Participants at last week’s United Nations climate conference in Poznan, Poland, were taken aback by a world seemingly turned upside-down. The traditional villains and heroes of the international climate narrative, the wicked U.S. and the noble European Union, had unexpectedly swapped roles. For once, it was the EU that was criticized for backpedalling on its CO2 targets while Europe’s climate nemesis, the U.S., found itself commended for electing an environmental champion as president.
The wrangle over the EU’s controversial climate package at a separate summit in Brussels wrong-footed the world’s green bureaucracy. The EU climate deal was diluted beyond recognition. Instead of standing by plans to cut CO2 emissions by 20% below 1990 levels by 2020, the actual reductions might be as trivial as 4% if all exemptions are factored in.
The Brussels summit symbolizes a turning point. The watered-down climate deal epitomizes the onset of a cooling period in Europe’s hitherto overheated climate debate. It may lead eventually to the complete abandonment of the unilateral climate agenda that has shaped Europe’s green philosophy for nearly 20 years.
The reasons for the changing political atmosphere in Europe are manifold. First, the global economic crisis has demoted green policies nearer to the bottom of the political agenda. Saving the economy and creating jobs take priority now.
Second, disillusionment with the failed Kyoto Protocol has turned utopian thinking into sobriety. After all, most of the Kyoto signatories failed to reduce their CO2 emissions during the last 10 years. There are also growing doubts about the long-term viability of the EU’s Emissions Trading Scheme. The price of carbon credits has collapsed as a result of the financial crisis. The drop in demand and the recession are likely to depress carbon prices for years to come. As a result, the effectiveness of the extremely volatile scheme is increasingly questioned.
Third, a number of countries have experienced a political backlash over their renewable energy schemes. Tens of billions of euros of taxpayers’ money have been pumped into projects that depend on endless government handouts. Each of the 35,000 solar jobs in Germany, for instance, is subsidized to the tune of €130,000. According to estimates by the Rhine-Westphalia Institute for Economic Research, green subsidies will cost German electricity consumers nearly €27 billion in the next two years.
Perhaps even more important is the growing realization that the warming trend of the late 20th century has, for the last 10 years or so, essentially come to a temporary halt. The data collected by international meteorological offices confirm this. This most peculiar fact is rarely mentioned in policy debates, but it certainly provides decision makers with a vital respite to reconsider their climate policy options.
Above all, Europe’s politicians have recognized that green taxes have turned into liabilities that may undermine economic stability and their chances of re-election. As German radio Deutsche Welle put it last week: “With the recession tightening its grip on the German economy, [Chancellor Angela] Merkel is betting that job reassurance is more important to the average worker than being a pioneer in tackling climate change.”
Nowhere has the fundamental change of the political landscape been more pronounced and less expected than in Germany. For more than 20 years, Europe’s economic powerhouse has been the major bastion of green politics.
In the 1990s, Angela Merkel steered and implemented Europe’s Kyoto policy as Germany’s first environment minister. Now serving as chancellor, she was hailed as Europe’s climate savior after playing host to last year’s G-8 summit in Heiligendamm. Only 18 months later, however, she no longer wears a halo. As a result of a concerted campaign by Germany’s heavy industry, as well as growing opposition from within her Christian Democratic party, Mrs. Merkel has been forced to abandon her green principles and image.
The deepening economic crisis seems to transform the mood of the German public. Next year’s general election looms large, and voters right now are worried about the economy and jobs, and not green issues. In early December, more than 10,000 angry metal workers and trade unionists — most of them from Germany — protested outside the European Parliament in Brussels against the EU’s climate policy, which they fear will increase unemployment.
For many international observers, the ease with which Mrs. Merkel overturned her celebrated climate policy has come as a shock. But she was almost the last member of her Christian Democratic party willing to accept that a change in strategy was necessary given the immense costs of the EU’s original climate plans. In fact, her party demanded that Mrs. Merkel veto the climate package if German industry did not receive an exemption from the Emissions Trading Scheme’s auctioning of carbon credits. The exemption was duly granted. . . .
In part as a result of German — as well as Italian and Polish — objections, Europe’s climate package did not survive in its original form. The inclusion of a revision clause, pushed by Italy, is particularly significant as it makes the EU’s climate targets conditional on the outcome of international climate talks. If the U.N.’s Copenhagen conference in 2009 fails to seal a post-Kyoto deal, it is as good as certain that some of the EU’s targets will be further cut. By linking its decisions to those of the rest of the world, Europe has begun to act as a more rational player on the stage of international climate diplomacy.
Instead of yielding to the siren calls of climate alarmists, European governments would be well advised to focus their attention on developing pragmatic policies capable of safeguarding their industries, labor forces and environment at the same time.
– Mr. Peiser is the editor of the international science policy network CCNet.