Chart of the week: Obama’s lacklustre breakthrough on emissions – in contrast to the European Commissions proposal to cut emissions by 40% compared to 1990, the US proposes to only increase emissions by 3% by Georg Zachmann on 3rd June 2014 | Read more at Bruegel http://www.bruegel.org/nc/blog/detail/article/1348-chart-of-the-week-obamas-lacklustre-breakthrough-on-emissions/Chart of the week: Obama’s lacklustre breakthrough on emissions – in contrast to the European Commissions proposal to cut emissions by 40% compared to 1990, the US proposes to only increase emissions by 3% by Georg Zachmann on 3rd June 2014 | Read more at Bruegel http://www.bruegel.org/nc/blog/detail/article/1348-chart-of-the-week-obamas-lacklustre-breakthrough-on-emissions/
Update – 04.09.2014, three new paper:
Update – 30.10 .2014, three new papers on PATSTAT:
Update – 14.12.2014, two papers on Ukraine and Georgia:
1.3.2016:
Rethinking The Security Of The European Union’s Gas Supply
[In this Bruegel Policy Contribution Simone Tagliapietra and myself argue instead of doing everything to reduce gas supplies from key suppliers, gas supply security could more effectively be safeguarded by ensuring that unused alternatives are maintained so that they can be tapped into for an indefinite period in case of supply
disruption from a key supplier. This Policy Contribution outlines a market approach that could safeguard gas supply security at very low cost.]
Restructuring of Naftogaz Considerations on scope and ownership of the business units
[In this Policy Briefing I line out the main economic arguments on restructuring and privatisation of the Ukrainian gas incumbent Naftogaz. I argue that on balance, a deep restructuring of Naftogaz into different companies and their privatisation appears most appropriate.]
2.1.2016:
Can a global climate risk pool help the most vulnerable countries?
[In this Bruegel Policy Brief Dirk Schoenmaker and myself argue that a global climate risk pool, with contributions from all countries, could help vulnerable countries to recover from extreme global warming related events. This could be somewhat similar to schemes for burden sharing for nuclear events.]
European climate finance: securing the best return
[In this Bruegel Policy Brief Guntram B. Wolff and myself explain that a global agreement is necessary to mitigate climate change and that a mayor contribution by the EU to achieve a deal would be in providing climate finance. ]
How to unbundle Naftogaz: Options and Policy Recommendations
[Policy Paper explaining why ownership unbundling would be the most appropriate unbundling model for Naftogaz and that privatisation of the network branch is most advisable in the Ukrainian context]
Accounting for gas distribution losses
[Technical Note of the German Advisory Group in Ukraine by Sergiy Golovin and myself showing that the current methodology of accounting for gas distribution losses in Ukraine is intransparent and inconsistent.]
Belarusian export sector: Structural challenges
[Newsletter by Robert Kirchner and myself showing that Belarus export sector features two structural weaknesses – its focus on GIS & focus on commodities – that are exposed by the recession in Russia and the fall in commodity prices.] [here the policy briefing]
Gas sector reforms set to accelerate after 20 years
[In this Newsletter I argue that Ukraine’s gas sector went through significant reforms in 2015 – but that success is by no means guaranteed]
COP21: An important turn on a long journey
[The Paris Agreement has been hailed as a turning point and a huge success in the international fight against climate change. Its big achievement is that it brings tackling climate change back into the sphere of the politically possible. But implementation will be by no means easy. I base my optimism on four observations:]
When will the EU switch away from coal?
[In the US, electricity producers are switching from coal to less polluting natural gas thanks to lower gas prices. However in the EU, the carbon price has been too low to make natural gas competitive with coal.]
An overview of Bruegel scholars’ contributions on Energy Union
[Bruegel scholars have contributed numerous ideas to the Energy Union concept – and to all five dimensions of the policy package. We provide a structured overview of the relevant policy analysis and proposals from Bruegel fellows.]
Egypt: The catalyst for a new Eastern Mediterranean gas hub?
[The recent discovery of the large Zohr gas field in offshore Egypt – the largest ever made in the Mediterranean Sea – might completely change the regional gas outlook.]
COP21: Climate action needs a new global architecture
[Private and public investors will only conduct the necessary long-term investments if COP21 manages to put in place a sustained political commitment of all relevant parties to the 2°C pathway. Such a commitment requires a new global architecture for climate action.]
Helping Ukraine to reform Naftogaz’s gas transmission business
[Reform of Ukraine’s gas sector is under threat. The European Bank for Reconstruction and Development should step in.]
