The European commission’s failure to propose a more ambitious and legally binding target to reduce energy demand represents a serious missed opportunity. It will increase the risks that EU member states face from dependence on imported fossil fuels and slow the economic and social benefits of better insulated homes and lower energy bills.
With the president–elect of the European commission publicly supporting an ‘ambitious binding target on energy efficiency,’ and with strong political support in many member states, the commission should have had the courage to adopt a legally binding target of 40 per cent energy savings by 2030.
This would ensure that all member states introduce credible and effective energy efficiency policies and would reinforce the EU’s leadership role in reducing carbon emissions and preventing dangerous climate change.
A 40 per cent target would be broadly consistent with current rates of improvement in energy efficiency across the EU - and is well within our reach. The commission's proposal of a less ambitious 30 per cent target implies a weakening of political commitment.
Recent progress has indicated that significant reductions in energy consumption can be achieved while at the same time maintaining productivity and improving quality of life. For example, in the UK primary energy consumption fell by 14 per cent between 2000 and 2012, while real GDP increased by 58 per cent. Similarly, recent studies have shown how the technology and strategies are available to achieve more ambitious reductions without imposing a burden on the economy. For example, the commission’s own impact assessment suggests that a more ambitious energy efficiency target would have somewhere between a slightly negative and a significantly positive effect on the EU economy.
A binding target would ensure political commitment to the task of developing effective energy efficiency policies and provide long-term confidence for investors delivering commercial goods and services for energy efficiency. It would also drive innovation in energy efficient products, opening up market opportunities for EU industries around the world.
"Regional instability in north Africa, the Middle East and now Ukraine has shown time and again that over-reliance on imported fossil fuels makes countries vulnerable to price shocks and supply interruptions"
Regional instability in north Africa, the Middle East and now Ukraine has shown time and again that over-reliance on imported fossil fuels makes countries vulnerable to price shocks and supply interruptions. A legally binding 40 per cent target could potentially reduce EU gas imports by up to 40 per cent compared to 2010, roughly equivalent to the amount of gas currently imported from Russia.
It would also reduce household energy bills through improved energy efficiency, lowering levels of fuel poverty and reducing the effects of poor-quality housing on health. And it would reduce the required scale of investment in renewable energy infrastructure by reducing energy demand.
Improved energy efficiency has repeatedly been shown to be the cheapest and fastest way of reducing carbon emissions, while at the same time providing multiple economic, social and environmental benefits. Without an ambitious overall energy-efficiency target it’s unlikely that member states would unlock these benefits. Nor can these benefits be achieved through the carbon price delivered through the EU emissions trading scheme.
"We need energy strategies that can improve energy security, reduce fuel poverty and household energy bills and at the same time protect the global climate"
An aggregate target helps ensure that energy savings in one area are not offset by the ‘rebound effect’ of increased energy demand in another. A legally binding target at the EU level would help ensure that progress is monitored, action is taken and results achieved. None of this is incompatible with the emissions trading scheme provided the appropriate steps are taken to ensure a minimum carbon price.
We need energy strategies that can improve energy security, reduce fuel poverty and household energy bills and at the same time protect the global climate. Energy efficiency is the only approach that scores on all three. A 40 per cent reduction by 2030 is not only desirable but entirely achievable - but only when backed by political commitment.