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Rapporten aan de Regering
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Frontmatter
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1 - Introduction
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Summary
WHY THIS REPORT?
Drinking water supply, mobility, communications and energy are critical to the functioning of contemporary society. Without these services all modern societies would collapse, as major energy blackouts and train accidents often remind us. Equally indispensable are the infrastructures that enable the protection against flooding, that facilitate electronic communications and transport by road, rail and air.
The efficiency of the entire economy is heavily influenced by the effectiveness, quality and universality of these infrastructures. They are priority factors in locational decisions for investment by firms in many industries. The effects of efficiency and universality ripple throughout the economy and society in a manner that multiplies their direct impact by many times. Because of their core functions, infrastructures and the services they deliver (also referred to as public utility services) have been treated differently from other industry sectors and have not simply been left to market forces (Mooij and Prast 2002; Teulings, Bovenberg and Van Dalen 2003; Melody 2008).
Core infrastructures have become truly critical infrastructures – in the sense that they are key to continued societal and economic security and well-being in the face of external threats. Such external threats may be brought about by factors such as a growing dependence on external natural resources and terrorist threats. Indeed, these threats are increasingly recognised by policymakers both at the European and national levels. At the same time, infrastructures are also seen as the key to a successful transition towards a low-carbon sustainable future for most of the world's economies. The Netherlands, with its heavy reliance on (increasingly imported) gas and coal, its overcrowded roads, railways and airports and its ambitions to become a knowledge-intensive society is no exception. Moreover, there is the need to adjust the Dutch flood protection strategy, its water management and spatial planning policies to the challenges of the sea level rising and the increasingly violent run-off of rivers. The costs of a transition to a sustainable future are both uncertain, as well as enormous in monetary terms (€ 2 billion annually in the near future, according to the Energy Transition Platform, Taskforce Energie Transitie 2006).
THE VITAL (BUT OFTEN NEGLECTED) ROLE OF INFRASTRUCTURES
Events around the globe have illustrated not only the vital nature of infrastructures which provide key services, but also their vulnerability to external challenges – like, for instance, climate change (section 1.5.3).
Infrastructures
- Time to Invest
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Influential policy advisors call for a reform of the management of, and investment in infrastructures at both the regional and the national level.
3 - A New Constellation of Actors
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INTRODUCTION
Concerns have recently been raised on the negative aspects of private involvement in infrastructures, a discourse for which the rise of private equity funds, foreign actors and discussions on the – possible – transfer of ownership into private hands provide the new context. More generally, the desirability of the private actors’ involvement in infrastructures has become an ever more probing issue in political debates. There is no doubt that many new actors have come to the fore, albeit that differences between infrastructures are substantial. It would be too simplistic, however, to limit the effects of regime change on the actor constellation to the mere emergence of private actors next to a public actor that used to have a monopoly position. Inevitably, the emergence of new actors – but also other manifestations of regime change – has caused existing relations to change and new relations to develop. These changes have demonstrated that the role and position of government is, in fact, a multifaceted one, because it comprises decision making, financing, regulating and supervising functions, but also (in sectors in which regime change has had only limited effects) operational functions and ownership.
This chapter addresses two issues. First, it focuses on the developments in the actor constellation. As a result of regime change, both the roles, and the interests and interactions between the (now multiple) actors have changed. Secondly, this chapter shows that the intensity of the change is in part a function of the degree of regime change itself and is also intrinsically linked to the degree and the type of competition in the sectors.
When analysing the trends in actor constellations, the differences between the various sectors cannot be ignored. In some sectors, infrastructures are now in private hands, and a regulator has been introduced (electronic communications). In other sectors, the state has awarded a concession to a publicly owned company (railways), while in still others the network is in the hands of public owners (drinking water). In the gas and electricity sectors, networks are owned and operated by a regulated monopoly. Lastly, regime change may have resulted in a public organisation, such as a government department or a local authority, outsourcing various activities, such as waste management, to private actors. Although the actual situation may thus differ from sector to sector, parallels may nevertheless be drawn with regard to the underlying trends and issues they are faced with.
5 - Regime Change and Public Values in Infrastructures
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INTRODUCTION
Infrastructures are the precondition for the delivery of services that are indispensable to modern societies, e.g., services such as drinking water supply, the provision of electricity, data communication and flood control. But the significance of infrastructures for society goes beyond the delivery of services. As Van der Woud's study (2006) has shown, infrastructures have been the prerequisite for economic, social and cultural development in societies. Infrastructures serve a wide array of public interests and values; from sustainability; public health, safety and reliability; affordability and many more. The relation between these public values and the investment in infrastructures is evident. Since the mid-19th century (Disco 1990), infrastructures have been a major policy tool for governments in the realisation of these broader public values and, over the last centuries, governments have sought to direct and develop societies through infrastructures.
