(Euroheat & Power, XXXI CONGRESS, Helsinki 15-17 June 2003
Eija-Riitta Korhola, 17 June 2003:)
The European parliament has been the leading force in creating the European single market since 1986. The Single European Act was an important amendment to the Treaty of Rome while harmonisation and removal of non-tariff restrictions has in practice increased remarkably the size of the market. This, in turn, has removed restrictions on benefiting economies of scale. In less than a year, the market size will be 455 million citizens.
The Treaty of Amsterdam, that entered into force in May 1999, added provisions about the sustainable development, and increased the powers of the European parliament. The Parliament that was elected a month later, in June 1999, is totally different from its predecessor in terms of power. I was astonished about the possibilities we were given – but so were many senior colleagues, as well. Members of the Parliament were used to the Parliament of more debates and less power. Suddenly we were given such big competence. This power was enforced by the dismissal of the European Commission in May 1999. Unfortunately, the public has not yet really understood this.
For example, in the area of environmental law, the Members of the Environment Committee have as much power as the ministers of environment when they come together in the Council of Ministers.
This is of great importance, facing the challenges of sustainable development. Nationally all governments are weak if they try to impose higher environmental standards than those agreed on internationally. They would simply threat to distort the competition of their domestic producers. The European parliament is the only organ that can manage it – and in some industries, even we have to get third countries along.
The creation of the single European market has meant lower prices for consumers and produced extra profits for those industries that can benefit economies of scale. Member States have been clever to use available national tools like taxation to distribute a nice slice of this bigger pie for the society. In the European architecture, it seems to be our task to cut a fair slice for protecting and improving the environment, too. The "polluter pays" principle would be the sufficient justification for these policies, let alone the fact that in many cases the environmental protection cost is much less than the increased profits from larger market size. Recent legislative work has actually aimed to decoupling economic growth from environmental impacts: restrictions has not been laid on demand, but on the environmental cost.
Another thing that has astonished me in the European parliament is the great amount of what I would call symbolic environmental acts. I define it as an act with a mere purpose to produce peace of mind to the person or group acting. It can be done in the form of legislation, as well. Unfortunately, it does not seem to have any relevance with the actual ecological gain – or loss – such an act would produce. I have promised myself to resist the temptations of such symbolic acting even if I sometimes will have to pay with my reputation.
One way for sticking to pragmatic work is to choose carefully ones viewpoint: one can start political work from ones ideals and try from there to reach the reality – or one can start from the reality aiming at the ideals. Personally, I find the latter more efficient way of doing politics. Here, in the North, two major facts of reality would be the state of environment and the supply of energy. Luckily, you seem to be interested in both of them.
Climate change is a fact that cannot be ignored. Of all our knotty problems it so far is the most difficult one. The global change has enormous societal, political and economic consequences. Now, this has not yet been seen clearly enough by politicians. Our social context includes the basic approach of being able to negotiate on everything. This time we have to face the Nature as our counterpart and it will not negotiate or agree on compromises: the Nature just is. It is our task to adapt to facts.
Although there are many new and promising initiatives, the negotiating approach is – unfortunately – still evident in many policies. We are eager to solve one problem without seeing how this creates a dozen new ones. I can tell you, the history of technology is full of examples of gadgets and systems that have no doubt answered one question but also created a bunch of new. The reason for this is in the human nature: Homo Sapiens is also Homo Trepidans, a fusspot.
Well, sometimes a politician can be the fusspot. The EU scheme for the greenhouse gas emission trading may serve as an example. The marvellous idea behind the Kyoto Protocol can easily be destroyed by less thoroughly thought implementation.
The European Commission released its annual figures for the greenhouse gas emissions: if the trend remains the same, the EU's emissions will have decreased by 2012 only by 4,7 per cent. This will leave a gap of 3,3 per cent points to reach the Kyoto target.
Emission trading could be a useful tool to invest promptly where emissions are to be abated with lowest marginal cost – which normally equals with sites of the most urgent need to start abatements. The Commission proposal, however, missed this simple but powerful mechanism with combining two incompatible concepts: market mechanism and authority permitting. The Parliament, unfortunately, amended it for the worse with further restrictions to the efficiency of the market. Few symbolic environmental acts tied together with lots of red tape, et voilá. The Council common position seems more reasonable, unless they give in to some wild ideas of the Parliament in the conciliation.
In other pieces of legislation, however, the Council has played the bad guy. For example, the harmonised taxation of energy products has been delayed in years while the Council has not been able to reach an agreement.
Other ongoing legislative work is the second Communication on European Climate Change Programme progress: it outlines new activities and identifies a total emission reduction potential of 500 to 600 Mt (million tonnes) of CO2 – twice more than the first Kyoto period EU commitment! The main focus will be in transport, which has been lagging behind and thus outweighs the positive progress of other industries.
Another important directive under work is revision on GHG monitoring: finally we can set rules for collecting reliable information for our decisions, and not a minute too early. Last but not least, of course, I should mention the directive on promoting CHP.
On the Commission pipeline there are still some pieces of legislation before the end of the mandate: revisions for the Energy efficiency programme SAVE, and revision for the Integrated pollution prevention and control directive, IPPC. The Clean air for Europe, CAFE Programme and the European climate change programme ECCP will be reviewed, as well as the so called Cardiff Process on integration of environmental considerations into all EU policies. These are all expected within less than one year.
The Commission will also issue the first annual environmental policy review in December, and a follow-up to the Johannesburg Summit for sustainable strategy. The latter would explore practical means for sustainability and a timetable of actions to be implemented up to 2020. This sounds a reasonable substitute, in case you did not get your copy of the famous Hogwarts institute book Unfogging the Future.
Within weeks the Commission is expected to propose a directive on Joint implementation and Clean development mechanism, and a directive on energy demand management. In addition, we are waiting for the Commission proposal for Heat from renewable energy sources to twin with the Res-E directive that was adopted recently.
So, already these few examples should hint you that there are all the reasons for you to keep an eye on the Members of the European Parliament, to monitor closely the work of your national governments, and most urgently, start contacting the draftspersons in the Commission in case you have good practices and experience to share.
In general, though, the Commission will not be proposing many new initiatives during the remaining mandate. Main focus, at the explicit request of the European parliament, will be in monitoring the implementation of the already existing environmental legislation. It will remain a major issue not only in view of the Enlargement, but also in relation to the unsatisfactory performance of current Member States. The increasing trend in complaints and in infringement cases has continued and so has Community's reflection on how to better deal with implementation cases.
You know better than me how important it is to restrict free riding in the open power market. It is perhaps more evident on the micro level. But on the macro level it is equally harmful: the environmental dumping like social dumping creates structures of poverty and causes erosion where the economy should be nourished. Therefore industries like those united under Euroheat & Power, that voluntarily participate in creating better standards and more efficiency have more insight for the sustainable future.
With the mandate I have been given by the citizens of Europe, I would like to thank you for taking the challenge, and warmly invite you to continue the co-operation with European legislators for the economic growth, increased welfare and improved environment.
Euroheat & Power, XXXI CONGRESS, Helsinki 15-17 June 2003
Eija-Riitta Korhola, 17 June 2003