Climate Change or Energy Security, the World's Dilemma [Climate Policy at a Crossroads①]

[Asia Economy Reporter Park Byung-hee] On the 7th (local time), Liz Truss, the new Prime Minister of the United Kingdom, announced in her first parliamentary speech after taking office that she would issue new licenses for oil and gas drilling in the North Sea. She also decided to lift the ban on hydraulic fracturing (fracking) techniques used to extract shale gas.

Eurostat, the statistical office of the European Union (EU), announced on the 16th of last month that the EU's carbon dioxide emissions in the first quarter of this year reached 10.29 billion tons (t), a 6% increase compared to the same period last year. This is because European countries, facing an energy security crisis after Russia, which accounted for 40% of Europe's gas demand, cut off gas supplies, have increased the use of fossil fuels such as coal instead of gas.

Although the EU unveiled the 'Fit for 55' plan last July to reduce greenhouse gas emissions to 55% of 1990 levels by 2030, the reality is moving in the opposite direction due to Russia's energy weaponization strategy.

More than 130 world leaders, including South Korea, gathered in Glasgow, UK, last November at the United Nations Climate Change Conference (COP26) to share concerns about the impending crisis caused by climate change and pledged immediate action. However, less than a year later, countries are caught in a serious dilemma between climate change and energy security. The severe inflation triggered by the energy crisis has led countries worldwide to rely on fossil fuels.

Even U.S. President Joe Biden, who led global climate change policies by declaring re-entry into the Paris Climate Agreement upon taking office, reversed his pre-election pledge and allowed oil and gas drilling on public lands. Faced with soaring energy prices, the worst inflation since the 1970s oil crisis, and plummeting approval ratings, he had no choice but to make a political decision.

In contrast, oil companies that were cornered until last year are thriving this year with astronomical profits. The stock prices of global oil companies such as ExxonMobil, Shell, and BP have surged 30-40% this year.

As they reap huge profits, calls for introducing a 'windfall tax' are emerging.

Meanwhile, the pain of climate change has not spared this year either. This summer, the world experienced record-breaking heatwaves and droughts. Countries are lost between increasing pressure from intensifying climate change and energy security.

The U.S. economic magazine Forbes, in its June 14 article titled "Chaos Between Energy Security and Climate Change," stated, "The recent situation affects both energy and climate change," adding, "There is a dilemma in that oil and gas, which account for 50% of carbon emissions, are needed to strengthen energy security."

The International Monetary Fund (IMF), in its report titled "Climate Change and Energy Security: Dilemma or Opportunity of the Century?" published on the 9th, diagnosed the current situation by saying, "As climate change accelerates, geopolitical tensions remind us that energy security remains a significant challenge for Europe."

[Photo by AP Yonhap News]

"More than half of Japanese citizens support nuclear power despite the 'Fukushima nightmare'"

Recently, the German Federal Statistical Office announced that Germany's coal power generation in the first half of this year increased by 17.2% compared to the same period last year, reaching 82.6 kilowatt-hours (kWh). Even Germany, a leading decarbonization country in Europe, has no choice but to rely on fossil fuels amid the energy crisis.

As carbon emissions increase, skepticism about achieving the 'Net Zero' goal of zero greenhouse gas net emissions is also growing. After the gas supply to Europe was cut off following the invasion of Ukraine, the U.S. and Canada have resumed expanding shale gas extraction. The U.S. became the top liquefied natural gas (LNG) exporter in the first half of this year.

However, countries are not standing still. Major countries are accelerating eco-friendly renewable energy and nuclear power generation while putting out the immediate fire with fossil fuels.

In particular, nuclear power, which had been avoided since the 2011 Fukushima nuclear accident in Japan, is rapidly emerging as a solution that can simultaneously address energy security and decarbonization. Japanese Prime Minister Fumio Kishida announced last month that he would extend the lifespan of existing nuclear power plants and consider developing next-generation nuclear power plants.

Public opinion in Japan has also turned favorable toward nuclear power. According to a survey conducted by Nihon Keizai Shimbun between the 16th and 18th, 53% of respondents positively evaluated Prime Minister Kishida's plan for new and expanded nuclear power plants, surpassing the 38% who responded negatively.

In the U.S., the California State Legislature, which had been at the forefront of anti-nuclear movements, decided on the 1st to extend the lifespan of the Diablo Canyon nuclear power plant by five years until 2030.

California aims to produce carbon-free electricity by 2045. To achieve this, coal power and nuclear power were scheduled to be phased out. However, due to record-breaking heatwaves and droughts causing a surge in electricity demand, the state has turned back to the most efficient nuclear power generation.

French President Emmanuel Macron announced in early February during his presidential campaign that he would build 14 new nuclear power plants to increase nuclear power generation capacity by 25 gigawatts (GW).

During former Prime Minister Boris Johnson's tenure, the UK announced an energy plan in April that included new nuclear power plant construction. The UK government aims to increase nuclear power generation capacity to 24 GW by 2050 and plans to build eight new nuclear reactors by 2030. As of 2020, the UK's nuclear power generation capacity was 9 GW, accounting for 20% of total electricity production. The new Prime Minister Truss also supports nuclear power plant construction.

The International Energy Agency (IEA) recently stated in a report that "extending the lifespan of nuclear power plants is an inevitable choice to achieve zero carbon emissions by 2050," adding, "It costs less than replacing them with renewable energy sources such as wind or solar power." The European Union (EU) and the U.S. classified nuclear power as carbon-free eco-friendly energy this year.

"Nuclear power and renewable energy shares must be expanded simultaneously"

Countries worldwide are also accelerating the transition to eco-friendly renewable energy. On the 30th of last month, leaders of eight Baltic Sea coastal countries, including Germany, Denmark, Finland, and Sweden, held a joint press conference in Copenhagen, Denmark, declaring their intention to increase offshore wind power capacity sevenfold to 20 gigawatts (GW) by 2030.

Germany and Denmark plan to invest 9 billion euros to create a large-scale wind farm on Denmark's Bornholm Island in the Baltic Sea. A 470 km-long submarine cable will connect Bornholm Island to the German power grid, and a 3 GW wind power complex will be established by 2030, supplying electricity to up to 4.5 million households.

Robert Habeck, Germany's Minister of Economic Affairs, said, "In addition to Denmark, we have plans for wind power with several European countries to simultaneously achieve Europe's energy security and climate neutrality goals."

Amber, a UK environmental think tank, analyzed in a June report that 19 European governments are responding to the gas crisis following COVID-19 and Russia's invasion of Ukraine by accelerating decarbonization.

Amber estimated that as several European countries accelerate eco-friendly transitions, the share of renewable energy in EU electricity production will reach 63% by 2030, an upward revision from the 55% estimated in 2019.

The UK also plans to significantly increase renewable energy generation. By 2030, offshore wind power capacity will increase fivefold from the current 10 GW to 50 GW, and more wind turbines will be installed in Scotland to increase onshore wind power capacity. Solar power capacity is also targeted to increase fivefold. The UK's current onshore wind and solar power capacity is 14 GW.

California is promoting the construction of a large-scale offshore wind farm. On the 10th of last month, the California Energy Commission unanimously approved a plan to install up to 5 GW of wind turbines along the West Coast by 2030 and increase the capacity to up to 25 GW by 2045.

Serhan Covic, a researcher at the IMF, said, "An empirical study of 39 European countries from 1980 to 2019 showed that increasing the share of nuclear power, renewable energy, and decarbonized hydrocarbon energy, along with improving energy efficiency, can significantly reduce carbon emissions and strengthen energy security."