With regime change that has occurred since the 1980s, however, emphases on efficiency gains, improvement of the service and on the short-term were introduced. Chapter 2 described this movement as an emphasis on ‘Type I’ market failure. Recently, attention has again been drawn to wider public values, which were described in chapter 2 as ‘Type II’ market failures. This renewed attention is partly a reaction to the narrower focus stemming from the previous stage of regime change, but it is also due to new external challenges, e.g., climate change and the future depletion of fossil fuel resources (International Energy Agency 2007). These challenges require systems innovations in many infrastructures, e.g., road and railway transport that is more sustainable; the strengthening of dikes; energy provision that relies on non-fossil fuel sources; co2 storage and natural gas storage.
Since public values are the heart of the matter in infrastructures, governments have continued to play a role in ensuring that ‘physical’ infrastructures are guaranteed now and in the future. The processes of regime change (as discussed in chapter 2) have altered the role of the state with respect to infrastructure provision, however. Instead of producer/operator, the state has now become a ‘director’ (Tweede Kamer 1999-2000, 27018, no. 1). This shift has an impact on the way in which public values are articulated, balanced, realised and monitored (see also Teisman 2008; Larouche 2008).
Annex Characteristics of the physical infrastructures: An indicative inventory
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Annex Characteristics of the physical infrastructures: An indicative inventory
2 - Regime Change and Investment in Infrastructures
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INTRODUCTION
As the previous chapter described, infrastructures are critical for the functioning of modern society as well as the key to successful social change such as, for instance, a transition to a low-carbon sustainable future for most of the world's economies. In the context of a multitude of discrete and autonomous transactions in relation to infrastructures involving both heterogeneous actors and principals at multiple levels or arenas, hybrid constellations of public and private actors and technological developments, critical infrastructures have become ‘systems of systems’ (Sajeva 2006; Larouche 2008).
The first stage of regime change focused on ‘Type I’ market failures, which implies ‘trimming the fat’ of the former monopolist as well as enhancing affordability and choice for the consumer. Whereas the processes of regime change adequately address a ‘Type I’ market failure, the potential for ‘Type II’ market failures, that threaten to lead to public value failure in which broader, long-term interests such as the longer-term reliability, the accessibility of the networks and innovation are at stake, has been largely disregarded. This, in turn, may require a strategic policy framework for the institutional arrangements of infrastructure provision in order to establish a stable long-term framework for infrastructure investments, which properly allocates costs and risks as well as rewards and responsibilities to the various actors involved. This focus restores the balance between the short-term efficiency-based approach engendered by the first stage of regime change and has characterised the majority of infrastructures in the Netherlands to date and longer-term societal values.
This chapter commences with a description of the role of infrastructures in facilitating and pushing spatial, economic and social development in section 2.2. In section 2.3, the specific features of investment in infrastructures are enumerated, followed by an assessment of the process of regime change in section 2.4. In section 2.5, five modes of regime change are distinguished, namely liberalisation, privatisation, unbundling, corporatisation and internationalisation. The analysis in section 2.6 shows that regime change is never completed and in continuous transition. Subsequently, the difference between function and governance in infrastructures are highlighted in section 2.7. Regime change takes place in both dimensions, albeit not to the same degree and at the same pace. We conclude this chapter with two major consequences of the process of regime change: investment in infrastructures increasingly takes place in a multiple actor- and multi-level context (section 2.8).
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Summary in Dutch
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INLEIDING
In het politieke debat, in de kranten en op straat zijn heel wat zorgen te beluisteren over de staat van de Nederlandse infrastructuren. Het zijn zorgen over treinen die niet op tijd rijden, prijzen die alsmaar stijgen, energievoorziening die uitvalt en dijken die het dreigen te begeven. Al gauw wordt dan een verband gelegd met de liberalisering en privatisering die in de afgelopen vijftien tot twintig jaar hun intrede hebben gedaan in al onze infrastructuren. De marktwerking, zo valt overal, ook onder parlementariërs, te beluisteren, moet worden teruggedraaid en de overheid zou weer volledige zeggenschap moeten hebben over wat ‘van ons allemaal’ is. Met infrastructuren doelen we hier op de fysieke, onroerende voorzieningen die ons economisch leven onderbouwen: wegen en spoorwegen, dijken en drinkwater, vliegvelden, riolering en afvalverwerking, elektriciteit, gas en elektronische communicatie.
