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September 15, 2019

September 11, 2019

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Is less discretion more green? A case for rethinking the implementation of the EU environmental policies.

July 24, 2017

European Union has very ambitious environmental policy goals - it has always been at the forefront of environmental innovation, sustainable development and citizen awareness, often way ahead of its counterparts. Environment, nature and sustainability are always present on the European agenda and usually at the national level too. Climate change skepticism is luckily a fringe stance in the European politics and European companies are usually leading the way in green research and innovations as well as making their operation more eco-friendly.

 

Nowadays, after the United States confirmed their withdrawal from the Paris Climate Agreement at the recent G20 summit in Hamburg (despite efforts from Mrs Merkel and Mr Macron to persuade the stubborn ignorance of Mr Trump), Europe seems to have solidified its position as a global leader and trend-setter on the environmental policy.

 

Can the EU deliver? The most recent plan, the so-called 20-20-20 Strategy is certainly a step in the right direction - by 2020, the EU countries commit to three targets: 1) 20% cut in greenhouse gas emissions, 2) 20% of EU energy from renewables and 3) 20% improvement in energy efficiency. This strategy also includes the Emissions Trading System (ETS) and NER300 & Horizon 2020 funding programmes for innovation and financing.

 

However, the determination to strive for greener economy and society is very different among the Member States. Aside from the Scandinavian countries, which have always been setting the pace, the big players have also played their part. Germany decided to completely abandon the nuclear energy in 2011 and just a week ago, president Macron announced that France will be banning all petrol and diesel cars from 2040. Yet this approach if far from uniform across the EU, mainly because of the Central and Eastern European countries. Poland is an apt example, with vast amounts of coal on its territory and a large part of the mining business still state-owned with strong and organized unions, hand in hand with old Soviet coal power plants still providing the majority of country’s electricity output. CEECs also sometimes views any environmental regulation as hindering their economic progress.

 

Especially painful is the lack of a united and unified energy policy, which has been stalled for many years. Public utilities are notoriously difficult area for many reasons. They are consumed by everyone in the society and constitute a necessity for subsistence, thus they have to be highly regulated and affordable for everyone. They are highly politically sensitive and any EU involvement is usually looked at with distrust or full-on refusal.

 

For this reason, the European Commission usually opts for directives as a preferred form of legislation on energy policy, setting a binding target but leaving the discretion of choosing how to reach it to the individual national governments. It should allow for the differences across the Member States to be settled in the most efficient manner. EU countries then set out how they plan to meet these targets and the general course of their renewable energy policy in national renewable energy action plans.

 

This approach unfortunately has many perils and it can also backfire in a very unpleasant way due to the ever-present moral hazard. One of the reasons the Commission chooses directives is to avoid accusation of setting a common, inflexible and centralized European energy policy which disadvantages certain Member States or groups of people. In accordance with the principle of subsidiarity, the lowest possible level is usually the best-equipped to make a qualified decision.

This strategy went sour for example in Czech Republic, where the government decided to reach the target set by the directive 2009/28/EC (18% of national energy output must be from renewable resources, in 2016 increased to 27% by 2030) by using the allocated European funds to subsidize solar panels to families and small energy enterprises. This unfortunately led to a widespread corruption on an unexpected level - corruption for which the wide public blamed the EU, thinking that the Union in fact forced the building of the solar plants, wasting money excessively in the process.

 

If the EU is truly serious about being the global leader in fighting the climate change and promoting ecology, it needs to adopt a more appropriate approach and a set of priorities. Finally completing the common energy market after years of delays is now an absolute necessity, which should also bring about a substantial amount of positive consequences.

 

Another step forward is the inclusion of environmental provisions in the new type of trade agreements the EU is concluding. Starting with the Comprehensive Economic and Trade Agreement (CETA) with Canada, these types of partnership will improve cooperation on environmental issues with countries that are very much advanced in research and development in the area. It will also ease public procurement for the foreign companies, which might often offer a “greener” solution. The next agreement will most likely be struck with Japan, another highly advanced country.

 

But mainly, the Commission and the Parliament have to come up with a better framework of implementing the environmental policies should the EU really make progress in the environmental protection. Since the election of Mr Macron as French president, there have been talks of reforming the Eurozone, giving it its own parliaments and a finance minister. How about proposing the same measure for the environmental policy? Environmental industry is no longer an unprofitable venture to gain popularity but a thriving, growing segment that can add to the EU’s economic power, especially with a view to the future. Contrary to that, the posts of the EU Commissioner for Energy Union (currently held by Maros Sefcovic from Slovakia) or for Environment, Maritime Affairs and Fisheries (Karmenu Vella from Malta) are far from being the most desired. Ministry of environment could be much better equipped to implement the directives, reducing the room for the inefficient corruption and hindrances stemming from a long “chain of command”. Putting the environment high up in the priorities of the European Union could have a tremendous future potential.

 

 

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