Harmony and understanding

November 1, 2012 | 00:00

Harmony and understanding

In these days of global conflict and confrontation, I am glad to say that this issue of European Energy Review is dedicated to international peace and partnership.

And I am only half-joking.

It may be tempting sometimes to try and get our way by putting the other guy down, but - as the Classical economists of the 19th Century already knew - in an international market economy everyone is better off in the end if we pursue our ends through trade and cooperation. This is no less true in the energy sector than in any other economic sector. Perhaps even more so. Protectionism tends to lead to scarcity and energy scarcity ends all too often in war. It is no coincidence that World War Two, which was at least partially about energy, followed upon the orgy of protectionism that haunted the 1930s.

The current crisis has not yet taken us all the way down that road, fortunately. But the forces of protectionism are strong and they will get stronger as the crisis bites deeper. In one energy sector they have already hit home: solar panels. The US has imposed steep tariffs on photovoltaic (PV) cells imported from China, the EU may soon follow that example. It is an understandable reflex, perhaps, from policymakers, to try and protect their domestic industry in this way. Yet, as renowned author John Mathews, who is currently Chair of Strategy at the Macquarie Graduate School of Management at Macquarie University, Sydney, makes clear in a new article for EER, such reflexes are ultimately a recipe for disaster.

Mathews, who for the past three years has held the Eni Chair of Competitive Dynamics and Global Strategy at the LUISS Guido Carli University in Rome - and is finalizing a new book on the theme of "The Next Great Transformation: The Greening of Capitalism" - explains in his article why protectionist measures against Chinese panel producers will inevitably backfire.

Worse, not only will they hurt the domestic solar power sectors in the US and Europe (did you know, for instance, that the US actually has a trade surplus with China in the entire solar power value chain?), they will also hurt the development of solar power in developing countries worldwide. Which is bad news, because, as Mathews also makes clear, solar power is (or was) on its way to become an energy saviour to a large part of the global population.

So don't miss John Mathews' fascinating piece, which does more than make a case against import tariffs for solar panels - it represents a succinct anatomy of how the global power sector works.

Other contributions we have for you today also relate to the theme of international cooperation. For example, Emilia Zankina, Assistant Professor of Political Science at the American University in Bulgaria, argues in an op-ed against the 'east-west' divide that is threatening to arise within the EU when it comes to climate policy. And we have news from Brussels, where gas producers, including Dong and Shell, announced a new "Energy Partnership" with producers of renewable energy, like First Solar and General Electric.

So we are all about peace and harmony today. Indeed, without undue modesty, I think European Energy Review itself may lay some claim to having become an instrument of 'partnership' in the energy sector since we started in November 2007, exactly five years ago.

We have, I believe, managed to generate a certain measure of harmony and mutual understanding between readers of all stripes and all nationalities. Not by avoiding sharp debates or shunning firm viewpoints. Far from it. We have in fact published (and will continue to do so) a wide variety of highly outspoken views and critical arguments.

Yet most of our readers understand by now that we do not try to push any set opinions or represent certain (hidden) interests. We try to get across as broad a spectrum of views and insights as we can - provided they are well argued and don't give offense. At the same time, I think we can justly claim that we have never descended into ideological protectionism, let alone war!

This more than anything explains - for me at least - the fantastic response we have had so far from readers across the world, and the steady growth in our readership.

As you no doubt have noticed, European Energy Review has entered a new phase of its existence. After five years our newsletter and website have been renewed and expanded, and our business model has been changed, to ensure that we can continue to function as the premier independent international energy platform for our readers across Europe and the world.

This does mean that we cannot provide all our content for free anymore - that too is part of what free trade means! But I do hope you approve of the changes and will continue to support us.

 

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