Policies to Reduce Europe's Dependency on Oil

By: EconomyWatch   Date: 30 April 2010

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The prices of oil have continued to rise in the recent times. The increasing prices have had the most adverse effects on the gross domestic products of these countries. The increase in the prices of oil have had a negative effect on important macroeconomic areas like the gross domestic products of most countries.

The levels of inflation have gone up in Europe as a result of the increasing prices of oil, which has also caused the levels of unemployment to go up in certain countries of Europe.

As a result of the rising prices of oil the financial worth of a lot of other asset categories, like the financial assets for example, have gone down as well. This has caused a lot of problems in Europe. It has been estimated by the International Energy Agency that for every 10% increase in the oil prices there is a loss of .5% in the gross domestic product of the world. This amounts to 255 billion Euros. In the last few years the prices of oil have gone up at a startling rate.

Several steps are being taken in Europe in order to curb the dependence on oil. One of the major steps is the improvement in the efficiency of the housing and transportation sectors of the European economy. These are being thought of as being important as far as responding to the various oil related problems are concerned. All over Europe the usage of renewable and energy efficient products is being promoted in a bid to counter the various problems posed by oil.

New developments are taking place in the renewable energy sector as the rate of production and development of these technologies are being increased. The main motive behind these motives is to make sure that there is a sustainable and trustworthy technology when the oil resources finish in Europe. Special emphasis has been provided on biofuels in these efforts.

There are several legislative decisions also being taken at various levels in Europe. These laws are being enacted with the precise of formulating a singular energy policy throughout Europe that would cover all the bases as far as the transportation and energy sectors are concerned. A major legislation in this case is a European Marshall plan. It focuses on energy and is being funded by the EIB. The European Union is also adopting an external policy that would stress primarily on renewable and efficient sources of energy.


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