The good COP: Why Europe’s climate leadership starts at home

World leaders left the United Nations Climate Change Conference (COP28) on Wednesday without a firm commitment to phase out fossil fuels and crucial questions on financing and technology cooperation left unanswered. But the final deal did make some progress, marking the first agreement to call on nations to “transition away” from fossil fuels. It also made a financial commitment to the loss and damage fund, which will support countries vulnerable to climate breakdown.

At the conference, the European Union showed leadership on the world stage by pushing back on efforts from oil-producing countries to water down commitments and by arguing for a tripling of renewable energy capacity and more energy efficiency. But European leaders cannot advocate for others to have bolder policies if their own are failing. Rather, the EU’s credibility as a climate leader depends upon the domestic success of its ambitious climate policies, such as the ‘Fit-for-55’-package. Recently however, such policies are facing growing criticism from the European right. To maintain its credibility, the EU should address the domestic backlash by ensuring that both citizens and businesses view the implementation of its climate laws as an opportunity.

Far-right populist parties such as the Alternative for Germany and the Dutch Freedom party have vocally opposed the phase-out of fossil gas heating and the introduction of renewable fuels by putting the blame on governments for high energy prices. Similarly, the Sweden Democrats have led the drastic watering down of their country’s climate commitments. The huge legislative task of implementing the EU’s agreed climate measures across national, regional, and local administrations could also provide more room for criticism – especially if voters feel that support for these measures is not easily or readily available, or that it will cost taxpayers more.

Weakening support for ambitious climate policies could jeopardise not just the EU’s progressive path on climate change. It may also undermine its position on the world stage. At the next COP, European leaders cannot hope to convince their counterparts to strengthen climate legislation if the EU’s has not been successful.

Europeans should thus pay close attention to their own national climate debates, where higher fuel and energy costs are increasing public discontent with national and EU policies. This holds true even if it would make long-term economic sense to transition to renewable energy. As of now, climate change is still regarded as a “very serious problem” by 77 per cent of European citizens, and several governments are committed to ambitious action. But this political momentum could disappear if public concerns are not met by national and European policy-makers.

That’s why the EU should focus more on the opportunities when implementing its climate decisions in a changing economic and geopolitical situation. There is fertile political ground for this: the European public already recognise that more renewables and improved energy efficiency reduce dependencies on foreign powers, such as Russia.

Such security policy aspects are important to highlight to maintain public support for existing decisions as well as for further measures to increase energy and resource efficiency. Member states’ implementation of new EU rules on energy efficient buildings, for example, will help reduce dependency on energy imports. Further investments in electricity grids will also make renewable energy more resilient, and thus more attractive.

To ensure more successful climate policy, the EU should also work towards overcoming potential social obstacles in policy implementation. For example, the Renovation Wave policy – which aims to improve energy efficiency through home renovations – has direct costs for citizens, relies on the availability of skilled workers, the administration of public support schemes, and on the attitudes towards significant changes to a home where people might have lived most of their lives.

The EU’s social climate fund, together with national income from the auctioning of emission trading permits, might facilitate the implementation of such far-reaching policies. But this would also require increased administrative capacity in several member states. And if energy efficiency policies are successful, they would reduce energy costs for households and increase energy sovereignty. When such results are evident, and initial social obstacles are overcome, support for climate policies might increase.

The success of Europe’s climate policy also relies on its success with businesses. A key opportunity lies in the link between the EU’s climate agenda and Europe’s growing green tech sector, where new business opportunities can boost the support of ambitious climate policies. The EU has already decided on several instruments to support wind energy industry development, the production of batteries for electrical vehicles, and the decarbonisation of heavy industry. Companies outside the ‘green tech-sector’ might also benefit. For example, Europe has a big potential in reducing the climate impact of production through digitalising industrial machinery.

At the same time, business organisations and the European People’s Party claim that climate and environmental policies are threatening competitiveness, and French president Emmanuel Macron has called for a “regulatory break” to stop new legislation. In many member states, there is also pressure for more ‘realistic’ climate policies.[1]

The March European Council will be decisive in this battle of narratives. There, European leaders will for the first time discuss an annual report by the European Commission on long-term competitiveness. Former European Central Bank president and Italian prime minister Mario Draghi’s forthcoming report on competitiveness will also be an important input, as will a report on the internal market by former Italian prime minister Enrico Letta.

At the European Council meeting, it would be a mistake if leaders fell into the trap of a short-sighted view on competitiveness that put ambitious climate policies and economic development in conflict with each other. On the contrary, there are good reasons to continue the path of ‘competitive sustainability’ well-formulated by European Commission president Ursula von der Leyen and others in the context of the Green Deal. And, measures to address how increased costs are affecting energy-intensive industry are already being implemented both on the EU and national level.

Those critical of the EU’s climate policy should not forget that many parts of European industry are still performing rather well. Modernisation and structural transformation have always been important for Europe’s economic development. It would be a mistake to frame competitiveness as only protecting the parts of industry that are most vulnerable to energy costs. Rather, research shows how ambitious environmental policies combined with well-designed industrial policy can contribute to necessary modernisation. In a world where others, notably China, Japan, Korea, and the United States, are supporting green tech on a large scale, stepping back could endanger the future of European industry.

Others will be watching Europe’s next steps. Returning to the outcome of COP28, the next few years will be vital for avoiding the tipping point of climate change, after which catastrophic melting of ice-covers is no longer possible to prevent.

Governments have committed to present revised national plans before COP30 in 2025. If the EU lowers its ambitions, it will be much harder to convince emerging economies to reduce their emissions. But if the EU takes advantage of the current momentum of support by managing the social dimension of the climate transition well, and promoting competitive sustainability, Europe can set an example for others to follow.

[1] Author’s interviews with European policy makers, off the record, Brussels, Rome, Bucharest, and Stockholm, September-December, 2023