14.04.2008

Financial Times, 4 April 2008

These are the best of times; these are the worst of times. Charles Dickens?
famous words describe the present state of European Union-Russia relations
perfectly. There has never been as much trade and business between Europe
and Russia. Yet, political tension has not been this intense since the days
of the Soviet Union.

At present, the EU and Russia are engaged in a waiting game. Brussels hopes
that President Dmitry Medvedev will turn out to be a pragmatic liberal with
a soft spot for Europe. Moscow knows that it is not Brussels it needs to
worry about. It is much more profitable to deal with Germany, France and
other EU member states on an individual basis. Neither side is doing
anything for the fear of showing its cards.

If Russia and Europe want to take their relations to a new level, they must
look beyond the potential membership of Ukraine and Georgia in Nato. They
must turn their geopolitical proximity into an advantage. There is no
better way to do it than concentrating on climate.

Moscow and Brussels should launch a European-Russian Partnership on Clean
Development and Climate. Europe wants to be a global leader on climate.
Russia’s status as a born-again great power rests on the sensible use of
its energy resources. The new partnership should be modelled on the
Asia-Pacific Partnership on Clean Development and Climate, launched in
2005. Australia, China, Japan, India, South Korea and the US were founding
members, with Canada joining last year. At first, the partnership was met
with scepticism. Now, most experts admit that it is a crucially important
complement to the United Nations-sponsored negotiations on climate. A
binding climate treaty in Copenhagen in 2009 is a must, but it is not
enough. Other innovative models should also be used.

Using the Asia-Pacific Partnership as a model would solve three huge
problems. First, it would move energy from the area of high politics and
prestige into the realm of concrete results. At present, European and
Russian approaches to climate and energy questions are dominated by vision
statements, declarations and summits. The Asia-Pacific model is based on a
bottom-up approach. Work is divided into task forces that deal with
questions such as production of aluminium and cement and cleaner fossil
energy.

Second, the new European-Russian partnership would engage business in a new
way. At present, business leaders from Russia and Europe meet in the
context of the EU-Russian Round Table of Industrialists. They draft policy
recommendations and lobby politicians. A more business-oriented approach
with emphasis on best practices would help to circumvent bureaucratic and
political obstacles.

Third, a European-Russian partnership would be an informal complement to
the existing strategic one, which produces tonnes of paper and ever more
frustration. It is a typical example of process over substance. The new
partnership would not be based on a formal treaty. It would have no binding
targets, but would concentrate on pragmatic solutions. The emphasis would
be on developing, deploying and transferring cleaner and more efficient
technologies. As such it would provide a gush of fresh air to the current
stale arrangement.

If we do this, will it prevent Russia from turning off the gas supply?
There is no guarantee against Russia turning off the taps for political
reasons ? even if it has not used the gas weapon against the European Union
in the past. The plan will not remove the danger. But it will facilitate
integration of European and Russian energy markets. One can but hope that
the more integration there is, the less likely Russia is to use gas as a
political tool.

The EU’s common energy policy has until now been a pipedream. The proposed
partnership will not stop member states from pursuing bilateral policies
such as the Baltic pipeline from Russia to Germany. But it will create a
strong incentive for companies and countries to link their policies to the
common framework. If they work within the framework, they will have access
to political leaders in Europe and Russia. If they work outside it,
political leaders are less likely to listen. In energy, giving up political
access is not a smart way to operate.

Trusting President Medvedev to do the right thing is ill-advised. ?Trust is
good, control is better?, as Stalin used to say. It is clear that Europe
cannot control Russia’s development. But it can try and influence it by
creating a proper framework for action.