VIDEO: EU emissions trading system must be extended and strengthened

This is the view of Andreas Loeschel, who heads Germany’s government-appointed expert committee looking into energy transition. “I think with the European Union’s 2030 climate package, we have the framework to promote new technologies,” Loeschel says.

Unlike others, Loeschel also takes a positive view of the EU’s Emissions Trading System (ETS), in which permits to emit carbon are allocated to companies and can then be traded between them. It has been a great success, he says.

This is not something regularly heard about the ETS. The policy has seen fairly modest gains, in the eyes of many energy-watchers. 

“We’re talking about it very negatively because people are not satisfied with the incentives it offers at the moment,” said Loeschel. The scheme needs time to develop and mature. “We need to use the EU emissions trading scheme as much as possible; extend it and make it stronger.” 

There should also be more joint initiatives for energy innovation across Europe. The European Strategic Energy Technology (SET) plan, which brings together a ragbag of EU energy research policies in renewables, clean coal, smart grids and nuclear energy, with the aim of encouraging more cooperation and increasing resources, is to be re-booted in 2015. This will be a positive step, said Loeschel, who is also Chair of Microeconomics at the University of Münster.

Harbinger of progress

While it’s obvious that there is a need for greater cooperation on pressing energy challenges beyond Europe’s borders, this is difficult to finesse. “We need the right regulatory framework,” Loeschel said, noting the US-China climate deal is very promising and a good harbinger for future progress.

Loeschel, of course, has been closely involved in the global climate debate and served as lead author in the latest report from the Intergovernmental Panel on Climate Change (IPCC).

On the domestic front, Germany is, “At the point where we’re thinking of our own big strategic projects,” Loeschel notes. “How can we deal with fluctuations in wind and solar, what’s the role of ICT, and how can we achieve growth with these new energies?” These are the issues sitting in his in-tray.

Power supply has moved to the centre of Germany’s political agenda since Angela Merkel, the German Chancellor, decided in 2011 to replace nuclear reactors with more fossil-fired power stations and boost the use of clean- energy sources. Loeschel’s commission has a brief to advise on how the share of renewables can be tripled, to supply 80 per cent of Germany power by 2050.