The European Commission has proposed a 55 percent greenhouse gas reduction target for 2030. Poland, however, refused to agree to it until there is further analysis on the proposal’s impact on member states and the economic issues associated with the coronavirus pandemic. The European Council held a discussion on the 2030 climate plan during a summit in October. The decision, however, was tabled until December after several Eastern countries, led by Poland, refused to sign on and pushed for the Commission to “conduct in-depth consultations with member states” to assess their specific national situations. It appears that those countries most recently familiar with the flaws of central planning and “one-size-fits-all” authoritarian edicts are raising concerns about the rise of similar policies under the guise of climate control.
One month after the October summit, little progress has been made. Poland insists that radical changes should not be enforced without the full slate of consequences as EU countries have different energy systems and national circumstances that need to be taken into account. Poland wants a fair distribution of the costs and benefits, taking into account the economic recession caused by the COVID-19 crisis. At a meeting with EU leaders on November 19, Poland and Hungary vetoed an agreement on the EU’s €1.8 trillion ($2.15 trillion) budget and recovery fund for the next seven years (2021-2027). According to Poland, EU climate targets had to be ambitious but realistic, while ensuring coal regions and workers are not left behind.
Poland is onboard with the transition, but notes a financing gap worth tens of billions of euros needed to phase out coal and reach the EU’s 2030 goals. Reaching the new targets for 2030 will be a huge effort for Poland since it is at a completely different starting point. Poland would need support from EU funds and additional allowances for the revised emissions trading scheme (ETS).
Similarly, Europe’s largest employer association, BusinessEurope, has questioned “the value and credibility” of the economic analysis underpinning the EU’s proposed climate target plan for 2030. They criticize the European Commission’s analysis as over-optimistic when analyzing the costs and benefits of raising the EU’s 2030 climate goals. The Commission President asserts that tougher climate policies are the bloc’s new “growth strategy”, but BusinessEurope is not in agreement. BusinessEurope, through its member trade associations in 35 European countries, represents 20 million companies.
According to BusinessEurope, “Every core scenario” in the cost-benefit analysis accompanying the Commission’s 2030 climate target plan, “is conducted with pre-COVID-19 data and does not take (the pandemic’s) economic impacts into account.” The analysis is based on the assumption of a quick recovery, but other scenarios should be examined. The International Energy Agency’s latest world energy outlook contains a scenario of delayed recovery from the coronavirus pandemic, finding that by 2030, the global economy would be nearly 10 percent smaller than in a quick recovery scenario. Also, they question the models used in the analysis because they have not been developed or discussed in any detail and were not open for public scrutiny. This lack of transparency concerns them.
Lessons for the United States
The United States could face the same issues shortly if a new administration takes over the White House with their $2 trillion plan to make the generation sector carbon free by 2035 (fully 10 years earlier than already-suffering California’s plan) and the whole economy carbon free by 2050. Analogous to the EU, where the member countries have different starting points, individual U.S. States have different percentages of non-carbon fuels in their generation sector, different transportation needs and different economic engines. Also, the length of the coronavirus pandemic will influence how long it will take for the nation to recover economically, and if another lockdown is eminent, that recovery would take longer. Businesses know how damaging the lockdowns and the coronavirus have been to their livelihoods. Adding more complications would create an ill-advised burden. Selling the climate plan as a new growth strategy, as the Commission President is attempting to do, would also be an economically damaging mistake. Proposals for enormous changes must be fully transparent to the public, rather than hidden behind opaque analysis as the European Union’s was.