Between national interests and the greater good: struggling towards a common European union energy policy in the context of climate change.

• Author: Focken, Hanno
• Position: Global Public Policy Network Essay - Ess

1. Introduction: Towards a Renewable European Energy Supply

   The strategy paper Renewable Energy: a major player in the European energy market of the European Commission describes a remarkably fast development of "green" energy sources in recent years. Yet, to continue this trend in the future, the underlying political framework has to be reliable. Creating a favorable environment through investment incentives and the integration of renewable sources of energy into a common European Union (EU) energy market is therefore key. (1)

   So far, the EU has, however, only set rough targets for the development of renewable energy sources. In 2007, the EU agreed to a twenty percent increase of the total share of renewable energy supply in Europe by 2020. However, member states were given the freedom to define their own national goals for 2020. (2) Hence, supervision of the overall implementation of renewable energy goals does not lie within EU jurisdiction, but instead remains within the control of national governments.

   Existing instruments within the EU framework for promoting renewable energy exemplify a lack of political coordination. Up to this point, no coherent energy policy has been formulated or implemented. The formulation of binding goals within the 20-20-20 framework was not followed by further attempts for a common European energy strategy. When observing the energy policies of some of the larger member states this becomes particularly apparent: On one hand, Germany decided to single-handedly phase out nuclear power and focus on the use and expansion of renewable energy sources; (3) on the other hand, France still draws the largest part of its national power generation from nuclear sources and will not deviate from this path in the foreseeable future. (4) Poland, as another example, still counts on coal as its main power source while planning on giving nuclear energy a more central role in the future. (5) Renewable energy sources have not yet been considered in a serious manner by Poland and have been regarded with skepticism by its government. (6)

   The "Europeanization" of the energy industry in recent years makes these differences in energy strategies seem somewhat paradoxical. Although member states still show a vast amount of autonomy in defining their individual energy policies, their national decisions are increasingly affecting neighboring countries. For instance, the electricity generated from wind power plants in Northern Germany is increasingly flowing through the power grids of the Czech Republic and Poland to reach the southern parts of Germany, as their own grid is not capable of supporting these energy streams. This additional strain on Polish and Czech grids by the "loop flows" of German wind-generated energy could, under certain circumstances, threaten the national energy security of these countries. (7) This example alone illustrates that a stronger coordination of energy policies among EU member states is needed, if only to stabilize the political climate within the EU and prevent future conflicts between neighboring countries from arising. Furthermore, if independent operation of the already interconnected systems of energy creation among EU member states continues, the EU will remain substantially inefficient and will miss out on possible synergy benefits.

   Finally, effective policies to combat climate change will only be feasible in close cooperation among EU member states. This paper therefore provides insight into the state of play of cross-border energy collaboration among EU member states in the context of EU policy and legislation as well as geopolitics.

2. Geopolitics, Economics and Collective Action--The Reasons for a Common Energy Policy

   Today human society consumes manifold amounts of energy that hunter and gatherer societies used to consume. (8) In this context, one of the key concerns for the 21st century, which will limit human energy consumption, is not the scarcity of resources such as fossil fuels but rather their abundance. 9

   So far, a clear vision and strategy on how to build a society that maintains the current standard of living using less energy, while discouraging individuals, organizations and economies from divesting from fossil fuels, is still missing. The main victim of this development is the earth's environmental system, which acts as a repository for waste products of these resources, like carbon dioxide. As pricing and thus self-regulation by the market does not help to limit greenhouse gases from concentrating in the earth's atmosphere, imposing strict limits on carbon dioxide production seems like one of the most promising options. (10) Furthermore, gains in technological efficiency will not be enough to limit pollution because income saved from these efficiency gains will increase consumption, which will in turn increase the need for energy. This is known as the rebound effect. (11)

   Furthermore, sources state that global energy demand has doubled between 1990 and 2011 and will grow another 81 percent before 2035. (12) Given this dynamic, Europe's energy demand is likely to plateau or even decrease. (13) Even with only a few proper resources, the EU still consumes one fifth of the world's energy. (14) By 2030, EU energy imports will likely increase to roughly seventy percent, resulting in a significant dependence on other countries for energy supply. Apart from this, the electricity blackout in November 2006 and the gas crisis in January 2009 brought to the table the issue of energy security, including related infrastructure needs. (15) In 2011 this led to the adoption of a regulation of European energy infrastructure and the dedication of close to five billion Euros in the EU budget to subsidize the integration of European energy networks by investing in cross-border energy infrastructure under the "Connecting Europe Facility". (16)

   In more recent discussions, the plan of establishing the "North-South Corridor" in Western Europe aims to strengthen a secure gas supply in Central and Eastern Europe (CEE) and create a single gas market for the total cost of roughly fifty billion Euros. This project features extensive infrastructure investments in Poland and will link it, as well as other CEE countries, to the global liquefied natural gas (LNG) markets. (17) The Ukraine crisis has exposed the vulnerability of CEE countries to Russian supply of natural gas, the only supplier to which their pipelines have access. Political pricing and other possible manipulations in the gas market by Russia make the strategic importance of this project more important than ever. (18)

   Diversifying energy supplies and their means of transport, ensuring affordable energy prices in order to avoid a lack of competitiveness on the global market, while at the same time protecting the environment through actions against climate change are thus considered key issues by the EU. From a geopolitical standpoint, member states cannot neglect the strategic importance of striking a balance between these three issues. However, collective action proves to be a problem. (19)

   The primary argument that countries like Germany use in defense of their efforts to combat climate change is that they are acting as a role model. (20) By reducing their carbon extraction and limiting their own emissions they try to be a leading...