supposed goal of addressing climate change?
But there is still not enough money being spent on renewables. While clean energy investment in 2017 topped US$300 billion for the fourth year in a row, this is far short of what is needed to unlock the technology revolution necessary to tackle climate change. There is clearly a gap between what is required and what is being delivered.
The private sector will continue to invest significant capital into energy projects over the next few decades, so one issue facing policy makers is how to influence investors away from fossil fuels and towards renewable projects. To really scale up investment into renewable infrastructure, long-term and stable policy is required – which investors see as clearly lacking.
By funding the Trans Adriatic Pipeline, the EU’s investment bank is hardly signalling to the private sector that governments are committed to a green energy transition.
What I find most ridiculous about Professor Jones’ position is the casual acceptance of the eyewatering sums spent on renewables, with so little to show for all that expenditure. Professor Jones admits US $1.2 trillion spent over the last four years on renewables, along with previous expenditures, is nowhere near enough to develop the required technology, let alone the required infrastructure.
The EU likely wants the new pipeline because they don’t like the fact that Vladimir Putin currently controls much of the EU’s gas supply. During a dispute with the Ukraine in 2006 over alleged theft of gas, Putin shut off gas supplies to the West, disrupting European gas supplies.
The EU could potentially source enough of its own gas to end dependency on Russia – but so far European greens have successfully blocked a large scale US style gas fracking revolution.
$1.2 trillion expenditure on infrastructure which requires technology which has not yet been developed in my opinion is utterly reckless. That $1.2 trillion dollars global spend on renewables to date has done nothing to alleviate the EU’s need for Gas. If US $1.2 trillion had been spent on zero CO2 emission nuclear reactors, that expenditure would have provided a massive boost to global supplies of reliable energy, and would likely have eliminated the EU’s energy dependence on Russia – without the need for a reckless $1.2 trillion technology gamble.