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Towards an ever closer union: with the Turks next door? Is Turkey the ideal energy partner for the EU?

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Title: Towards an ever closer union: with the Turks next door? Is Turkey the ideal energy partner for the EU?
Author(s): Turk, Lauren
Advisor(s): Pahre, Robert
Department / Program: Liberal Arts & Sciences
Discipline: European Union Studies
Degree Granting Institution: University of Illinois at Urbana-Champaign
Degree: M.A.
Genre: Thesis
Subject(s): European Union Turkey Energy Policy Nabucco Renewable Energy Climate Change integration
Abstract: This thesis explores the respective energy policies of the European Union (EU) and Turkey, identifying common goals and external threats in order to entertain the hypothesis of whether Turkey is the ideal energy partner for the EU. The analysis supports the formation of a full energy partnership between the EU and Turkey, arguing that common goals will achieve greater fulfillment while common external threats will remain more effectively palliated through partnership. The policy level adjustments both for the EU and Turkey are recommended and justified in detail throughout. Overall, both the EU and Turkey prioritize diversifying their energy suppliers, combating climate change, and ensuring stable and competitive energy markets for their consumers. In the EU, energy demand is projected to rise by 11 %, while import dependence by 20 % by 2030 (to 71 %). Turkey remains 73% resource dependent overall, with a 97% dependence on natural gas specifically. Both rely on Russia to supply most of their natural gas, creating the mutual goal to diversify their suppliers and reduce the impact of one-sided dependence. The Nabucco Pipeline project has become the poster child of ‘pipeline politics’, or supply diversification affairs between the EU, Turkey, and resource supplier regions such as the Caspian, the Caucasus, and the Middle East. Nabucco also serves as the linchpin of the EU-Turkish energy partnership at present; this thesis will argue that further institutional measures are necessary, both within the EU and in Turkey, in order to equip this long-term project for success. Specifically, the EU needs to enable its members with a choice of suppliers through constructing pipeline interconnectors. This will further the notion of diversifying suppliers and reducing the dominance of Russian natural gas, as well as foster the formation of an integrated natural gas market. Turkey, on the other hand, should be allowed to open the Energy Chapter of accession negotiations and implement the energy related acquis communautaire. This will benefit business and investment relations in the energy sector, as well as promote more cohesive handling and maintenance of projects such as Nabucco between the EU and Turkey. With regard to combating climate change, both the EU and Turkey have made ambitious formal commitments. The EU employs the 202020 Strategy, aiming to reduce carbon emissions, improve energy efficiency, and incorporate renewable energy into the mix by 20 percent by 202020. Turkey enacted a National Climate Change Strategy in 2010 which aims to incorporate renewable energy by 30 percent by 2023, while also curbing emissions, improving efficiency and introducing clean coal technology. Within the EU, diverging performance among member states, due to different socio-political and economic factors, threatens the acquisition of 202020 targets. A means of bridging these gaps is to introduce EU-funded subsidies for countries whose renewable energy sectors have failed to thrive, and whose governments have not already introduced subsidies for renewable technology. This would involve making adjustments in the EU budget; currently, conceptualization of the EU’s 2014-2020 allocates 20 percent to fulfilling the goals of the 202020 Strategy. However, this thesis also argues that investment into the Turkish renewable energy sector would not only reinforce the EU’s status as a global leader against climate change, but also benefit the EU’s goals. Turkey has undergone great energy market liberalization efforts within the last decade, as well as interconnected its electricity network with the European network, ENTSO-E. As such, renewably produced electricity in Turkey could be transferred to bordering easterly EU countries, which happen to exist as the countries struggling to meet their renewable energy targets and embrace this market. Turkey itself possesses the world’s fifth largest geothermal capacity, eighth largest hydroelectric and significant wind and solar (situated in the Sun Belt). From an economic standpoint, creating an economy of scale for renewable energy will improve profit margins over time, as well as instill investor confidence both within the EU and Turkey. EU level internal subsidies will also serve as a means to this same end. As such, Turkey can serve as a catalyst to creating competitive and integrated natural gas and renewable energy markets within the region, better enabling the fulfillment of energy policy goals of the EU and Turkey. Finally, an energy based partnership with Turkey will improve the EU’s ability to influence, or exercise normative power, within the region. Through partnership with Turkey for projects such as the Nabucco pipeline, the EU has already been able to bridge gaps in its relations with countries in the Caspian region, the Middle East, and the Caucasus. Partnering with Turkey in a more comprehensive respect will also offer the EU an opportunity to reinforce its position as a normative leader against climate change. Turkey itself exercises a generally successful “Zero Problems with Neighbors” foreign policy approach, and hopes to become an energy hub in the region for trade. The EU already finances in part Turkey’s development through Pre-Accession funds to prepare Turkey to become ‘fit’ enough to join the EU, however investment directly pooled into the energy sector will allow Turkey to progress more quickly to become a more carbon-neutral economy as it grows. This remains in alignment with the EU’s foreign policy as well as its approach to combat climate change in part through assisting the environmentally responsible development of third countries. Finally, this thesis will argue that the EU must exercise a modified external governance policy towards Turkey in order to avert undesirable consequences. Turkey has shown interest to join the EU since its inception; however accession negotiations did not begin until 2005. At present, little progress has been made due to formally blocked chapters by select EU member states. Meanwhile, opening certain chapters, such as the Energy chapter, has become increasingly necessary, especially considering large-scale, long-term projects already underway. The coordination necessary to generate success for projects of this kind cannot be achieved with the current lack of political, institutional and regulatory harmonization in an energy context. Furthermore, the EU must tread carefully with regard to the stalled accession negotiations, as frozen negotiations could lead to a uniquely ‘frozen conflict’. With greatly vested interests, especially with regard to energy affairs, failed relations could undermine the EU’s efforts to diversify its energy suppliers and improve its relations with its external neighborhood. In particular, rejecting Turkey as a candidate country or continually preventing accession negotiations to move forward would tarnish the conditionality and credibility attached to EU candidate status, weakening the EU’s normative power, while also reinforcing negative stigmas of the EU turning the cold shoulder to Muslim populations. In particular, this would harm relations with the Caspian, Caucasus and Middle East; the very regions where the EU wishes to improve relations and create a symbiotic interdependence of energy supply through diversification. Supported by the aforementioned ideas, this thesis concludes that a full energy partnership between the EU and Turkey is in the best interest of both entities for energy and foreign policy related endeavors.
Issue Date: 2012-05-22
URI: http://hdl.handle.net/2142/31057
Rights Information: Copyright 2012 Lauren N. Turk
Date Available in IDEALS: 2012-05-22
Date Deposited: 2012-05
 

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