Iran: a new natural gas supplier for Europe?
[We suggest that there are important impediments to significant commercial gas flows from Iran to the EU in the foreseeable future. We argue, however, that cooperation on a limited pilot project could have strategic value.]
A European approach to climate finance will make a deal at COP21 more likely
[Europe needs to convince poor countries that it is serious about a climate deal. To do this it must act jointly and decisively to shape global climate finance.]
The EU 2030 Climate and Energy Framework: Keeping up the pressure on governance structures
[The Transport, Telecommunications and Energy Council on 26 November should indicate a clear way forward.]
The European Energy Union: Slogan or an important step towards integration?
[The broad definition of an Energy Union may enable the European Commission to facilitate a radical compromise between the member states. Because Germany’s energy and climate policy goals can be realised only within the European network, the country ought to play an active role in this process.]
Kosten uns die Russland-Sanktionen wirklich 2 Millionen Jobs?
[Did the Wifo study exaggerate the impact of EU sanctions on commerce , growth and employment?]
European political preferences for decarbonisation
[On 8 July the European Parliament finally voted to introduce a mechanism to stabilise the European emissions trading system (ETS). What can a detailed analysis of the voting results tell us about European enthusiasm for ETS?]
Die Europäische Energieunion: Schlagwort oder wichtiger Integrationsschritt?
[Die Schaffung einer europäischen Energieunion ist ein zentrales Projekt der Juncker-Kommission. Die umfassende Definition der Energieunion kann es der Europäischen Kommission ermöglichen, einen tiefgreifenden Kompromiss zwischen den Mitgliedsstaaten zu moderieren. In diesem Prozess sollte Deutschland eine aktive Rolle spielen.]
4.7.2015:
Designing a new EU-Turkey strategic gas partnership (English)
[In this paper Simone and myself argue that Turkey and the EU have well-aligned interests w.r.t. the Southern Gas Corridor and share complimentary policy leverage in the region.]
Can Ukraine secure enough gas for the winter 2015/16?
[In this analysis I argue that the gas-supply situation of Ukraine is more relaxed than last year. The country could come over the winter solely based on reverse flows. But this requires constant daily imports of at least 50 million m³.]
4.6.2015:
Georgia’s economic specialisation: Present and future
[a paper that predicts potential avenues for specialisation based on the the current comparative advantages of Georgia and the historic specialisation pattern of other countries with similar strength]
Making low-carbon technology support smarter
[a paper that evaluates how low-carbon technology innovation can be supported and where there is room for improvement in the EU]
When and how to support renewables – letting the data speak
[a book chapter that empirically assesses the optimal balance and timing of deplyoment policies and R&D support]
Rebalancing the EU-Russia-Ukraine gas relationship
[a policy paper that suggests that the EU can be instrumental in reforming Ukraine’s gas sector when it is prepared for a difficult ride]
14.12.2014, two papers on Ukraine and Georgia:
Some tools for lifting the patent data treasure
by Michele Peruzzi and Georg Zachmann on 9th December 2014. We produced several open source tools for finding the missing link of other databases to PATSTAT and letting a computer do all the hard work . Read more
30.10 .2014, three new papers on PATSTAT:
Remerge: regression-based record linkage with an application to PATSTAT
A flexible, scaleable approach to the international patent ’name game‘
A scaleable approach to emissions-innovation record linkage
12.09.2014: New Bruegel Policy Brief
Elements of Europe’s energy union
To meet the EU’s objectives for emissions, electricity supply and gas security of supply, well-designed European markets could provide better results at lower cost than uncoordinated national approaches. In other areas – such as energy efficiency and supporting innovation – markets alone might not be enough. Europe should thus rethink its quantitative headline targets for 2030.
