Energy-environment nexus

The high energy intensity has had direct impact in the region on standards of living and environmental stability. It draws investment into the energy production sector in disproportionate amounts, and retards investments in other economic sectors. Only by increasing the energy efficiency in all activities can the peoples of Central and Eastern Europe hope to achieve living standards comparable to those enjoyed in Western Europe.

The immediate needs of the citizens of these countries, however, may seem to be far removed from global environmental concerns, such as greenhouse gas emissions. While the Western world contemplates setting national goals for the reduction of carbon dioxide emissions, the citizens of Central and Eastern Europe live in some of the most polluted areas of the world. Poland, Czechoslovakia, and Eastern Germany share a region with the highest sulphur dioxide depositions in the world. In the most affected communities in the former Czechoslovakia, bone growth in one-third of the children is retarded by 10 months or more. In Hungary, two-thirds of the drinking water is threatened by environmental hazards, and literally thousands of communities are exposed to unsafe drinking water.

Many of the environmental threats in Eastern Europe are directly related to energy use. It is in Eastern Europe's self-interest to adopt national energy policies that increase efficiency as well as reduce carbon dioxide, the major greenhouse gas produced during the burning of fossil fuels such as coal, oil, and natural gas. Energy efficiency will free capital from energy production and make it available for other productive uses. In Poland, for example, coal production now requires double the annual investment that it did in the early 1970s. Polish energy-related investments consume more than one-third of the total industrial investments. Almost a quarter of all steel produced in Poland is consumed by the energy sector, creating a vicious circle of industrial production for the sake of increased energy supply, which in turn feeds more of the inefficient industrial production that is required by the increased demand for energy.

Energy efficiency offers the single most effective means to reduce carbon dioxide emissions. It is a policy instrument that can achieve the twin goals of economic development and environmental protection. The capital and other resources that these countries invest in energy production could be reduced by substantial amounts if their energy-intensity was reduced to that of the economies of the European Community countries.