Phasing out fossil fuel would show true EU leadership

On the other hand, China and the US have become more proactive in negotiations and are also in the lead for wind energy production and investments in renewable energy.

The EU has largely lost its ability to lead by example. The 2030 framework for climate and energy policies agreed last October, was criticised by NGOs for its lack of ambition.

Although the 40 percent reduction of greenhouse gas emissions by 2030 was generally welcomed, the non-binding targets for energy efficiency and the shy 7 percent increase in share of renewables over 10 years was considered too weak.

Simultaneously, concerns about the influence of fossil fuel and other industrial lobbies on EU decision-making processes raise questions about the EU’s willingness to lead.

Among the latest victims are the Fuel Quality Directive whose ambitions were reduced in the context of the 'CETA/TTIP' negotiations with North American countries, and the 2030 European renewable energy targets that were weakened following intensive lobbying by oil and gas giant, Shell.

Calendar records show that some European Commissioners have dedicated a considerable amount of their time to business lobbyists.

Around 83 percent of the meetings of climate commissioner Miguel Canete, and 70 Canete of Maros Sefcovic’s, commission vice-president for the Energy Union, were with businesses, mostly representing heavy industry and fossil fuels.

Knowing that, according to International Monetary Fund estimates, the EU is collectively allowing $330 billion in subsidies to fossil fuels annually, one could question the EU’s ability to lead a climate transition.

If it wants to come out of the climate crisis with a prosperous, socially, and ecologically sound society, the EU must speed up the pace of its transition and review its priorities.

Immoral

Defending fossil fuels is immoral and goes against the human rights so dear to Europeans’ hearts. The EU cannot be a genuine leader in climate negotiations while at the same time supporting destructive practices that will affect billions of lives.

This is why the EU needs a new climate narrative.

Europe could win big by reinvesting in its ability to lead by example. Given the austere economic context, it is unlikely that it will be able to lead by using carrots and sticks as it used to do in the past.

Instead, a less costly option would be to reaffirm its role as a normative power. Endorsing fossil fuel divestment and taking measures in that direction could help it achieve this objective.

The demands of the fossil fuel divestment movement are rooted in scientific evidence.

A recent article published in Nature, claims that 80 percent of coal, 50 percent of gas and one third of all oil reserves must remain in the ground if we are to stay within the 2°C maximum temperature rise.

Given the current rate of emissions, this “carbon budget” will be exhausted within 25 years.

Phasing out of fossil fuels is a necessity. By publicly endorsing fossil fuel divestment and reorienting its incentives and subsidies the EU could gain the trust of other nations, particularly the most vulnerable ones. This could ultimately contribute to the enhancement of the Union’s bargaining power in climate negotiations.

This is not just idealism.

In 2013, Connie Hedegaard, then EU climate commissioner, pleaded for the European Investment Bank and the European Bank for Reconstruction and Development to lead the way in eliminating public finance support for fossil fuels.

Numerous world leaders and organisations including the UN's Ban Ki Moon, South Africa's Desmond Tutu, and French president Francois Hollande have publicly supported divestment.

Economic rationale

There is also a strong economic rationale for this.

Fossil fuel companies are currently overrated as their value on financial markets does not appropriately account for the risks of their assets being stranded.

Future climate regulations are likely to impact on the financial value of these companies, which will in turn affect all those who have invested money in them.

A study by the European Green Party found that European pension funds, insurance companies and banks have invested more than €1 trillion in fossil fuels.

In a low carbon breakthrough scenario, these institutions are likely to lose between €350 billion and €400 billion.

A much higher figure is expected if action is further delayed. In June, Shell’s former chairman said that moving money away from fossil fuel companies is a rational response to slow progress on climate change.

Besides, low-carbon energy products are amongst the most dynamic growth sectors. Reorienting subsidies to support transition towards low carbon technologies, energy efficiency, and renewable energy is a reasonable option.

Leading by example has worked in the past.

ETS

The 2005 Emissions Trading System is probably one of the best examples of successful spill over. It has also been argued that the EU’s leading role in climate action was crucial in creating momentum for other countries to act elsewhere.

In the current context of austerity, with an almost unconditional focus on growth and competitiveness, the EU is missing a major opportunity.

The EU should phase out fossil energy. It is of course only part of a solution that requires much broader changes.

This might sound too idealistic, but aren’t youngsters allowed to dream?

Charlotte Flechet is an environment policies worker and an activist for the Global Call for Climate Action campaign