EU-US Energy Cooperation to Address Climate Change

Massive efforts are needed to urgently mitigate greenhouse gas emissions and, in parallel, support adaptation measures for those already affected by its negative impact. 

On the occasion of the EU-US Energy Council meeting in February 2022, it is useful to recall the dramatic impact of the European Recovery Program—the Marshall Plan—on the reconstruction of Europe; that the financial, technical, and political support of the United States to both former friends and foes in Europe were essential in re-establishing democracy and growth in a Europe devastated by internal strife and war. Seventy-five years since Secretary of State George Marshall announced the plan, and 50 years since the German Marshall Fund was established to build greater transatlantic and international cooperation, it is a timely moment to reflect on how the European and American powers can work together globally to address climate change immediately, adequately, and innovatively to ensure global prosperity and democracy. The cooperation of the transatlantic powers to transfer regulatory best practices and new technologies in the clean energy transition can help all global partners attain net-zero emissions by 2050. In addition, technical and financial assistance to those suffering most from the consequences of climate change must be provided to help them to urgently take measures to adapt and protect themselves. 

It is a timely moment to reflect on how the European and American powers can work together globally to address climate change immediately, adequately, and innovatively to ensure global prosperity and democracy.

What would an energy transition “modern Marshall Plan” from the transatlantic partners look like?

Energy Efficiency

On the grounds that energy efficiency should be a first principle of all energy systems and in all states, the United States and the European Union can cooperate and lead on new digital and other innovative technologies to reduce energy consumption, lower greenhouse gas emissions, and improve energy efficiency. As a principle to be applied worldwide, they can provide know-how for others to improve energy consumption efficiency.

Electricity

“Greening the grids” is an important priority for both the United States and the EU. Cooperation on better regulation for integrating renewable sources into electricity grids should enable and encourage better digital management of grids to ensure that demand and supply of renewables are efficiently matched. As well, better interconnections (new and more extensive infrastructure to expand and diversify sources of supply and to react to demand) will provide a boost for others to showcase technical efficiencies that help increase the level of renewables in the electricity supply.

Greater investment in renewable electricity sources from both private and public funds will help to increase the supply and lower costs to consumers.

Hydrogen

Following on from better management of electricity grids and greater supply of renewable energy, “excess” renewable electricity can be used to generate clean hydrogen. The United States and the EU have already begun cooperating bi- and multilaterally on driving forward a hydrogen market and need further impetus from regulatory, infrastructure, and investment perspectives to ensure that this component of the energy mix is in place and operational at scale. Hydrogen storage can be used to offset variability in renewable electricity. 

With respect to hydrogen generated from natural gas, better and more efficient carbon capture and storage technologies at a lower cost should be encouraged to ensure that “blue” hydrogen can be ramped up as a transition fuel in parallel to the development of “green” hydrogen. The cost-benefit analysis will depend to a large degree on the market prices of natural gas; its availability; carbon capture, use, and sequestration (CCUS) costs; and alternative sources for hydrogen production. Nonetheless, for many countries, hydrogen will be an important part of the future energy mix and efforts to encourage and help with regulatory and technology improvements can drive forward this development.

Natural Gas

Natural gas will continue to play a key role as a transition fuel in the clean energy future. Replacing coal with natural gas can halve greenhouse gas emissions, but access to supply, and at a reasonable price, will be an important factor. Given the current high cost of natural gas in many parts of the world, greater supply at lower cost will be needed to encourage that displacement.

Gas as a storage and back-up fuel for electricity supply will also continue to be important during the transition period, and joint efforts to reduce methane emissions (as announced at COP26) will be crucial in creating greater public acceptance of natural gas use while ramping up the generation of renewable sources.

Sourcing natural gas and the role of international markets are essential to the smooth functioning and application of natural gas as a transition fuel; the United States and the EU should both continue to reinforce regulatory provisions to encourage the efficient functioning of those markets.

Nuclear

An important feature of the shared interest in nuclear energy between the United States and the European Union has been cooperation on nuclear safety and security. While some EU member states are adamantly opposed to the use of nuclear power in their countries, others are keen to improve, develop, and modernize clean, efficient, and safe nuclear energy and to use new and innovative technologies to attain those goals. The work of the Euratom Treaty and the European Commission’s Joint Research Centre on the security and safety of nuclear fuel and its installation is an important contribution to EU-US cooperation.

Further, cooperation between the two on the International Thermonuclear Experimental Reactor nuclear fusion project, which includes other international partners, should continue, as it it provides a good example of innovative, international cooperation on a new “moon shot” energy source.

Just Transition

It is clear that the clean energy transition will have winners and losers. Workers dependent on jobs in coal mining and processing or maintaining internal combustion engines will find that demand for their services will wane over time. New jobs, retraining, and the opportunity to employ their skills and experience for the development of new markets will be essential to encourage these workers and their families to see the benefits of the clean energy transition. Government support for them will be a fundamental factor in garnering public support for the many changes coming. 

Again, showing by example how new jobs are created in the greening of energy systems, providing support to the workers and families affected by the transition, and leapfrogging to technologies that are efficient, green, and job-creating will provide the impetus for other countries to take similar actions.

Loss and Damage Fund

Regarding climate change adaptation, perhaps one of the most important symbolic contributions that the European Union and United States can make is to honor their commitments to the loss and damage fund promised at COP21 to help people in the global south who have been most affected by climate change and will continue to suffer from its impacts. This does not preclude other bi- or multilateral actions they can take to provide financial and technical assistance to those countries and regions most severely affected. 

The 2022 EU-US Energy Council meeting will be an occasion for the transatlantic partners to reinforce their mutual concern and cooperation on addressing practical implementation measures in the clean energy transition and to offer the world an example of how change can drive forward sustainable growth and prosperity. Together, the European Union and the United States should lead the global effort toward an effective energy transition that will benefit all.