Energy Action Plan: Can Europe Co-operate?

On March 9, the heads of state of the European Union member countries endorsed the EU Commission’s proposal for a major redrawing of European energy and climate-change policy. The EU Council’s endorsement included an Action Plan that would put a common policy in place by 2009.

Most of the Commission’s proposals, including a greenhouse-gas reduction target of 20%, a mandatory 20% share of renewables in the energy sector, and a cut of 20% in primary energy consumption, were adopted as part of the EU Energy Action Plan. Ideally, these goals should be achieved by the year 2020.

"The Summit results are without doubt a major breakthrough," said Stavros Dimas, the EU Environment Commissioner, speaking at the Institute of Political Science in Paris, on March 10.

"The agreement by the heads of state was a historic step, which will now need to be followed up by concrete policies," he added.

The greenhouse-gas reduction targets would be reached by implementing a series of measures, including increasing the share of renewables, introducing environmentally friendly technologies in energy production, and cutting primary energy consumption – by scrapping the use of incandescent light bulbs and other means.

The EU’s plan reflects the urgent need to reduce dependency on imported oil and gas, as well as a commitment to slash energy costs by approximately €100 billion every year. If successful, the plan would keep 780 million tons of CO2 from being emitted into the atmosphere – twice the EU target under the Kyoto Protocol.

Although some have labeled it overly ambitious, attaining the energy efficiency target seems to be the easiest and most pragmatic of the three key points of the EU Action Plan.

European Members of Parliament have established an oversight unit, Energy Efficiency Watch, to monitor developments and offer advice to governments, which will in turn have to present national Energy Efficiency Action Plans by June of this year.

However, representatives of the business sector have voiced concerns, particularly over the binding 20% renewables share by 2020, and the 20% greenhouse-gas reduction target – the two keys points at the center of the debate.

Business Europe, the EU employers’ organisation, is concerned over competitive issues in the world market, and wants to leave other options, such as nuclear energy, open.

Eurelectric, the Union of the Electricity Industry in Europe, has also taken a very critical stance, saying that the EU should avoid setting binding targets over the use of energy sources altogether, further questioning the capacity of a government agency to stay on top of technological change and perhaps the wisdom and practicality of setting compulsory targets altogether.

"There is certainly equal opportunity for new business development in energy efficient technologies, operations and services," said policy analyst Samuel Schubert in a recent interview for The Vienna Review.

"If European businesses, particularly in the energy sector standardise and coordinate their implementation together with Brussels, new and perhaps more profitable opportunities will arise, which in turn may give Europe a competitive advantage in the long run."

Leaders at a European Business Summit, on March 16, warned that the unilateral greenhouse-gas emissions cut might compromise economic growth and lead to businesses moving abroad. They warned further that efforts to revert climate change turn useless if no other countries adopt similar schemes.

"Further strong CO2 reduction targets that have not been adopted by other major emitting nations will weaken the European industry’s competitiveness within the global business environment without achieving effective environmental benefits," said a European Chemical Industry Council (CEFIC) press statement.

Andris Piebalgs, the EU Energy Commissioner, has defended the Action Plan, saying that the 20% reduction would be attainable even if no other countries followed the EU’s example.

"In Europe indigenous oil and gas is going down," said Piebalgs at the Business Summit in March. "With less carbon needs, you create a market that favors the development of new technology. Less carbon means more energy security."

"In the short run, businesses unprepared to meet the new standards will lose," said Schubert. "In the medium to long term they may gain enormously, particularly if, and when, other industrialized countries adopt similar technological and environmental standards."

In addition, the EU has said it would increase the greenhouse-gas reduction target from 20% to 30%, if other major industrial nations follow suit, most importantly the U.S. However, the U.S. reluctance to ratify the Kyoto protocol – which assigns mandatory emission limitations for greenhouse gas emissions – is indicative that the 30% target will probably not be met in the near future.

Environmental NGO’s have welcomed the new EU targets; however, they warn that inappropriate implementation may yield only indifferent results.

"It is clear that the targets decided today will only be achieved with solid laws, measures and incentives," said Stephan Singer, Head of European Climate and Energy Unit at WWF, the World Wide Fund for Nature. "The targets must be translated into a shift of investments towards green technologies, rather than to nuclear power stations."

Experts in the energy sector have voiced their uncertainty over the attainability of the targets set in the EU Action Plan.

"Significantly reducing CO2 emissions ultimately requires a fundamental shift in combustion fuels used for transportation, something that would require a major evolution of the auto, shipping and airline industries," said Schubert.

"This is not likely anytime soon, and for that matter, Brussels does not yet appear to have the power to implement such a change."