Stricter EU policy Recommendations

23 3 Response of the minister and the Netherlands Court of Audits afterword

3.1 Response of the minister

The Minister of ELI responded to our audit on 6 September 2011. He wrote on behalf of the Ministers of the Interior and Kingdom Relations BZK, Finance and IM. His response is summarised below; the full text can be read at www.rekenkamer.nl. The Minister of ELI noted that some of our recommendations were consistent with policy developments launched by the government. The House of Representatives would be informed of some of the initiatives soon. They include the Green Deal, the Local Climate Agenda and the Sustainability Agenda. The minister also referred to the Minister of BZKs Built Environment Energy Saving Action Plan that was recently submitted to the House BZK, 2011. The minister confirmed that the binding European goals on CO 2 reduction and the share of renewable energy were the guiding principles of the governments energy and climate policy. Energy savings were a means to achieve these goals. The energy saving instruments applied by the previous government would be continued and refined where necessary to strengthen their effectiveness. The minister wrote that the Netherlands did not support separate binding national energy saving goals in addition to the renewable energy and CO 2 reduction goals. Such goals might require non-cost effective measures that would make the policy unnecessarily expensive. In this light, the minister also responded to our recommendation that energy saving policy instruments should be selected so that their reasonably estimated impact is adequate to achieve the policy goals and the instruments should be adapted if policy execution or impact is below expectations. Since the government no longer sets a separate energy saving target, the minister thinks this recommendation is no longer appropriate. 24 The minister will partially adopt our recommendation that policy for the manufacturing sector be revised and potential improvements be identified. A study will be conducted of the consequences for the competitiveness of Dutch industry of the further greening of the tax system. The government believes there are openings to increase the minimum European tax rate on energy products and electricity. The minister expects the ETS companies to take a step in the field of energy efficiency through the Multiyear Energy Efficiency Agreement for ETS Companies MEE Agreement and through the conclusion of Green Deals. The Green Deal, according to the minister, should better match entrepreneurs reasons for investing in energy savings. The minister would consult the participating companies regarding our recommendation to increase the social pressure of voluntary agreements by informing them of each others performance. The sustainable procurement policy will be continued and the government will scale up innovative projects and act as a launch customer for new products. An action plan is being prepared to improve both compliance with and enforcement of the Environmental Management Act. The minister thought our recommendation to study the cost benefit ratio of good enforcement was unnecessary because studies have shown that investments that recover their costs within five years are among the most cost effective options in the climate policy. The minister agreed with two of the options we gave to overcome the negative interaction between national energy saving policy and the ET S: directing energy saving policy at sectors not participating in the emissions trading system and supporting long-term innovation. Existing energy saving measures in non-ETS sectors will be continued. But the minister will not continue to support the ETS sectors. The MEE Agreement and the Green Deal, he wrote, were necessary to overcome barriers to profitable energy saving investments in energy intensive industries. The government will take extra steps to promote innovation, especially in the energy sector, so that there are more alternatives to fossil fuels. The expensive option of buying up emission allowances with other European countries in order to force up the cost of emissions trading is not thought appropriate. The government will not intervene actively in the system. However, it will implement the Van TongerenVan Veldhoven motion. This motion asks the government to work on improving the emissions trading system at European level House of Representatives, 2011. 25 The minister does not think it necessary to strengthen the form or intensity of energy and climate policy. The minister does not share our conclusion that the 2020 CO 2 target will probably not be achieved; recent data suggest that the policy the new government has introduced and proposed will achieve the CO 2 reduction target in 2020. The minister briefly considered our recommendation to formulate a government vision of the coherence, priorities and route to the energy and climate policy targets and of the interaction between national policy and the European emissions trading system. The minister noted that the government had already set out its vision in the coalition agreement. The government will ask the European Commission to analyse the relationship between reducing greenhouse gas emissions and renewable energy on the one hand and the Commissions proposals for compulsory energy efficiency measures on the other. This might prevent the compulsory energy efficiency measures having a negative impact on the CO 2 emissions trading system.

3.2 Netherlands Court of Audits afterword

The minister does not disagree with our conclusion that previous governments energy saving policies were too weak to achieve the targets and that this was often known on their introduction. He writes that the problem has been resolved because the RutteVerhagen government no longer treats energy saving as a separate goal. Energy saving is still an integral part of most policy measures to reduce CO 2 emissions. It is therefore important to clarify the relationship between goals and resources, to periodically monitor the results and to inform the House of Representatives of them. The importance of energy saving is self-evident. Specific goals provide clarity to parliament and the public. The minister refers to the coalition agreement in his response to our recommendation to develop a vision to clarify the relationship, priorities and route to the policy goals. We would draw attention in this respect to the following points. Achieving the CO 2 reduction target in 2020 In his letter of June 2011, the State Secretary for IM wrote that the Netherlands would achieve the CO 2 reduction target set by the European Commission IM, 2011. We would refer to the warning in the underlying documents especially PBL ECN, 2011 that the results should be treated with caution. Furthermore, significant benefits are expected from the standardisation of EU car emissions. Experience shows that European