Elements of Europe’s energy union
04.09.2014, three new paper:
Memo to the new Commissioner for Climate Policy
Memo to the new Commissioner for Energy
Can Ukraine secure enough gas for the winter? A scenario analysis
2006, 2009, 2014? How to prevent the next gas crisis? 21st August 2014
Russia stopped gas supplies to Ukraine in mid-June. If there will not be an agreement between Gazprom and Naftogaz, Ukraine will need to significantly curtail its gas consumption this winter, even if it can import substantially more gas from the West. Read more
Ukraine gas negotiations: from ‘win-win-win’ to ‘lose-lose-lose’? 17th June 2014
The recent escalation is a costly strategy for both sides. With current infrastructure, Ukraine will only be able to cover about three quarter of its total consumption (about 50 billion cubic meters [bcm] in 2013) with domestically produced gas (20 bcm) and imports from the West (up to 15 bcm). Read more
Chart of the week: Obama’s lacklustre breakthrough on emissions 3rd June 2014
– in contrast to the European Commissions proposal to cut emissions by 40% compared to 1990, the US proposes to only increase emissions by 3 percent compared to 1990. Read more
Europe needs an energy ‘situation room’! 20th May 2014
– member states‘ governments should do ‚all it takes‘ to prepare for an imminent supply crisis. Read more
Renewing Europe’s renewables 9th May 2014
– increase public investment to reduce the cost advantage of fossil fuels Read more
Could Russia’s troubles affect the world economy? 8th April 2014
– there is little cause for alarm over global trade shock waves Read more
Eastern promises: The IMF-Ukraine bailout 27th March 2014
– while the current situation is very critical, it also provides a great opportunity for sweeping reform Read more
Interactive chart: How Europe can replace Russian gas 24th March 2014
– and what it would cost Russia and EU28
Based on interactions with various stakeholders we updated several figures on March 25th (you may need to clear you cache for the changes to be reflected in the chart below). Read more
Can Europe survive without Russian gas? 21st March 2014
– replacing 130 bcm of natural gas imports from Russia within a year would be a significant challenge, but not impossible Read more
The cost of escalating sanctions on Russia over Ukraine and Crimea 18th March 2014
– sanctions are not about how much damage can be inflicted on the sanctioned, but how much pain the sanctioner can tolerate Read more
Gas imports: Ukraine’s expensive addiction 25th February 2014
– a ‘cold-turkey’-strategy is even more difficult than it already sounds Read more
What should Europe do about high energy prices? 31st January 2014
– though Europe might have to live with higher energy prices than the US, it does not face a trade-off between remaining competitive and becoming sustainable Read more
Does Europe need a renewables target? 23rd January 2014
– yes, but it should be defined in terms of innovation Read more
Die Nachbarländer in die Energiewende einbinden 6th December 2013
Wenn die Große Koalition die europäische Dimension der Energiewende nicht berücksichtigt, wird Deutschland mit einer nur am Ausgleich einheimischer Interessengruppen orientierten Energiepolitik scheitern. Read more
Die Energiewende braucht einen europäischen Strommarkt 28th October 2013
– Bruegel-Forscher Georg Zachmann über das Paradox sinkender Stromerzeugungskosten Read more
Empirics of energy competitiveness 9th October 2013
The loss of competitiveness because of elevated energy costs is concentrated in a limited number of sectors. The cost of subsidising energy-intensive companies might be greater than the benefits. Read more
EU vs. regional electricity markets: Don’t think too small 8th October 2013
Going for regional electricity markets instead of an EU-wide market comes at a cost. Read more
Making the internal electricity market work 26th September 2013
Why the economic pressure to create a comprehensive internal energy market is building Read more
Borderless electricity: completing the internal energy market 5th September 2013
After the European Commission in November last year and the European Council in May, it is now up to the European Parliament to affirm its commitment to make the internal energy market work. Read more
Backloading – An ineffective economic measure for a good political reason? 19th June 2013
Wednesday afternoon will see the fourth vote in the European Parliament (this time again in the environment committee) on a scheme to temporarily reduce the number of allowances available to particip Read more
Wetten Sie nicht gegen das ETS
Fragen und Antworten von Bruegel-Forscher Georg Zachmann zur Krise des Europäischen Emissionshandelssystems. Read more
European Emission trading – A blueprint for a countercyclical policy without teeth 11th April 2013
Carbon emissions have been falling, but perhaps not for the most sustainable reasons. The graphs below show volumes of carbon emissions produced by the European industrial sector. Read more
Electricity Infrastructure – more border crossings or a borderless Europe? 27th February 2013
Enabling the seamless trade in electricity across borders would help to deliver on all three European energy policy targets – security, sustainability and competitiveness. Security would be increased because local supply shortages can be addressed by importing electricity from elsewhere. A larger-than-national market would mean that competition between national energy companies should lead to increases in efficiency and reductions in prices. Finally, in a European market, intermittent supply of energy from local renewable sources can be reliably averaged across wide geographic areas, reducing the need (and thus costs) of back-up capacity and system-stabilising services. Read more
