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EU plans tough laws on energy efficiency

Wasteful television standby settings and the energy efficiency of computers and water heaters are to be targeted in a new legislative drive aimed at slicing EUR100bn a year from the European Union's energy bill, in a move that could impose Europe's green agenda on the world.

Stringent new European Commission energy efficiency targets for items such as electrical appliances and cars could set new global standards, since all imports into the European market would have to comply.

Welcome to the new world where soft power rules.

In a move reflecting Europe's growing fears about its energy dependence on the rest of the world, as well as its preference for high environmental standards, Andris Piebalgs, EU energy commissioner, will announce on Thursday that he wants to put the bloc on course for a 20 per cent energy saving by 2020.


From next year he wants to implement directives setting down minimum energy performance requirements for 14 priority products, including boilers, computers, washing machines, office lighting and air conditioning. His plan says "special attention will be devoted to standby loss reduction," a reference to the power-consuming standby modes on televisions and other appliances.


The proposed regulations "including extensions of existing rules" would impose European energy efficiency standards on any company worldwide seeking access to the EU's 480m consumers, including US manufacturers.

European standards and norms in the car sector and mobile telephony have already become accepted in many countries worldwide, to the annoyance of Washington, which believes the EU sets too many rules.

The Nation already note that trend two years ago, in this essential article, New Power for 'Old Europe', where they noted the EU's increasing reach via its ability - and willingness - to set technical and legal standards for almost everything.

Since the fall of the Berlin wall, the European Union has been steadily transforming itself from a facilitator of trade to a sophisticated geopolitical power with the teeth to back up its policies--an evolution that has occurred largely under the American public's radar. Over the past decade, EU member states have ceded governing and enforcement authority to Brussels in areas ranging from environmental regulation to food safety, accounting standards, telecommunications policy and oversight of corporate mergers. As a result, US companies that do business in Europe--which remains America's largest export market--are quickly learning that "old Europe" is now wielding new world power.

Just this year, US manufacturers of such goods as chemicals, cars and cosmetics have been confronted with EU regulations that force a choice: Either conform to the EU's standards of pre-emptive screening for toxicity--far tougher than US standards--or risk sacrificing the European market, which, with 450 million people, is now larger than that of the United States. In the process, the European Union is challenging US presumptions of unilateral decision-making on issues with tremendous consequences for American companies and consumers, treading on ground that has long been considered sacred turf.

"Americans are in for a rude shock," says Clyde Prestowitz, a former Reagan Commerce Department official and author of Rogue Nation: American Unilateralism and the Failure of Good Intentions. "Other players are establishing their own standards, and they have the muscle to make them stick. We are headed into a new era."

This process has been underway in the chemicals industry, with a massive lobbying fight where US corporations have allied with European ones againt NGOs and public health advocates (with the European Commission more friendly to corporations, but the European Parliament more friendly to consumer and health groups). This diary (Europe's Soft Power in action: REACH) from last week describes the latest skirmish in that longrunning saga.

The final result is not clear, but one thing is certain - worldwide standards for safety in the chemical industry will be set via that directive decided in Brussels (seat of the European Commisison) and Strasbourg, France (seat of the European Parliament).

The same thing could now happen for a whole series of goods: if Brussels sets energy efficiency standards for computers sold in Europe, then these standards will apply worldwide, because they will be tougher than those in the US or anywhere else and manufacturers (large ones, anyway) are unlikely to split production between EU-compatible products and less regulated products.

Multiply this over the range of products now under consideration, and you could see a massive imapct on the energy efficiency of many goods sold in the USA.

This may sound good, but the risk of course, is that regulations set in Brussels are shaped in ways that European manufacturers are more familiar with, thus giving them an edge against manufacturers from other countries, including in these manufacturers' home markets.

This is what has happened on carbon trading. The EU countries, having signed the Kyoto treaty, have also set up new markets to trade emissions rights (effectively, carbon trading) based on obligations imposed on European (and other participating Kyoto-countries) industry. That means that the high-paying jobs that come with these markets (bankers, lawyers, consultants, etc...), and the technological know-how necessary to comply with the new rules are based in Europe, not in New York or Chicago.

Regulation drives new industries within the regulated markets, but once the manufacturers are able to meet such higher standards, they are competitive everywhere else, and in particular in countries that did not prod their industry that way.

So thank Brussels for bringing new energy efficient goods to your homes and businesses, but blame Washington for its lack of foresight, and its wholesale abandonment of the issues that will shape industry in the coming years.

Originally posted to Jerome a Paris on Tue Oct 17, 2006 at 06:40 AM PDT.

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