De Wetenschappelijke Raad voor het Regeringsbeleid deelt deze conclusie niet, maar wel de onderliggende zorg om de huidige en toekomstige staat van de Nederlandse infrastructuur. In de eerste fase van de introductie van de marktwerking is vooral gekoerst op vergroting van de efficiëntie en vergroting van de keuzevrijheid van consumenten. In vrijwel alle sectoren is daarbij winst behaald, doorgaans in het voordeel van de consument. Maar langetermijnwaarden, zoals innovatie, onderhoud, beschikbaarheid en duurzaamheid, zijn binnen het nieuwe regime zelden expliciet aan de orde gesteld. Ze dreigen daardoor minder aan dacht te krijgen, waardoor kortetermijnwaarden (gericht op de individuele consument) bevoordeeld worden boven deze langetermijnwaarden (waarden die het individu overstijgen). In het WRR-rapport worden de eerstgenoemde waarden aangeduid als ‘Type I’-belangen en spreken we van ‘Type II’-waarden als het gaat om de laatstgenoemde.
Ervaringen uit het buitenland en wetenschappelijk onderzoek ondersteunen het vermoeden dat de huidige institutionele arrangementen onvoldoende in staat zijn om op de lange termijn dergelijke publieke waarden te realiseren. De vrees hiervoor wordt niet weggenomen als infrastructuren, en de dienstverlening die zij moeten garanderen, weer worden ondergebracht in een publiek monopolie: daartegen pleiten de daarmee verbonden risico's van politiek opportunisme, verkokering en een te gering innoverend vermogen. Daarbij komt dat de fysieke netwerken van onze infrastructuren nauwelijks meer nationale netwerken zijn: ze zijn geïnternationaliseerd, ze zijn netwerken van netwerken geworden. In veel sectoren bestaat er gedetailleerde technische afstemming op internationaal niveau, maar ontbreekt de bestuurlijke en politieke besluitvorming op systeemniveau van de infrastructuren. Een terugkeer naar nationale publieke monopolies vult dit democratisch hiaat niet.
7 - Conclusions and Recommendations
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INTRODUCTION – THE CHALLENGES AHEAD
This report has established that the role which infrastructural provision must play in the future requires a new perspective which recognises their core, strategic role in facilitating wider economic and societal change. Among the future challenges that require vast investments are the transition to sustainable mobility, a knowledge-based economy as well as a low-carbon economy – all of the revised Lisbon agenda goals. These goals show that the infrastructures involved are not just important for the delivery of services such as gas, electricity, drinking water, transport or electronic communications. Infrastructures are increasingly pivotal for facilitating change and as such, in realising general, long-term collective public values for society at large. It follows that government strategy must now devote renewed attention to securing a facilitating, strategic role for infrastructures and recognise that investing in infrastructures is absolutely vital for achieving long-term public values.
This report, in this perspective, has also identified challenges and potential risks that are at least in part, intrinsic to the process of regime change examined in previous chapters. Specifically, as chapters 1 and 2 have emphasised, the essential focus of regime change has been i) on short-term and static efficiencies and ii) on the products and services delivered over the infrastructures, and not the infrastructures themselves. But in order to maintain a high quality of service delivery and, at the same time, meet these new challenges, a renewed focus on the role of infrastructures in not only serving consumer interests but also in meeting longerterm societal values including sustainability, mobility and innovation, is imperative. The enormous costs as well as the increasing urgency for large-scale investments to accomplish this process cannot be underestimated (for example, the iea estimates for energy transport networks alone this is in the region of € 200 billion). However, substantial investments in the trans-European infrastructures, that provide the true backbone for Europe's single market in transport, electronic communications and energy supply, figure high on the EU policy agenda. The challenges ahead, especially in climate change, require a transition of a magnitude that has brought EU Energy Commissioner Andris Piebalgs to speak of a ‘Third industrial revolution’.
6 - Regime Change and the Investment in Energy Infrastructure
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INTRODUCTION
This case study will apply the analysis developed in the previous chapters, to examine how investment decisions in infrastructures in the Dutch electricity and gas sectors have been affected by regime change thus far, and consider the likely impact of new exogenous factors on energy infrastructure development. The aim is to highlight the issues in one particular sector in which the process of regime change is relatively advanced.
