European heads of state, energy ministers and the EU are actively debating climate and energy policy at a series of summits in the coming weeks. If the decisions they take are to matter, the leaders must work to understand the changing nature of such policies — and the enormous opportunity that they must seize.
Energy can be a key driver of European competitiveness and the transition to a low-carbon economy, benefiting European businesses and citizens alike, but realizing this promise requires European leaders to provide a vision and act decisively now.
While the developed world may still be wrestling with the fallout of the financial crisis, most emerging economies are already back on a strong growth track. China posted nearly 10 percent growth last year; India was close behind, at 8 percent. Much of that remarkable economic performance is built on the industries of the low-carbon future.
Against this backdrop, should our leaders focus on energy policy from a narrow, nationalist perspective? Or should they connect the dots and frame a vision of a Europe that can compete in a global economy where resource efficiency, clean energies and low-carbon prosperity are the ingredients of success? The future of economic growth is low-carbon growth, so Europe has a stark choice.
Of course, a new competitive landscape will create winners and losers. Creative destruction, the process of innovation described by the economist Joseph Schumpeter, will be at work. Not surprisingly, the loudest voices are heard from companies that face challenges and are among the potential losers. The potential winners, meanwhile, are creating the jobs of tomorrow.
In fact, HSBC estimates that global climate business will total US$2.2 trillion in 2020, and that China’s low-carbon market will overtake that of the US, but not Europe. However, Europe’s -leadership in the environmental field cannot be sustained without the right policy framework. It needs a visionary approach and active engagement on energy issues from its leaders.
Here are seven policy steps that EU heads of state can take to embrace the low-carbon economic future:
One, create an investment-driving, low-carbon EU vision that combines the goal of 80 to 95 percent emissions reductions by 2050 with the prospect of a Europe that leads, and make this vision a tangible and inspiring part of all European governments’ policy orientation;
Two, commit immediately to a 30 percent reduction in carbon emissions by 2020, and commit to a target for 2030. Only bold target-setting demonstrates a credible commitment to the low-carbon vision and can provide much-needed certainty to businesses and markets. Furthermore, a 30 percent reduction by 2020 is well within reach, as a 17.3 percent reduction against the 1990 baseline was already achieved by 2009;
Three, a consistent, economy-wide price for carbon that effectively mobilizes capital towards technologies of the future is key. The EU’s Emission Trading System remains the cornerstone of Europe’s climate policy, but suffers from the unambitious 20 percent cap, as well as from the lack of complementary policies to increase its effectiveness;
Four, commit to the decarbonization of the power sector as a vital building block of the low-carbon economy. The European Climate Foundation’s Roadmap 2050 shows that full decarbonization of the EU power sector by 2050 is feasible and affordable. Electricity grids are the key infrastructure element that will connect the EU power markets. Public investment must be matched with private capital to accelerate these grids’ deployment;
Five, competitive leadership will not come without substantial increases in reaearch and development commitments. The EU’S Strategic Energy Technology Plan (SET-Plan) is an excellent, but modest, start, and should be scaled-up;
Six, energy efficiency is often called the “low-hanging fruit” of emissions reduction. However, if it is so easy, why is it not getting done? A firmer commitment to energy efficiency, particularly the rollout of large-scale programs to retrofit the existing building stock, would create large numbers of jobs, expand the market for energy-efficiency products and technologies and reduce energy demand;
Seven, industry would benefit enormously if energy-efficiency standards were demanding and continuously tightened. Nowhere is this truer than in automotive emissions, where the battle for leadership on new power trains — whether electric, hydrogen or biofuel-based — is already upon us. Tougher automotive standards will help the European car industry remain competitive.
An ambitious policy framework that underpins Europe’s energy security and strengthens the single market would also support Europe’s drive toward reduced carbon emissions and low-carbon prosperity. The economic transition would help maintain and strengthen Europe’s competitiveness in a global economy that is increasingly competing on the basis of sustainability and resource efficiency.
The challenge for Europe’s leaders nowadays is to see that the economy, energy, and climate change are interdependent. Only concerted action taken and an integrated policy vision on these issues can give Europe the lead in the twenty-first century.
Jules Kortenhorst is chief executive officer of the European Climate Foundation.
COPYRIGHT: PROJECT SYNDICATE
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations