top of page
synergy logo.png

Can Europe Lead In Climate Change? - Barış Sanlı

Europe can transform the world for better or worse. Climate change and consumer rights can be one of these transformation areas. Still, we never know whether Europe can lead to climate change. It looks as if there are lots of publicity, publications but no solid action. There are incremental solutions, but nothing like the world needs in its energy transformation.

In terms of market size, Europe is big. The import and export markets amplify its influence even further. But it is also a technocratic citadel. More rules, more strategy plans, more commitments are always widely available. Sometimes it looks like a printing house than a governing entity. When you look to the world as a whole, Europe's efforts and rank in clean energy technologies are not synchronous. The big clean utilities, if I may say so, owe all their greatness to EU subsidies. Not even one of them has an innovative technology that the world knows. Balance sheets and innovation capacities are not matched.

Recently, hydrogen strategy has also faced European treatment. First, they pledged for only green hydrogen, and then they published an ambitious hydrogen strategy with blue hydrogen. The interesting thing is the missing references to the EU's hydrogen-related strategies during the 2000s. Now German carmakers are against hydrogen. German state minister does not think hydrogen will be part of residential heating. Then what is the point of having an ambitious hydrogen strategy? A simple hydrogen strategy may do the job.

Comparing the EU and US is just a cheap trick. It is not geographies that matter in energy transitions. The volume of published documents also doesn't guarantee success. Rationality is essential, just like Tesla.Tesla's secret strategy is straightforward. "Aim the high-end market with premium, as you scale and earn a profit, move to the lower end of the market." This became a much better strategy than all the other technocratic designs.

Lithium-ion batteries and hybrid cars are the results of R&D done by US oil companies. The shock of the oil crisis pushed oil companies to inventions. But the Carter administration was thinking that synthetic fuels were a much better option. It was "the obvious solution" for years. Despite higher budgetary allocation, the thing didn't work. In the long run, the state's plans failed, but oil companies' inventions paved the way.

Maybe innovation and especially disruptive innovation is not an outcome of a technocratic state. The innovation is the result of an entrepreneurial entity, and you may call it to state. Just as the world needs more innovation to deal with climate crises, the EU is not an entrepreneurial state. Worse, it is turning into another lobbying network. Do you think that the handmade European electrolyzers can decrease the cost of producing hydrogen? No way. This perspective will strengthen Chinese manufacturers' position in Europe further, but not the European technology base.

Europe can create the scale for energy transitions. Already high prices can support this. The technology base in Europe is good but not a bonus for the energy transition. First and foremost, European companies do not believe in the energy transition. The leaders are not pushing these companies hard enough. There are no disruptive technology ecosystems. But plenty of ambitious targets.

My lesson from this story is to simplify the problem. Start with a simple progressive lean strategy, support more private-sector R&D, a specific fund for disruptive technology candidates, fewer rules, less technocracy, more sandboxing, less ambition but more frequent action.

The world has not come out of any crisis with more ambition, rules, and strategies. Creativity is the key. Innovation should be part of our lives, the whole of government so that we all can search for solutions. The high-level design for energy transition is not working, and it merely serves to fund lobbying companies to their likings. The emissions are not going down. The disruptive technologies are late. We have to move from a technocratic state to an innovative state.


bottom of page