Two sets of European directives were aimed at creating an internal market for electricity and gas within the European Union. Investments in infrastructures at the national level were not dealt with at all in these measures and in particular, the regulation of interconnectors between Member States or with third countries was left essentially to national policy and regulation. The latest package of proposals submitted by the EC Commission in September 2007 will, if finally adopted, expand the scope of European regulation considerably. Indeed the ambition is to secure the operation of the major electricity and gas networks as an integrated whole – as a true European gas and electricity grid network. Although ownership and financing of investments will remain a national matter, most other operational aspects will be coordinated at the European level through a combination of instruments. These include the creation of a new European Agency, the Agency for the Cooperation of Energy Regulators (acer), which is comprised of representatives from the 27 national regulators in the EU. Moreover, the national tsos (Transmission System Operators) is necessary to coordinate their operations via two European-wide bodies.
Dutch energy market liberalisation essentially mirrors the experience of other Member States, but in some aspects it went further than the EU rules. Today, multiple national and foreign firms are involved in the production, transport, distribution and supply of energy to end users who, since 2004, have had the freedom of choice to select their own electricity and/or gas supplier. The divergent interests of these different actors have led to contested public values, which are pursued on multiple national, EU-wide and regional levels. Market integration and corporatisation have resulted in increased trade within and between the Member States, raising the pressure to further develop existing networks, crossborder interconnector capacity and other facilities.
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Contents
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Preface
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This report has been prepared by an internal project group of the WRR. The group consisted of prof.dr. Leigh Hancher as member of the Council, and staff members dr. Willemijn Dicke (project coordinator), mr.dr. Ton van den Brink, dr. Aad Correljé (external advisor), drs. Gera Arts and drs. Niels Feitsma. In addition, ir. Marten Jorritsma contributed to this report for a year during the course of the project.
The analyses in this report are, in part, based on studies conducted by externals at the request of the Council. These studies will be published simultaneously with the report in the series ‘Verkenningen’ no. 19 New Perspectives on Investment in Infrastructures. That publication contains contributions by dr.ir.ing. Rudi Bekkers, dr. Theon van Dijk, drs. Dick van Duijn, prof.mr.dr. Ernst ten Heuvelhof, mr.drs. Hamilcar Knops, prof.dr. Pierre Larouche, mr.dr. Saskia Lavrijssen and prof.dr. Leigh Hancher, prof.dr. William Melody, mr.dr. Jan de Pree, prof.dr.ing. Geert Teisman, and mr. Kirsten Wilkeshuis. Along with this report and the ‘Verkenning’ a webpublication by prof.dr. Leigh Hancher, dr. Willemijn Dicke and ir. Marten Jorritsma will be published.
In preparing this report, the Council also used advice and information provided by people from the Dutch Court of Audit, the ‘Algemene Rekenkamer’. We wish to thank Eric Polman, Cor van Montfort, Jan Wieles and Freek Hoek. Furthermore the project group organized several workshops with policy experts, practitioners and academics, and we did a number of interviews. During the seminars and interviews we spoke with: Nico Baken (kpn), Daniel Tijink (EZ), Robert Haffner (NMA), Wim Holleman (RWS), Luc Kohsiek (RWS), Arend Kroes (GasUnie), Mark Leijsen (Kennisinstituut voor mobiliteit), Frits Otte (EZ), Annetje Ottow (OPTA), Siebe Riedstra (VW), Robert Stil (OPTA), Gert Zijl (NMA), Alexander van Altena (Prorail), Sjoerd Bakker (EnergieNed), Edgar van Boven (KPN), Bernard Dijkhuizen (Zesko BV), Arjen Frentz (VEWIN), Lex Hartman (Tennet), Frank van den Heuvel (Delta), Helma Kip (Essent), Hans van der Meer (NAM), Petra Smeets (GasUnie), Maurice de Valois Turk (KPN), John Groenewegen (Delft University of Technology), Ger Ardon (VROM), Jurrien Prast (VROM), Ton Bestebreur (RWS), Erik van de Brake (Rabobank), Jaap Korf (Rabobank), Wim Dik (Zesko), Paul Disveld (DNB),
4 - Infrastructures in a Multi-Level Arena
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INTRODUCTION
This chapter analyses increasing internationalisation as a second change to the organisation as well as the delivery of public values within the infrastructure. In chapter 2, we examined the impact of regime change and analysed how public values in infrastructure provision had come under pressure from private sector involvement and with it, a blurring of the dividing line between public and private values, undermining the ‘public-ness’ of infrastructures. The second relevant challenge is that of the increasing involvement of ‘levels’ other than the national. Together, these two challenges may lead to the hypothesis that national authorities are merely one of the relevant actors alongside private actors and international and regional public actors.
