At the end of April this year, the French government put forward proposals to achieve carbon neutrality (https://bit.ly/2JiILGJ) as part of the country's ongoing response to climate change targets set out in the Paris Agreement, and intended to institute change in the country's energy sector.
Responding to the proposal, Guillaume Di Pizio, CIO, Dauphine Asset Management, says the idea would need to be done consistently with other countries.
"Electricity output is generated 72% by nuclear power and 17% by alternatives, and as a result France is in the top five OECD countries, emitting the lowest amount of electricity greenhouse gases. In Europe, 54% of carbon dioxide emissions are produced by coal-fired power plants located in Germany and Poland."
"In order to reduce electricity related pollution it is essential to shut down fossil fuel plants for good, but government measures should also aim to reduce energy requirements by improving building insulation."
"Contrary to popular belief, the French government's idea of delaying the timetable for the closure of nuclear plants, actually results in the reduction of carbon emissions. Building new gas plants to reduce nuclear power's share to 50%, goes against pre-set climate targets; but replacing nuclear with solar would paradoxically increase our emissions because photovoltaic panels emit about three times more CO2 than nuclear."
He adds: "In addition, renewable energy is sporadic because it cannot be produced on demand or continuously; daytime only for solar energy and windy days only for wind turbines. This also means creating new infrastructure for electricity storage as well as modifying the network for essential changes which, once again, contributes to increasing CO2 emissions. Technology is not quite ready yet for the mass deployment of renewable energy."
"Governments are aggressively imposing the rejection of diesel and promoting a transfer to electric vehicles and plan to have households and car manufacturers foot the bill. But if the electricity produced to recharge the batteries is not decarbonised, the efficiency of these measures is limited. At present, France has four coalfired power plants that produce 1.8% of the country's electricity requirements against 2,700 coal-fired power plants across Europe. There is still a long way to go."
The latest issue of the InvestmentEurope magazine contains more French investor views on the proposals to impose carbon neutrality. Click here to read more: https://www.investmenteurope.net/digital-editions/4003063/ie103-equinox-esg-equities
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