E3G

Energy, Climate, Democracy and the Future of Europe

By Marina Brutinel

But this is as much an external agenda as it is about Europe’s own energy system. Europe’s core strategic interests lie in helping drive the global transformation to high efficiency and low carbon energy system, not narrow commercial advantage in proprietary clean technologies or gaining privileged access to energy resources.

Europe can use its enormous economic weight to drive change, especially in relationships with India and China. The industrial boom in China – mainly fuelled by our investment and consumption – means that it is currently building coal-fuelled power stations at the unprecedented pace of a major 1GW plant every 4 days. The lifetime emissions of the coal power plants build by 2030 will equal 2/3rds of total global emissions over the last 2 decades, and will push us into levels of climate change which have a high risk of catastrophic outcomes.  We cannot stop India and China building coal power stations to meet their energy security aims, but we could prevent lock-in to their carbon emissions by helping deploy carbon capture and storage (CCS) technologies. The EU has already agreed to build a commercial scale CCS demonstration plant with China. While this is a good first step, unless the planned completion date of 2020 is moved forward it will have little impact on climate stability. E3G work in this area suggests that a plant could be built by 2010, if the right level of political and financial investment was mobilised inside a robust commercial framework.

China has also set an extremely ambitious target of reducing energy intensity per unit of GDP by 20% by 2010. It is in Europe’s interest to act decisively to help China achieve this, in parallel with developing a more aggressive domestic energy efficiency policy; for example, by harmonising efficient product standards in the EU and China and lowering relevant tariffs. The energy and climate security benefits of cheap and highly efficient Chinese appliances in Europe outweigh any possible “competitiveness” issues around tariff reduction. In the same way Europe (and the rest of the world) has a greater interest in ensuring energy and climate security rather than overprotecting intellectual property rights (IPR) around clean technologies. Fears around IPR protection are holding up EU-China and EU-India cooperation in renewable technologies, coal, efficiency and other areas. However, many European companies already successfully manage access to IPR as part of their commercial and governmental relationships in China and India, showing a strategic balance of risk and reward can be found if ultimate objectives are clear.

Beyond using technology to diversify and reduce demand it is in Europe’s interest to ensure that access to energy sources is driven by rules-based market processes, not strategic and military relationships. At the moment oil and gas markets are moving in the other direction, with direct state control and strategic involvement increasing across the world. The impact of emerging geopolitical competition is to further destabilise fossil fuel producers in fragile states in Africa and Central Asia; areas where Europe will be drawn in to resolve any resulting conflict and will suffer the inevitable knock-on effects of refugees, organised crime and residual violence. Europe needs to further promote mechanisms to weaken the “curse of oil” on unstable states. This could involve working with other major consumers such as China to reduce destabilising interventions and breaches of human rights, and expanding and strengthening agreements such as the Extractive Industry Transparency Initiative (EITI) to help reduce corruption and ensure populations benefit from their country’s natural wealth.