As was explained in chapter 2, the national level is traditionally the focal point of both the institutional and the operational aspects of infrastructure investment decisions. Decisions to invest in infrastructure are made at the national level based on national interests and policy objectives. However, as a result of the processes of internationalisation, the situation is becoming increasingly complex. Infrastructures have become more transnational and international in their operation and investment decisions are increasingly dependent on international, and most notably European, regulations.
For the Netherlands, the European Union has become by far the most relevant international organisation with regard to investment decisions in infrastructure. Its influence is, however, far from unequivocal. Indeed, a rich variety of policy objectives and measures affect national investment decisions in an equally rich variety of ways. Most of this chapter will therefore be devoted to the significance of the European Union on infrastructural policy. A distinction will be made between eumeasures that support (or facilitate), and EU measures that constrain national investment decisions.
It is useful to recall that what has been referred to as the ‘European regulatory space’ has traditionally been dominated by the nation-states. Ministries have the formal regulatory powers, although, in practice, they have enjoyed very close relationships with the state-owned companies. The EU has played almost no role in the regulation of network industries; for instance, the EU telecommunications ministers met twice between 1959 and 1977; almost no EU sectoral legislation was passed, and network industries were seen as being beyond the reach of European primary law.
Executive summary
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Drinking water supply, mobility, communications and energy are critical for the functioning of contemporary society. Without these services all modern societies would collapse, as major energy blackouts and train accidents often remind us. Equally indispensable are the infrastructures that enable the protection against flooding, that facilitate electronic communications and transport by road, rail and air.
The efficiency of the entire economy is heavily influenced by the effectiveness, quality and universality of these infrastructures. They are priority factors in locational decisions for investment by firms in many industries. The effects of efficiency and universality ripple throughout the economy and society in a manner that multiplies their direct impact many times. Because of their core functions, infrastructures and the services they deliver (also referred to as public utility services) have been treated differently from other sectors of industry and have not been simply left to market forces.
Core infrastructures have become truly critical infrastructures – in the sense that they are key to continued societal and economic security and well-being in the face of external threats. Such external threats may be brought about by factors such as a growing dependence on external natural resources and terrorist threats. Indeed, these threats are increasingly recognised by policy makers both at the European and the national level. At the same time, infrastructures are also seen as the key to a successful transition towards a low-carbon sustainable future for most of the world's economies. The Netherlands, with its heavy reliance on (increasingly imported) gas and coal, its overcrowded roads, railways and airports and its ambitions to become a knowledge intensive society, is no exception. In addition there is the need to adjust the Dutch flood protection, its water management and spatial planning to the challenges of sea level rising and increasingly violent run-off of rivers. The costs of transition to a sustainable future are both uncertain, as well as enormous in monetary terms (Euro 2 billion a year in the near future, according to the Energy Transition Platform). Thus, system innovation is necessary in various infrastructures. In others, maintenance will require substantial investments in the future.
Why this report: From a ‘Type I’ to a ‘Type II’-strategy
Over the last two decades most infrastructures have been subject to significant regime change, which led to more emphasis being put on service delivery, lower prices and enhanced consumer choice, together with a greater concern for efficiency.
2 - Problem Definition and Policy
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Section 2.1 describes the present state of knowledge about the climate. Section 2.2 discusses the difficult judgments that have to be made in formulating climate policy. Section 2.3 shows that the climate policy pursued to date can at best be seen as a first step.
KNOWLEDGE ABOUT THE CLIMATE
Our knowledge about the climate and the influence of human activity on it is still incomplete, but is increasing. This report takes as its starting point the scientific insights as set out in the Third Assessment Report (TAR) by the Intergovernmental Panel on Climate Change (IPCC 2001), supplemented by more recent insights both at global level (Levin and Persching 2006) and specifically for the Netherlands (MNP 2005; Rooijers etal. 2004). The current level of knowledge suggests that, without a climate policy, the global temperature will rise in the period to 2100 by an average of between 1.4 °C and 5.8 °C compared with 1990. The average world temperature in 1990 was already 0.6 °C higher than in 1850.
