Netherlands Diary 6 – Frans Timmermans’ Muller Lecture
On March 25, 2013, the Dutch Minister of Foreign Affairs delivered a lecture with his thoughts on history, energy, the environment – and their impact on geopolitics. (Thanks to Johannes Vervloed, the Dutch consul general in Vancouver, for bringing it to my attention.)
The lecture is helpful not just for its content on the above issues but also for giving insight into the Dutch way of seeing the world. I’ve greatly abbreviated it to excerpt key points below, but you can read the whole Muller Lecture here.
Muller Lecture by the Minister of Foreign Affairs Frans Timmermans, held on Monday 25 March 2013, The Hague.
The increase in demand for energy in the next two decades alone will be greater than all the energy the world consumed in 1970. By 2030, the demand for energy will be 35 to 40% higher than it is today. This sounds challenging, but we can meet this challenge. The real problem is not that we’re running out of fuel. The real problems are high prices, conflicts over resources and environmental stress. …
The United States will be the biggest gas producer in 2015 and the biggest oil producing country in 2017. … in 2035 about 90% of all oil from the Middle East will go to Asia. And China is investing heavily in Latin America. The expansion of the Panama Canal with Chinese funding is a case in point. Broadly speaking we can say that the oil trade is moving east.
Let’s take a look at Europe. At the moment, Europe imports 60% of its energy. In 2035, this will be 80%. Europe will have a hard time competing with China and India for oil from the Middle East. As energy expert Fatih Birol put it, ‘The energy future of the EU will be shaped more in Beijing than in Brussels.’ …
International markets do not function according to the laws of supply and demand. In the energy and resources trade, state companies dominate the market. We are witnessing resource nationalism. The state is back. And it is back with a vengeance.
This is not a sector that you can outsource to private companies, even if some of their balance sheets are bigger than certain national budgets. Europe and the Netherlands have to address this issue by political and diplomatic means in support of, and in addition to, the activities of private companies. We shouldn’t be naïve about this. …
As I said, the world can meet the growing demand for energy in the coming decades. That is not the problem. The effects on the environment of rising demand, however, do pose a serious problem. Climate change will continue to haunt us. …
Despite all our efforts, over the next two decades, 75 to 80% of the world’s energy will be supplied by fossil fuels: oil, coal and gas. Of the three, coal produces by far the highest CO2 emissions, followed by oil, while gas is significantly cleaner…. Unfortunately Europe is also increasingly running on coal. This has a negative impact on Europe’s carbon footprint. This is directly linked to what is happening in the American market. …
The fact that shale gas has been found and developed in the United States will lead to economic restructuring. It will become more attractive to start producing again in the United States. It will become more difficult to keep production up in Europe. …
More competition for energy and other resources threatens our security and the environment. We need to turn this situation around. In particular, we need to work for:
• Secure access to energy and resources.
• Prevention of conflicts over resources, food, water and the environment.
• A global strategy to combat global warming.
• Sustainable growth, worldwide.
We need to respect the earth’s capacity. CO2 emissions and the use of natural resources such as water should be incorporated into the price of energy. They are left out of every business model today; they should be part of every business model tomorrow: access to water, food and energy for all of this great planet. Efficient exploration of, trade in and use of resources.
The solution to the problem of this new Great Game, the challenges for our security, our environment and our livelihood, can be pursued along a number of tracks.
Security of supply is the most important part of our international energy policy. We need to secure our own energy and resources. In part, we do this by contributing to a more stable, worldwide energy market. … The Netherlands has a lot to offer. As an expert on sustainable supply chains, governance, international standards and norms for clean energy. We want to underscore this by creating a ‘Sustainability Valley’ in this country.
