EU Energy and Climate Policy in Disarray

European Energy and Climate Policy are not in good shape.

Commission, European Parliament and member States are at odds about the objectives to pursue and the best means to implement them. There is no agreement about increasing the target for reducing green house gas emissions to 25 per cent until 2025, Poland remaining dead against.

C02 prices, hailed as the miracle weapon for reducing emissions, have fallen to less than ? 10, while more than ? 20 would be needed to trigger necessary investments in energy efficiency and alternative energies.

Policy makers are increasingly suffering from ?climate fatigue?.

They have lost hopes for the EU ? with its share of only 14 per cent of global green house gas emissions ? to set an example to be followed by China, USA, India, Japan, Russia. Brazil and others.

Energy security and low energy prices for industry are therefore becoming more important objectives than lower green house gas emissions.

In such a situation of uncertainty it is necessary to get the priorities right.

• The 2050 EU Energy road map proposed by the Commission in December 2011 should serve as the lighting rod by which to assess future policy.

  Its target to ?decarbonise? the European economy by the middle of the century, agreed upon by the European Council. responds to Europe?s concerns for sustainability, diversification of energy sources and competitive prices.

  It is up to the Commission to make appropriate proposals for progressively implementing that objective and to the legislature to adopt the necessary actions.

• Defining actions must have priority over setting targets.
• The EU needs to agree on a time frame for the reduction of C02 emissions from 2025 to 2050. Reducing them by one one quarter until 2025 seems appropriate. To overcome the Polish veto, the EU might offer an extra delay until 2030. By this time, Poland should be able to reduce its C02 emissions through higher energy efficiency and more power generation from nuclear and wind power.
• The ongoing dispute between Commission, Parliament and member States on raising energy efficiency until 2020 by 20 per cent is futile. It is unreasonable to expect from fuel, gas and electricity suppliers to finance housing insulation to enable house owners to reduce their energy demand by 1.5 per cent annually.As to thermal renovation of public buildings, the Commission should be content if ? in a first stage ? central governments were to renovate at least 1.5 per cent annually of their buildings. Municipalities should follow in a second stage with appropriate incentives from European structural funds.

• The Commission should urgently reduce the quantities of emission certificates to prop up C02 prices to levels which will foster investments in renewable energies and energy efficiency. Market forces operate more effectively than administrative commands.
• Last not least, the Commission should persuade member States to extend their feed-in tariffs to ?green electricity? imported from other member States.

The EU needs to focus its energy and climate policies on a few relevant objectives and practical measures for their implementation.It cannot afford to b get lost in intractable details and unproductive prestige fights. Citizens want to see actions, however imperfect, that they can understand and support.

Brussels 13.06.2012 Eberhard Rhein

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