Investors in the energy and environmental space know that, for better or worse, policy matters. Some examples are obvious, like direct government subsidies for renewable power generation. Others are equally recognisable but have a more indirect impact, like landfill tax. And then there is a large number of \u2018micro\u2019policies such as industry- and product-specific standards covering things like chemicals used in consumer products, energy efficiency standards in electrical goods and recycled water quality. Whilst these ultimately manifest themselves as legal or regulatory requirements, they are often preceded by consultation, debate and lobbying.<\/p>\n
To many people, lobbying brings up an image of vested interests (like \u2018Big Oil\u2019) trying to preserve the status quo. But, of course, in the environmental sphere there is a range of actors who lobby on behalf of renewables, clean fuels, low-carbon housing and so on. Certainly they are smaller and more diverse than their counterparts who represent the incumbents in these industries but nonetheless they have an impact. However, is it always the right impact?<\/p>\n
Politicians may say that the public audience has a limited appetite for detail and prefers clear, strong messages. Lobbyists may say the same of most politicians. This leads us down the path where every issue is black or white and all interested parties are good or bad.\u00a0 Even\u00a0 though\u00a0 the\u00a0 subjects\u00a0 are\u00a0 complex,\u00a0 the\u00a0 nuances\u00a0 get\u00a0 lost\u00a0 in\u00a0 the\u00a0 heat\u00a0 of\u00a0 argument.\u00a0 So\u00a0 if\u00a0 central\u00a0 government\u00a0 assumes responsibility\u00a0 for\u00a0 approving\u00a0 wind\u00a0 farms,\u00a0 fracking\u00a0 sites\u00a0 or waste-to-energy\u00a0 plants,\u00a0 it\u00a0 is\u00a0 either\u00a0 confronting\u00a0 the\u00a0 nimbyism\u00a0 which\u00a0 is holding back necessary development or it is riding roughshod over the reasonable concerns of local communities. If government devolves these decisions to the regions but allows commercial interests to offer a share in the profits to local communities then that is either a win-win for localism or encouragement of corruption and bribery.<\/p>\n
The\u00a0 European\u00a0 biofuels\u00a0 sector\u00a0 provides\u00a0 an\u00a0 excellent\u00a0 example\u00a0 of\u00a0 the\u00a0 often\u00a0 perverse\u00a0 impacts\u00a0 of\u00a0 lobbying.\u00a0 Having,\u00a0 in\u00a0 the\u00a0 face\u00a0 of opposition\u00a0 from\u00a0 the\u00a0 oil\u00a0 industry,\u00a0 promoted\u00a0 a\u00a0 biofuel\u00a0 industry\u00a0 as\u00a0 a\u00a0 way\u00a0 to\u00a0 partially\u00a0 decarbonise\u00a0 transport\u00a0 fuels,\u00a0 the\u00a0 European Commission\u00a0 was\u00a0 subjected\u00a0 to\u00a0 a\u00a0 bombardment\u00a0 of\u00a0 criticism\u00a0 from\u00a0 a\u00a0 range\u00a0 of\u00a0 environmentally-minded\u00a0 parties\u00a0 including\u00a0 prominent NGOs.\u00a0 Their message met\u00a0 all\u00a0 of the\u00a0 effectiveness\u00a0 criteria: food-based\u00a0 biofuels\u00a0 were\u00a0 bad\u00a0 because\u00a0 they\u00a0 caused\u00a0 starvation\u00a0 in\u00a0 the developing world,\u00a0 served to increase carbon emissions not reduce them and were responsible for sweeping deforestation in Asia. There was little-to-no differentiation between various types of biofuels and their respective feedstocks, at least partly because that kind of subtlety would have undermined the simplicity of the message.<\/p>\n
On\u00a0 the\u00a0 other\u00a0 side\u00a0 of\u00a0 the\u00a0 debate,\u00a0 the\u00a0 response\u00a0 was\u00a0 equally\u00a0 lacking\u00a0 in\u00a0 nuance.\u00a0 Because\u00a0 industry\u00a0 lobby\u00a0 groups\u00a0 represented producers of all biofuels, they too were unable or unwilling to differentiate between them. So the only possible response was that all biofuels\u00a0 were\u00a0 good\u00a0 because\u00a0 they\u00a0 substituted\u00a0 for\u00a0 carbon-intensive\u00a0 fossil\u00a0 fuels,\u00a0 they\u00a0 reduced\u00a0 dependence\u00a0 on\u00a0 imported oil,\u00a0 they created markets for European farmers and they did not have a material impact on global supply and demand for foodstuffs.<\/p>\n
A more considered analysis might have argued that, taking into account all of the relevant criteria, some biofuels were better than others and that policy should favour those products. It might have said that the impact on emissions would depend on where the feedstocks\u00a0 were\u00a0 sourced\u00a0 (and\u00a0 the\u00a0 farming\u00a0 practices\u00a0 in\u00a0 those places)\u00a0 and\u00a0 what\u00a0 kind\u00a0 of\u00a0 energy\u00a0 generation\u00a0 was\u00a0 used\u00a0 in\u00a0 the processing plants. It might have said that Europe had significant excess wheat production capacity that could be used to support bioethanol production. And it might have said that the impact of bioethanol demand on the global grain market was small relative to biodiesel demand on the much smaller oil seeds market (contributing to both price volatility and deforestation).<\/p>\n
At the time, the situation was far from clear and there were some legitimate concerns on most sides of the argument. But most of the lobby groups were not interested in highlighting the complexity of the issues; all that mattered was the clarity of the m essage which had to be yes or no, one or zero. The result was years of uncertainty in policy-making during which time the European biofuel industry ground to a halt and little progress was made in reducing the carbon intensity of transport fuels.<\/p>\n
We should be able to do better.<\/p>\n","protected":false},"excerpt":{"rendered":"
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