BFBEnergyPaper

It is important to note that many of these IAs state that there is both a cost and a benefit thatstems from the policy. There are benefits that stem from these laws, not least the potentialto make the air cleaner and it is worth emphasising that the above analysis suggests thatsome EU directives actually have a net benefit for the UK. This table simply shows the netcosts that stem from these rules.It should be emphasised that this paper does not take a stance on the climate changedebate and does not consider the environmental pros and cons of these laws. It has beensuggested that, even were it outside the EU, the UK Government would go beyond minimumEU requirements in implementing EU regulations. However, this claim is deceptive: studiesby Open Europe have shown that British regulation is more effective at delivering benefitsthan European regulation, so were the UK to replicate EU laws, these rules would likelybe much less onerous and, crucially, could have been altered in response to changingcircumstances. 44Finally, it is worth pointing out that while these directives have, usually, been based on theargument that they are building a Single Market in energy, there has been a noted failureto actually improve cross border trade. While the European Commission has argued thatcompleting the Single Market could add significantly to Europe’s GDP and claims that theEU’s efforts to unbundle networks and to open the energy markets have had a downwardimpact on prices, there is a concerning lack of evidence for this in many areas. 45 The UKGovernment has noted the “missing links in the EU’s energy infrastructure” 46 while reportsfor the European Commission have noted that the EU has managed to secure some marketcoupling over the last ten years “market coupling is delivering only the benefits of shortterm arbitrage in energy trading. The Target Electricity Model only makes partial progress indelivering a fully integrated electricity market.” 47Other reports have pointed out that price convergence between markets has notmaterialised. In the Central West Europe region market coupling initially resulted in priceconvergence of 66 per cent in the first year (2011) but by 2012, this figure had fallen to 46per cent and, in 2013, to just 15 per cent. According to the study “market coupling has failedto overcome national supply/demand factors.” 48 The lack of growth in cross border energytrade can also be seen in Figure 8 which, while showing significant variation over severalmonths, also shows a concerning lack of growth over time.Energy Policyand the EU44 Open Europe, Still out of control? Measuring eleven years of EU regulation, June 2010, found at 45 European Commission, Energy Economic Developments in Europe 2014, p.61, 46 BIS, European Commission Consultation on the Single Market Act, p. 23, February 2011, found at 47 Booz&co, Benefits of an integrated European Energy Market,20 July 2013, found at 48 Energy Economist, Trying to get a single European electricity market, 27 February 2014, information and summary can befound at 22