The transition to net zero is Europe’s time to shine

The transition to net zero is Europe’s time to shine

After doing so much to elevate the global climate debate to the highest diplomatic level, the EU and key member state governments will soon be faced with a fundamental paradox. The world’s leading driver and setter on climate change is heading into a year of protracted and deadly political struggle to achieve its own climate ambitions.

On July 14, with little fanfare, the European Commission unveiled one of the most important climate policy responses since the signing of the Paris Agreement in 2015. The Commission’s “Fit for 55” plan proposes a bold plan to reduce greenhouse gas emissions by 55%. by 2030, on track to achieve net zero emissions by 2050. With a clear set of policy proposals tailored to different geographies, social systems, energy mixes and wealth levels, the plan is truly impressive, clearly demonstrating how the European Green Deal work in practice.

Unlike its American counterpart, the European Green Deal was not born out of grassroots activism. Although it is a response to demands backed by voters during the last European elections, it is an initiative rooted in the EU executive. To its credit, the commission managed to mobilize the necessary technocratic and legislative expertise faster than any other institution in the world. And because the EU Green Deal will define economic policy in the world’s largest single market, it has the potential to set new standards globally, shaping the contours of the future net zero economy.

The EU has been wielding this kind of soft power for years in vehicle emissions, appliance efficiency and many other critical areas. As the Green Deal continues to take shape, this “Brussels effect” could conceivably extend to other technical issues, such as standards for electric vehicles, thus accelerating the move away from the internal combustion engine worldwide, alongside the goal of phasing out non-electric motors in Europe by 2035. electric vehicles.

The Fit for 55 package is both concrete and already funded, at least in its early stages. Alongside the EU’s target to achieve a 40% share of renewables in its energy mix by 2030, the plan’s emissions targets send a clear signal to other advanced economies that they must also see bigger and raise their ambitions.

The EU is also a world leader in sustainable finance. Its taxonomy for sustainable activities will provide urgently needed clarity on what counts as a “green” investment. By codifying new standards, the EU taxonomy is likely to influence capital markets globally.

European diplomats have long excelled at encouraging other major powers to step up their own climate ambitions. In this sense, the implementation of the Green Deal will be a major test for Europe. With Sino-US tensions at an all-time high, it remains to be seen precisely what role Europe will play in the next phase of climate diplomacy. Everything will depend on its ability to muster a single, integrated European voice, rather than relying passively on the existing bilateral and commercial relations of its Member States. To exert its weight on the world stage, Europe must act as a single unit. But can he?

For the first six months of 2022, France will hold the Presidency of the European Council (coinciding with its own presidential and legislative elections in April and June, respectively). Its success will require a delicate touch to balance different interests and accommodate German Chancellor Angela Merkel’s departure from European politics. One of France’s main tasks will be to defend the Fit for 55 package in its country and among the Member States. To ‘bring the Green Deal home’, it must help translate the commission’s aims into a wide range of national policy contexts.

The bloc’s emissions targets send a clear signal to other advanced economies that they too need to think big and raise their ambitions

Laurence Tubiana

Navigating these political challenges will not be easy. But European leaders must retain a simple proposal: the Green Deal is an invitation to rethink the social contract. Rather than being imposed as a single policy, the Green Deal should be presented as an agreement between the citizens themselves. Because it calls for legislation, it represents an opportunity for open debate on critical issues of social justice and equity. Meanwhile, the wave of support for climate action is only growing. Tellingly, a recent poll in France showed nearly nine in 10 right-wing voters think the environment is a cross-party issue, adding to a cascade of similar results across the continent.

One model to consider is the French Citizens’ Convention on Climate, which was organized in response to the ‘gilets jaunes’ (yellow vests) protests in 2018. While the French government’s commitment to the convention’s proposals has been uneven , polls show that virtually all of them are supported by most of the country. In this result, we see the obvious institutional barriers that need to be overcome, but also the untapped potential. Other like-minded efforts, including in Ireland, Scotland and beyond, as well as an upcoming global initiative, are further signs of the momentum for democratic innovation.

As the energy crisis affecting much of Europe has shown, concern about carbon pricing is already high, even when it has only marginally contributed to the problem. Implementing Fit for 55 will bring up these issues time and time again. Policymakers will face tough questions and trade-offs whenever higher carbon prices are extended to sectors that directly affect citizens’ wallets, such as transport and heating. Combine these challenges with the task of reskilling entire segments of the European workforce, especially in more fossil fuel-intensive economies, and you can already see the outlines of the political battles ahead in Europe.

At the heart of the matter is the debate over borrowing and debt. The management of the common debt and the sovereign debt of the Member States will remain one of the most important – and most difficult – political issues on the European agenda. As the clouds of the pandemic begin to lift in Europe, there will be pressure to revert to previous fiscal rules limiting member states’ debt-to-gross domestic product ratios. The battle lines are already drawn. While countries like France, Italy and Spain favor loosening the rules, a “frugal” bloc – led by Austria and backed by the Netherlands, the Czech Republic and Sweden – s strongly opposes such revisions.

In any case, the pursuit of economic growth in Europe will have to be very different from what is envisaged in current models. A net zero model raises many important questions. What will the new growth path look like? Will private consumption have to fall? Will investment, especially public, play a more important role? If so, where will these resources come from?

Clearly, European governments will have to reconcile an investment program capable of implementing the Green Deal with a viable plan for consolidating deficits. This means that we will have to reconsider the very meaning of borrowing and debt, starting in the coming year.

At the height of the COVID-19 crisis, EU Member States showed genuine solidarity with each other in their commitment to increase public spending, largely financed by mutualised debt. The stimulus fund was a historic breakthrough. But the coming political contest will test Europe more – by orders of magnitude.

There are good reasons to exclude climate investments from the calculation of the debt-to-GDP ratio and to rethink short-term fiscal rules when the real priority is to preserve the planet for future generations. The transition to net zero is an extraordinary challenge. But this is also Europe’s time to shine. Let’s make the most of it.

Laurence Tubiana, former French Ambassador to the United Nations Framework Convention on Climate Change, is CEO of the European Climate Foundation and professor at Sciences Po, Paris.

Disclaimer: The opinions expressed by the authors in this section are their own and do not necessarily reflect the views of Arab News

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