Industrial policy in Europe and new “Fit for 55” proposals

For a fair and effective industrial climate transition is a working paper newly published by the European Trade Union Institute, evaluating the support mechanisms for heavy industry (such as steel, cement and chemicals) over the past twenty years. Looking specifically at Belgium, the Netherlands, and Germany, the paper describes and evaluates policies related to the EU Emissions Trading System (ETS), energy tariffs, and other taxes and subsidies at the national level. The authors conclude that the policies have largely been defensive and insufficiently ambitious, and have had negative distributional effects. They call for a more cooperative approach across EU national jurisdictions, and highlight some “best case” current practices, particularly from the Netherlands. Finally, the paper makes specific suggestions for future transition roadmaps which incorporate a “polluter pays” approach, and which incorporate an environmental and social evaluation of all subsidies, tax breaks and other support mechanisms.

The ETUI working paper was completed before the European Commission announced its  ‘Fit for 55’ package on July 14 –   proposals for legislative reforms to reduce emissions by at least 55% from 1990 levels by 2030 . Fit for 55 includes comprehensive and controversial proposals which must survive negotiation and debate before becoming law, but offer  reforms to the Renewable Energy Directive, the Energy Taxation Directive, the Energy Efficiency Directive, and the European ETS, including a carbon border adjustment mechanism.  Also included: a circular economy action plan, an EU biodiversity strategy, and agricultural reform.  The Guardian offers an Explainer here; the Washington Post calls the scope of the proposals “unparalleled”, and highlights for example the transportation proposals, which  mandate reducing new vehicles’ average emissions by 55 percent in 2030 and 100 percent in 2035, which “amounts to an outright ban of internal combustion engine vehicles by 2035 ….”.  

EU €750 billion Recovery Plan announced to mixed reaction

In a speech before the European Parliament on May 27, European Commission President Ursula von der Leyen announced an updated seven-year €1 trillion budget proposal and a €750 billion recovery plan for the European Union, focused on a green and digital economy.  Europe’s moment: Repair and Prepare for the next generation describes the major structure of the plan,  accompanied by  a 5-page Fact Sheet  which highlights “Next Generation EU”, the new recovery instrument.

The EU recovery strategy affirms a commitment to a European Green Deal and promises:

  • “A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
  • Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
  • Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
  • Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
  • Also, recovery goals include a short-term European Unemployment Reinsurance Scheme (SURE) will provide €100 billion to support workers and businesses;
  • A Skills Agenda for Europe and a Digital Education Action Plan will ensure digital skills for all EU citizens;
  • Fair minimum wages and binding pay transparency measures will help vulnerable workers, particularly women”;

Some European reactions to the proposals are compiled in the summary article “‘Do no harm’: EU recovery fund has green strings attached ” in Euractiv . More negative views come from  Climate Action Network Europe, which  calls the proposals “greenwashing” and in a more detailed press release  states:  “Despite repeated commitments by the European Commission to make the European Green Deal the blueprint of the recovery, the proposal still allows for money to be spent on supporting fossil fuels and is lifting climate spending targets in regional development funding, while the climate emergency would need a rapid phase-out of these polluting fuels and strong climate earmarking.”  

Friends of the Earth Europe had earlier released their own proposals for a European recovery plan, here ,  and reacted to the EU announcement on May 27 with  EU Recovery Package falls short of Building Back Better – which states:

“today’s package would not prevent investments in new fossil fuel infrastructure nor put conditions on bailing out polluting industries like airlines – leaving a gaping hole in achieving the aims of the European Green Deal. Nor are there conditions related to compliance with human rights, not paying out dividends, or buy-back of shares for companies that receive funding. …… The plan gives significant political support to the development of hydrogen, without stipulating that this comes from renewable electricity alone. This could open the door to more climate-damaging fossil fuels in our energy system. The Commission will direct welcome financial support to renovating buildings, creating jobs and cutting carbon; this will need to be backed by legislation to reduce energy poverty and ensure every home in Europe meets minimum efficiency standards. Friends of the Earth welcomes an increase in funds for the Just Transition Fund, and the focus on jobs and skills.”

In  “’Defining moment’ as EU executive pushes for €500bn in grants (May 27) The Guardian summarizes the proposals and focuses on the political fight ahead amongst EU members: For example, Austria, Denmark, the Netherlands and Sweden, (a group called the “frugal four”), who want recovery funding to take the form of loans, not grants.  The potential financial and political wrangling is also the focus of the New York Times article, ” A €750 Billion Virus Recovery Plan Thrusts Europe Into a New Frontier” .  The Energy Mix  reported on North American reaction to a version of the EU proposals leaked by Bloomberg, in “EU’S massive green recovery plan includes 15-GW renewables tender, support for green hydrogen” (May 24).