We need to promote a level playing field in the markets for energy and natural resources. More transparency, integrated reporting and actual playing by the rules to enable our companies to compete fairly worldwide. …
The environmental challenge is arguably the biggest challenge we face. For this, we need a better understanding of the way energy, food, water and the environment are interrelated. No one can do this on their own. Here, governments, business, international organisations, NGOs, consumer organisations, academia and individual citizens will need to work together if we want to come up with a solution to this most complicated of issues. Because it means that we’ll have to live differently. Not just produce differently and trade differently; we need to change the way we live….
So we need governance, public governance at a global level, led by global players. Which means that you have to look at it from a European perspective. Only a common European energy policy will put us in a position to be part of that team of global players that needs to address this issue.
Also, we need more innovation. Obviously, we need new, effective techniques and approaches. If we are to introduce fracking in areas where there is high population density, we need to find new techniques. Present techniques will not suffice. We need to find techniques that need less land and less water, and we need to be inventive to bring this about.
We need to think about high-tech information exchange. This could make our transportation more efficient…. And we need a lot of innovation in the field of saving energy. … The International Energy Agency recently stressed the enormous potential for saving energy and called it a ‘hidden fuel’….
There is no real distinction between strategic issues and energy issues. How should we go about tackling this situation? I think there are two routes open to us.
Firstly, more than ever before, international cooperation on a global level will make the difference between failure and success. We need to work with partners who have something to offer and whom we can offer something in return. … It is clear to me that a unified EU position is the best starting point for the EU as a whole and for the individual member states. It is very clear to me that if we are not able to reach that unified position, it will be easy for our partners – and I would do the same if I were in their shoes – to play one member state off against the other and thus strengthen their own position….
Secondly, to protect our environment and our competitiveness, we need to rethink the European climate and energy policy.
At the moment, we have the EU 2020 programme. What are its goals? By 2020 in Europe we want a 20% CO2 reduction, to get 20% of our energy from renewables and to be 20% more efficient in energy consumption. The intentions of EU 2020 were great. The programme has, however, been overtaken by events. In practice EU 2020 turned out to be too expensive, too inefficient and, on a global scale, just a drop in the ocean. It is not helping the environment very much. It is not helping our competitiveness. And according to Dieter Helm, author of The Carbon Crunch, it is not sustainable for the future.
It is no coincidence that both Helm and Paul Gilding, author of The Great Disruption, compare decarbonisation to the war industry of the 1930s. It means overhauling some of our most fundamental structures such as energy plants, industry and transportation. We should be brave and say: if we really want to decarbonise, we will have to pay for it. The International Energy Agency, the European Climate Foundation and the Stern Review have tried to calculate what a reduction of our CO2 emissions of 80% by 2050 would cost. Their answers range from between 300 and 600 billion dollars worldwide. Per annum. A liveable planet doesn’t come cheap.
So we need to think about life after EU 2020. And ask ourselves important questions. No subjects should be off-limits. Do we need a simpler system? With one ambitious CO2 emissions goal for the long term? Should we assign a global price to CO2? With one European market for renewable energy and one system of subsidies?
We need to have a debate about this. And we need to have this debate on several levels. Nationally, we need to discuss governance. But of course we also need a debate at EU level, with all relevant ministers, the Commission, the European Parliament and other stakeholders. This is such a huge issue: it concerns climate, competitiveness, finance and foreign relations.
None of this will occur if we are not able to do what I said in my first point: create an international platform to attain these goals.
I think this is a time when people in many countries are talking a lot about nationalism. About patriotism. About the need to retain our own national sovereignty.
This time, we should come to terms with the fact that with fundamental issues at stake about the structure of our economy, about geopolitical matters, about power relations between continents in the future, if Europe wants to play a role in these matters, it should leave behind discussions about nominal sovereignty. And start discussing real sovereignty. And the reinvention of sovereignty on issues such as these can only take place on a European scale. Nation states are too small – in Europe at least – to wield the same power as nation states that operate on the scale of continents, such as the United States, China and others.
A level playing field in the world in these matters can no longer be created by saying that in terms of international law all states are equal. It can only be created by coming to terms with the fact that some states are more equal than others, and that we can only ensure equality by working more closely together as European states.