healthier, happier and richer

I have just returned from a trip to Slovenia. On Monday, I chaired a session on the transition to new energy at the Bled Strategic Forum, an annual event which brings together politicians, business people, NGOS and journalists. This year, the forum was about the global challenges of the next decade, so there was a lot of discussion about climate change. Felipe Gonzalez, ex-prime minister of Spain and now the chair of nine ‘elders’ considering the future of EU strategy, spoke at one session and said that the EU had been ignored at the Copenhagen Climate Summit because it had a common position, but not a common strategy. This is correct. The EU is quite good at reaching formal common positions, involving lengthy negotiations between the member states, the Commission and the Parliament, but having agreed the common position and issued a press release, there is not nearly enough consideration about what to do with it. Press releases do not have much impact on international diplomacy or negotiations.

With the Lisbon Treaty now in force, the EU has an External Action Service, which is essentially a diplomatic service but cannot be called that as that would upset the nation states. The External Action Service should give EU foreign policy a bit more coherence, but will not deliver miracles as big countries like France and the UK (who will certainly not give up their permanent membership of the UN Security Council, to the EU or to anyone else) will continue to do most foreign policy themselves. The European Commission now also has a climate action commissioner, Connie Hedegaard. She was previously the Danish Minister for Climate and Energy (2007-2010) and, before that, the Minister for the Environment (2004-2007). So she hosted the Copenhagen summit. At the time, she was blamed for its failure, and some of the disorganisation and lack of stronger chairing were her responsibility. However, it would be completely unreasonable to blame her for the failure to get unanimous international agreement to anything radical. Denmark has excellent climate policies and performance on renewables and district heating (see Why can’t we all be more like the Danes?), and Hedegaard should be credited with pushing them forward and getting them implemented. The main concern about her new role is not her lack of success last December, but the lack of a clear role for the Climate Action Directorate General at the Commission. The role has to be shared with High Representative Ashton, Energy Commissioner Oettinger, Environment Commissioner Potocnik, Transport Commissioner Kallas, Industry Commissioner Tajani, Development Commissioner Piebalgs, Taxation Commissioner Semeta and Agriculture Commissioner Ciolos. The only way to get a coherent approach on climate is for Commission President Barroso to take a lead. He has quite a good record on this – he was behind the 20/20/20 package and also the proposal to end subsidies to hard coal by 2014 (see  my article at Centre for European Reform: The EU must support clean energy, not dirty coal ).

For many years, when it comes to energy policy, the EU has gone beyond press releases. It has a range of regulatory Directives. However, it does not yet regulate greenhouse gas emissions: the Parliament tried to insert CO₂ into the recently-agreed Industrial Emissions Directive, but this was rejected by the Commission and member states, so it must be a priority for future work. The EU does have Directives on energy efficiency: the Energy Services Directive and Energy Performance of Buildings Directive.

It also has many Directives – some quite strong – on other pollutants, notably acid rain gases. (These have been combined into the new Industrial Emissions Directive.) However, enforcement of the regulations is left to member states and some of them do very little to ensure that standards are met. The UK is actually quite good at this. The chairman of the UK’s Energy Regulator Ofgem, John Mogg, has been appointed to lead a new Agency for the Co-operation of Energy Regulators (ACER), which formally starts in March 2011 and will be based in Ljubljana, Slovenia. So, after the Bled Forum, I went to Ljubljana to meet some of the staff. The creation of yet another institution is not particularly inspiring and I was concerned that the emphasis of those I met was on liberalisation and increased competition. This has a role – increased competition would keep energy tariffs lower than they otherwise would be, which will be helpful when they go up due to decarbonisation. However, liberalisation and deregulation (which was also a theme of the ACER people) will not deliver either energy efficiency or low carbon energy supply. More optimistically, they stressed the importance of a coherent approach to regulation across borders, since grids already cross borders and an improved European grid to maximise renewables is essential. So ACER could play a valuable role.

I also had a meeting with a Slovenian official working on nuclear waste management. Slovenia has made some progress on this – it has got a community to accept that it will be the site of the waste repository. Not surprisingly, this is the place where the one nuclear power plant is located, so many of the inhabitants work in it. Equally unsurprisingly, agreement came after the offer of considerable sums of money.

The current nuclear station, which is in Slovenia but actually shared with Croatia (which gets half the electricity), is due to close in 2023. This date may be extended. The government is also considering getting a new one built. It is also considering allowing a large new coal station, in an area where coal is mined. The new coal station would directly provide or maintain 3,000 jobs in the mines and the power station. However, the power station would not have any CCS. Slovenia is therefore a stark example of the choice between coal and nuclear – which is less bad?

However, Slovenia is also an example of how renewables are underexploited. It is a mountainous country with lots of areas unsuitable for arable agriculture, but extensive forests. Using the waste wood from these (which could be cleared regularly anyway to improve the forest condition and does not require mass felling of trees) would be an excellent way to get both electricity and heat. Yet, Slovenia does not do this. Having little access to natural gas, two thirds of its heat comes from the combustion of coal (see Slovenia – climate and energy statistics). Much of this is imported from Indonesia.

I also had a meeting with two very impressive officials from Slovenia’s Climate Change Office. They are working on a Climate Change Act which, modeled on the UK approach, will set a total reduction target for 2050 but also interim budgets to ensure that significant progress is made between now and then. The government has set up the Climate Change Office, to be cross-departmental and not speak for just energy, environment or anything else. The UK also set up such an office, but foolishly placed in the environment department, so it was not see as cross-departmental. The Slovenes have learnt from this mistake, so their office is located in the Prime Minister’s Office and has his support. It is small (only nine staff), but potentially influential. The officials emphasised that one of their objectives is a massive expansion of the use of wood for both electricity and heat, including through an expansion of the district heating networks. Ljubljana already has a district heating network, but most of the other towns do not. They will also try to improve the facilities for getting the wood turned into pellets usable for cogeneration. At present, Slovenia does not have enough capacity to do this, and the facilities that exist are not always reliable at paying the landowners for the wood. Therefore, most of the wood is sold to Austria, which uses biomass extensively for both electricity and heat (see Repowering Communities case study: Upper Austria).

The Climate Change Office is also leading Slovenia’s work on delivering the fast-track financing agreed at Copenhagen to other countries, particularly other West Balkan countries. The focus for this is on low-carbon technologies. The Balkans are a good location for solar power – one of the panellists in my Bled Forum session was from Bisolar, which makes photovoltaic panels in Slovenia.

My programme in Ljubljana was organised by the British Embassy. I was very pleased with it, but also with the enthusiasm of the Ambassador and his staff for work on climate – combined with great knowledge and skill. The UK government is now saying that trade promotion must become a much greater part of embassies’ work. This is fine; trade is good. However, it isn’t the only thing that matters.