Energy issues and climate changes are posing an enormous and inescapable challenge, and it is thus essential to develop the most appropriate strategy and tools for meeting that challenge.
Energy research is perhaps the most strategic of Europe’s energy policy tools, and the most universal one with regard to the fundamentals described in that document’s introduction.
If properly directed research and technological progress will be able to generate the changes necessary for rendering our economic development model capable also of safeguarding the environment.
Thus national and European institutions must develop ad hoc financial tools and programmes for further developing those research projects that appear the most promising from the standpoint of potential and benefits to the system; even though at the current stage of development these are not economically competitive, multilateral agreements to share the costs of the most onerous programmes would be advisable.
With regard to technologies that have passed the purely experimental phase and are just waiting for the proper incentives to make them competitive with older technologies; it would therefore be advisable to create temporary subsidies—or better yet, market instruments—that would make these more appealing to consumers and thereby lead to more rapid market penetration.
The main research sectors to be developed are those that contribute most to lessening dependence on fossil fuels, lowering CO2 emissions and increasing the efficient use of energy.
In addition to developing energy research, it is necessary to supplement and coordinate the strategies of individual nations and the tools used within the European context.
An effective approach could be that of flanking the European deregulation currently under way with specific investment (and/or regulatory and market) priorities and adequate instruments for implementing them while, at the same time however, shifting a portion of the authority and responsibility currently given to national governments to community institutions.
The advantage of this assignment of coordination to supranational institutions is owing to the fact that Europe today is a sort of energy “patchwork” made up of national markets that often differ widely from one to the other and that there is not enough desire on the part of Member State governments to contribute to a rapid and effective integration process.
Delegating specific powers to a coordinating authority—for example, with regard exclusively to integration—could result in interconnecting the main European energy infrastructures and harmonising the rules governing their use, with clear advantages also at the level of market integration.
Obviously there are also risks associated with a process of this sort, but we believe that these are to be dealt with in the basis of the fact that exclusively national long-term policies are bound to fail.
Practical mechanisms already at work both at national as well as international level such as, the Emission trading Scheme (ETS) for CO2 emissions or the major rail and road transport corridors, are good examples of specific objectives and instruments that combine community aims with national responsibilities.
Cap and Trade mechanisms, for example, could be introduced at community level in order to encourage the more widespread use of renewable energy sources in Europe, without significant distortions among national markets; while the experience of the European transport corridors could offer a way to better confront the idea of connecting international energy networks: no longer exclusively from a national standpoint but from the broader one of regional market development.
Independent of the future harmonisation of national policies, taxes also represent a tool that, by its very nature, does not prevent effective market regulation and can be used effectively for selecting appropriate types of investment and related allowances, or supporting energy efficiency programmes, in such a way as to render the energy infrastructures and markets of every European country complementary to and homogeneous with the Community plan.
Finally, a note on existing European financial instruments for encouraging investment and their possible use in the field of energy: the European Investment Bank and Structural Funds should be called upon to play a more incisive role in this sector, funding major energy research, interconnection and storage projects. Eventual initiatives of this sort, if correctly inserted within the framework of current deregulation process, could contribute effectively to accelerating the European continent’s transition toward a future of more secure and sustainable energy.