Energy Policy

E.U. Commissioner Hedegaard discusses U.S. action on clean energy, carbon markets

With a split Congress in Washington, what is Europe's view of the United States' prospects for action on energy and climate policy? During today's OnPoint, Connie Hedegaard, commissioner for climate action for the European Union, gives her take on Washington's clean energy standard discussions. She also comments on recent corruption in the E.U. Emissions Trading System.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. EU Climate Commissioner Connie Hedegaard sat down with E&E TV during her recent U.S. tour. Commissioner, thanks for joining me. During your visit here in the U.S. you've been speaking to Republicans in Congress. What message are you bringing to them and what kind of pushback are you hearing from them in terms of climate and energy policy here in the U.S.?

Connie Hedegaard: Well, we have a very good dialogue also with your administration, so of course it does not come as a huge surprise that you are having troubles in getting climate legislation through in the U.S.. But we also discussed sort of the possibilities of having energy legislation through, because we think of course that must be crucial also seen from American point of view. So, I'm here also to understand sort of better what would be the prospects this side of the election, what are the ideas floating, just to learn more about the American debate.

Monica Trauzzi: And there's an ongoing debate here in Washington about whether the U.S. can actually afford a clean energy standard. Can a clean energy economy work? I mean make the case for clean energy economy.

Connie Hedegaard: OK, I think that we have proven in Europe that it can work. We had, over the recent years, 40 percent growth in our GDP. At the same time, we managed to keep energy consumption stable, did not grow. And at the same time we actually increased our manufacturing input with more than 30 percent. So I think that we are living proof that, yes, you can do this. Myself, I come from Denmark where the last year before the crisis energy-efficient products and renewable technologies sort of accounted for 12 percent of the whole export of the country. Thirty years ago we had no industry in this field, but then we had the climate legislation, environmental legislation, things like that, and that was sort of driving innovation in the industries so that today we can export these things and, by that of course, also create jobs.

Monica Trauzzi: So, why do you think we're not making that same connection here in the U.S.? There's always this pushback that if we move towards clean energy it's going to affect the economy negatively.

Connie Hedegaard: I think there is one misunderstanding in the United States, it seems that many people tend to believe that if you do this, you will, maybe together with Europe, be more or less alone in doing this. But let me give you just one example. Three years ago Europe was the only region in the world who has set targets for CO2 reductions. Today, 89 countries around the planet have done the same thing, among them all the emerging economies, among them almost all G20 countries, I think with the exception of Saudi Arabia. So it's just this is turning into also a competitive area, an area where it's also about who will first develop the new innovative products, because we know one thing for sure, in a world where the world population is growing very rapidly and when my children will be my age, we will be 9 billion people on earth, all wanting a share in modern commodities and heating and cooling and, you know, food, transportation, mobility. There we know that energy prices is going up. We know that resources will be more expensive. In other words, we also know that to become more energy efficient, less dependent on imported fuels for instance, that is a competitive edge thing. It can improve your competitiveness. It will not harm your competitiveness.

Monica Trauzzi: There are several attempts in Congress right now to block EPA from acting on moving forward on regulating greenhouse gas emissions. If something like that were to pass Congress, what kind of message would that send to the international community about the U.S. in terms of climate talks and sort of a global climate agreement?

Connie Hedegaard: You know, while we talk this is still a hypothetical question and I'm not going into that. We will take note of that and comment on that in Europe if it were to happen, but I understand that many good forces are also trying to work on avoiding that scenario.

Monica Trauzzi: Does Europe consider the U.S. a failure when it comes to climate change?

Connie Hedegaard: I would not say that. We know that you have an administration that has engaged very strongly on this also internationally. We know the political challenges in this field. I mean sometimes it's as if Americans think that in Europe it's just a walkover to do climate policies and make our economies more energy efficient. It's not, we are also debating it. It's just that in the end we actually managed to move forward normally with rather broad political consensus and our experience is that it has not harm our economy and the country.

Monica Trauzzi: You do make a look easy though. What are we doing wrong? What is the U.S. doing wrong?

Connie Hedegaard: Can I give you just one example? I heard some years ago, it might be old data, but it's maybe two or three years old data, that an average American household consumes 11,000 kilowatt hours of electricity per year. In Denmark it's 4,000 kilowatt hours. I'm sorry to say, but you are not more than double as rich as we are in Europe. So we just tend to believe that if for instance you save energy, if you save heating because you have insulated your houses or you have some energy-efficient windows, you can save money on your electricity bill or on your heating bill. If you are a big shipping company and you are conscious about your fuel consumption, you can save lots of money for fuel expenses. So that's sort of the way we try to see it in Europe. This is, yes, a cost to make the transition, but it's also an investment in a cleaner future. And if you make that investment, then your energy bill will drop, no matter whether you're a citizen, a company, or a country.

Monica Trauzzi: You've confirmed that California will be linking up its carbon market with the European Trading Scheme, how do you make those two systems compatible?

Connie Hedegaard: You know, what we agreed with Governor Brown earlier this week is that we would stay very much in touch to take care that we are not creating systems that go like this, because now when California is coming into this cap-and-trade system, hopefully, we also see it in New Zealand, we see plans in Korea, in Australia, even in China. They have now said in their last five year plan that they are making huge pilot projects in cap and trade because they say we cannot reach our targets without using the market mechanisms. And what we just want to take care in Europe, being the first in this field, is that all these different systems, in the end, can be able, so to speak, to talk to one another so that, in the end, we deliver a truly global price on carbon.

Monica Trauzzi: One of the other things that you do is you oversee the EU's ETS. There were recently some issues with hacking of accounts that led to theft of emissions credits totaling about €30 million. How can you ensure that that type of theft will continue to happen?

Connie Hedegaard: What we did was, when we discovered this hacking, that we closed down all the registries and all the member sites and we agreed with the member sites, they can only be opened when they are living up to certain security measures. These measures are now being taken and from next year, by the way, we will have a more sort of unified European platform. So you can say that the security measures, all other things being equal, will be very much strengthened and we will not have 27 different systems, but only basically a European system to deal with.

Monica Trauzzi: Is the fact a surprise though? I mean you've put a price on carbon and anything that costs money can be stolen.

Connie Hedegaard: Sorry? That it can be stolen? Yes, but you will see that in many areas, I mean, people can-the WikiLeaks, we saw that hackers went into the French Foreign Ministry. I mean hacking is happening in the world of the 21st century. What you can do is to take care that your security standards are very, very high and that is what we have been doing now.

Monica Trauzzi: OK, we'll end it there. Thank you so much for coming.

Connie Hedegaard: Thank you for having me.

[End of Audio]



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