Last week, two big weather news shook Europe. Germany and Belgium, as well as France and the Netherlands, suffered devastating floods. At the same time, the European Commission launched its set of legislative proposals “Fit for 55” on how to achieve the goal of reducing greenhouse gas emissions by 55% by 2030.
The first underscored the reality and urgency of the climate crisis we are facing. The latter showed that although the European leadership agrees with this urgency, we are still deeply divided on how to share the cost of the transition from carbon.
The fireworks that broke out at the commissioners’ meeting in the Berlaymont building prior to the launch of the package on July 14 highlighted that reaching an agreement in the coming months between national governments in the EU Council and between political families in the European Parliament it’s going to be complicated.
The commission proposes to expand the existing emissions trading scheme to also cover road transport and households. Ultimately, this will mean that households will see their costs rise significantly over the next several decades, as will businesses. It was the fear of social unrest that it is likely to unleash in many Member States that led to the tense debate when Commission President von der Leyen presented the proposals with her colleagues.
Climate Social Fund
While it may be essential that the cost of climate action is shared across European societies and economies, it is also clear that equity must be at the center of the EU response. In ‘Europe’s Green Moment: Addressing the Climate Challenge’, ECFR researchers found that in 19 out of 27 member states, mitigating socio-economic consequences tops the list of perceived challenges in implementing the European Green Deal.
Surveys commissioned by the ECFR in 12 EU member states in November 2020 indicated that the most popular policies under the Green Deal will be those that invest in public goods; the most popular policy was spending more money on green transport systems linking European cities. The narrative around the “Fit for 55” package will be key here, and the Social Climate Fund must shine in public messages about the Green Deal package.
The external dimension of the Green Deal also reveals unresolved tensions over what kind of climate leadership the EU wants to represent. EU officials have made clear that the EU’s ambition to become the world’s first climate-neutral continent is partly based on pressuring others to go further and faster as well.
However, the Carbon Frontier Adjustment Mechanism (CBAM) was less ambitious than what climate action activists expected in terms of its sectoral coverage, in its initial phase starting in 2026, covering aluminum, cement, electricity, fertilizers and iron and steel, probably in part due to concerns raised by competitors, including China and the US, about WTO compatibility.
Given that one of CBAM’s explicit goals is to incentivize non-EU companies to limit the use of carbon in their production to maintain ease of trade with European markets, the G20’s support for carbon pricing at The beginning of July gave impetus to the EU to come up with a more comprehensive proposal.
In the first six months of Joe Biden’s presidency in the United States, it is becoming clear that America’s climate leadership will be diplomatic leadership. To complement this, the EU should instead strive for “leadership on climate action”. Now that the legislative package is on the table, the EU must carefully manage the internal divisions highlighted above to show the world that the Green Deal is not just a plan, but a fact.
The EU now needs to engage in dialogue, starting with neighboring countries such as Turkey, North Africa, the Western Balkans and the Eastern Partnership countries, on a firm but supportive basis.
It should be clear that there is no plan B for the Green Deal, but that the EU is ready to invest and support as an interested partner in building its capacity to develop its renewable energy sectors, moving towards zero carbon production.
The EU’s leadership on climate action must not be compromised by months of division as the package of proposals progresses through the institutional approval process.
We will not be credible to others if it is clear that we cannot agree at home and, instead, third countries will trust that the proposals will be diluted.
Susi Dennison is a senior policy researcher and head of the European Power program at the European Council on Foreign Relations.
George is Digismak’s reported cum editor with 13 years of experience in Journalism