In search of common ground
By Dafydd ab Iago | Friday 16 January 2009
The change of administration in the US should lead to a new spirit in bilateral energy relations. As in the field of environmental affairs, the US has long been painted as a conservative force in relation to EU policy. A change of administration could open up the route for new policy directions in the field of energy. Nonetheless, there is a fundamental difference between EU-US relations in the field of environment and energy. Unlike the environment, where binding international agreements have been set for the EU, energy policy is not (yet) governed by any substantial and binding agreements. The EU itself continues to reject binding targets for improving energy efficiency. We are also still far away from any joint EU-US commitment to promote renewable energy.
That said, the incoming US administration has promised much in terms of energy policy. The electoral document presented during the campaign by Barack Obama and Joe Biden contains a promise to “help” create five million new jobs by strategically investing US$150 billion over the next ten years to boost private efforts to build a clean energy future. Obama and Biden commit to saving, within ten years, more oil than the US currently imports from the Middle East and Venezuela together. The two will “put” one million plug-in hybrid cars on the road by 2015 as well as ensure that 10% of the US' electricity comes from renewable sources by 2012. By 2025, a full 25% should be renewable.
With the lower oil price, the US and EU administrations should also have a common ground for working on measures to crack down on excessive energy speculation – when oil prices rebound again. “Current loopholes in Commodity Futures Trading Commission regulations have contributed to the skyrocketing price of oil on world markets,” noted Obama and Biden in their electoral document. They promised to enact simple legislation to close loopholes and increase transparency on the market so as prevent traders from unfairly lining their pockets. A more populist point in the Obama-Biden programme, the tax on oil companies' windfall profits to provide an energy rebate, is unlikely to find an echo in the EU. Given the fall in oil prices, and the obvious legal difficulties in such a tax, the Obama administration is likely to forget this levy on windfall profits.
The Energy Star Regulation (EC No 106/2008) requires EU institutions and central member state government authorities to use energy efficiency criteria no less demanding than those defined in the EU-US Energy Star programme when purchasing office equipment. It is one of the key examples of concrete EU-US cooperation in the field of energy rather than dialogue between leaders. This programme adopts a very practical approach to improving energy efficiency in the specific sector of electrical appliances.