Fighting windmills? EU industrial interests and global climate negotiations

sustainable energy path unless we make considerable changes”. (IEA, 2002a).
Furthermore, ”The IEA notes that a projected 57 per cent increase in mainly
fossil-fuel based energy demand over the next 20 years will exert enormous
pressure on the global environment. Huge investment demands, continued dis-
tortions in energy markets, growing problems caused by the insatiable demand
for transportation, and barriers to deployment of renewable energy technolo-
gies, all point to a need for countries to do more” (ibid.). Here, one of the main
instruments will be to develop renewable energy further. In light of this, first
mover advantages are not unrealistic for those countries that support innova-
tiveness in the field of less polluting energy producing technologies.

The most optimistic future scenario for a windmill producing country is given
by three conditions. Firstly, off shore windmill technology will generate a new
downward trend in the learning-by-doing curve. Secondly, tighter future regula-
tion of GHG gasses world-wide will occur, at least in countries possessing high
potentials for wind energy production. Thirdly, no alternative technologies will
become more competitive than off shore wind energy. If so, the best strategy
for a country will be to promote its windmill industry indeed by keeping invest-
ing (subsidising) the development of off shore based windmills, and conse-
quently promote a fully tradable GHG permit market at the global market. Only
in this way is it possible to include all the main actors in the climate change is-
sue, as it is not obvious that there are other means through which the USA,
China and India could be expected to enter binding agreements in the near fu-
ture. Once a price on permits is established, this will make windmills more
competitive, and will work as an implicit subsidy on windmills abroad.

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