There is no doubting the European Union (EU) knows what it wants to do in terms of cutting emissions and renewables growth. Its 2020 vision, to cut greenhouse gas emissions by 20 percent on 1990 levels and for 20 percent of the region's energy mix to come from renewable sources, is one of its core and oft debated goals. The problem is about how it gets there. Knowing what it wants, and then actually achieving it, are two very different things.
This is clear in the many questions currently being raised by member states and it was brought to the fore at a recent two-day summit of EU leaders in Brussels. Whilst leaders agreed to stick to the 2020 plans, there were clear divisions over how to share the emissions cuts, particularly given the impact of the current financial crisis.
Italy's Prime Minister, Silvio Berlusconi, threatened to veto the plan unless changes were made to lessen the burden on Italian industry. And the leaders of eight eastern European countries (Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia) in a joint statement said the EU must balance “this wish” against the need for sustainable economic growth at a time of economic uncertainty. They added that they had made great cuts in carbon emissions since emerging from communism in the late 1980s and that “should be recognized” now.
Others too have been vocal in looking for “wiggle room” from the conclusions of a March 2007 summit that offered the 20 percent pledges and proclaimed the EU's “leading role” on climate change. Over this past year, Angela Merkel, the German chancellor, has talked about German industries that should be safeguarded from the full costs of the package, the UK has been downbeat about its renewable energy targets, Ireland says its farmers must be protected and Greece has talked about renegotiating the details regarding carbon capture and storage (CCS) technologies over concerns that the country's geological instability means it will not be able to benefit from this technology.
In truth, most countries have found reasons why the current promises may be impossible to meet. It begs the question: are these targets now achievable?
What is evident is that much of the concern comes down to money, which is now being exacerbated by the current global financial crisis. There is a feeling that the EU has much less financial leverage now than it did only a year or two ago, with a number of member states talking of watering down the measures. Put simply, many feel the EU and its member states will struggle to put enough incentives and money in place to meet its emissions and renewable targets.
This is also brought home when talk turns to the how the system could impact EU industry in a global context. There is particular concern about the issue of “carbon leakage” arising from the possibility of EU companies having to pay for emissions permits, whilst their competitors elsewhere do not face this burden. Many governments certainly appear less keen to get major energy users and carbon intensive industries such as power generators, steel makers and cement producers to pay billions into its emissions scheme. The French and Germans have talked about giving permits for free, but not everyone agrees, with some arguing that this would undermine the credibility of the entire package.
Nevertheless, it is easy to appreciate the potential disadvantages of these additional costs. There are widespread fears that the EU will simply export industries and jobs outside of its borders, without any noticeable reduction in emissions. A “lose-lose” situation for the EU.
There has also been much talk focused on two energy resources. The first is biofuels, which was initially lauded for its potential to provide a cheaper, cleaner and more secure means of energy supply, but over the past year or so research has seriously questioned the actual credentials of biofuels and highlighted the greater competition they can bring for land, water and food. This culminated in a recent EU Parliament vote which, though confirming a binding 10 percent target for renewables in transport fuels by 2020, shifted the focus away from agro-fuels. In fact, with 2020 goals in mind, some have asked whether many current biofuels technologies and products are now more of a problem, than a solution.
And then there is coal, often derided because of its so-called “dirty” reputation, but now in the early throes of what some have labeled a “renaissance”. This is particularly apparent in countries with an abundance of coal, such as Poland and the Czech Republic, which increasingly fear that abandoning coal will cost them financially, and mean that they have an over reliance on gas imports from Russia. There is no doubt that the stability and predictability of coal supplies make it currently the most viable energy security option for many member states.
It does, however, provide a serious headache for the EU 2020 pledges. Whilst these countries want a climate deal that does not lead them down the path of energy insecurity, at the same time, coal obviously raises some profound environmental questions. With these issues in mind, it means there needs to be a major premium placed on developing and deploying technologies that allow coal to fit into a more carbon constrained world. Foremost among these are clean coal technologies and carbon capture and storage. Yet at present the large-scale commercial deployment of these seems to be beyond 2020.
This only provides a brief snippet of some of the possible issues at play, but what it does underline is that there are serious competing interests. And given the current financial turmoil, many of these appear to have been magnified. Recent comments from the EU's environment commissioner, Stavros Dimas, in an interview with the BBC, appear to recognize some of the concerns. Though he stressed that the target of a 20 percent cut in emissions by 2020 still stands, he said that governments should be able to achieve more than half of their target carbon cuts by paying developing countries to invest in clean energy projects on their behalf. The commission had originally put this figure at not more than a third.
As with any EU deal, the devil will certainly be in the detail. In the coming months there will certainly be plenty of horse trading going on, both out in the open, and behind closed doors. There are two key questions. Firstly, just how much of the package will be renegotiated? Will it be some, or will it be all? The EU will certainly hope much of the essence and spirit of the original package remains intact.
And secondly, can member states work to find a final agreement on the package before the end of the year? If not, it may mean that the EU will have to await a new European parliament elected next summer, a new European commission appointed next autumn. In reality, it could see the EU's lead on this issue in tatters.
It is not easy making predictions 12 years or so hence, but in many respects it does seem that as 2020 draws closer, the actual goals are moving further away.