The European Union’s climate chief, Wopke Hoekstra, has cautioned against succumbing to a “false narrative” that addressing global warming is detrimental to the competitiveness of European businesses. In an interview with the Financial Times, Hoekstra expressed confidence that Europe could maintain a thriving business environment while taking significant climate action. He emphasized the need for a balanced approach, combining climate action with a just transition and competitiveness. The EU is expected to propose a plan to cut greenhouse gas emissions by 90% by 2040, compared to 1990 levels. This target serves as a milestone on the path to net-zero emissions by 2050, as outlined in the EU’s Green Deal climate law.
However, the EU is facing challenges as it grapples with the repercussions of the Covid-19 pandemic, the war in Ukraine, a gas supply crisis, and competition from the US and China’s extensive subsidy schemes for clean technologies. Farmers in France, Germany, Poland, Romania, and Belgium have staged protests against environmental regulations, while right-wing politicians have criticized EU targets and bureaucracy, claiming they hinder investment and innovation.
Despite these obstacles, countries like Germany, France, and Spain have expressed support for ambitious climate goals for 2040. The EU’s scientific advisory board has emphasized the need to more than double the current rate of emissions reductions to meet the existing target of a 55% reduction by 2030. Achieving such a transformation of the EU’s economy will require substantial investment, estimated at €1.5tn annually.
Hoekstra acknowledged that the transition to a low-carbon economy has already caused significant disruption and will continue to do so in the foreseeable future. Linda Kalcher, executive director of Brussels-based think-tank Strategic Perspectives, highlighted concerns that the high level of investment required may cause unease in member states, particularly those with smaller economies. However, she also emphasized the benefits, such as greater energy security, industrial competitiveness, and more affordable electricity.
Critics of the EU’s environmental regulations question the impact on industry, especially considering that the bloc’s emissions account for only 7% of the global total, compared to 13% from the US and nearly 30% from China. Hoekstra suggested that one of the most effective actions the EU could take is helping other countries establish carbon markets similar to its own, which would hold polluters accountable for their emissions. He stressed the importance of addressing the remaining 93% of global emissions, as climate change affects all regions of the world.
In conclusion, Hoekstra’s remarks highlight the EU’s commitment to balancing climate action and competitiveness. Despite challenges and criticism, the EU aims to lead the way in cutting emissions and promoting sustainable business practices.