European energy objectives and national facts are not in phase

The Treaty of the European Union does not foresee a common energy policy. In the past, every tentative to include an energy chapter in the Maastricht, Amsterdam or Nice Treaty failed. Most Member States refused a sectorial policy and preferred to deal with energy under the general rules for competition and environment. This tendency contrasts with the fact that two of the three founding treaties of the Union: the Coal and Steal Community and the EURATOM Treaty dealt with energy. The first one has expired after 50 years of more or less useful existence. The second one is still alive although heavily criticised for its democratic deficits. But neither the Coal and Steal Treaty nor the EURATOM treaty triggered the creation of a common energy policy. Common action did not go beyond co-operation and sometimes wishful thinking.

A qualitative leap was achieved with the completion of the common market. Two consecutive directives have opened the markets of electricity and gas to competition even for individual consumers. Liberalisation has abolished the vertical monopolies, has introduced competition over the price, has allowed preferential access of electricity from renewable energy sources to the grid, has lowered the prices and introduced common rules for regulators. Labelling of electricity has become obligatory. From now on every single European household knows where his electricity comes from.

Common rules create a common policy. The market forces will slowly bring about a new industrial culture. Transeuropean companies will be created and the fact that companies have to compete over the price will force them to consider costs more carefully than before. Energy policy becomes, therefore, more cost oriented.

A second, perhaps even more important leap forward was made with the inclusion of a chapter on environment in the Maastricht Treaty. Hence, environment policy is by its very nature European policy. Common rules for emissions of SO₂, CO, N₂O and dust were decided by the European legislator, i.e. the European Parliament and the Council of Ministers. The Kyoto Protocol was ratified and the CO₂ emission's quota was negotiated between the Member States. This so-called burden sharing restricts hitherto the Member State's margin of manoeuvre. A Member State that emits more than agreed can be sanctioned by the others. He is free in the choice of his means but he is not allowed to exceed his quota. In the wake of the Kyoto Protocol industrial objectives for combined heat and power (CHP) and renewables were agreed, followed by a policy to develop biofuels and better heating isolation of buildings. Last but not least a directive on the trading of CO₂  emissions was voted, which has meant the beginning of a new economic process, which takes the costs of CO₂  emissions into account. Emission trading is a strategy included into the Kyoto Protocol and is expected to lower the cost of the climate policy.

So far, so good. But where is the problem? The problem can be resumed by the fact that the Member States agree in the Council on specific objectives, e.g. the mitigation of greenhouse gas emissions. But most Member States do not comply with that obligation. In the case of greenhouse gases we must unfortunately admit that the 15 Member States as a whole emit at the moment more greenhouse gases than in the year 1990, although they should emit some 5-6% less if they were on track with their commitments according to the Kyoto Protocol. If nothing extraordinary happens in the coming years Europe will fall behind the promises it made in Kyoto and will be to blame in the eyes of a still very climate sensitive public.

The same seems to be the case for the indicative commitments to double the amount of renewables, to increase energy efficiency, to double the share of CHP and to increase the role of biofuels. If all these objectives were to be fulfilled the EU would be able to do without coal by 2010, incidentally, something no one foresees. In other words, the European Institutions, Parliament, Commission, Council- pass generous resolutions on common energy objectives that nobody expects will finally be put into practice. As no Member State is effectively  sanctioned, if he does not comply with the common agreed objective. National and European energy policies are therefore not in phase.

One of the reasons for this divide is the fact that energy policy is very often regarded as a confession. It became politically correct to confess an ambitious objective in order to calm rebellious spirits without taking the necessary but painful measures. And Parliaments forget that scientific laws are not voted in their Plenary sessions.

This is particularly true for our climate policy. Europe must seriously face the failure of its promises, if it does not take measures. Seriously means that our climate obligations introduce a new hierarchy of decisions in our energy policy. Every measure, every technology must be considered according to its effects on the emission of greenhouse gases.

Scenarios do not help, because reality never follows the pathways of assumptions. The best way to reach the Kyoto commitments would be to define an objective, combined with severe sanctions, but to leave the choices of the policies to the actors, i.e. the companies. In other words, not to exclude a single technology but to insist on the compliance with the mitigation objectives. Or  to be even clearer, not to exclude the  nuclear option.

Europe should not choose the technology, but create a framework, with simple and measurable limits. The rest should  be left to the companies under the competitive rules. As long as this is not the case we will continue to make people believe in objectives we will never reach. This loss of reality will lead  inevitably to a loss of credibility, which no real European would wish.

What sort of sanctions could we think of? In the case of our climate policy it should be the price companies and the consumers must pay for exceeding the CO₂  quota. It is the least bureaucratic way to handle a delicate problem. And companies would be left to choose the most cost efficient way to avoid emissions.

If CO₂  prices go up, renewables will win. We do not need quotas, we simply need honest prices. But new coal technologies or nuclear would also be among the winners. This is perhaps the reason why many friends of an exclusively renewable policy, object to this market based strategy. They prefer a technology driven policy, a political choice between technologies - a too expensive pathway which is doomed to fail because of excessive costs.