Franco-German energy cooperation – from a joint declaration to measurable results 7th February 2013
At the celebrations of the 50th anniversary of the Elysée treaty the Franco-German Council of ministers issued a joint declaration on guidelines for future cooperation [link]. The document called, in the expectable diplomatic language, for a closer Franco-German cooperation in the energy sector. Read more
Decarbonisation is no 100 metre race 16th November 2012
In November 2012, the European Climate Commissioner made a proposal to stabilise the European Union’s emission trading system – a market for greenhouse gas emission allowances that has been in place since 2005. Under the proposal, allowances worth six month of EU emissions (900 mn tonnes) would be temporarily taken out of the trading system, and sold in 2019 and 2020 rather than 2013-2015. Read more
Internal energy market: The pieces of the puzzle do not fit 15th November 2012
The internal energy market is the cornerstone of European energy policy. Most consumers like it because it increases competition and eventually reduces their energy bills. Suppliers are partly released from their dependence on the whims of national politicians. Climate activists like it because it allows the renewable resources of an entire continent to be used. And energy security enthusiasts appreciate that internal rebalancing within the single market allows individual foreign supplies to be replaced if needed. The European Commission’s energy market communication (to be) published on November 15 indicates that there are major obstacles blocking the implementation of the internal energy market by the political target date, 2014. The communication points frankly to numerous core issues: due to national renewable… Read more
Eine schwierige Beziehung 25th September 2012
Bruegel-Forscher Georg Zachmann zu politischen und ökonomischen Hintergründe des Streits zwischen EU und Gazprom Die europäisch-russischen Beziehungen im Energiesektor haben mit der Eröffnung eines formellen EU-Wettbewerbsverfahrens gegen den russischen Gasversorger Gazprom im September 2012 eine neue Wendung erfahren. Die Reaktionen auf diese Entscheidung, die mit Gazproms Preispolitik in Europa begründet wurde, sind ein Beispiel für die zwiespältige Natur von Energiebeziehungen. Während die Generaldirektion Wettbewerb der EU-Kommission betont, dass das Verfahren rein ökonomische Gründe habe, unterstellt Präsident Putin politische Motive. In Wahrheit liegt keiner der beiden Protagonisten falsch. Der Handel von Gas zwischen Russland und Europa hat immer eine politische Dimension. Da Erdgas relativ günstig im Osten produziert und relativ teuer im Westen verkauft werden kann, ist die entscheidende Frage, wie… Read more
Market coupling does not lower prices! 24th September 2012
Market coupling is one of the key-policies for achieving the EU single electricity market. The EU Commission praises the price-lowering effects of market integration in the first draft of the Internal Market Communication of August 30th: “wholesale electricity prices in the EU have risen much less thanks to competition facilitated by increasing cross-border trading and market integration”. And common sense would indeed suggest that in competitive markets the average price of two market zones will be equal or lower when they are coupled than when they are separate. In fact, coupling should lead to lower average prices for typical electricity markets (increasing marginal cost on the supply side and price-inelastic demand). The intuitive reason is that the most expensive MWh… Read more
Investment and growth in the time of climate change 27th June 2012
Climate policy, like all polices, is about making choices. Taking an economic perspective, the report addresses two major choices of European decarbonisation policies. At the highest level, a decision has to be made whether climate change is best dealt with by reducing carbon emissions into the atmosphere (mitigation), or by investing into assets that allow people to better cope with the consequences of global warming (adaptation). Then, the individual policies to curb emissions and incentivize adaptation Read more
Cross-Mediterranean economic and political relationships must be rebalanced to include all of Europe 20th June 2012
In the wake of the Arab Spring the European Union (EU) is eager to foster closer relations with North Africa and the Middle East. Georg Zachmann,Mimi Tam and Lucia Granelli look at the EU’s current policy initiatives and assess which measures countries should undertake to help the economies of the Southern Mediterranean. Read more
War against climate change or a broad concept of security? 5th June 2012
Many of the arguments which could justify “green growth” might have been employed equally well in favor of one of the oldest and most sizable government policies: military expenditure. Theoretically, military expenditure has been linked to many productivity-improving civil innovations, such as civil aviation or the internet. Large scale military spending has been used to stabilize business cycles, replace cheap energy imports with expensive domestic energy sources (coal liquefaction), and to create a competitive edge in exporting military equipment. Even improved healthcare has been linked with military expenditure (Benoit 1978). Similarly to green growth policies, the aim of military expenditure has been to create an insurance against “disaster”. Looking only at green growth, Fay, Hallegatte, Heal, Tréguer argue against the common view… Read more
EU carbon levy: try to avoid air turbulences 15th March 2012
