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Progress on the European Climate Law

As the disruption in our collective lived experiences from the Covid-19 pandemic prompts a rethinking of unsustainable consumption patterns and lifestyles, interest in the “green” transformation of the global economy has risen considerably. It is in this context that the negotiations surrounding the European Climate Law, which would turn the targets set in the European Green Deal into law, have played out. The climate law represents substantial progress in moving beyond politicians’ lip service to the Green Deal. However, a lack of specificity in outlining incremental steps to reach its goals and unclear overall objectives within the legislation remain problematic and may potentially compromise the EU’s ability to mitigate the impacts of global heating and the climate crisis.

The concept of a “Green New Deal” originates from political discourse in the United States. Globally, it lacks a distinct meaning, because different climate policies are associated with it in different local, national, and international contexts. Overall, it refers to the use of green technology and renewable energy to sustainably transform the global economy. The necessary base conditions are created using targeted government intervention and policy making. In the EU, it was the European Commission, led by German politician Ursula von der Leyen, that proposed the concept of the European Green Deal, which would set EU emissions targets for 2030 and aim for net-zero emissions by 2050. Among other initiatives, it expands the core tenets of EU climate policy, namely the EU Emissions Trading System (EU-ETS) and effort sharing regulations, which focus on promoting sustainable practices in transportation, agriculture, and infrastructural development. Further, it calls on the European Investment Bank to invest in climate policy implementation, such as infrastructure for sustainable sewage treatment or water preservation. 

Negotiations surrounding the European Climate Law have been ongoing through the early months of 2021 and have now mostly concluded for the European Commission. If passed, this would be the first collective law by the EU on climate policy. In its text, it clarifies some aspects of the European Green Deal and related legislation. Until recently, there was a lack of clarity on whether the European Union as a whole or each of its member states would be required to reach the net-zero emissions threshold. As submitted by the European Commission, only the EU as a whole would legally need to reach this goal, which makes it more achievable; for instance, Poland had already expressed doubts over its ability to reach the threshold, which could have compromised its willingness to vote for the law’s implementation if it weren’t for this new clarification. 

A further upside of the proposed law is that it guarantees a higher threshold for the required decrease in emissions for 2030, compared to a decrease of 50-55 percent in 1990; previously, the agreed upon number was 40 percent. However, the problem is that it would likely take more than a year to determine an exact target, which creates uncertainties in planning and implementation for member states. Thus, whether they will be able to achieve this goal within a shortened time frame remains uncertain.

Similarly significant is the economic upside from counteracting climate change. Considering that the current annual damage to the EU’s economy from climate change lies at 12 billion euros and will likely only rise in the future, providing enforcement mechanisms for achieving net-zero emissions could well act as an engine for economic growth. Investing in green technologies early could also act as a springboard for the EU’s increased competitiveness in global markets. Moreover, as a foundation for the success of the European Green Deal, the climate law would play an important role in the EU taking a leading role on the world stage in the fight against the climate crisis. If Europe  were to manage to be the first continent to reach net-zero emissions, this would lead to a rise in the Union’s international prestige and influence. 

However, there has also been widespread criticism of the climate law and the European Green Deal in its entirety. For instance, it is unclear how the EU will determine which emissions it is or is not responsible for. Should it be counted against an EU member’s emissions quota if they shift energy-intensive production processes to a third country? This would significantly complicate keeping track of their emissions, but the alternative is the illusion of progress toward net-zero emissions where there is none. The financialization of the EU’s economy, as the financial sector grows in relative importance and the bloc becomes less reliant on industrial production, conceals the fact that energy-related pollution is being relocated rather than reduced. The idea of net-zero emissions also allows companies to avoid investing in renewable energy by simply paying for carbon capture or carbon credits from abroad, so the potential economic growth from green initiatives might not be fully realized. Furthermore, the climate law does not directly prohibit fossil fuel subsidies, and considers burning biomass to produce energy to be sustainable, even though many scientists disagree with this approach.

As of yet, the way an enforcement mechanism will work remains somewhat unclear, though there is the possibility of member states facing high fines, as is the case when violations of some other EU laws occur. A further point of criticism is the lack of specific carbon dioxide emissions reduction requirements and incremental goals that would increase accountability and the likelihood of success. The skepticism of a number of Eastern European countries toward the law and the European Green Deal as a whole is also worrying for its passage and implementation.

Now that the European Climate Law has been approved by the European Commission, it will move to the European Parliament, followed by the EU Council of Ministers of the Environment prior to passage. Thus, it forms a crucial part of the groundwork needed for reaching the goals set out in the European Green Deal and, though flawed, is an important step in moving toward the net-zero emissions goal. If the EU can enact this law prior to the UN Climate Change Conference in Glasgow later this year, this would elevate the image of the EU on climate issues and perhaps even incentivize other leaders across the world to follow its example. Nonetheless, it will only be truly meaningful if paired with the political will and public pressure to ensure it is more than just rhetoric.

Image: Flickr (PapaPiper)