BY RHODA WILSON ON APRIL 11, 2024 | The Expose When the European Union (“EU”) approved its Green Deal, it was done with much fanfare and sparkles. Now, the fanfare and the sparkles are a distant memory as the EU grapples with the actual “how” of the transition equation it wrote for itself. Staying silent on the real costs of the transition push has not helped either. The EU had set aside some 580 billion euros for its net-zero plan over the period 2021 to 2027. However, it is going to cost a lot more than that – and the EU does not have that kind of money, which is only now coming to light, Oil Price wrote. Last year, the European Commission estimated the cost of the energy transition at over 700 billion euros in additional annual investments between now and 2050. That’s 700 billion euros to be invested in the transition – and replacement of Russian hydrocarbons – every year. And a good portion of it is coming out of European citizens’ pockets. This is perhaps the worst possible time for the real costs of the transition [to come] to light—just as Europeans are beginning to feel the pinch of the additional costs that this transition is imposing on household budgets. And there are European Parliament elections on the horizon. In a July 2023 column for Reuters, Pierre Briancon wrote about European governments that “If they don’t come clean to public opinion, and explain how these costs will be shared, they may face crippling populist protests that will compromise their end goals.” These words have proved to be prophetic, with right-wing parties gathering popularity across Europe months before the European Parliament elections in June 2024 Meanwhile, as the costs of transitioning away from hydrocarbons have continued to mount in the form of both direct inflation and reduced industrial activity, the EU is falling behind on its own emission reduction targets. Doubling down on its initial targets is likely to alienate voters even further. It seems the EU’s leaders have finally started taking notice, possibly helped by the widespread farmers’ protests, which were essentially a reaction to the Green Deal, which requires the diversion of money previously used to subsidise agriculture to the transition effort. The EU is also losing business to the US because of the regulatory strangleholds it is imposing. Voters’ disgruntlement with high energy costs and the overall inflation they drive has turned the attention of decision-makers and planners to questions such as boosting the European Union’s competitiveness in the face of stiff competition from the US and China. The EU’s leadership has cornered itself by focusing on all the wrong things at the same time and ignoring all the important factors. And it is running out of time. “Now, the transition push is in danger,” Oil Price wrote, “and the repercussions will be felt far and wide.” Featured image: European Green Deal will change economy to solve climate crisis, says EU, The Guardian, 11 December 2019 |
2024-04-12