Geoscience Reference
In-Depth Information
All such interventions serve to complicate third country access to European
markets and in essence provide an export subsidy to help European
rms con-
quer new global markets. Some observers observe the creep of a
'
European
champion
industrial strategy returning in a protectionist fashion that undermines
market dynamism and competition. Free market advocates criticised the dilution
of the Commission
'
s unbundling proposals in 2009 as a huge environmental
setback: breaking apart vertically integrated conglomerates would have made it
easier for renewable sources to gain access to European grids. At the end of 2011,
the International Energy Agency (IEA) stated that
'
nancial support to renewables
was unacceptably high in nine EU member states and was a sign of new green
mercantilism.
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Confronted with criticism that mega-projects represent a specta-
cularly bad waste of taxpayers
'
cials have increasingly defended
subsidies for renewables as cheaper in the long run than the extra costs to fuel
bills as oil process inevitable rise.
Economists have calculated that the huge amount of subsidies going into green
industry development needs to be better focused. They argue that subsidies are
likely to be bene
money, EU o
cial only where countries already possess some skills, existing
expertise and infrastructure. They can help deepen a competitive advantage but
not create it from nothing.
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EU business representatives warn that the scale of
European governments
domestic subsidies may contribute to a more general
unravelling of at least the spirit of open global markets. And the focus on such
large-scale subsidies also undermines prospects for the international extension of
acarbonmarket,whichmanysuchcompaniesseeasmorelikelytoprovide
a harmoniously governed system for tackling climate change than a zero-sum
subsidies race. Criticisms are voiced that the extent of European subsidies now
weakens the market mechanisms of the Emmissions Trading Scheme (ETS) and
undercuts the EU
'
'
s credibility when it seeks to encourage non-EU states to buy
into the scheme
s ostensible disciplines.
The formal and much repeated EU line is that liberal external energy policies
'
s own internal market.
However, this internal liberalisation appears to have stalled. While European
leaders have committed to completing the EU energy market by 2014, imple-
mentation of the third package of liberalisation agreed in 2009 is not on track. The
EU energy sector has actually become more, not less, concentrated, with increasing
market shares in the hands of a small number of vertically integrated large con-
glomerates. In Germany the government has even over-turned rulings of its own
anti-cartel o
ow naturally outwards
from liberalisation of
the EU
'
ce in order to enable mergers. Experts argue that the dilution of
the Commission
'
s unbundling proposals, combined with the similar withdrawal of
the
'
reciprocity clause
'
,re
ected a broader waning of the market dynamic in the
EU
'
s external relations too.
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