Germany, U.K. Plunge in Energy Council Affordability Ranking

  • Sweden, Switzerland only two nations with top rating
  • U.S. retains position as top nation ranked by affordability

Germany and the U.K. are among nations plunging down a league table of energy affordability and accessibility as they grapple with policies to cut greenhouse gases while keeping the lights on.

Germany, Europe’s largest economy, slumped to 46th from 11th two years ago, according to the World Energy Council’s 2015 Trilemma Index, which ranks 130 nations according to energy security, household affordability and environmental sustainability. The U.K. dropped to 30th from 8th under the affordability measure, while Denmark went to 57th from 25th.

The council, formed in 1923 as a forum for the global energy industry, called on countries to end the uncertainty created by the lack of an international climate framework ahead of the United Nations climate summit in Paris at the end of the month. Such a framework is needed to spur innovation by the private sector, it said.

“The message is not to stop decarbonizing,” Joan MacNaughton, the executive chairman of the study, said Tuesday by phone. “Germany is cited as successful in the huge penetration of renewables that it achieved in its market, but actually its fuel-use emissions have gone up and costs have gone up. That’s not the result you want from trying to be a poster child.”

Sweden and Switzerland were the only nations to get the council’s overall top AAA rating. The U.S. maintained its top ranking in the affordability category. 

Cost risk

Nations must “think very carefully” about the methods they use for climate protection or risk driving up the cost of reducing emissions, she said. Ignoring market mechanisms and changing subsidies in unpredictable ways reduces the ability for companies to find the “least-cost ways” to combat global warming and keep energy affordable.

U.K. Energy Secretary Amber Rudd said Tuesday the country needs to rework incentives to spur cleaner forms of transportation and heat for buildings, as it seeks to rein in subsidies for renewables.

Environmental lobby groups don’t necessarily understand the importance of incentivizing the private sector, MacNaughton said.

“Some of them still have an emotional distrust of business and the role of markets,” she said. “They don’t understand that we could do more faster if we harness the profit motive.”

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