Rhein on Energy and Climate

Western societies are largely driven from interest groups, constantly attempting to influence governments to legislate in their interest or prevent legislation susceptible of hurting their interests.
It is the prerogative and duty of democratic governments to arbitrate between competing lobby interests and define the common interest of all citizens. In doing so, they should listen to the sector interests, but the public interest must prevail.

It is understandable that the automotive, coal, refining, metal and other industries oppose stricter C02 emissions standards in the EU, as these oblige them to invest in new energy saving technologies. But it would be wrong for the EU to follow their argument that the present financial and economic crisis necessitates a softening of EU climate policy.
The various lobby groups confound short- and long-term consideration and, even worse, use the crisis as a camouflage of their egoistic short-term thinking.

First, there is no connection between the banking crisis and the investments to be made in climate-friendly technologies and production processes.
The present credit crunch does not impede investments, which will have to make in 2010-15 and beyond in wind, nuclear or solar power plants and fuel-efficient automobiles.

Second, the new EU climate programme will enter into force as of 2013 for power and other energy-intensive sectors, for automobiles most probably only in 2015. It will become fully operational only by 2020, plenty of time to adjust. By then, the present economic crisis will be a forgotten episode of human economic history, like previous recessions or economic hiccups.

Third, the fossil energy lobby dramatically overstates the alleged costs of the EU climate programme. Luxury cars might be charged with a sur-tax in the order of € 10.000, nothing to induce potential clients to switching to mini-cars. The cost of fossil-fuelled electricity might rise by 5-10 percent until 2020. But this is most probably an exaggerated estimate, considering the potential for energy saving in all EU member countries, particularly in the new member states. Such a cost increase will not affect the competitiveness of EU industries on the international market, except for very few sectors like aluminium and copper heavily dependent on cheap electricity. Germany demonstrates very well how little high electricity prices influence competitiveness: its high power prices have not prevented it from being one of the most competitive countries.
Moreover, the development of world market prices for oil, gas and coal will have a much bigger impact on electricity rates than the 20 percent reduction of C02 emissions to be achieved by 2020!

Fourth, in 2020 when the oil price is likely to be the oil price is likely to be in the order of $ 150/barrel, the EU power generation sector and energy-intensive industries will be grateful to the EU for having obliged them to start undertaking the necessary adjustments in due time.

Fifth, the risk of irreversible long-term climate change with disastrous consequences for 500 EU and 7 billion world citizens overrides the short-term inconveniences of a few industrial sectors

Sixth, without the EU, in conjunction with the new US Administration, taking the lead the Climate Conference in Copenhagen in December 2009 is bound to fail.

In conclusion, the EU must stay course and insist on the complete implementation of the climate objectives unanimously adopted by the European Council in March 2007. There is no reason whatever to waiver under the impact of a short-term global financial crisis and a slight dip of the EU gross national product of about one percent in 2009. On the contrary, the EU should seize the opportunity of the economic slow-down to dramatically push investments in energy efficiency, especially in through “repowering” public and private buildings, which account for 40 percent of EU energy consumption.

In the interest of their credibility, the lobbies would be well-advised to tune down their lamentations and focus on the long-term perspectives of their respective interests.

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  1. Having covered the progress of the cars legislation over the past few months, I am at a loss as to why the industry is kicking so hard against the targets when consumers are already voting with their feet and choosing smaller more efficient cars. If only they would do as you suggest and focus on how to market greener cars.

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