Digging the trenches: The EU and the Green Deal

The Green Deal is set to create new divides in the EU. Conflicts are already brewing, and not just between eastern and western member states.

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The Green Deal is a European Union project like few others. Refugee resettlement, the defence union, the posted workers directive, or the fiscal compact – all have made headlines and evoked emotions. However, each belonged to a specific policy area, so that the boundaries of the political battlefields in the EU were clearly defined. The EU was able to work on the contents of each policy area individually: whether by making progress, or accepting compromises and then complaining about the failure of the compromises.

With the Green Deal, things are different. This is not merely a new project for a more ambitious EU climate policy, but rather what in German would be called the union’s “century project” – something especially large and significant. With the Green Deal, the EU seeks to become a pioneer in the fight for the planet’s survival. The goal of climate neutrality by 2050 implies not just a total transformation of the economy, but also of the lifestyle of Europeans over the next three decades. You might call it a planned economy (as Free Democratic Party leader Christian Lindner might), or a green revolution. In any case, one thing is certain: if the EU really is really serious about this, all other interests and projects must be subordinated to the Green Deal. Unlike previous sometimes-controversial EU projects, the Green Deal will plough up all policy areas at once. Not just energy policy, but the rules of the common market too, including tax policy, transport, mobility, trade, cohesion policy, and many others. It would be naive to expect this will create less tension and conflict than already exists in the daily business of the EU.

At first glance, the consensus on the new EU objectives certainly appears surprisingly broad. An opinion poll conducted by ECFR in several EU member states prior to the European election showed that, despite their differences, citizens east and west recognise the importance of climate change and see an important role for the EU in combating it. Achieving unanimity on climate neutrality at the level of EU governments was not easy, but (almost) succeeded. Despite several EU member states’ initial reluctance to do so, in the end only coal-dependent Poland was left alone with its concerns. At the EU summit in December 2019, all countries agreed on the climate target that is fundamental to the Green Deal – as well as on a convoluted regulation that exempts Poland from this obligation for the time being.

Currently, the goal of climate neutrality is still a long way off. The broad consensus on the target should not conceal the fact that real conflicts are already raging under the blanket of green euphoria. After all, committing to political ambitions is one thing. Deciding on concrete measures that will lead to their fulfilment is another. Instead of bringing EU countries together in a noble quest for clean air and sustainable economic activity, the Green Deal will expose new dividing lines and create trench warfare.

The imminent conflict does not concern the distant 2050, but rather the EU’s climate strategy up to 2030. If member states wish to achieve the goal of climate neutrality by 2050, they cannot stop at merely reducing CO2 emissions by 40 percent by 2030 as currently planned. After 2030, there would simply not be enough time to bring them down to zero in the following 20 years.

The European Commission is proposing to raise the Europe-wide reduction target to 50 or even 55 percent by 2030. So far, it is not just the naughty kids from eastern Europe who have resisted this, but would-be model students Germany and Italy too. Although Angela Merkel is trying her luck as Klimakanzlerin (climate chancellor) again and is in favour of the commission proposal, the matter is far from settled. It remains unclear how the burden of radically accelerated emission reduction in the EU is to be distributed. Polish government circles argue that, under every conceivable transformation scenario for climate neutrality, the costs for Poland will be twice as high as the EU average. Are the climate policy leaders and net contributors such as Germany willing to give central and eastern European countries more support so that the targets can be achieved?

The current dispute over the distribution of the €7.5 billion Just Transition Fund, which aims to support the regions most affected by energy transformation, is only a harbinger of the future conflicts set in motion by the Green Deal.

However, it would be wrong to invoke the east-west divide in this context. It is not just about money, nor just about coal and the effects of burning it on the climate. The future of the energy industry is only one part of the problems the Green Deal raises, and not the most difficult one. With the falling prices of renewables, the direction the energy sector is heading in is set, and the reduction of emissions from electricity production is relatively simple to achieve. Yet, the more ambitious the emission targets are, the more painful and conflict-laden the path to achieving them is. The next step is radical reductions in the transport sector and mobility as a whole, as well as in agriculture and heavy industry. These measures will not affect the owners of the frowned-upon coal-fired power plants, but car and food producers, and ordinary citizens. The next few years will see a debate take place about the pace of CO2 reduction and its design, and new camps will be formed around this.

Already today, the services-providing countries (including the Baltic states) tend to be advocates of tightening climate targets, while the industrialised countries (the Visegrad countries, and Germany and Italy) are struggling with the project. This dividing line will only deepen over time. It is no coincidence that countries with a particularly strong car industry are putting on the brakes, as the Green New Deal puts their current economic model is at stake. These contrasts will only be exacerbated by Britain’s withdrawal from the EU. Today, the United Kingdom contributes above average to the EU reduction target; since 1990, its CO2 emissions have fallen by more than 40 percent, compared with an EU average of only 23 percent. Without the British, reaching the abovementioned 50 percent EU average target by 2030 will require correspondingly greater efforts. Who will be prepared to shoulder them?

To achieve its goals the EU needs new instruments, especially within the area of tax policy. A CO2 limit tax is being considered, which Germany rejects but France supports. Or the EU needs a unification or coordination of the CO2 tax in the EU, whereby some countries already have high CO2 tax rates (Sweden), while others (like Germany) are only now thinking about introducing the tax.

The Green Deal is just the beginning, yet the first tensions in its implementation are already apparent. It will not only largely divide the EU into east and west, but it will also create divided societies internally, as well as different coalitions and new areas of conflict. In this respect, the ‘project of the century’ will differ little from other EU projects. Yet, its sheer size and ambition will not bring the EU closer together in the same way, and will instead subject it to a real test of strength. Without a doubt, with the Green Deal the EU will stand or fall. The outcome of that challenge today is uncertain.

This article was originally published in Der Tagesspiegel.

The European Council on Foreign Relations does not take collective positions. This paper, like all publications of the European Council on Foreign Relations, represents only the views of its authors.

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