December 12, 2019
Greta is right - the EU’s fight against climate change is most likely a PR exercise
Greta Thunberg made a comment on climate change that pretty much sums up our own view of the modern history of multilateral governance in general - all the way from the eurozone to climate change:
"The real danger is when politicians and CEOs are making it look like real action is happening when in fact almost nothing is being done apart from clever accounting and creative PR."
Remember our tirades about policy-by-press-release, like Jean-Claude Juncker’s €315bn investment programme? The sole purpose of that was to impress the gullible, to give us the sense that the EU was doing something when in reality it was only putting new numbers on old programmes. The notion of leveraging the EIB is fine in principle, but it requires massive changes in the EIB’s statutes for which there isn't the necessary unanimity.
When you replace actual policies with PR stunts, you trade short-term headlines for a long-term loss of credibility. Brussels-based journalists are still beholden to the Commission. But as we saw in the UK, and are seeing increasingly in Germany now, they are no longer a good bellwether of public opinion back home. The root cause of the investment crisis in the eurozone is the stability pact - a target that reduces the role of investments to that of an economic residual. The root cause behind climate change is over-reliance on carbon. It requires hard choices. The experience of Juncker's investment hoax has led us to be very sceptical of the Commission’s role in the climate change debate as well. It would be the first time in the EU’s history where the Commission goes full-frontal against the industry.
Listening to German radio yesterday, we got a sense of the German establishment's deep hostility to the climate change targets. Germans like to express verbal support for any good cause, and are disappointed that Germany ranks behind India and Brasil in a much-watched climate-change index. But the German priority is not to meet multilateral targets, but to secure their own prosperity. The German economic strategy has been to make carbon more efficient, not to replace it. This is a fight about Germany’s economic future.
We are therefore not surprised to learn German industry flatly rejected Ursula von der Leyen’s green deal, as reflected by the BDI president’s comment yesterday that climate policies were killing long-term investment plans. A German radio programme calculated yesterday how many wind turbines you need to a run single steel plant in Duisburg: 3500, apparently. The conclusion was that an exit from coal-fired power stations is impossible if you want to keep up steel production. The head of Bosch said the proposed strengthening of the CO2 reductions by 2030, to 55% from a baseline target, would mean the end of the fuel-driven engine. We are sure this is right, but the comment is also indicate that German industry still clings on to the technologies of the past, rather than seeking leadership in a new generation of emerging technologies.