The fight against global warming took a significant step yesterday when the Kyoto Protocol came into effect. The 1997 international agreement on climate change obliges industrialised countries to cut their greenhouse gas emissions to around 5% below 1990 levels by 2012. The agreement follows a growing scientific consensus on global warming that anthropogenic emissions are to blame and that their impact could be catastrophic. The UN’s Intergovernmental Panel on Climate Change (IPCC), for instance, has drawn up scenarios of mean temperature rises from 2000 to 2100 of 1.5 – 5.8oC above 1990 levels. However, with ever increasing demand the drive towards renewable energy is unlikely to generate enough electricity to meet the Kyoto obligations of the signatories, according to most estimates. There is consequently a growing consensus that there will be a move towards a nuclear building programme. This nuclear building programme is unlikely to be limited to the industrialised nations though.
Along with other developing countries, India and China are permitted unlimited emissions but China, for example, not only has a huge growth in demand but also some of the worst pollution in the world. It is no surprise that the country is planning to build dozens of new reactors over the coming decades to deliver some 30 GWe of installed capacity by 2020. However, while nuclear energy is likely to benefit from the implementation of Kyoto, critics argue that not only is the science flawed but that there will be widespread economic impacts. New research from investment bank UBS, for instance, has suggested that the new European Emissions Trading Scheme (ETS) will add 15 – 20% to utility customers’ bills following a 30% increase in wholesale electricity prices across Europe by 2013. Analysts at UBS estimate emissions trading has already caused a 10% rise in wholesale electricity prices. Over the next two to three years, there will be no significant additional price pressures caused by the trading scheme, but from 2008 the price of CO2 is expected to increase gradually.
