A MAJOR STEP TOWARDS GLOBAL ENERGY REFORM?

The G7, which is the group of 7 major advanced economies in the world, met recently in Germany to discuss a wide variety of topics concerning the world. The topic that has most people talking is their discussion to end fossil fuel emissions by the end of the century. If these countries (U.S. included) follow through with this objective, this could signal the end of the fossil fuel era that has fueled economies since the industrial revolution.

THE PLAN:

The initial target is to reduce emissions by 40-70% from 2010 levels by 2050. The German chancellor, Angela Merkel, stated that economic leaders needed to “decarbonize the global economy in the course of this century”. Many believe these statements will pave the way for a comprehensive decarbonization plan that could be put together during climate talks in Paris, slated for later this year. The targets set forth for mid-century could keep global temperatures within 2 degrees of the earth’s temperature dating back to pre-industrial times.

The 7 also look to strengthen planned projects for energy efficiency as well as clean energy research, and development.

 THE SKEPTICS:

 While these plans look good on paper, some scientists and environmentalists think it reckless to plan on continued utilization of fossil fuels at all past 2050. Others are concerned that countries that do not have a burgeoning economy could be crippled by coal being phased out of the world’s energy plans. Despite the cost of solar energy falling to a point where it is competitive with fossil fuels in some parts of the world, coal remains the cheapest option for many of the poorer nations, and could hinder their participation in a global clean energy drive.

Some fear this declaration is simply window dressing, siting that progress has been extremely slow from the 2009 plan to phase out inefficient fossil fuel subsidies. This was a plan designed by the G20 (a group that includes the G7). The G7 reemphasized their commitment to continue to eliminate these subsidies as part of their bigger plan.

The impact of the 7’s declaration in June will have on the global energy strategy will not be known for some time. Although some skeptics enter with trepidation, many believe this is a major step towards responsible global energy reform.

Matt Helland
Sr VP of Client Relations

Sources:
http://www.bbc.com
http://www.theguardian.com
http://www.greenbiz.com