EU Energy Orwellianism: Ignorance Is Strength

In George Orwell’s masterpiece, 1984, one slogan of the party dominating Britain was: “Ignorance Is Strength.”

It actually meant that the ignorance of the people is the strength of the government: if people do not know things, or do not have the information to make informed decisions, they are like subjects, not free citizens.

Something akin to this is going on in the European Union (EU) on the energy front. Energy is an active are of EU public policy. Yet authorities are not revealing information (data is surely has) that is crucial to determine whether its policies are distorting the market and come at too high a cost to society.

High-Sounding Aims

The website of Eurostat – the European Union’s statistical office – sells itself as “your key to European statistics.” The EU also created an ad-hoc website, www.energy.eu, in order to provide “your trusted source for past, present and projected Energy Prices and Statistics.”

While words are sweet, the implementation of the goals is far from perfect. In fact, several key statistics are not available–not even commercially–especially with regard to energy issues.

This is a major fault in Europe’s credibility in advancing its policy goals, as well as a serious limitation to the accountability of the policy making process, because it prevents, or makes it much harder, to double check the rationale, the numbers, and the declared outcomes of the EU’s policies.

Ironically, Eurostat is hosting a major conference on “Statistics for policymaking: Europe 2020”. Many interesting issues will be debated, but apparently the conference will fail to deal with the most important one: how can we evaluate policies, if we are not provided the relevant data to do so?

My Experience

I have been feeling uncomfortable with the quality of statistical information provided by Europe’s statistical office, as well as by my own country’s statistical office, for a long time, but in the last few months I have had serious problems.

A few months ago, together with Luciano Lavecchia, I authored a paper on green jobs creation in Italy (that we also discussed here at MasterResource).

We realized that, while strongly supporting green investments through mandates, a cap and trade scheme to cut CO2 emissions, and massive tax payers-funded propaganda, the EU does not know, or does not make it public, how much is spent every year on green subsidies. We did not even seek complicate estimates such as the actual value of mandates or other policy tools: we were just interested in knowing how much money is given to green producers by the EU member states. With regard to green jobs, several estimates exist, but no official figure is provided.

On the opposite, new investments and the growth of installed renewable capacity are reported as magnificent and self-evident proof that EU policies are working well. Apparently, nobody cares whether the effectiveness of the “climate package” (however defined) is also efficient. We are just told: we did this and that.

But at what cost? Could the same resources could be employed more efficiently elsewhere in the economy – or even if the same amount of emissions reductions could be achieved in cheaper ways?

More recently, I have been working on Europe’s electricity generation technologies, and I discovered that Eurostat does not tell how much coal capacity is installed – as opposed to natural gas- or oil-fueled generation plants. The only figure which is made available is that of thermoelectric conventional capacity – a too broad category to make any assessment, because it includes coal plants, oil plants that are being dismantled, and CCGT plants, each of which has different operating costs, a different ratio between fixed costs and variable costs, a different performance, and meets a different segment of the electricity demand.

How is it possible to tell how things will go, if you don’t know how things are? This is even more shame than the lack of information on green subsidies, because – while the latter may be hard to estimate – Eurostat must know how many coal plants are existing. In fact, some documents of the Commission provide some piece of information, and Eurostat declares the amount of electricity which is actually generated from coal. So it is possible to know how much coal is used, but not the amount of fixed capital which is invested in coal plants.

There may be more examples, but the point is simple: if proper information is not available, independent review is impossible and people necessarily have to trust their politicians. Politicians, in turn, need to blindly trust the bureaucracies who practically design and implement the policies. Neither politicians, nor bureaucrats are called to be accountable toward anybody, and nobody can really challenge them. If data are not available, every conclusion is questionable because it relies on assumptions or estimates. So, politicians and bureaucrats are in the very comfortable position of not having to answer criticism, because they can always argue that criticism relies on erroneous numbers.

Conclusion

I am not sure whether Eurostat, or the EU Commission, are intentionally hiding pieces of information, or they just do not think those pieces of information is really relevant. I am not even sure whether it is better to be governed by evil people who do not want to be challenged, or by stupid people who do not realize that data availability is a critical part of a well-functioning decision-making process. I am sure, however, that policies that are built upon data which either do not exist, or are not accessible, deserve no public trust.