09.21
THE WARREN REPORT
Andrew Warren is chairman of the British Energy Efficiency Federation
The conundrum facing European policy makers The EU’s Fit for 55 programme will challenge politicians to ensure that large sections of the European population are not disadvantaged by regulations to cut greenhouse gas emissions. The UK must follow their lead
T
his autumn the UK government is finally due to publish in detail precisely what steps will be taken during this decade to realise its testing net zero climate change ambitions. There has been much speculation as to what it may contain. So, it is instructive to cast eyes over the Channel, to observe how our former partners in the European Union are handling matters. Just before the summer break, the European Commission issued its own “Fit for 55” programme. This is a mega-package of a dozen regulatory instruments aimed at cutting EU greenhouse gas emissions by 55 per cent between 1990 and 2030, a key step toward the long-term goal of becoming climate neutral by mid-century. Making it happen will impact the personal choices and bank accounts of Europeans of every class. The EC is demanding changes to everything from the cars people drive, to how they heat their homes, whether they can take a cheap flight on holiday, and even if their current jobs will exist in the new, clean and green economy. Brussels is well aware that if it gets the balance wrong, the result could be a continent-wide political backlash. “Any fundamental transition like this will get us a massive lot of pushback,” warns the EC vice-president in charge, Dutchman Frans Timmermans. “Very simply, the European Green Deal has got to be seen as just, or there is just not going to be a European Green Deal.” Corinne Le Quéré, chair of France’s High Council on Climate, believes there is “absolutely” a chance these policies
will spark rebellious public responses. The Yellow Jackets movement’s explosive reaction to a 2018 fuel tax hike in France is now political folklore in Brussels. Germany’s September federal elections are another early test of the political cost of shifting climate change-mitigating measures into national law. In particular, because the leader of the Greens, Annalena Baerbock, is a genuine prospect to win the chancellorship. When the campaign got underway, the Greens were hit by their rivals for their plans to raise fuel taxes and shift traffic from short-haul flights to railways — even though the parties in the governing coalition of Christian Democrats and Social Democrats also support some form of these policies.
Coal miners a shrinking, but powerful lobby Armin Laschet, the conservative Christian Democrats’ candidate for chancellor, is accusing his competitors of “ending the dream of a summer vacation” with their calls for a minimum airline ticket price. In Warsaw, the EU’s climate policy was already a major political challenge. Poland relies on coal for about 70 per cent of its electricity as well as about 40 per cent of home heating. The government’s energy strategy calls for a very gradual retreat from coal — it is meant to be phased out by 2049, the year before the whole EU is supposed to become climate neutral — but that plan is increasingly at odds with fast-rising ETS permit prices. The country has already scrapped the construction of a big coal-fired power plant, and electric utilities are scrambling for the exits. Coal miners are a shrinking, but still a politically powerful lobby, and the nationalist ruling party is wary of angering them as talk of an early election increases. This summer, as Irish politicians were preparing to vote on the country’s landmark Climate Action Bill, designed to implement Europe’s climate goals, Michael Healy-Rae, an independent MP from South Kerry, posted a video on his Facebook page. In the monologue, Healy-Rae attacked the Bill for the burden that he said it would place on peat production, tourism and farming. In the Dáil, Ireland’s parliament, where the climate bill was overwhelmingly passed, Healy-Rae was a lonely voice. But the video was viewed 392,000 times, 23 times the number of people
‘Brussels is well aware that if it gets the balance wrong, the result could be a continent-wide political backlash'
who voted for Healy-Rae in the 2020 election. Public anxiety that the price of climate cuts will be unfairly borne by those who can’t afford it gives such groups a platform to broaden their appeal by attacking any policy that can be branded as elitist. The Commission faces a similar bind. On the one hand, Timmermans believes “we need everyone to do their part.” But who will be prepared to pay the political cost of carrying that message to the holidaymakers, drivers and households of Europe? Tensions were already clear at the European Heads of Government Council in May when the leaders of Slovenia, Latvia, Poland and Luxembourg declared their opposition to the Commission’s plan to extend the EU:ETS to transport and buildings, on the basis that would unfairly hit their poorest citizens. “The redistribution of these funds will be critical,” said Le Quéré, especially because the instruments are being imposed from Brussels. A Commission spokesperson reckons “Fit for 55” weaves “anti-regressive” elements through the entire package. That includes expanding existing funds to help poorer countries. Home insulation schemes are also viewed as a measure that can ease fuel poverty. But when it comes to ensuring the costs of the policies don’t fall too hard on those who can least afford it, the European executive has “very limited” powers, the official said. That means Brussels carries much of the political risk, while national governments can choose whether and how to soften the blow. In a last-minute attempt to wrest some control back from member countries, the package deliberately includes a new “social fund,” which would use revenue generated by the extension of emissions trading to road transport and buildings to compensate people who need to drive to work or better insulate their homes. The Commission text confirms it will be available in all EU countries, not just the poorer ones that normally benefit from the EU’s redistributive funds. To meet its climate goals, the UK will need just as radical and just as inclusive policies as the EU. And every bit as great a determination to implement them.
10 | ENERGY IN BUILDINGS & INDUSTRY | SEPTEMBER 2021
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