In the early summer of 2002 company representatives from five separate nations signed a protocol in Vienna. It was an agreement to construct a gas pipeline over three thousand kilometres in length that would run all the way from eastern Turkey and the gas fields of the Caucasus to the heart of Europe. The intention was to provide Europe with another main gas supply, relieving its dependence on capricious Russia. The pipeline would also provide a secure market for the abundant energy available from those eastern gas fields and so make money both for them and for the pipeline promoters.
When all was signed the promoters went to the Viennese state opera, which that night was performing Verdi’s Nabucco. And thus the anonymous pipeline acquired a fancy name, though as Nabucco (Nebuchadnezzar in English) is hit by a thunderbolt it doesn’t seem the most propitious name for a gas pipeline in these unfortunate days of rampant terrorism.
Construction of the €8 billion project was due to begin next year, though there may be a delay. Completion has in any case been put back to 2016. The question is whether this is an investment and a pipeline too far?
For the its gas will be subject to carbon controls, certainly in the form of increasingly restrictive carbon allowances, and possibly carbon-taxed as well. Moreover, since the turn of the millennium when the project was conceived there has been a sea change in the attitudes on the part of consumers to using carbon fuels.
Of course there is still a very large market for gas which will continue for very many years to come. But there is no question in which direction new energy markets are likely to lie. It is the renewables and low carbon sector.
Consumers, worried about the future, are subscribing to initiatives such as the 10:10 campaign, launched by the filmmaker Franny Armstrong, aimed at getting businesses and individuals to pledge a ten per cent reduction in their carbon footprint during 2010.
The campaign was only launched on 1st September, but already big companies such as the mobile phone giant O2 and local authorities such as Manchester City Council head a long list of public and private sector organisations pledged to cut their emissions.
The EU as a whole is pledging a 20 per cent cut, with a 30 per cent cut on the cards in the event of a challenging international agreement.
Some cuts will be delivered by lower energy use. But many consumers may prefer simply to switch to low or zero-carbon electricity or fuels produced from biomass or other non-fossil sources.
Increasingly dire predictions from the climate change scientists can only hasten the process. Reviewing the current state of climate science a recent report from the UN’s Environment Programme warns
“Growth of the global economy in the early 2000’s and an increase in its carbon intensity (emissions per unit of growth), combined with a decrease in the capacity of ecosystems on land and the oceans to act as carbon “sinks”, have led to a rapid increase in the concentrations of carbon dioxide in the atmosphere. This has contributed to sooner-than-expected impacts including faster sea-level rise, ocean acidification, melting Arctic sea ice, warming of polar land masses, freshening of ocean currents and shifts in the circulation patterns of the oceans and atmosphere.”
No surprise then that demand for renewables and low-carbon energy is increasing, a trend that the UN Climate Summit in Copenhagen later this year can only reinforce. But where is this abundant green electricity for consumers to buy? The market is outstripping green generation capacity.
Only this week comes a report that Areva, the French nuclear energy giant, is rushing to hire workers as global demand for nuclear reactors takes off. Over the next decade the forecast is that 180 new reactors will be built. France already sources some 75 per cent of its electricity from nuclear and while many countries in Europe have reservations about nuclear power there are other technologies available.
Solar, for instance! Only this week the EU Energy Commissioner Andris Piebalgs helped to inaugurate Europe’s largest solar power plant near Seville, Spain which will produce enough clean electricity to supply 10,000 homes.
With its manufacturing, development and research capacity, Europe is well-placed to exploit this rising tide of opportunity. Harnessing this market could help Europe out of recession creating very large numbers of new jobs, which could be financed, long term from the savings in oil, gas and coal currently being imported. Indeed, it may not be stretching the point too much to assert that Europe’s future pensions may be borne on the wind.
If the new German pro-business government, headed headed by the sagacious Angela Merkel, lives up to its rhetoric then what better opportunities for the German economic motor than this kind of investment?
Not only that but if European business can grasp such potential opportunities – which are global in their scope and can only grow as developing countries demand energy to build their economies and their standards of living – then it could also give Europe back its sense of purpose.
The European construction has always been a bicycle project: it has to keep moving to stay upright. During the first fifty years the focus has been on prosperity, completing the single market and the single currency and reuniting the two halves of the Continent. For the last ten years we have struggled with institutional reform – a process the beginning of whose end may be clear next week with the result of the Irish referendum on the Lisbon Treaty.
But institutional reform has largely overshadowed the intended driver of Europe’s progress: the commitment to sustainable development, sealed at the Gothenburg summit in June 2001. With the reform package out of the way (one hopes) and with Europe’s economies moving out of recession, there is a real prospect of moving forward again on sustainability.
While we may be able to revert to business as usual, the signs are that this will be calamitous in the longer term. There are more sustainable business opportunities on our doorstep. Besides being vulnerable to terrorists Nabucco may fall victim to the thunderbolts of carbon taxation and falling demand for fossil fuels.