Twenty Something

February 14, 2013 | 00:00

Twenty Something

After the EU adopted the famous 20-20-20 targets, we now learn that 20% of the new proposed EU budget for 2014-2020 is to be spent on climate action. Does Mr Barroso want to go down in history as Mister 20%?

The Final agreement on the EU budget that the European Council concluded on 8 February states that "climate action objectives will represent at least 20% of EU spending in the period 2014-2020 and therefore be reflected in the appropriate instruments to ensure that they contribute to strengthen energy security, building a low-carbon, resource efficient and climate resilient economy that will enhance Europe's competitiveness and create more and greener jobs."

The idea for a 20% per cent climate appropriation was first suggested by José Manuel Barroso's European Commission, who seem to have a certain obsession with this figure. Whatever the reason for this particular fixation, it is clear that EU policymakers across the board regard "climate action" as probably the main future driver of the European economy.

There are three issues involved here. First, there is the idea that the EU has a special Duty to do all it can to "protect the climate". Does this make sense? Not really. The fact is that the EU is far too insignificant to do very much about global greenhouse gas emissions at all. EU Climate Commissioner Connie Hedegaard said, upon greeting the 20% news: "If all other major economies were to make similar commitments, it would have a very significant impact." Exactly - if. (If you want to know why it is fairly useless for Europe to try to limit its emissions, and what an effective alternative policy could be, I can recommend Dieter Helm's new book Carbon Crunch.)

The second assumption of European policymakers is that "climate action" enhances competitiveness and creates jobs. Does it? Well, "creating jobs" is of course not a very difficult thing to do. But whether "climate action" leads to net job creation and economic growth is something else entirely. What one would like to know is how, for example, subsidized investment in low-carbon technologies, as in Germany, compares with investments in shale gas production, as in the US, when it comes to growth and job creation? The European Commission would greatly enhance its credibility if it commissioned some really independent research into questions like this.

The third reason given for the 20% spending target (at least 20%) is that it would make the European economy more "resource efficient" and "climate resilient". Those are rather vague notions. As it is used in Brussels, the concept of resource efficiency seems to be based on the idea that "resources" are scarce and should be used as little as possible. In reality, as the unconventional energy revolution shows. things are not as simple as that. As to climate resiliency, if this means building higher dikes and such, as a Dutchman I won't object.

Seriously - I am not arguing that "investing in a low-carbon future" is in all cases a waste of money. But why 20%?

Over in Washington DC, President Obama meanwhile has recently announced similarly ambitious climate plans, in his State of the Union address. He urged Congress "to get together, pursue a bipartisan, market-based solution to climate change" and added that "if Congress won't act soon to protect future generations, I will."

Interestingly, he proposed that "we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good" and issued "a new goal for America: Let's cut in half the energy wasted by our homes and businesses over the next 20 years." (The 20 virus seems to be spreading!)

So far so good, but - and here is the difference with the EU - Obama also said: "Today, no area holds more promise than our investments in American energy. After years of talking about it, we're finally poised to control our own energy future. We produce more oil at home than we have in 15 years." And he said: "We produce more natural gas than ever before, and nearly everyone's energy bill is lower because of it."

This is the kind of talk one never hears in Brussels.

But isn't the American president pursuing a contradictory course here? Isn't he trying to eat his cake and have it too? Environmentalists in the US are certainly not satisfied with the President's stance. They claim his rhetoric may be good, his actions are less so.

Do they have a point? Well, we will know very soon where Obama's real priorities lie. This is because he will soon have to make a decision on whether or not to allow the controversial Keystone XL oil pipeline project.

Now you may think that a decision on some pipeline plan is hardly decisive for the US government's climate strategy. In fact, I thought so myself - until I read the new article by the well-known energy author Michael Klare, in which he explains why Keystone XL is not some random project, but indeed represents the most significant "climate decision" that president Obama is faced with. This is because Obama has in it his power to give the green or red light to Keystone XL - and this decision in turn will largely determine whether the Canadian province of Alberta will be able to develop its stupendous tar sands resources (which climate activists call a "carbon bomb") or whether tar sands will die a slow death.

As an editorial in the trade publication Oil & Gas Journal puts it: "Controversy over the Keystone XL project leaves no room for compromise. Fundamental views about the future of energy are in conflict."

Whether or not you agree with Klare (who opposes the Keystone pipeline), I can recommend his article, which you can find here. In addition, we have a related article for you today, provided by our friends at Oilprice.com, on the issue of pipeline safety.

Of course, Keystone XL is an exclusively American problem. But European policymakers have their own choices to make. For instance, whether or not to develop European shale gas resources. A 20% target does very little to help with this kind of decision.

(Respond? karel.beckman@europeanenergyreview.eu)

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