GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 31 IntroductionIn the last decade, energy systems transformation hasbecome the new and unheralded frontier of Europeandeepening. Starting in 1996, the European Union mandatedthe liberalization and integration of national energysystems, put a price on greenhouse gas emissionsfrom electricity generation, established binding targetsfor renewable energy adoption, mandated the breakupof state energy monopolies, and sponsored the creationof EU-level regulatory and standards-setting bodies forenergy infrastructure and markets. Most recently, theEurope 2020 program has established enforceable goalsfor the integration, liberalization, and decarbonizationof the European electricity supply system, and ambitiousbut aspirational targets in energy efficiency.Most analysis of this European policy history has emphasizedthe role of environmental politics in drivingprogress on emissions reduction. Appeals to environmentalpolitics in this context appear to explain the apparentwillingness of the European economies to trade off theeconomic costs of climate change mitigation for the perceivedecological and social benefits it might bring. Consistentwith this understanding of the politics of Europeanenergy policy, green parties and social movements havebeen given significant explanatory weight."Appeals to environmental politics...appear to explainthe apparent willingness of the European economiesto trade off the economic costs of climate change mitigationfor the perceived ecological and social benefitsit might bring."This paper argues that the environmental politics approachfalls well short of a satisfying explanation for boththe evolution of European policy and the characteristicsof the policy suite. The attention to environmentalism,rather than to the details of European energy policy andthe constraints of the current European energy system,over-emphasizes the role of environmental concerns.It also leads to the conclusion that the European policysuite may be fundamentally unstable–prone to reversalwhen the costs of environmental action exceed the altruismof European publics. This poses particular problemswhen faced with the fact that progress on emissions andrenewable energy continued even after European enlargementadded 12 member states with significantly lessenthusiasm for climate change mitigation and significantlygreater reliance on fossil fuels.Instead, European policy must be understood as an attemptto transform the energy system amidst, on the onehand, the need to maintain a stable political coalition ofEU member states supportive of the transformation; and,on the other, the technological and economic complexityof the energy system. This trifecta of constraints–political,technological, and economic–complicates the processof policy design. But it also improves the prospects forsustaining policy through cross-subsidization across policydomains. These constraints and opportunities arisefrom the common role played by energy in emissions, security,and technological change. That role is closely intertwinedwith the possibilities for technological changein the energy system. Thus only by understanding boththe technological challenge of energy systems transformation,and the political conflicts implicit in that transformation,can we understand the resulting policy suite.2 Green parties for green energy?Competing explanations for EU policyleadershipWhile the energy sector itself accounts for only 2-4% ofEuropean GDP, the central role of energy in modern industrialsociety gives changes to the energy system importancefar in excess of their immediate economic valuation.Today, Europe’s energy system provides abundant,reliable, relatively inexpensive energy. Disruption of anyof these characteristics would pose major challenges tothe rest of the economy. Thus it is not surprising thatboth the European Union and its member states haveapproached climate and energy policy as an attempt torestructure the inputs to the energy system while leavingthe outputs untouched. Technologically, that has meantswitching away from imported fossil fuels towards domesticrenewable energy. Economically, this has meantmarketization of the energy system; dismantling of vertically-integratedstate-owned energy firms; and differentialregulation of energy production, distribution, anduse. These initiatives all seek to accomplish the decarbonizationof European energy supplies and the integrationof European energy markets while leaving the industrialsuperstructure of the European Union unperturbed.On their own, these technical and regulatory changespose significant challenges. Ongoing changes in the politicallandscape of the European Union have only compoundedthese challenges. Europeanization of energypolicy has taken place amidst an enlargement programthat has made Europe’s climate and energy interests more,not less, diverse. The industries of eastern Europe andthe Baltic states in particular were more dependent ongreater quantities of less expensive carbon energy thantheir Western counterparts. The publics in those countrieswere less enthusiastic about climate change mitigation,and more likely to support exploitation of domestic22