October 19, 2010
It is understandable that our elected representatives in the form of the Environment Council may wish to undertake more studies on moving to a 30% reduction in CO2 emissions. After all, this is a momentous step. PWR has some very good news in this regard, which will also delight BusinessEurope.
Towards the end of 2009 two Fraunhofers produced a report for the German Ministry of Education and Research which addressed the issue of “how much energy could the German manufacturing industry save in the medium term”. The answer was between 25 and 30%, or expressed another way – about half the energy currently consumed by German households (= roughly 15% of German CO2 emissions).
The European Commission was sufficiently impressed by the report to have the summary translated into English. If the European Council asks the Commission nicely, it might even let it have a copy of the summary.
One image that does not spring to mind when considering the German manufacturing industry is the word ‘inefficient’. Quite the reverse. That an institution known for its generally rigorous approach (i.e. the Fraunhofers) can identify medium-term (less than 10 years) savings in an industry admired globally for its efficient approach to most things suggests that as a minimum there are similar (if not greater) amounts of energy savings possible in the rest of the European manufacturing sector.
In turn this suggests that achieving the 30% (well in reality an additional 10%) over 10 years using efficiency measures in industry is not just possible but also desirable, since it would leave the European manufacturing industry in the position of using less energy to produce the same goods. PWR has no doubt that BusinessEurope and doubtless our elected representatives in the form of the environment ministers would support such a worthy aim (over to you chaps).
BusinessEurope (BE) is also correct in observing that CO2 emission reductions can only be tackled globally. However, as the Fraunhofer study has shown, important sectors such as manufacturing could take efficiency measures that would in turn allow Europe to easily reach the 30% and at the same time be more competitive.
I cannot imagine that either the ministers or BE would want a less competitive European manufacturing industry. So why not, for example, push hard for efficiency in the manufacturing industry and get to a double result – a more competitive industry and a painless 30% CO2 reduction?
In the case of ‘open markets’, these are to be desired and supported and in this PWR agrees with BE. Continuing in this context, PWR would be delighted to hear an explanation of China’s current lack of ‘market economy status’ vis-à-vis the EU and how this relates to ‘open markets’. If a lack of ‘market economy status’ means that China does not have an ‘open market’ then surely the fuss over border carbon tariffs (BCTs) does not matter.
The other curious aspect of BCTs rarely referred to is the July 2009 report from the WTO on border carbon taxes. Depending on where you sit, this gives either an orange light (get ready to go) or green light with respect to BCTs. Either the report is garbage (over to you, Pascal) or some member states and the European Commission are being ‘economical with the truth’ when they warble on about how the imposition of BCTs would leave Europe open to disputes in the WTO. Surely the WTO would not produce a report that encourages trade litigation – would it?