420 7th Street SE, Washington, DC 20003

Phone: (202) 986-2433 – Fax: (202) 546-3749

info@streitcouncil.org
www.streitcouncil.org

“Shared Vision for Energy and Climate Change: Establishing a Common Transatlantic
Agenda” – A Year Later

Elena Nikolova

June 29, 2010

On May 28-29, 2009, the Atlantic Council of the United States along with the Clingendael
International Energy Program (CIEP) at the Netherlands Institute for International Relations held
a series of workshops discussing the potential of European Union – United States cooperation.
This conference resulted in a policy report – “Shared Vision for Energy and Climate Change:
Establishing a Common Transatlantic Agenda” – published in October 2009. The document
outlined key areas crucial to mitigating the effects of climate change by strengthening
transatlantic and international cooperation. The report focused on the difficulties in initiating
costly environmental overhauls during times of financial and economic insecurity. It argued that
precisely because of the difficulties ahead, the United States and European Union should take the
lead in establishing international standards for climate change mitigation, including the
establishment of a global carbon emissions trading market. The paper also highlights the
importance of the relationship between Russia and Europe in terms of energy supplies. Among
the specific recommendations included in the report are the establishment of a Transatlantic
Energy Council and the implementation of smart grid technology, focusing on energy efficiency
and coal with carbon capture and storage technologies. The authors stress that the government
has a responsibility to gain the support of the public and the private sector by creating a clear
vision of its overall objectives and of the societal changes to come.

One year later, there has been mixed success and partial implementation of the report’s
prescriptions. The Transatlantic Energy Council, or US-EU Council, was established in
November 2009 during a EU-US summit in Washington DC. It closely follows the
recommendations of the Atlantic Council-CIEP report, establishing three working groups to
better facilitate cooperation and normalization of standards in Energy Policies, Global Energy
Security and Global Markets, and Energy Technologies Research Cooperation. Since the end of
2009, however, there has been little progress in terms of common labeling and regulation – key
areas of transatlantic cooperation envisaged by the workshop series.

In terms of creating a clear vision, recognizing the challenges ahead and attracting public and
business support, The European Union has continued to renew and update its own legislation and
vision, while the United States has not been able to create a comprehensive climate change
policy. The Kerry-Lieberman climate change bill has been stalled in the Senate awaiting
approval by a 60 senator-majority. The Obama Administration hopes that the BP Gulf of Mexico
oil spill will underscore the risks of fossil fuel drilling and the need to stimulate clean energy
alternatives, garnering support for legislating a clear vision of broad objectives. By contrast,
since January 2008, the European Union has adopted a clear vision for its contribution to climate
change mitigation: the 20/20/20 strategy (reducing energy consumption by 20%, having 20% of
energy come from renewable sources, emitting 20% less greenhouse gasses, all by 2020). All of
the EU’s subsequent legislation and directives have been focused on achieving this goal. A
growing number of cities, regions, and countries have passed legislations reflecting the EU’s
overall strategy. Recent studies have shown that the EU is on track to achieve its 2020 goals and
that some member states may even surpass the minimum 20% reductions.

The report pays special attention to the natural gas dependence of both the United States and the
European Union. The US has sufficient reserves to weather a potential supply crisis; the EU
relies mainly on foreign importation of natural gas. In this case, Russia provides 25% of the
needed natural gas to the EU and the maintenance of an interdependent relationship between the
two countries is crucial to EU energy security. The importance was highlighted after Russia
suspended gas supplies to Ukraine in January 2009. Since then, the EU has established an early
warning mechanism with Russia, meant to rapidly respond and resolve an energy supply dispute.
The mechanism was put to the test, and failed, when Russia President Dmitry Medvedev
announced on June 22, 2010 that his country will reduce the amount of gas flow to Belarus
because of payments disputes. Even though the shortage will affect a much smaller number of
member-states (Lithuania, Poland, Germany) and less dramatically since it is summer, the gas
dispute highlights the need for diplomatic progress between the EU and Russia when it comes to
energy supply mediation. It is imperative that the two sides establish an effective method of
resolving energy supply conflicts as these crises negatively affect both economies.

Throughout the report, the authors stress the need for transatlantic leadership in establishing
labeling standards, a global carbon market, and motivating developing nations to commit to
costly energy efficiency improvements. It seems unlikely that any progress to the above
objectives can be made until the United States passes its own clear vision of environmental
objectives outlining a possible cap-and-trade system that could subsequently be linked with the
EU’s Emissions Trading Scheme and serve as the backbone of a global carbon market.

Elena Nikolova is a Research Assistant at the Streit Council.