December 13, 2019
EU climate disagreement overshadows budget
The European Council expected to devote the summit dinner last night to the budget discussion, and to be able to agree on climate policy as part of the afternoon session. But disagreement on the climate-neutrality target dragged on, pushing the budget off of the meeting's agenda. In the end, it was not possible to agree on the climate targets either. The marathon session concluded recognising that Poland cannot commit to an objective of climate neutrality by 2050, and putting the issue back on the agenda for the June 2020 Council summit.
Poland, which is largely dependent on coal for energy production, managed to extract a commitment to including a just transition mechanism in the next multi-annual financial framework. The European Commission will work on a proposal for a €100bn pot. Both Ursula von der Leyen and Angela Merkel seemed convinced that Poland would eventually come around, and that it just needs more time. We are reminded of the establishment of cohesion funds as a central pillar of the EU budget alongside the common agricultural policy thirty years ago. Spain played a key role in this by making structural funds a condition for supporting the Single European Act. In any case, the Just Transition Mechanism ties the climate targets to the budget, including whether this new fund should be part of the structural funds or in addition to them, as well as its size.
Other partial holdouts include the Czech Republic, which depends on nuclear energy as well as coal. The Czechs agreed to the climate-neutrality target, but on condition that the summit conclusions include language recognising that some member states use nuclear power as part of their energy mix, which member states have the right to choose. This may sets the Council on a collision course with the Parliament again. Last week's inter-institutional political agreement on the sustainable investment taxonomy got around the disagreement on nuclear energy by subjecting it to a yet-to-be-defined do-no-harm principle. Green MEPs are convinced that this principle will set so stringent environmental impact conditions as to exclude investments in nuclear power from the sustainable taxonomy. We would not be surprised if other countries where nuclear power is a big part of the energy mix, such as France or Sweden, will be tempted to water down the do-no-harm principle. However, these countries are also fully on board with the climate targets, unlike the Czech Republic whose government can safely be rated as sceptical.