Archive for October, 2007

Busy months ahead for EU climate policy

October 17, 2007

Well, the past few months have been extremely busy for EU climate change policy. Unfortunately we weren’t able to update this blog very often, so I will now have to try to quickly summarise what’s been going on and what is expected. We’re hoping to keep the blog more up to date, and to provide some analysis of what is going on, in the coming months.

The EU Commission is currently working on mammoth package of new energy and emission legislation proposals this autumn. The package was announced in January (see our earlier post) and given the go ahead by heads of state at the Spring Summit in March.

Among the measures under discussion:
– a strategic energy technology plan and rules on carbon capture and storage expected for November
-new rules and targets for renewables expected for December
-a review of emissions trading
-new measures on energy efficiency

After these new measures are presented in the autumn, they will be discussed by member states and the EU parliament during the course of 2008.

One of most contentious issues will be how the renewable energy target will be split among all countries. While EU heads of state signed off in March a 20% renewable energy target, they did not specify how this would translate into national targets. The Commission will make its initial proposals on this in December. The debate among member states in the Council is however likely to be pretty heated, particularly because it has meanwhile emerged that some member states are actively lobbying one way or the other.

The UK government has been particularly active. Despite its often stated intention to “take the lead” on climate change, some forces in the government appear to be actively trying to undermine renewable energy. In particular, a leaked memo written for ministers by the Department for Business, Enterprise and Regulatory Reform (BERR) made for some shocking reading.

The paper reveals that these forces in the UK government believe the country will not achieve its own, existing targets for renewable energy. The solution? Not, as one would expect given the climate crisis, to boost renewable energy policy. After all, the UK has a huge amount of wind and a large potential for wave power and few effective policies in place to promote them.

No, the solution, according to the BERR – is to lobby the EU to make sure the block’s target for 2020 is weakened. It is surprising that the UK government has taken this approach when the UK has some of the best renewables resources in Europe. In many ways, the proposals BERR makes are also in complete contradiction to the reccomendations contained in the UK governmnent’s own Stern review.

Also, BERR has now successfully pushed the EU Commission to link the ongoing review of the EU emissions trading system and the new discussions on the renewables target burden sharing – which were previously separate.

The results of the review and a new Directive on renewables are therefore now expected to be presented at the same time in December. Now, this may seem to an outsider as a good idea. Of course all climate policies should be coordinated and seen as part of one package. However, the agenda behind this is that some forces – e.g. within BERR – appear to think that we can achieve climate change goals without having to bother setting targets for renewable energy. The market, i.e. emissions trading, will achieve that. If only! Of course, that would be a “theoretically neat” solution (their words).

Problem: the emissions trading market needs considerable strengthening if it is to work. I personally believe it can, and will be strengthened. But to believe that this will be enough to stimulate the development of renewable energy is rather bizarre. In fact, the EU emissions trading was never set up with that goal in mind, but rather to merely promote a more modest goal to switch to cleaner fossil fuels.

Also, undermining the current framework for renewable energy (which does include targets and has been successful in many countries such as Germany) could be very disruptive. Regulatory uncertainty could put off the large number of investors that are currently queuing up to put money in renewable resources around Europe.

More to follow!