Green investment and EU sustainability policy
From the Green Investment Event in The Hague: Edited notes and a climate action proposition
Whether you picked environmental protection as your lifelong battle or you are just concerned about the socio-economic challenges, we all have many questions on what is currently being done and how we should act to curb the worst effects of climate change. For this reason we, DiEM25 Den Haag, decided to meet with three established sustainability experts to delve into this existential battle.
The fundamental premise of our talk was that the challenge we are facing is not only about ensuring that coastline cities are protected from the rise of water levels (which would represent a local tragedy in itself, with large population displacement), but that we are also at a risk of disruption of supplies for water, food and the potential heightening of geopolitical tensions.
Shall we state the obvious? We’re in a mess and urgent actions need to be taken. It has now been over two decades since the signing of the UNFCCC environmental treaty of 1992. We should have been decisively addressing this challenge since then. Yes, the Paris climate agreement is a positive step forward but what are we really doing to meet the below 1.5 or 2°C target? How effective are these actions and what else should we do?
A recent study from Ecofys and Circle Economy, showed that with the current policies on the implementation of a renewable energy system, we are a third of the way through for the below 1.5°C target. 15 billion tons of CO2-eq per year by 2030 still need to be reduced globally.
The outlook is not particularly positive. In the meantime, demands are made, discussions are held, and legislation is sometimes issued or killed in the process. The obscene lack of political will to urgently act on solving this problem, supported by an unwittingly complacent or confused constituency is taking us down a tragic path. We now need to think and act also about societal adaptation to climate change while we keep on addressing the mitigation of emissions.
Many actions have been taken on the EU level but the fragmentation of the policies is such that it prevents impactful results. Sometimes policies are also watered down from their original proposal or they are weak from the start. This is what brought us the EU cap and trade system, the Emission Trading Scheme (ETS), which burdens us with empty discussions on how we should fix a shameful price of carbon at only at ~5€/ton and all the other problems related to carbon leakage and member states’ discretion to protect strategic industries, to name a few.
It is time to acknowledge that the EU Emission Trading Scheme is a tragic failure and we should move on. In retrospect, not introducing any policy at all would have been better, as the public and institutional discourse is now clogged with words on how to fix a failing CO2 reduction policy instead of concerning ourselves with introducing a well thought out plan for emission mitigation.
Nevertheless, it should also be noted that while the ETS won over carbon taxation (at least for the moment), the increasing number of climate-related policies that are indeed being issued within the EU is a positive development. Many regulations are in fact implemented to support the reduction of consumption, the move towards a renewable energy system, and supporting the reuse and recycling of resources. However, a lack of coordination and harmonization of these policies with one another, complicates the addressing of our global problems.
A coherent and coordinated policy is urgently needed. We can’t spend our efforts, money and time on duplicating work or issuing policy that could be in conflict with one another. In fact, if we coordinated policies appropriately, we would be doubling down by broadcasting the needed signal of strength and stability from institutions to businesses.
Within this frame, more spending is urgently needed. The current levels of funding within the EU for sustainability projects, both for development and implementations, appear to be already substantial, so the capital is available. What is lacking are enterprises’ interest in entering this type of investments due to perceived risk and lower return on investment than what they were used to in the past, on top of a longer time span and implicitly a slower yield of return.
Given the current climate, it is perhaps time that companies find ways to be content with this type of investment, as a new way of doing business should be modeled for this economic environment. It is imperative that enterprises return to investing and they adapt expectations to what constitutes an acceptable risk and return on investment. However, to do this, they also need policy that is unequivocal, assertive and conducive to creating the type of sustainable economy we all want. In this regard, policies need not only show the way we need to follow, but they also need to be clear on what we need to stop doing. Divestment from fossil fuels is a much heated topic in this respect but consumption patterns are still a big issue that is only now starting to be addressed through EU scale policy.
We need to do this urgently and we need to do it right. This means that we need to be specific when we are addressing this problem not only from the perspective of subsidies but also from the market perspective of competition. However, often times this discussion is clouded by approximations. A well informed public and activist community is instrumental to this goal, as this awareness is crucial for the overall discussion of climate change action.
We need be precise and we need to be active on two fronts. Transitional activism is where we start, and this means pushing politicians at the right moments to make decisions and support our policies. Call them, send them emails, organize general peaceful disturbance to their work asking them to do what we want them to do. This will, however, not suffice if just us, the “converted” will be doing this. The truth is that the majority of the population doesn’t have the time, desire and at times access to knowledge to make and persist on the very same decisions we, as activists, take. So the second and equally important action is that we need to make it clear to everyone why they should care, why they should pick up the phone and talk to their representatives asking them to support a carbon tax, or any other policy or decision.
It is not enough to tell them it is good for the environment, or that it is good for the future of their children. Our propositions must address their interests in the short term, and for people to act on them they need to be precise and convincing in the way they work. Asking them to join us in demanding a global carbon tax in favor of reduction of other types of taxations over which they have less influence seems to be the starting point.
Author: Franco Donati
Editor: Felix Bodea
Video highlights: Adina Dragnea
Full video of the event: Omer Eilam
Video of the event and further resources can be found by clicking here.