EU must put more faith in efficiency

Everyone wants energy efficiency, but how to get it is another matter.

Sometimes the difficulty for the European Union’s policymakers is to identify what their objective should be. But in the case of energy efficiency – the subject of an action plan published by the European Commission this week – the difficulty is not identifying the objective, but working out how on earth to get Europe from where it is to where it should be.

Greater energy efficiency is so obviously desirable that it verges on being a no-brainer – it would save Europe money, it would make Europe more secure, become less dependent on energy imports and less vulnerable to energy price fluctuations, and it would help save the planet by reducing the release of global warming gases.

However, energy efficiency has become the “world peace” of the EU’s climate effort – something that everyone professes to believe in, but cannot realise in practice.

Indeed so great is the gap between ambition and reality that it is worth pausing to ask why this should be so.

One problem is the conflict between the short-term and long-term. Money has to be spent up-front in order to achieve energy efficiency savings in the medium to long-term. That is true whether one is talking about the construction industry, the transport sector or domestic appliances. It is the European Commission’s misfortune, as it launches its action plan, that the economic cycle does not favour such investment.

Only some aspects of the market can be relied upon to help the cause of greater efficiency. True, one of the greatest incentives to more efficiency is more expensive energy. But the energy market has been notoriously inconstant, with prices fluctuating sharply. The best incentive to efficiency is a constant, predictably high, energy price.

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The action plan identifies other market difficulties: the tensions between landlords and tenants as to who benefits from investing in improved efficiency in buildings, and difficulties getting energy-efficient technologies onto the European market.

On this latter point, the EU should be braver about promoting certain technologies, if necessary with regulations phasing out the old. There are plenty of innovations that have already been made that could bring enormous improvements to efficiency, for instance in the manufacture of glass and other building materials, but those products are not yet sufficiently widely available.

The Commission’s action plan identifies public buildings as an opportunity, and it should begin by setting a model example. Setting high efficiency standards for new buildings is perhaps not the best test: more telling would be to retrofit some existing EU buildings to achieve sizeable energy savings. The Commission has to challenge the prevailing ethos that there is not a business case for radical improvements in efficiency.

Inspiration will not be enough, not least because there is a shortage of skills in various important industrial sectors. Some coercion will be necessary. The Commission is wary of offending national governments by proposing that a binding target for efficiency should be put into law. Instead, it has adopted a more oblique approach. It reasons that if it can get individual plans approved, such as binding targets to refurbish public buildings and tighter efficiency standards for industry, they might add up to more than an eye-catching overall target.

A final point, which the Commission is too polite or too politic to make, but that is bound to come up as the member states and the European Parliament debate the action plan. The EU will be at a disadvantage in delivering moral lectures about energy efficiency to other public authorities, private enterprise, and individual citizens for as long as the Parliament shuttles between Brussels and Strasbourg.

As this week’s vote makes clear, the Strasbourg seat has diminishing support among the MEPs, though it is maintained by the member states as part of the EU’s treaty. Strasbourg’s symbolic value, as a reminder of Franco-German reconciliation after the Second World War, may or may not be fading. But whatever else the Strasbourg caravan is about, it is not about energy efficiency.