nEUrosis

Three cheers for the binding targets

April 4th, 2007 by Paolo Berrino

In the wake of the 50th anniversary of the European Union, media across the world ran numerous pieces of journalists, experts, and politicians, who analysed the five past decades of EU integration and cast an eye to its future. I was surprised to see that, at least for this occasion, most reports focused on the positive impact of the “EU system”. I agree - we often read (and write) negatively about Europe. But this time, I would like to offer a positive picture - a practical example of a good outcome from EU decision-making.

I refer to the consensus reached by the European leaders at their summit on March 9, to adopt 20 percent overall European binding targets for renewable energies, and to commit to the reduction of CO2 emissions by 20 percent (from 1990 standards) by 2020. This decision should be cheered for at least three reasons, which are linked to the environment, the markets, but most importantly to the very essence of the Union’s existence – effective multilateralism.

By all means, it is hardly conceivable to deny the necessity of more renewable energy. The disastrous impact of climate change has been evidenced by reputable scientists at the global level. A significant cut in the use of polluting agents for production of electricity, fuels, heating and cooling, is not politically and practically sustainable at the moment. The only alternative is to hoist the share of renewable energy in our energy mix.

The 20 percent binding targets will obviously not solve our climate change problem if they are implemented by the EU alone. Action at global level is needed. Yet, for the first time a major international political body has set such ambitious goals. In typically optimistic EU-style, the conclusions of the March Council mentioned the possibility to bring the CO2 cut emissions at 30 percent, if other countries would follow Europe’s example. This is an open call to the US, China and India. The EU is using its international visibility to set global standards, in the smoothest way, and hopefully its call will be answered.

However, the Council’s conclusions were meant to tackle the issue of energy security as well. Recent data clearly show that if EU countries continue with the current trends, their dependency on gas and oil imports will increase to up to 80 percent by 2030. Scarcity, combined with the mounting demand of energy resources, will further increase international competition in the coming decades. Most likely, this will cause an escalation of fossil fuels costs.

The adoption of the binding targets is part of a strategy to deal with these problems by developing indigenous energy sources. At present, the costs of renewable energy are higher than fossil fuels’ - this is why the industry needs political backing. The binding targets provided for a legal framework which will boost the industry’s investments in the sector. Much work has still to be done to find out how much each country will contribute to the 20 percent overall EU target. Yet, with a much more stable legal framework markets acquire confidence, for the industry knows what to aim for, and on such scale benefit the whole economy. Moreover, the development of a home-made energy sources has the advantage that investments are inward-looking, and mostly coming from European industries, or European branches of global industries, which impacts positively on the labour market.

Seeing these constructive outcomes of the binding targets, a spontaneous question may arise: why we did not hear about Italy, France, Germany or Spain (a very “renewable country”) adopting binding targets for renewable energies? Why the EU has achieved, and thought of, something that its members did not?

This is one of the mysterious powers of the European Union. Apparently, the old expression “two minds are better than one” applies for the EU as well. 27 countries are better than one, or two, or three… For some mystic reasons, at the EU level the very same policy makers that at home are inactive or ineffective, sometimes manage to agree and take steps forward in tackling sensitive and crucial issues such as energy security and climate change.

It might take time, but when they put heads together, European leaders somehow realise the weight of the EU when acting as one. In the meantime, although they try to protect national interests, should they want to achieve practical results they have to find compromises. It is concessions and bargaining that shape European policies. And often, as the example in this article shows, in the right policies too.

But even more strikingly, Member States carry on negotiations, discussions, disagreements, and rows, in a real multilateral contest, where cooperation substituted conflict as the key word of European diplomacy. I am convinced no better example could have been chosen than energy. In consideration of the increase of energy competition for scarce resources, sometimes I ask myself: what would European States do, if the EU didn’t exist?

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