Roll up, roll up, get your energy here

IN EUROPE, policy packages are like patent remedies: if they promise to cure one or two ills, they might be worth a try; if a dozen, suspect quackery. On January 23rd the European Commission is to unveil a comprehensive energy policy that promises to curb climate change, increase energy security, shield economies from volatile fuel prices and foster new industries in which Europe will lead the world. The mandate for this monster comes from national leaders, who set themselves a string of ambitious but sketchy energy goals at a summit last March, the European Union's first after growing to 27 members. Beforehand, some people wondered how such a diverse group would agree about something as tricky as an energy policy. In the event, agreement came fast. The reason for that is now clear: like the finest snake-oil, the new policy promises something for everyone.

For countries worried about global warming, there is a target to reduce EU greenhouse-gas emissions by at least a fifth of their 1990 level before 2020. For countries less fussed about climate change (some ex-communist newcomers), the policy stresses independence from scary suppliers such as Russia, and asks the rich countries of old Europe to accept the lion's share of greenhouse-gas curbs.

Countries with lots of coal will doubtless be gratified by talk of clean coal plants, and of carbon capture and storage. Farmers get a potentially lucrative pledge that the EU will use biofuels for a tenth of its transport needs, as long as they are eco-friendly (fierce rows continue about how to judge that). For Europeans opposed to nuclear energy (the biggest source of low-carbon energy in the EU), the portmanteau places a huge bet on technologies such as wind and wave power, setting a target to triple Europe's overall use of renewable energies by 2020.

Countries determined to subsidise expensive forms of greenery (cloudy Germany loves solar panels, for some reason) will be allowed to carry on. This is sold as a punt on EU innovation, keeping a mix of technologies alive while waiting to see which will sell. The model is Denmark, which subsidised wind turbines for years and now makes a mint exporting them—never mind that wind power itself has to be subsidised.

For fans of market mechanisms, an existing European scheme for trading carbon-emissions quotas will be tightened up and a separate trading scheme created to set up a market in renewable power certificates among EU members. That would allow Britain—a crowded and expensive island with strong planning laws—to pay for new wind farms in Romania, say. With traded certificates, the power generated by Transylvanian windmills would be credited to Britain's renewables account, while Romania would get cash and clean electricity. Free-traders, in principle, ought to be pleased. Renewables such as windmills promote trade and market integration by prodding governments to link up national grids, says Peter Brun of the Danish wind-energy firm, Vestas. Otherwise, on blustery days you risk swamping your own grid, and on calm days going short.

European officials predict that their policy will redistribute wealth to poor neighbours. These may include non-Europeans, as long as renewable energy produced by them is imported back to Europe. Thus Italy could build solar arrays in north Africa, as long as it laid undersea cables to bring back the electricity.

Europe has “so much to gain”, enthuses a Eurocrat: energy security, jobs, technological gains, you name it. There will be new industries “to replace older industries that will increasingly have trouble surviving in a carbon-constrained environment”.

But that is where the clashes start. The French president, Nicolas Sarkozy, complains that if EU policies drive heavy polluters to countries with laxer carbon regimes, that would be “neither efficient, nor fair, nor economically sustainable”. To France, it is “indispensable” to fight back with import tariffs on goods from countries that resist binding curbs on greenhouse emissions (trade war, anyone?).

One minister says it is “stupid” to pin such high hopes on renewable energies, because boosting them is not the same thing as cutting carbon emissions. If Europeans want to have global impact, he says, they should invest heavily in clean coal technology. “There is no way you can sort out China with wind power.”

Source: The Economist