The media coverage of the recent meeting of the European Council (June 26-27) was almost exclusively devoted to the candidacy of Jean-Claude Juncker for President of the European Commission. In reality, apart from agreeing to nominate Juncker, the European Council spent much time on a number of highly important substantive issues, most notably those regarding energy and climate.

On the first day of its meeting (June 26), the Council discussed and adopted a new strategic agenda, officially called the Strategic Agenda for the Union in Times of Change. High on this agenda is, among other things, the creation of an “Energy Union with a forward-looking climate policy.”

Over the past few years, the idea of an Energy Union was informally mentioned already several times. But now, in this new strategic agenda, the Energy Union has been introduced for the first time in an official European document, and has been accepted by an official European institution.

The overall goal of the Energy Union is crystal clear: it should achieve “affordable energy”, “secure energy”, and “green energy”. The new strategic agenda for the European Union thus provides not only the birth certificate of the new Energy Union, but also embodies its ambitious mandate.

On the second day of its meeting (June 27), the Council returned to climate and energy. It looked at the 220-page study on energy security that was published by the European Commission on June 4, in which the Commission proposed a new European Energy Security Strategy. Basically the Council adopted all the various policies as proposed in this study.

The Council also decided that it would finalize the new climate and energy policy framework (i.e., the Energy Union) in its regular meeting in October 2014. In short, the European Union in June 2014 has moved quite a way forward with respect to climate and energy, but important work on these issues remains to be done between now and October 2014.

In that context, one issue in particular should get much more attention than it has received so far, and that is the need to make the EU Emissions Trading System (ETS) more effective by raising the price of CO2 to €40 per ton. ETS was launched in 2005 to combat climate change, and remains the largest greenhouse gas emissions trading system in the world to date. But at the current CO2 price of €5 per ton, ETS is not working and is doomed to become irrelevant.

From a global perspective, climate change is a matter of the highest importance. That is why the Port of Rotterdam went for the Rotterdam Climate Initiative. That is why Angela Merkel went for the “Energiewende”. But throughout the past decade, the ETS emission rights were given out much too generously—fully underestimating CO2-saving technologies.

Curiously enough, the European Council in its official conclusions of the June meeting fails to make any reference to ETS and the price of CO2. This in sharp contrast to the recommendations of the Green Growth Group—an informal network of thirteen European ministers of climate and energy—which in a report published in October 2013 emphasized that ETS, based on an effective CO2 price, should remain the EU’s most important policy instrument.

So the Energy Union will contribute to affordable energy, secure energy, and green energy. But to deal effectively with climate change, ETS has to be reinforced and the price of CO2 raised to €40 per ton. All this will result in new investments, new jobs, and new growth. It will give the European Union new Energy!

thezimbabwean.com