Despite voters rejecting the green deal, the EU continues with “business as usual”

By
Pieter Cleppe
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Copyright: Image Courtesy: Mueller / MSC, Licensed under the Creative Commons Attribution 3.0 Germany | Wikimedia Commons

This week, European leaders meet in Brussels to discuss the distribution of so-called EU top jobs. Despite all the uncertainty, it is looking pretty good for Ursula von der Leyen to succeed herself as president of the European Commission. This is not only because French President Macron apparently supports her after all, despite the fact that this may not help him during the French parliamentary elections, but because the European People’s Party (EPP), which won seats in the European Parliament and remains the largest group there, also continues to support her as their candidate. Perhaps Italian Prime Minister Meloni may still try to obstruct, but in the secret ballot in the European Parliament, her MPs may well end up supporting von der Leyen, just as the MPs of Hungarian Prime Minister Orban and the Polish conservative party PiS did five years ago. According to some sources, she would abstain, in return for a top EU Commission portfolio for Italy, but on the other hand, she has come out pretty firm against the so-called deal that was announced by EPP-S&D-Renew.

Von der Leyen is a questionable choice. One of the reasons that the EPP held firm and even won some EP seats is precisely because they started to challenge von der Leyen’s left-green policies a year and a half before the election.

Von der Leyen herself has also recently started to abandon some of her green stances, but that in turn raises the question of how trustworthy she is. Despite strong criticism among European Commissioners, she supported Dutch “climate” Commissioner Frans Timmermans and top European civil servant Diederik Samsom to push through very extreme “Green Deal” legislation, including a ban on the internal combustion engine, an extension of the European “ETS” climate tax to more sectors and a new, prohibitively expensive renovation obligation for buildings. In short: anyone who believes that von der Leyen will suddenly renounce just about everything she has fought for for years is very naive.

Global impact

At the very least, the EPP is now going to review the internal combustion engine ban. German CDU MEP Peter Liese also argues that European legislation for the Green Deal needs to be rewritten. In particular, he describes one such law, the EU’s new anti-deforestation law , as “a bureaucratic monster” that needs to be revised.

This is important, and not just for European companies. EU trading partners have been railing against this new EU law for some time. Just this week, the United States demanded that the EU delay the regulation, which normally comes into force from 30 December, because of the extra red tape for US companies. In doing so, the US government claimed that the EU does not even yet have a system where producers can submit their documentation and has also not yet provided “clear implementation guidelines”.

Already since 2023, there have been serious tensions on the issue with South-East Asia and in particular with countries like Malaysia and Indonesia that export a lot of palm oil to Europe. These find it unfair that despite their efforts – including stiffer penalties for offences and tighter controls introduced in 2022 – the EU flatly refuses to recognise Malaysian standards, even though 93 per cent of palm oil exports to Europe already respect them, and even though the NGO Global Forest Watch recognised last year that the country had achieved a sharp reduction in deforestation. That was also one of the reasons why the UK does recognise Malaysia’s local standards, which also helped the British gain access to the major trade agreement CPTPP, which comprises as much as 15 per cent of global GDP.

The EU Commission’s trade policy under Ursula von der Leyen has therefore been characterised by tensions with trading partners of all kinds over the past five years. The EU’s failure to conclude a trade agreement with the Latin American trade bloc Mercosur, for example, was because the EU suddenly asked to be allowed to attach all kinds of additional requirements – including environmental ones – to the removal of trade barriers.

Moreover, the new European climate protectionism, with its so-called CBAM trade tariff, also sets off bad blood with major trading partners like India. It also threatens to hit African economies hard: as much as 25 billion a year. Of course, it does not stop eurocrats from demanding more and more money from taxpayers for “development cooperation.”

Also not insignificantly, CBAM makes our own chemical industry, which is already currently under particular pressure from high energy prices, another consequence of green policies, a little less competitive. After all, import tariffs on all those supposedly climate-unfriendly imports also hit importers.

An alternative approach

In line with von der Leyen’s leftist perspective on other policies, it should not suprise that under her reign, the EU Commission has doubled down on the punitive and regulatory approach to tackle climate change – which has now slipped down the priority of EU voters, according to surveys. Alternative approaches were never considered, as the EU Commission was even still hostile to carbon neutral nuclear power, something that has thankfully changed, due to French pressure. One such an alternative approach has been supported by members of the “Climate & Freedom International Coalition“, an international network of thinkers and academics. Members of that group have suggested that countries could instead replace the current “Paris Agreement” and promote an alternative international treaty whereby countries that ratify this treaty would then enjoy trade benefits, provided they adopt climate-friendly free-market policies.

Such policies could then include encouraging targeted tax cuts (“Clean Tax Cuts”), specifically in the four sectors that account for 80% of greenhouse gas emissions – transport, energy and electricity, industry and real estate – and tax cuts aimed at demonopolisation. That would also entail scrapping profit taxes for investors that purchase companies with a monopoly and state-owned enterprises, all with the aim of encouraging energy market liberalisation among treaty parties.

Another suggestion to encourage entrepreneurs and financiers in the states that signed the treaty through tax-exempt “CoVictory bonds” to make investments in “Property, plant, and equipment (PP&E)”. These are assets that are important to companies in the long term. The goal here is to lower the cost of borrowing by at least 30%, to incentivise more innovation.” In particular, an analysis highlighting this perspective stresses that the idea is to incentivise private debt to become an instrument for reducing greenhouse gas emissions. The idea here is that in every Accord nation, entrepreneurs and financiers could raise internationally reciprocal, private tax-exempt CoVictory Bonds, Loans and Savings Funds, to finance all property, plant and equipment (PP&E) in any Accord nation. Tax free interest reduces the cost of debt by some 30% or more, driving investment in newer, cleaner technologies, while unlocking capital flows across borders.

Instead, under von der Leyen’s Commission, “climate” merely acted as a front for what was the preferred policy approach in other areas: spend, tax, transfer and regulate.

Conclusion

The left-green Ursula von der Leyen was the face of all of this. To reappoint her is nothing more or less than a negation of the European Parliament election result.

 

 

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