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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
26
decision-making often takes longer than foreseen and leads to less potent results than the Netherlands had anticipated.
Energy saving by energy intensive industries The Minister of ELI wrote that energy intensive industries were
particularly slow at investing in energy savings and that the MEE would help overcome the barriers. This raises questions because the results of
the Benchmarking Agreement the predecessor to the MEE have not been satisfactory. The minister will submit the monitoring results for the
first year of the MEE to the House of Representatives shortly. We recommend that the minister use the results to explain what he
expects from the MEE. Costs and benefits of enforcing the Environmental Management Act
The Environmental Management Act requires entrepreneurs to invest in energy saving measures that recover their costs within five years. Since
most entrepreneurs set considerably stricter conditions on cost recovery, enforcement is expected to be difficult and expensive. The study report
the minister refers to does not mention the cost of enforcement. The costs and benefits of enforcing the energy clause in the
Environmental Management Act should still be studied. Limiting the negative interaction between national energy saving policy
and the European emissions trading system The minister said he agreed in part with two of the three options we gave
to reduce the negative interaction. We assume that he will follow them up appropriately and mobilise funds so that more are targeted at non-ETS
companies andor long-term innovation. Clarity for the House of Representatives
The ministers response again shows that policy and its implementation require many activities with many ministers being responsible for them.
This makes it difficult for the House of Representatives to follow th e results and effectiveness of policy. We recommend that all ministers
concerned prepare clear reports highlighting the relationship between the various aspects of the policy.
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Main conclusions, recommendations and undertakings
Place in part I
Conclusions Recommendations
Undertakings
2.1 Fewer and weaker policy
instruments have been applied than thought necessary in advance
to achieve the energy saving goal. Policy instruments must be selected so
that reasonably estimated effects will achieve the policy goals. If the policy or
its impact is inadequate it must be revised.
Since there is no energy saving goal, the minister of ELI does not think this
is relevant. 2.2
Policy instruments had little effect in the manufacturing sector in
1995-2008. The reasons include: energy saving agreements in
energy intensive industries have become increasingly less strict and
the CO
2
emissions trading system has had little effect so far.
Policy for energy intensive industries must be revised:
study options to improve the cost benefit ratio by spreading energy tax
more evenly among user groups; strengthen the CO
2
emissions trading system by supporting calls to lower the
ceiling in 2020. The Minister of ELI will support the
increase in European minimum rates of energy tax.
The government will work at European level to improve the operation of
emissions trading. MEE will encourage energy intensive
industries to invest in energy savings. 2.3
Policy instruments for the manufacturing sector are more
effective if they agree with the reasons why companies take
energy saving measures. Many policy instruments only partially
recognise these reasons. Policy for the manufacturing sector must
be strengthened through better agreement with the companies reasons
to save energy: higher priority for knowledge;
stricter multiyear agreements; increased market for energy efficient
and low carbon goods and services through public procurement of
sustainable goods and services. The costs and benefits of environmental
permits should be studied further. The Green Deal will improve the
agreement. Disclosing each others performance
will be discussed with the participants. Sustainable procurement will be
continued. A plan will be drawn up to strengthen compliance with and
enforcement of the Environmental Management Act. Studies show that the
Act is a cost effective option; additional study is not necessary.
2.4 Part of the energy saving is
negated by the interaction between CO
2
emissions trade and other energy saving instruments.
Three options not mutually exclusive to overcome the negative interaction with
CO
2
emissions trade: 1.
focus energy saving policy on sectors not participating in emissions trade;
2. target policy for ETS sectors on long-
term benefits; 3.
strengthen the operation of emissions trade by lowering emissions ceiling as
from 2020 or by having the Dutch government buy up emission
allowances. The Minister of ELI says that, despite
the emissions trading system, targeted policy efforts are still required to
promote profitable savings options for energy intensive industries.
Innovations that produce alternatives to fossil fuels will be promoted.
Buying up emission allowances is inappropriate. The government prefers
an extension of emissions trading to other sectors. The government will
support the better operation of the trading system at European level.
2.5 Continued implementation of the
Balkenende IV energy saving policy will not bring about the stronger
approach as promised by RutteVerhagen. The binding EU
CO
2
emission reduction target will probably also not be achieved.
A new vision of energy and climate policy is required that clarifies the
relationship, priorities and route to the goals, with particular attention for the
relationship between national energy saving policy and CO
2
emissions trade. According to the Minister of ELI the
vision is set out in the coalition agreement. Existing instruments
complemented with such plans as the Green Deal, Local Climate Agenda and
Sustainability Agenda will be adequate to achieve the European CO
2
reduction targets by 2020.
