Not fit for 55

Too low climate targets, too much regulation, too little social compensation – the EU Commission’s fitness programme is not convincing. The hardly manageable, partly contradictory measures result in a toxic mix, Brussels must brace for trouble.

For this analysis, we take up our blog post from 13 July – and answer the questions posed there.

• Will the climate be protected, will the goals be achieved? No, say critics like BUND: for climate neutrality by 2050, CO2 emissions must be reduced by 65 percent, 55 are not enough. In addition, Brussels is making the figures look good by counting forests and other “sinks”. Let’s see if these two “birth defects” are corrected – otherwise the climate package does not deserve its name! – The mistake has not been corrected, the package as a whole seems too unambitious. The EU Commission has not even bothered to explain whether and how the 12 laws it now wants to tackle will contribute to CO2 savings. Therefore, the Union remains “unfit for 55”, and improvements will soon be necessary…

• How much market – how much state? There was a dispute about this in the EU Commission right up to the end. The head of the authorities, von der Leyen – like the CDU, i.e. her party – favours the market, while Climate Commissioner Frans Timmermans wants more state regulation. In the end, the right “mix” between CO2 prices and regulatory law will probably decide whether the climate package is effective – and can be approved. – Here von der Leyen has prevailed. She pushed through an “ETS 2”, i.e. emissions trading for buildings and road transport. At the same time, however, there are many dirigiste interventions in the market. One could almost speak of market dirigisme – a toxic mix that is likely to cause a lot of trouble!

• To whom is it given – and to whom not? So far, it is mainly heavy industry that has benefited by being given free emission certificates. This is to remain the case; industry is counting on exceptions and transition periods. Relief for consumers, on the other hand, for example in the form of a social fund, is controversial – although acceptance depends on it. The “yellow waistcoats” in France have shown how quickly the mood can change… – The social fund is coming, but with many imponderables. The EU states are to finance half of the billions in aid themselves. It is unclear whether consumers will be directly compensated for rising petrol and heating prices. The whole thing looks more like a social fig leaf….

• Are hard or soft bans coming? This question is being discussed above all with regard to the combustion engine. The EU Commission wants to put the brakes on the internal combustion engine, but not ban it outright; the dispute revolves around the question of when the “end” should come – 2030, 2035 or 2040. On the other hand, there is no thought of obvious, hard measures – such as a ban on climate-damaging SUVs. Why not? – The EU Commission is calling for an end to internal combustion vehicles in 2035, but it is not talking about a ban, not even SUVs are to be stopped. It also remains unclear how electric cars are to take over all traffic by 2035. The burden – and the hassle – will be shifted to industry and consumers, with the threat of a traffic accident looming…

• What are the risks and side effects of the climate package? The USA is already threatening countermeasures if the EU introduces a CO2 border tax. The WTO also warns – the border tax would hardly be compatible with trade rules. But there is also the threat of side effects in the elections in Germany and France; President Macron therefore wants to postpone parts of the climate package. – The border tax is coming, in EU jargon it is called CBAM. But how it is to function in conformity with the WTO remains in the dark. The USA and the affected industrial sectors are likely to take the EU Commission to task together – with considerable risks for all involved. Even the EU budget is affected…

Conclusion: The EU Commission’s climate package is not convincing. The various measures (12 EU regulations after all) are not enough to make EUropa climate neutral by 2050.

At the same time, they result in a toxic mix of dirigisme and market, in which the new climate-social issue comes far too short (as usual). Brussels must be prepared for resistance and protest.

The citizens now see what is in store for them.

It is particularly problematic that von der Leyen has procrastinated for years – and now chooses a “top down” approach that patronises everyone. An unelected head of authority wants to intervene massively in the economy and govern the everyday lives of EU citizens. That cannot go well.

But there is one good thing about it: instead of abstract goals, concrete measures are finally being discussed. For the elections in Germany and France, the impact from Brussels comes just in time.

The citizens now see what is in store for them. And they can have their say – at least in Berlin and Paris…

Translated with www.DeepL.com/Translator (free version) The original post (in German) is here