Policy brief: Putting Europe back on its feet

By Claire Roumet on 12 October 2017

A more democratic, sovereign and united Europe is the “Holy Trinity” French President Emmanuel Macron deeply believes in. A belief he shared last week when presenting his vision of Europe. What the media retained is a proposal for greater European integration for some states; but let us take a closer look.

“The fourth key to our sovereignty is being able to address the first of the major global transformations, the ecological transition”

How? By implementing these 4 transformation pillars:

1. Interconnecting the energy markets – this classic pillar is a primary goal of the Energy Union that has often been opposed in Brussels by France, anxious to preserve its nuclear plants from the competition of Spanish power from renewable sources. This is therefore a complete change in posture.

2. A €30/tonne carbon floor price: given the lack of unanimity on taxation, it is very difficult to make progress on the idea of a European carbon tax, the most efficient way of really transforming the economy according to experts. A floor price would bring about a change in the ETS market instrument by integrating a bottom price. Many economists, however, consider that this price is too low to be a genuine signal and to result in investment changes. This remains a first step.

3. A carbon tax at the borders would protect the European economy by making imported goods less competitive. The best protection would still be to reduce our energy demand (including grey energy) but such a border tax would also involve redesigning climate geopolitics (as suggested by Paul Magnette, Mayor of Charleroi, Belgium, in his analysis of the speech(1)) by clearly distinguishing those countries which apply the Paris agreement from those who do not.

4. Finally, regional transition contracts. This last proposal echoes that of the Commission of testing out a new form of partnership between authorities at different levels in a few “coal” regions and using the Structural Funds to finance industrial transformation/restructuring projects. This would mean devising a regional transition project for all the partners in the region affected by a mine or plant closure: civil society, businesses, local and regional authorities, the State and the Commission. In France, several pilot contracts will be signed in 2018 and the Commission plans to sign one with the Nobaky region in Slovakia in the coming months.

For Energy Cities, much more than just the 4th transformation pillar, this should be the backbone of the European project, enabling Europe to get back on its feet and create a more democratic, sovereign and united European Union. Democratic because its transformation will involve all stakeholders; sovereign, because local development will be based on local resources; united because the contracts will be signed between different levels of governance and various authorities in a collaborative approach, thus overcoming the classic urban-rural opposition in regional cohesion expenditure.

These proposals for the future of Europe form a long-term project. The announcement by Jean-Claude Juncker, President of the Commission, in his “State of the Union” speech about the articles of the Treaty relating to energy and the need to review them shows that there is room for discussion about how to integrate the 21st century into the energy security concept, a concept often used by Member States to delay their much-needed industrial transformation.

by Claire Roumet, Executive Director of Energy Cities


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