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Energy efficiency and green growth

The triple-headed crisis of an economic downturn,climate change and pressure on European energy security are at the top of Europe's agenda right now. It will be very important that,at the upcoming European Council summit on 19-20 March,the EU charts a course that can guide us safely through the storm,so that we emerge all the stronger to face the challenges of the future.

The issues are closely interrelated,and so their solutions must be integrated. Measures to improve energy efficiency are vital to efforts to address the current crisis as a more efficient use of existing energy supplies will at the same time make EU less dependent on energy imports and reduce the effect of our energy use on the climate. Moreover,such measures make sense in a time of economic and financial difficulties.

Today,a common understanding is emerging across Europe and within the new US administration:That climate and energy-related efforts must be seen as part of the solution to the current crisis. It will remain vital to continue to ensure that this understanding translates into concrete action.

At the forthcoming summit,the European Council is expected to allocate a total of EUR 5 billion to a number of projects designed to kick-start the economy – the vast majority of these projects being energy-related. Denmark is satisfied that priority is being given to the development of new energy infrastructure,including the Baltic Interconnection Plan. Denmark also supports security policy objectives in the earmarking of funds for energy projects such as the construction of the Nabucco gas pipeline,which is to supply Europe with gas from Central Asia and the Caucasus,thereby enabling us ultimately to become less dependent on one large external supplier – Russia.

Lagging behind on energy efficiency

However,action at European level lags behind in the important area of energy efficiency. It seems that the enormous potential of energy efficiency measures is not yet fully appreciated. The Danish example is an eye-opener:Over the last 25 years,the level of energy consumption has been constant despite the growth of our economy.

Very few know that the EU has adopted an energy efficiency improvement target of 20 per cent. This target was set as part of the so-called "20/20/20 decision" from the European Council summit in March 2007. The decision is an agreement to achieve a triple target by 2020:a 20 per cent share of renewable energy,a 20 per cent improvement in energy efficiency,and a 20 per cent reduction in greenhouse gas emissions (or a 30 per cent reduction if this target forms part of a global climate agreement in which other industrialised countries make corresponding commitments). Unfortunately,only the targets regarding renewable energy and greenhouse gas reductions are binding. This should also be the case for the energy efficiency improvement target.

The recent gas crisis,where Russia again cut off gas supplies to the Ukraine,had serious repercussions in large parts of Europe. It would not be overstating the case to say that the crisis was the most serious attack on the EU's energy supply in recent times. The new Czech EU Presidency took active steps in the gas crisis and clearly voiced the EU's views. The Czechs did a great job. And the Commission was able at very short notice,in cooperation with European energy companies,to deploy observers to monitor the gas transit. Evidently,the latest gas crisis should not have come as a surprise. And it would be naïve not to prepare ourselves for recurrences. Energy has become part of foreign- and security policy.

However,in protecting Europeans from another such crisis,it would be wrong to focus exclusively on finding new sources of energy supplies. The serious economic difficulties faced today are an added reason for improving energy efficiency. We must not let ourselves be lulled into inaction by the fact that energy prices are lower today than they were six months ago. This price level is a natural consequence of the economic downturn. Prices will rise again. And the cheapest energy is inevitably the energy we do not use. Moreover,improvements in energy efficiency will be positively reflected in the climate accounts.

Helping the European economy recover by allocating funds to energy efficiency-related projects is a very sensible,comprehensive approach to the challenges,we are currently facing. In Central and East European Member States in particular,this could lead to very tangible benefits for the climate,the economy and for European energy security.

A turning point

Calculations show how much impact reductions of unnecessary energy consumption and CO2 emissions could have on Central and East European economies. For example,if the district heating network in Rumanian towns were renovated and modern pump technology installed in the pumping stations,energy consumption in the network could be reduced by 40 - 60 per cent. This type of investment typically has a payback time of only 1-2 years,and in the long run the potential savings are so huge that the Central and East European countries quite simply cannot afford not to undertake such investment. Also in relation to the heat consumption of consumers,savings of up to 50 per cent are achievable if modern pumps,thermostats and meters are installed and individual billing of heating is introduced.

The potential for energy saving in the Central and East European housing stock is also colossal. Large savings are achievable if the standard renovation work is combined with new energy-saving windows and modern insulation. An extensive programme of renovation can create 50,000-185,000 new jobs in Central and Eastern Europe and at the same time reduce CO2 emissions by up to 62 million tons annually – corresponding to Denmark's total CO2 emissions. At the same time,the renovation programme will create better quality homes that are draught-proof and have 70-80 per cent lower heat consumption – and it will also produce less air pollution from the power plants,furnaces and boilers that are needed to supply the buildings with heating.

The original Greek meaning of the word 'crisis' is a turning point. We should focus on and invest in energy efficiency measures which combine sound economic sense and protection of the environment and also contribute to increasing energy security.

Per Stig Møller is Danish minister for foreign affairs;Connie Hedegaard is Danish minister for climate and energy.


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