The global climate system reacts only very slowly to changes in emission patterns. There is a time lag in the reaction of CO2 concentrations to changes in emission patterns because of the long residence times of greenhouse gases (GHGS) in the atmosphere and because emissions resulting from human activity are small in relation to the total amount of CO2 in the atmosphere. Moreover, the global temperature responds slowly to changes in atmospheric concentrations of greenhouse gases because the change in the energy balance is small in relation to the accumulated warmth. There is thus a double delay in the transition from a ‘flow variable’ to a ‘stock variable’, in which the second flow is determined by the initial stock of greenhouse gases. In such a slow system, disturbances have a lasting effect and the end result of changes in emission patterns are seen only after many centuries. Even in the event of a reduction in net emissions, the temperature rise that has begun will continue for a long time. Although the year 2100 is often used as an endpoint for projections, a stable final situation will not have been reached by that year, especially as regards sea levels.
6 - A Dutch and European Climate Strategy
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Climate strategy requires ambition and realism
An effective and efficient climate policy demands an unusual combination of realism and ambition: the realism starts from the existing situation, but is unable to break away from it sufficiently; the ambition focuses on what is needed, but without realism will turn out to be nothing more than building castles in the air.
There has been no lack of ambition in the past decade. The European Union (EU) has taken the lead by formulating its 2°C target. Achieving this target means that, according to current insights, net global emissions of greenhouse gases (GHGS) must be so low by around 2050 that the stock of GHGS in the atmosphere stabilises at around 550 ppmv CO2 equivalents by the end of the century. This report shows that it is in principle possible to opt for global emission reduction routes which realise the required ambition. That is the good news.
However, the 2°C target is also an exceptionally demanding one. An assessment of which global strategy can actually be realised requires a sober assessment of the interests and policy priorities of all countries, and above all of a limited number of large polluters with different preferences from the eu, and certainly from the Netherlands. In the Council's view, the combination of high ambition and low realism could very easily drive up the costs without underpinning the global efficacy – and that is the only thing that matters for the climate. Simply waiting without ambition until other countries demonstrate leadership is neither in Dutch long-term interests nor in line with the evident preferences of the Dutch population.
The Council is concerned about both the efficacy and efficiency of Dutch climate policy. If we look at climate policy in the light of all manner of other important social objectives (such as health care, education, reducing world poverty and securing energy supplies), the situation becomes more complex. It then becomes necessary to make choices between, say, investing a euro now or in ten years’ time in education in poor countries or spending that same euro on climate policy. These are difficult judgments to make given the great uncertainties. And the precautionary principle cannot replace those judgments. In other words, it would smack of tunnel vision if the ambitions and efforts in relation to climate policy were not placed in this broad social context.
1 - Introduction
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Summary
This document is an abridged version of the Dutch-language report on climate policy Klimaatbeleid – tussen ambitie en realisme (‘Climate policy - between ambition and realism’) published by the Netherlands Scientific Council for Government Policy (WRR 2006). As well as being longer, the original report also contains 12 appendices each focusing in more detail on a specific topic.
THE CLIMATE PROBLEM
The Earth's climate will become warmer in the coming centuries, and the consequences of this will vary widely at local level. This global climate change is due at least in part to human activity. The sustainability of the Earth in the long term depends on a stable atmospheric concentration of greenhouse gases. In order to achieve that stable situation, emissions will have to be brought far below their current levels. The desirability of achieving this reduction forms the starting point for climate policy.
In the longer term, the climate problem is related principally to emissions of carbon dioxide (CO2) as a consequence of energy consumption, though the impact of other greenhouse gases such as methane will certainly not be negligible in the shorter term. According to the International Energy Agency, CO2 emissions per head of the global population amounted to 3.9 tonnes per year in 2001. However, there are considerable differences at national level: per capita emissions in the developed countries average 11 tonnes per year, and in the United States (US) the figure is no less than 19 tonnes. At present, the emissions in poor nations amount to less than 1 tonne per year per head of the population.
The greenhouse effect is associated with wealth and prosperity in two ways. On the one hand increasing prosperity leads to greater consumption of energy and thus to a bigger greenhouse effect. On the other hand, prosperity creates a better balance between gross domestic product (GDP) and energy consumption; in other words, to the extent that CO2 is regarded as pollution, richer countries produce more cleanly than poor countries. The first effect dominates at present. In the near future, the way in which the problem develops will be determined mainly by emerging economies such as India and China.