European View of Trump’s Climate Threat
February 25, 2017
We are pushing Europe toward China.
Money quote here – “The only thing that this administration will respond to is pressure…words will not suffice, EU has to work together with China to exert maximum pressure.”
Faced with a U.S. retreat from international efforts to tackle climate change, European Union officials are looking to China, fearing a leadership vacuum will embolden those within the bloc seeking to slow the fight against global warming.
While U.S. President Donald Trump has yet to act on campaign pledges to pull out of the 2015 Paris accord to cut greenhouse gas emissions, his swift action in other areas has sparked sharp words from usually measured EU bureaucrats.
When Trump’s former environment adviser, until the president’s inauguration this month, took to a stage in Brussels on Wednesday and called climate experts “urban imperialists”, a rebuke from Britain’s former energy minister drew applause from the crowd packed with EU officials.
But with fault lines over Brexit, dependence on Russian energy and protecting industry threatening the bloc’s own common policy, some EU diplomats worry Europe is too weak to lead on its own in tackling climate change.
Instead, they are pinning their hopes on China, concerned that without the backing of the world’s second-biggest economy support for the global pact to avert droughts, rising seas and other affects of climate change will flounder.
“Can we just fill the gap? No because we will be too fragmented and too inward looking,” one EU official, involved in climate talks, told Reuters. “Europe will now be looking to China to make sure that it is not alone.”
Meanwhile, disruptive change continues as Germany, Europe’s largest economy, charges ahead to a renewable future.
Last year at this time, RWE, one of Germany’s largest power producers, announced a surprise annual loss for 2015 and scrapped its dividend for the first time in decades.
That was nothing.
Today, the company warned of an even bigger loss in 2016—a whopping €5.7 billion ($6 billion)—and, again, decided to forgo a dividend payment for most shareholders.
The main culprit is a €3.7 billion writedown in the value of RWE’s German power-plant portfolio. Wholesale power prices have plunged in Germany in recent years, as the country ramps up renewable production. Around 30% of the country’s power is now generated by renewable sources, with a long-term target of 80% by 2050.
“The large writedown is unhelpful, but this shouldn’t come as a complete surprise in the context of wholesale power prices that are still historically low,” noted analysts at Jefferies after RWE’s announcement.
As more wind and solar capacity comes online, the value of fossil fuel-burning plants has plummeted. Both RWE and EON, its main German competitor, have written down the value of their power plants by some €30 billion in recent years, according to Bloomberg, especially since German policymakers announced an aggressive “Energy Transition” (Energiewende) in 2010.