Questions to the First Executive Vice President-designate Timmermans

Ursula von der Leyen adopted the European Green Deal as a top political priority for her incoming Commission, pledging to make it ‘Europe’s hallmark’.

Should this experiment succeed, the European Green Deal might become a seminal blueprint for other economies around the world; a tangible example that pursuing climate neutrality is not only technically feasible but also economically and politically viable.

In the von der Leyen Commission, the European Green Deal will primarily belong to the ‘First Executive Vice-President for the European Green Deal’, whose designate is Mr Frans Timmermans, and to the Commissioners’ Group on the European Green Deal[1].

In my reading, the mission letter to Mr Timmermans outlines five key priorities for the European Green Deal:

1. A European Climate Law to enshrine the 2050 climate-neutrality target into legislation
2. An increase in the 2030 emissions reduction target from 40% to 50-55%
3. The establishment of a Just Transition Fund to support industrial, coal and energy-intensive regions that will be impacted by the transition
4. A reduction of the transport sector’s carbon footprint
5. The elaboration of a Carbon Border Tax, and the review of the Energy Taxation Directive

These points touch upon critical issues for the future of Europe’s decarbonisation, but they remain vague. To create a workable and impactful European Green Deal, these priorities will have to be quickly developed, while other issues – missing from the mission letter – will also need to be tackled.

The upcoming hearings of the Commissioners-designates will provide a first, important, opportunity to move beyond headlines and discuss practicable proposals.

In this context, I recommend the Members of the European Parliament ask the following questions to Mr Timmermans and to the other European Green Deal-relevant Commissioners-designates.

How do you intend to promote a sensible carbon price in the EU?

Credible long-term carbon price signals are crucial for directing investments towards lower-carbon solutions. But today, only half of the EU’s emissions are priced, and carbon price remains too low to drive significant behavioural changes. So, it is clear that carbon prices should go wider and higher. But how do you intend to do so? Are you in favour of extending the Emissions Trading System (ETS) to cover the maritime sector and reduce the free allowances allocated to airlines over time, as indicated by President von der Leyen’ political guidelines? Or would you rather prefer to maintain the current ETS’ sectorial coverage (i.e., industry and power plants), while promoting national carbon taxes – possibly with minimum EU standards – on the non-ETS sectors (i.e., transport and buildings)? This is a crucial point, that needs clarification.

How would you structure a Carbon Border Tax?

While the academic debate on carbon border adjustment has developed for decades, not a single country in the world ever introduced a carbon border tax. Technical difficulties, such as calculating the carbon embedded in goods, as well as political difficulties have indeed prevented such measure to be implemented. Considering the strong emphasis given to this measure in both President von der Leyen’s political guidelines and your mission letter, we expect you to work on this measure. So, given the well-known technical and political challenges, how do you intend to structure a carbon border tax?

How do you plan to avoid other ‘Gilets jaunes’ movements across Europe?

The ‘Gilets jaunes’ movement has shown the importance of ensuring that decarbonisation policies are designed with careful consideration of their distributional consequences. How do you intend to push both the EU and member states to properly assess the distributional effects of their energy and climate policies, and to take adequate measures to address them? Moreover, how will you persuade voters that the European Union can cut carbon emissions while continuing to grow the economy?

How would you promote renewable energy?

Electricity from renewables will be the main vector to decarbonise our economy – including transport and heating. Despite the falling cost of wind turbines and solar panels, increasing the share of renewables remains an uphill battle. The key challenge is to ensure that if the wind is not blowing and the sun is not shining in a certain place, consumers still get all the electricity they need. Your challenge will be to devise a regulatory framework that unlocks investments into a well-coordinated system of storage, network, dispatchable plants and demand response. Otherwise, the system cost of renewables will substantially increase or unmanaged variability will put security of supply at risk. How do you intend to tackle this issue?

How would you promote energy efficiency?

Notwithstanding the numerous legislations put in place to reduce energy consumption, progress has been uneven. In 2016, EU final energy consumption was 7 percent lower than in 2005, as a result of the economic downturn, of structural changes towards less energy-intensive industrial sectors, and of the implementation of energy efficiency policies. Nevertheless, EU final energy consumption started to increase again since 2015, as the economy recovered from the crisis, putting into risk the achievement of the 2020 energy efficiency target. How do you intend to tackle this issue?

How would you reverse Europe’s failure in decarbonising transport?

Between 1990 and 2016, EU greenhouse gas emissions decreased significantly in all sectors with the only exception of transport, which has seen a 18 percent increase. Transport is thus becoming a key obstacle to EU decarbonisation and more aggressive policies are needed to decarbonise this sector. A particular focus should be placed on decarbonising road transport because it is responsible for more than 70 percent of overall transport emissions. Decarbonising road transport would also improve air quality in cities, which remains the number one environmental cause of premature deaths in Europe. EU tighter vehicle fuel economy standards have not sufficiently delivered. How do you intend to foster the sector’s decarbonisation, given the EU’s failure in doing this so far?

How would you push for a quick coal phase-out across Europe?

Coal remains the most polluting component of the EU energy system – it alone represented about 15 percent of EU emissions in 2018. This is profoundly damaging not only for the climate but also in terms of air pollution, mining fatalities, substantial fiscal subsidies for coal and global credibility. How do you intend to push member states to implement a speedy coal phase-out, given the national competence on the energy mix?

Do you see the case for exporting the European Green Deal?

The EU only produces 10 percent of global greenhouse gas emissions. This implies that the only way for the EU to exercise global leadership on climate change is to move beyond its borders. Do you see the case for exporting the European Green Deal? In practical terms, do you see the case for setting-up a substantial EU financing mechanism to invest into low-carbon assets abroad? After all, this would climate policy, as well as industrial policy and foreign policy.

 

[1] Composed by the Commissioner for Health (whose designate is Stella Kyriakides), the Commissioner for Agriculture (whose designate is Janusz Wojciechowski), the Commissioner for Transport (whose designate is Rovana Plumb), the Commissioner for Energy (whose designate is Kadri Simson) and the Commissioner for Environment and Oceans (whose designate is Virginijus Sinkevičius).