On March 12 the CEOs of Airbus and of eight other European aviation and airline companies urged the leaders of France, Germany, Spain and the UK to solve a dispute with the US, China, India, Russia and 23 other countries over the inclusion of foreign airlines in the European Emission Trading Scheme (ETS) that was extended to the air industry on January 1, 2012. The European CEOs warned that the dispute could lead to foreign retaliation in the form of suspensions or cancellations of orders for European aircrafts that would cost jobs to Europe. The fear of a trade war between the EU and its foreign partners had already been aired the week before by the head of the International… Read more
Choosing the right one 9th February 2012
Public support for new energy technologies has involved some pretty expensive decisions. Billions of public Euros have been spent on nuclear energy in countries that are currently phasing-out this technology. Research and development funding for CCS, hydrogen fuel cells, nuclear fusion, and second generation biofuels have not, as yet, led to a major commercial breakthrough. Visibly, today, thousands of cross-subsidized solar panels lie under a layer of snow in Germany. It is clear, however, that incumbent technologies such as coal fired power plants and gasoline cars lack the capability of achieving emissions reductions targets set out by the EU. Consequently, new low-carbon technologies have to enter the market. For this purpose, the EU has established horizontal policies, including carbon prices… Read more
Making the carbon market wider and deeper 9th February 2012
A drastic change in the way we produce and consume energy is necessary to contain the risk of a global environmental catastrophe. For its part, the EU has set targets for reduction of GHG emissions by up to 80-95% of 1990 levels by 2050 to keep global temperature increases below 2°C. One key policy for achieving this target cost-effectively is the European Emission Trading System (EU ETS). However, the only partial coverage of important emitting sectors (namely transport) creates economic inefficiency. While the ETS has succeeded in containing carbon emissions in the power sector, it has not provided sufficient signals for incentivising low-carbon investments. Thus, we suggest making the EU ETS wider and deeper. Widening the ETS: Inclusion of … Read more
Green financial innovation to boost private investment 27th December 2011
Decarbonising the economy is one of the key challenges of the twenty-first century. Due to the limited carbon-reduction potential of incumbent transport and energy technologies, a major shift in the way we produce and consume energy is needed to avert potentially disastrous climate change.This transition will only be possible through substantial upfront investment. It is unrealistic that these considerable sums will come only from the public sector. Pure public finance would imply a nationalisation of the energy sector; and public budgets are already over-stretched, even in times of relative stability.Private investment is crucial for the success of the post-carbon transition. However, private actors are reluctant to engage heavily in ‚green projects‘ that are markedly different from their usual lines of… Read more
Can the sun saver Greece? 5th August 2011
BRUSSELS – German Finance Minister Wolfgang Schäuble has proposed that developing green-energy resources could be a good way for Greece to generate much-needed economic growth. On paper, it sounds like a perfect solution to the country’s dire fiscal problems: Greece, according to Schäuble, could export solar electricity to Germany. At first glance, monetizing an abundant natural resource (solar energy) to strengthen the national accounts sounds like a straightforward idea, particular given that electricity in central and northern Europe is becoming more scarce and expensive, owing to Germany’s decision earlier this year to phase out nuclear power. But has Schäuble really found a magic bullet to hold down German electricity prices while restoring economic growth to Greece? Yes and no. First,… Read more
Of meltdowns and fallouts: What do the financial and the nuclear crises have in common? 23rd March 2011
The metaphors used for the financial crisis have reappeared in the news. Earthquake, tsunami, meltdown, black swan and fallout have been used to describe both the (possible) events in the financial markets in 2009 and in Fokushima recently. It might just be the journalists searching for powerful visual language. But maybe there are some revealing structural similarities. I would argue that apart from being perceived as catastrophic, both events have at least four similarities: (1) As indicated by the “black swan” metaphor they are in part due to the difficulty in correctly assessing risks in complex systems. (2) The “fallout” in both cases is potentially cross-border in nature. (3) The cost incurred by the imprudent companies will be partially socialised.… Read more
Rare earth – no case for government intervention 8th November 2010
China has officially restricted exports of rare earth for several years and announced this year it will further tighten exports. Rare earth is a group of 17 different metals, usually found clustered together. These metals have hundreds of different industry applications. For example, they are used in certain high capacity magnets, batteries and lasers. As the rare earth elements are used in sectors that are assumed to have an over-proportionate growth potential (eg. green-technology), policy makers are paying particular attention to them. In the policy debate, the different elements are considered jointly, as they are typically clustered together. But each element has its own supply and demand characteristics. Consequently, prices for the individual elements might differ by factor 20 (in… Read more