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Europe must set targets for energy efficiency, too

How do you know when your energy efficiency strategy has succeeded? Most companies can answer that, because they set themselves very specific savings targets. They recognise that it is rigorous monitoring and targeting which are the key components of any successful drive to reduce fuel wastage.

Shame therefore that our government seems to be deliberately eschewing any such overt measurements of success – or failure. Simply because it refuses to declare any statistical targets for its energy efficiency initiatives.

To be fair, there is one pertinent target that Energy Secretary Edward Davey has been vigorously championing. He is calling for a 40 per cent cut between 1990 and 2030 in CO2 emissions across the 28 countries of the European Union. This should rise to 50 per cent, if an “ambitious global climate deal is struck.”

But that, he argues, does not mean that any related targets – whether covering renewable or energy efficiency – are necessary. “Adopting an ambitious and binding greenhouse gas target will provide a…compelling reason for us all to do more on energy efficiency. But we should not prejudge the balance between increasing efficiency and deploying other low carbon measures to meet the greenhouse gas targets.”

 Strong argument

He has been vigorously making this point, both in public speeches in Brussels and in private bilateral and trilateral discussions with his opposite numbers in other European governments. One strong argument that seems to have swayed both the Italian and French governments, is that a strong unanimous position between EU countries would be a means of regaining a leadership role for Europe, a credibility much damaged by the perceived debacle with the showpiece EU:ETS carbon trading scheme. Crucially, the most climate sceptic member, Poland, is due to host the next Conference of the Parties, the interminable itinerant UN-backed roadshow still following up the 1997 Kyoto Accord, which returns to Europe this November for the first time since the Copenhagen debacle in 2009.

At present, the European Union has three energy-related targets for 2020. Each is based upon an emblematic 20 per cent reduction.These are to cut carbon dioxide emissions by 20 per cent; to boost the proportion of renewable energy to 20 per cent; and to improve energy efficiency by 20 per cent.

These targets may be equal in timescale and objective. But they are not equal in stature. The first two both have the force of Community law behind them, effectively compelling each government to adopt appropriate policies. In contrast, the energy-saving target does not have the same status at all. It is far from compulsory, just an indicative aspiration.

Does this distinction matter in practice? You bet it does. The consequence of this “also ran” status is plain. Whereas there is great confidence that the first two targets are on track to being met, you can find nobody who right now believes that the energy-saving “target” will be met.

Latest estimates from the European Commission maintain we are set to achieve less than half of that 20 per cent improvement, no more than 9 per cent. Even if all directives are implemented in full (chance would be a fine thing!), that figure would still only creep up to 17 per cent.

And that matters: most of all for economic reasons. Every single objective commentator acknowledges that the cheapest and swiftest way to achieve carbon dioxide reductions is by minimising energy wastage.

Similarly we know that, in energy security terms, it is far cheaper in macro-terms to save than to import or generate more energy.

 Legally binding target

For many years other European governments – together with the European Parliament – have pushed for the adoption of a legally binding energy efficiency target. Rather than the largely ignored aspirations that currently exist.

Last month in France there was a summer study gathering of the European Council for an Energy Efficient Europe, attended by over 450 of those most actively involved in developing energy efficiency policy, from both a governmental and nongovernmental standpoint.

The issue of whether or not a new binding 2030 energy efficiency target is required, in addition to one for greenhouse gases, was the subject of a very lively debate. Taking the pro-side was a senior Danish official, Peter Bach, who happens also to be the present ECEEE chairman. In the absence of any attendee from the UK government, I set out to argue Ed Davey’s case for a single target as persuasively as I could.

At the close, a vote was called. My argument received not one endorsement. Everybody else present was convinced that Europe needed a binding target for energy efficiency too.

The premise that specific targets are otiose, just because implementing energy saving measures is normally the economically rational thing to do, doesn’t wash. We have known for 30 years that rational investments aren’t being taken, and won’t be taken, unless market failures are corrected. We aren’t getting the least cost path to saving carbon during this decade. Nor will we in the next, unless there is a specific energy efficiency target.

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