Bertrand Deprez, Head of the Forum and Principal Consultant, The Centre
If I had to draft the agenda of the next EU-U.S. Summit, I would put energy efficiency first.
Why? The first reason is obvious. Promoting energy efficiency is as much a “green” necessity as much as an economic one on both sides of the Atlantic.
The other reason is less well known. The United States and the EU could learn a lot from each other by working more closely together.
Energy Efficiency Technologies for a Low-Carbon Economy
Energy efficiency technologies and services offer a powerful means to modernize and decarbonize our economies on both side of the Atlantic. The diffusion of energy efficiency also gives a boost to the dissemination of other green technologies.
For example, energy-efficient grids will accelerate the connection of new energy sources, such as windmill parks, and give end-consumers the chance be proactive in reducing their consumption of energy. The design of enhanced energy-efficient cars will be crucial to the development of new fuel technologies such as hydrogen, biofuel or electric technologies.
To paraphrase Darwin, energy efficiency is a kind of missing link which would help to make the transition to a low-carbon economy. A missing link which would force economic agents to “trim the fat” and focus on innovation so that we could achieve competitiveness gains with a large pay back in the coming years.
Debates on Both Sides of the Atlantic
However, obtaining those benefits will not be easy either in the United States or the EU. Strangely, the public debate around energy efficiency in the United States and in Europe sounds quite familiar – e.g., How sure are we that these new jobs would not be exported? How can we spread expansive technologies and services when the upfront investment is so high?
An enhanced dialogue between Europe and the United States on this issue would be therefore highly valuable, especially since the approach taken in the United States is complementary to the one taken in Europe.
The United States typically has taken a bottom-up approach which has led to profound changes in the behavior of some businesses – for instance, energy regulators in some states such as California have decoupled energy utilities’ revenues from the amount of energy they sell. This arrangement has created a fundamental conflict between a utility’s interest in selling more energy and the public interest in conserving it. These energy utilities are now the main promoters of energy efficiency in these states.
In Europe, policy makers tend to take a top-down approach; public authorities have often developed sets of standards or labels which have accelerated the transition from many energy-intensive products and practices. An illustration is the Eco-design Directive which hasted to a whole range of products based on their life cycle analysis being banned.
The Solution: Meet in the Middle
Both of these approaches have strengths and weaknesses. The EU top-down approach has the merit of politicizing the issue and gives a real public legitimacy to energy-efficient behavior from the average EU citizen. The U.S. bottom-up approach has the advantage of being more business friendly and of deploying into a more important number of areas, applications and sectors.
The main lesson of these differences is that EU and U.S. stakeholders still have to learn more from each other. Policy makers, members of civil society and businesses need to understand what works and what does not work on both sides of the Atlantic so as to implement new ideas which would achieve the energy efficiency transformation of our economies.
Tags: Bertrand Deprez, consumer behavior, energy-efficient technologies, Europe, low-carbon economy, The Centre
Energy efficiency is certainly a less politically divisive and more business-friendly issue, which gives it the benefit of being a means to immediately make positive progress in addressing global climate change–yes, in Europe and the U.S., but also in more than one hundred other countries across the globe.