Climate Change, Natural Gas and the Rebirth of EU Energy Policy
Abstract:It will come as a surprise to many outside observers that, until the entry into force of the Treaty of Lisbon, more than fifty years after the Treaty of Rome, the EU lacked a formal common energy policy. This was all the more surprising given the crucial importance of this sector to the economy and society as a whole. Yet a concern with energy supply as a basis of economic growth and prosperity did play an important part in the early history of European economic integration. Two of the three Communities on which the Union is founded actually refer to a particular source of energy in their very names. The European Coal and Steel Community (ECSC) was the first common market and supranational organisation for economic integration to be established by the six founding member states in 1952. The European Atomic Energy Community (EAEC), generally referred to as Euratom, was established by the same original members alongside the better-known European Economic Community (EEC) a few years later.
The ECSC Treaty was allowed to lapse without fanfare in 2002, having initially been concluded for a period of fifty years and gradually grown obsolete in its objectives and instruments. However, it remains as a testimony to the extent to which Europe's post-war reconstruction and regained economic prosperity were based on fossil fuels and heavy, energy-intensive industry. Coal and steel are referred to in the treaty's preamble as “common bases for economic development”. The Community's primary concern, as expressed in Article 2 of the Treaty of Paris, was, “to ensure the most rational distribution of production at the highest possible level of productivity” in order to encourage economic growth and increased standards of living. One of the ECSC's objectives mentioned in Article 3 was, “to promote a policy of using natural resources rationally and avoiding their unconsidered exhaustion”. However, the ECSC High Authority's research policy was expressly geared towards, “increased use of coal and steel”. The externalities of the production and consumption of these commodities were not a concern of public policy at the time. The treaty, rather, provided specific powers and instruments to cope with the economic consequences of any “decline in demand” or “serious shortage of coal (or steel)”. These provisions reflected the perceived risks of the time.