Friday

19th Aug 2022

Opinion

Phasing out fossil fuel would show true EU leadership

  • Coal plant: Countries like Poland fear additional regulations (Photo: AdamCohn)

For about 20 years, the EU has been a constructive leader in climate negotiations: benefitting from a growing economy, and support from public opinion. However, in the last few years, the EU’s leadership has been declining due to a series of internal and external factors.

On the one hand, the Union’s eastern enlargement has increased internal divisions among member states. Countries like Poland, which heavily rely on coal for their energy supply, fear additional regulations, and traditional leaders, such as Germany, are taking a step back in the context of an ongoing economic crisis.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

EU apathetic on fossil fuel divestment

Organisations around the world have pledged to remove €2.3 trillion in investments from oil, gas, and coal companies. However, MEPs have yet to convince political leaders to hold a debate about it.

Column

Is this strange summer a moment of change?

It is a strange, strange summer. The war in Ukraine continues, 60 percent of Europe is in danger of drought, and Covid is still around and could rebound in the autumn. At the same time, everyone is desperate for normalcy.

Russia puts EU in nuclear-energy paradox

There's unprecedented international anxiety about the safety of Ukraine's nuclear reactors, but many European countries are also turning to nuclear power to secure energy supplies.

News in Brief

  1. China joins Russian military exercises in Vostok
  2. Ukraine nuclear plant damage would be 'suicide', says UN chief
  3. Denmark to invest €5.5bn in new warships
  4. German economy stagnates, finance ministry says
  5. Syria received stolen grain, says Ukraine envoy
  6. Truss still leads in next UK PM polling
  7. UN chief meets Zelensky and Erdogan over grain exports
  8. Fighting stalls ahead of UN visit, Ukraine says

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  2. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  3. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  4. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  5. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  6. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis

Latest News

  1. European inflation hits 25-year high, driven by energy spike
  2. No breakthrough in EU-hosted Kosovo/Serbia talks
  3. Letter to the Editor: Rosatom responds on Zaporizhzhia
  4. Could the central Asian 'stan' states turn away from Moscow?
  5. Serbia expects difficult talks with Kosovo at EU meeting
  6. How scary is threat to Ukraine's Zaporizhzhia nuclear plant?
  7. Slovakia's government stares into the abyss
  8. Finland restricts Russian tourist visas

Join EUobserver

Support quality EU news

Join us