October 26, 2009

This Energy and Environment Program report, A Shared Vision for Energy and Climate Change: Establishing a Common Transatlantic Agenda, finds that the two highest priority energy technologies for the Atlantic community are those involving energy efficiency and coal with carbon capture and storage. Without significant and timely progress in deploying these basic technologies on a massive scale, there is virtually no possibility of achieving emission reduction targets.
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The report is a joint project of the Atlantic Council and the Clingendael International Energy Program at the Netherlands Institute for International Relations.  It is the product of a series of workshops that included the business community, governmental organizations and civil society organizations from both sides of the Atlantic.

Executive Summary:

The world, is facing two simultaneous crises. One is financial and economic and the other is environmental. The former is making it difficult to make necessary environmental investments and to pay the higher energy costs that may be required. The latter is making it necessary to change radically how we produce and consume energy.  Failure to transform the energy sector to address the threats of global warming adequately will have very costly consequences for future generations. It is essential that the United States and Europe provide the needed leadership.

Renewables, for both power and transportation fuels, are critical transforming technologies. Smart grid developments are also a necessary enabling technology in obtaining energy efficiencies and to reducing demand. The expansion of safe nuclear power with a secure fuel cycle is necessary, too.  In short, the transformation of the energy sector will impact virtually all segments of the energy industry.

Cooperation in undertaking such a transformation is more urgent than ever before, as it will be easier to devise an effective and efficient way forward through cooperation than by going on separate and possibly conflicting paths. The government has a clear responsibility to create the framework for addressing the multiple challenges associated with transforming the energy industry.

  • The framework should be based on an implementation plan that is broadly supported by industry and the public.
  • Obtaining such acceptance will require the creation of a clear vision of the broad objectives as well as the societal changes and economic transitions that will have to be undertaken by industry and the public.
  • A coordinated set of communications across the transatlantic community will help overcome growing resistance to the building of new facilities and infrastructure, as well a reluctance to absorb higher per unit energy costs.
  • The workshop discussion confirms that the numerous government –to – government dialogues that are being undertaken on subjects ranging from climate change to R&D cooperation on specific technologies are essential. But, they are not seen as sufficient by themselves to drive societies to undertake the radical transformations deemed necessary.
  • Track II workshops involving a blend of business, NGOs and government experts have the potential to strengthen significantly the understanding of issues, broaden the political will, and provide governments with useful information related to the feasibility and implementation issues involved in creating the transition.
  • A Transatlantic Forum or Council on Energy should be formed to coordinate the identification of critical subjects that could benefit from cooperative activities and to ensure that knowledge on technology and implementation issues is kept current.
  • A holistic framework is needed for government-to-government dialogues.

The formation of a governmental umbrella council focused on energy cooperation should be created to ensure that critical interrelationships are understood and properly addressed in legislation, policies, regulations and programs throughout the transatlantic community. It is recommended that early attention of the Transatlantic Energy Council should be placed on:

  • The design of “common, compatible and complementary” regulations
  • R & D technology cooperation on a number of key technologies
  • The development of common and compatible standards and labeling

Although R &D cooperation on a number of these technologies has been initiated, it should be expanded by broadening the dialogues on specific technologies to include a full review of the impact of various enabling factors as well as the interactions between technologies. Because of the complexity of these interactions, specific work groups should be established under the guidance of the Transatlantic Energy Council.

The transatlantic community essentially agrees on the magnitude of the energy and environmental challenges facing the world. However, there remains substantial uncertainty over what is achievable without a significant increase in cooperation and a greater dedication of resources. In the course of increasing transatlantic cooperation, a number of basic issues were identified that need to be addressed as fundamental to the required transformation of the energy sector. These contingent issues include recognizing that:

  1. International cooperation is required
  2. A price on carbon is required
  3. Developing countries should be provided a convincing case for incurring higher energy costs
  4. The cost and social impacts of adaptation need to be understood
  5. Business input is critical to the creation of realistic legislation, regulations and programs
  6. Major technological advances require government support
  7. The transformation of electric power sector requires fundamental restructuring to replace ageing assets and accommodate renewables and distributed systems
  8. Energy efficiency and conservation are top priorities
  9. Governments must address the “BANANA Syndrome”
  10. Clear legislation and policy direction will need to be accompanied by mandatory regulations
  11. Only real economic costs will change behavior
  12. Long-term rather than short-term solutions are required
  13. There are uncertainties associated with the impact of transitions on global energy markets
  14. An assessment of long-term availability of energy resources and ability to convert intermittent renewables to stable supply sources is needed
  15. Governments need to assess costs of adaptation and develop policies to avoid most damaging impacts of climate change