by Nayah Thu (she/her)
The European Green New Deal has some ambitious goals, such as achieving net zero carbon emission by 2050, and positive effects on European Quality of Life. However, we have seen pushback from countries such as Poland, movements such as the Gilet Jaunes, and other issues stealing the limelight, such as COVID-19. The Oxford Climate Society was joined by Ottmar Edenhofer and Linda McAvan, who brought both economic and political perspectives on the European Green New Deal.
Edenhofer started by outlining the requirements for climate neutrality:
Right now, the European Emissions Trading Scheme, a common carbon-trading market, covers only energy and industry, whereas transport and buildings are determined at a national level.
Going forward, there are two possible extremes. Either one could create a comprehensive regulatory framework, or one could aim for one consistent emission trading price, without additional policies. The first would have a limited scope, and the latter would face pushback from industry groups. Edenhofer argued that the most feasible alternative is a mixed scenario, pushing for a carbon price, but relying on complementary policies too.
He mentioned that there is quite a lot of uncertainty about the possible range of CO2 prices. Additionally, if all sectors pledge the same reduction of carbon emissions, based on historical trends, this would be perceived as fair, but would not be cost-effective. The marginal cost curves for different abatement strategies vary wildly. Hence, in order to reach a uniform carbon price, without lobby groups shutting it all down, an intermediate step is necessary.
In his view: a consistent carbon price is a worthy goal, and can feasibly be reached through a mixed intermediate step.
Combining the ETS (energy and industry) and the ESR (transport and buildings), would lead to a comparatively low initial carbon price, and lower pressure on member states, but some may not accept even this price. One could have two ETS systems for different sectors, which would allow for trade, decreasing arbitrage opportunities over time, while also reducing initial pressure on energy and industry.
In his words, the European Green New Deal is a reform opportunity, whereby the EU has a chance to convert its ambitious targets into ambitious policy tools.
Linda McAvan, a MEP from the UK until 2019, and now head of the European Climate Foundation, drew our attention to the politcal side. Always importantly, it is especially salient this year, as the dea lands with policy-makers who will define its implementation.
The European Green New Deal is special because it is all encompassing. It is also special because of its relevance to the electorate. Climate concerns ended up surpassing Syria and the rise of right-wing populist parties to define the results of 2019 MEP election, where there was a “green wave”, spurred on by high youth turnout and the Greta effect. In Germany, 48% of voters called climate a key factor in their political choice, while 77% said climate affected how they voted to some degree.
Ursula von der Leyen, coming in as a candidate relatively unclear on policy, committed herself to climate action, putting Timmermans, in charge of climate policy. Under her leadership, all commissioners, no matter their portfolio, have had to commit to the SDGs and take it into account in all decision.
The next milestone is the 14th of July, when the “fit for 55” will be put on the table. The question as to whether its proposals will become laws depends on European parliament deliberation.
A question on many people’s minds is the effect of the COVID crisis. In McAvan’s experience, the financial crisis, which hit in the run up to the Copenhagen 2008 climate summit, was more of an issue, and made climate action lose steam and popular backing. However, the natural impetus to the COVID crisis has incentivised humility about the fragility of human systems, and created a push to “build back better”. The EU recovery plan itself does include climate considerations, such as the creation of the just transition fund, climate quotas in lending to member states, and leveraging its budget to borrow, a previously unthinkable idea.
McAvan then mentioned the difference between different member states. While is easy to make a distinction between coal giants like Poland and the comparatively progressive Scandinavia, the south in general, a traditionally coal heavy region, has been moving forward. Germany and France remain the key players, and domestic politics may give some clues as to their paths. In France, a new climate goal and law was recently passed, but domestic frustration in terms of the Gilet Jaunes is an issue, with Macron caught in the middle. Germany, a standard-bearer for climate action, also faces issues in the form of influential industry lobbyists.
She concluded that, going forward, it will be important to bring targets closer to home. While we are currently plucking at low hanging fruit, further emissions reductions will require short-term goals and incentives.
In her perspective, the transition is not impossible. On an encouraging note, people used to think that wind power was impossible in the UK, but it has since become an important contribution to the energy mix.