On Friday 6 June, oil prices soared to $138 per barrel. That was – again – a new record. But the truly historic fact is that the price reached the point where, for the first time in history, the value of EU oil imports exceeded the until-now-unimaginable sum of €1 billion per day. Yes, you read correctly, per day. Cars guzzle about €400 million of that amount; yes, every single day. To put that into perspective, Europe’s car industry is responsible for around €300 million a day of ‘value added’. In other words, the economic value of Europe’s car industry is lower than the economic value of the oil we buy to power the cars. Unbelievable as it may sound, that is where we are. The value added from car making is lower than the value lost from all the oil those cars need to keep rolling.
The next working day, Monday 9 June, Chancellor Merkel and President Sarkozy jointly, and seemingly happily, attempted to drive the final nail in the coffin of Europe’s policy to make our cars use less oil. Their agreement on cars and CO2 (see story, page 1) is as vague as it is ominous. But it seems to imply that the antique ‘voluntary agreement’ target of 140 grams per kilometre has reared its ugly head again. The Merkel-Sarkozy pact would mean a 138 gram target (130 grams + 8 grams for ‘eco-innovations’), except with a deadline for compliance later than 2012 instead of 2008 as was agreed under the voluntary agreement ten years ago. Again, it sounds unbelievable but that’s where we are.
The German government and its car industry, in particular the brand with the three-pointed star, are delighted with the deal, although it does nothing to meet the former’s self-imposed 40 per cent greenhouse gas reduction target or lower its € 25 billion oil import bill for cars. By contrast, on the French side there was silence. It was a black day for Europe, and a black day for its so-called ‘leadership’ on climate change and transformation to a low carbon economy.
It is obviously undemocratic and unacceptable that two member states would decide for the other 25 how hard they should work to hit their climate targets. Or how high their oil import bills will be, and how much their citizens will have to pay at the pump. Europe already has a problem of looking undemocratic at the best of times, and cynical deals like this one don’t help.
The European Commission, thankfully, reacted cooly to the Franco-German deal. And so far, the European Parliament’s environment committee has taken a tougher line on cars and CO2. Italy, albeit belatedly, spoke out against the idea of two countries deciding for all. I hope these voices get louder and are joined by others.
Clearly it is now up to the other countries and the European Parliament to show that Europe is not governed by the lowest common denominator of one industry. It is high time that innovative carmakers, low carbon technology suppliers, fuel bill-paying citizens, energy security specialists, economists, and indeed environmentalists, are listened to as well.