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Luxembourg

The European Environmental Agency just published the updates on the shares of renewable energy in gross final energy consumption across Europe. Nearly every European country fully met or even exceeded their targeted shares of renewable energy.  Only Netherlands did not meet its goal, while Luxembourg just about met its target. But Luxembourg’s performance is nevertheless really disappointing. I am going to argue that the only serious policy option for Luxembourg is to increase its renewables in energy target and thereby start to become energy independent.

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Last evening I attended a discussion, organized by the Mouvement Écologique (Luxembourg’s biggest organization for sustainable development), about the possible direction that Luxembourg should take when it comes to its future. Invited speakers were Professor Reinhard Loske and Professor Harald Welzer, and the moderation was done by the never-fatigued Blanche Weber. In this post I will discuss what Luxembourg’s politicians should think about when they discuss policy options that influence Luxembourg’s future.

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There is a new petition in Luxembourg against the 32 years (!) life-time extension of the Cattenom nuclear reactor. If you want you can read and sign it HERE, and please do so. Sign if before the 30th of July!! (Don’t forget that you will receive an email in order to activate your signature.)

This nuclear reactor is one of Europe’s biggest, but also the one with most problems. I have written extensively on it HERE. More information (in German) is HERE.

This debate must be viewed in the light of the recent discussion in the Luxembourgish parliament that Luxembourg wants to build an electricity line connecting Luxembourg to France directly. This is most likely in order to connect Luxembourg directly with Cattenom. Obviously, a petition should thus necessarily be linked also to the development of this electricity line: What use is there to try and stop a lifetime extension of a nuclear power plant when, at the same time, the government plans to build an electricity line in order to receive electricity from just that plant?

In my opinion, Luxembourg needs to very carefully think of what kind of electricity mix it envisions for the future, and building an electricity line directly to France will clearly shape its future electricity mix towards nuclear energy. This is not an innocent choice!

A new European Environmental Agency report about pollution levels in 2012 just came in. And this may interest my fellow country residents:

Luxembourg is Europe’s ozone pollution beast of 2012!

From the 11 countries that breached air pollution limits, it is Luxembourg that was among the worst, exceeding the ceiling for non-methane volatile organic compounds (NMVOC) as the only European country, and exceeding the mono-nitrogen oxides(NOx) threshold by more than 50%.

NMVOC is a measure for indoor air pollution or smog, while NOx is a compound that arises due combustion (e.g. a measure of pollution through traffic). Both NMVOC and NOx react together nicely to form ozone, and you can check out this post to know what they do to you. And I can tell you: You won’t like what you will find…

However, the good news is that this breach of the regulatory limits occurred only in Luxembourg city. Then again, the bad news are that one-out-of-five of Luxembourg’s residents live in Luxembourg city, and there are roughly 360,000 cross-border workers daily, a large part of them also work in Luxembourg city.

So the solution is obvious: Make driving into Luxembourg city more expensive. This increases incentives to take the train from train stations close-by.The question is: Who really wants that? Is the public transport system up to the task? And when are we going to see a useful and clear response from the politicians that are supposed to deal with this issue?

One thing that has been on my mind recently is the evolution of the monetary financial institutions (credit institutions and money market funds) in Luxembourg. For Luxembourg’s financial sector (and thus its GDP), private banking and asset management has always played a significant role. In the graph below I compare Luxembourg to Germany and France.

mfis

While the trend for Germany and France since September 2007 is somewhat mixed but definitely nothing to worry about, the evolution of MFIs in Luxembourg is worrisome to say the least. Basically – down since the crisis. Now – is this only a short-term trend or a new evolution?

Stay posted – I’ll write more on this.

Here is a short study I did about whether or not Luxembourg may become the new Cyprus. Lot’s of people have been claiming this and going on and on about the potentially grave situation in Luxembourg. Drawing similarities between Luxembourg and Cyprus. Proclaiming how short-lived Luxembourg’s current utopia may be. So let me tell you: That’s all quite far fetched – mostly…

So my study below (unfortunately in German for all non-German speakers) says basically:

  1. Luxembourg’s main banks are much more sound than Cyprus’ banks.
  2. Luxembourg has been able to keep unemployment low. However, this is only because the government basically took in a good number of the unemployed.
  3. a potential future problem for Luxembourg comes from the currently bad trend on the balance sheets of the monetary financial institutions – they have been decreasing substantially and continuously since the crisis 2007. Short-term effect or long-term trend? good question… Anyone interested in doing a study on this? contact me…
  4. public debt from pension problem is going to be the killer if not addressed asap!

read more here : Luxemburg_IS_4_2013b. This article may or may not eventually come up in Tageblatt (Luxembourgish Newspaper).

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