old on, you move too fast
‘The most massive energy programme ever proposed anywhere in the world outside war-time conditions.’ That’s how energy analyst Andrew MacKillop, the author of today’s new publication on European Energy Review, describes current EU energy and climate policy.
This is not, in fact, how EU policy is usually regarded – it is more often treated as a fairly technical or technocratic process – but it is surely a correct assessment. European energy and climate policy is indeed radically transforming the very foundations of European energy supply. Even though most people may not be aware of it, it is a project that can be compared in its scope and ambitions to the Monetary Union.
The question is – where is it taking us?
The key notions of the transition process are: liberalisation (unbundling), integration (of national markets) and decarbonisation. Again, these are quite abstract, technocratic notions. It is by no means clear how they will be translated into reality – and how effective they will be in bringing us the results that we are looking for.
As MacKillop points out, there is a deep paradox at the bottom of the transition process: it is a process of liberalisation, but one that is very much centrally planned. This not only applies to the decarbonisation part, but also to the whole issue of market design (unbundling, infrastructure). It is the policymakers that call the shots – but no one quite knows where the role of the policymakers will end and “the market” will begin.
In this context of uncertainty, argues MacKillop, policymakers would do well to moderate their ambitions – to make sure that the troops are lined up before they move on. But, he notes ,the opposite is happening. The plans and decisions coming out of Brussels seem ever grander, more ambitious, more complex, more intrusive, and more expensive.
He warns that this process, if it is not checked, will lead to disaster. In view of the state the EU’s Monetary Union is in, it is a warning that deserves to be heard – and heeded. You can read Andrew’s analysis by clicking here.