New European and global alliances launch, calling for Just Recovery economic plans after Covid-19

In an Open Letter  signed in the first week of April,  the environment and climate change Ministers of eleven European Union countries call for the European Green New Deal to be central to the post-pandemic economic recovery plans of the EU.  By April 14, that initiative was boosted by the launch of a larger Green Recovery Alliance, including over 70 Members of the European Parliament and civil society groups, including  CEO’s, business associations, NGO’s, think tanks, and the European Trade Union Confederation.  In its 4-page Green Recovery Call to Action, the Alliance acknowledges the urgency of the Covid-19 health crisis,  and states:

 “After the crisis, the time will come to rebuild. This moment of recovery will be an opportunity to rethink our society and develop a new model of prosperity. This new model will have to answer to our needs and priorities.These massive investments must trigger a new European economic model: more resilient, more protective,more sovereign and more inclusive. All these requirements lie in an economy built around Green principles. Indeed, the transition to a climate-neutral economy, the protection of biodiversity and the transformation of agri-food systems have the potential to rapidly deliver jobs, growth and improve the way of life of all citizens worldwide, and to contribute to building more resilient societies…… “Projects such as the European Green Deal, and other national zero carbon development plans have a huge potential to build back our economy and contribute to creating a new prosperity model. We therefore consider that we need to prepare Europe for the future, and design recovery plans, both at the local, national and at the EU level, enshrining the fight against climate change as the core of the economic strategy. The time has come to turn these plans into actions and investments that will change the life of citizens and contribute to the quick recovery of our economies and our societies.”  [emphasis by the WCR editor].

This European initiative is consistent with a worldwide movement for a Just Recovery from Covid-19, co-ordinated by 350.org.  In the U.S., this is allied with the People’s Bailout movementdescribed in a previous WCR post  , and sharing the same five principles.   The #Just Recovery Open Letter states:

“ We, the undersigned organisations, call for a global response to COVID-19 to contribute to a just recovery. Responses at every level must uphold these five principles:

  1. Put people’s health first, no exceptions.
  2. Provide economic relief directly to the people.
  3. Help our workers and communities, not corporate executives.
  4. Create resilience for future crises.
  5. Build solidarity and community across borders – do not empower authoritarians.”

Both the European and Global movements are described in “Pairing ‘Green Deal’ With ‘Just Recovery’ in EU, Groups Embrace Tackling COVID-19 and Climate Emergency in Tandem”  in Common Dreams (April 10).  The newsletter Euractiv describes the European initiative in ‘Green recovery alliance’ launched in European Parliament (April 14) .

Is the Just Transition fund in Europe’s Green New Deal funded adequately?

Europe’s landmark Green New Deal was unveiled on December 11 2019, but eu flag heldcriticisms abound over the structure, ambition, and particularly the funding.   “Question marks raised over scale of EU’s new climate fund” in Euractiv (Jan. 14) discusses the Just Transition Mechanism funding, and “Commission warns of Green Deal failure if Transition Fund not well financed” ( February 12) states that the European president warned Members of the European Parliament that “she would ‘not accept’ any result that does not guarantee at least 25% of the budget devoted to the fight against global warming and to proper funding of a just transition for regions and workers.”

A more general criticism comes in “The EU’s green deal is a colossal exercise in greenwashing”, an Opinion piece in The Guardian on February 7.  Authors Yanis Varoufakis and David Adler  compare the €1tn (over 10 years) allocated for the GND with an estimated €4.2tn spent to support the European financial sector after the 2008 recession.  Furthermore, they state that the  €1tn GND money “is mostly smoke and mirrors”…”composed of reshuffled money from existing EU funds and reheated promises to mobilise private-sector capital down the road.”  As for the Just Transition mechanism itself, they state: “the deployment of just transition funding in the green deal is a pork-barrel payoff to rightwing governments that supported Von der Leyen’s election and who she fears might throw a spanner into her signature proposal.”  (Euractiv helps to explain this in “Poland, Germany get largest slices of Just Transition Fund” ).

Yanis Varoufakis and David Adler are part of the Democracy in Europe Movement 2025,  a coalition of European scientists, activists and trade unionists. Their Blueprint for Europe’s Just Transition  outlines a strategy for a radical, activist  pan-European movement for a Green New Deal: “The climate movement today — whether it takes the form of student strikes, Extinction Rebellion, or the Gilet Jaunes — has articulated a shared enemy: climate and environmental breakdown. But it has yet to come together to articulate a set of shared demands…. It advocates “ channeling the energies of activists across the continent to clash with the institutions that sit at the Belgian capital — through strikes and sit-ins, occupations and demonstrations: the full arsenal of direct action and civil disobedience.”

The Blueprint is built around three major actions: 1. Green Public Works: (“an investment programme to kickstart Europe’s equitable green transition”);  2. an EU Environmental Union: (“a regulatory and legal framework to ensure that the European economy transitions quickly and fairly, without transferring carbon costs onto front-line communities”); and 3). an Environmental Justice Commission: (“an independent body to research and investigate new standards of ‘environmental justice’ across Europe and among the multinationals operating outside its borders”).

Further, with emphasis on the democratic, grass-roots activism demanded:

  …. This Blueprint provides a general framework for Europe’s just transition, but it must be complemented by deliberation at the ground level to decide where the resources raised by the Green Public Works programme will be directed. No campaign, movement, union, NGO, or political party can devise a climate plan on its own; the People’s Assemblies for Environmental Justice offer a common process by which to develop it.

Just transition for the Coal and Car Industries – a period of “revolutionary” change in Europe

coal-cars-and-the-world-of-work coverTowards a just transition: Coal, cars and the world of work  is a new and unique report edited by Béla Galgóczi, senior researcher at the European Trade Union Institute, a member of the Adapting Canadian Work and Workplaces to Climate Change (ACW) research project , and the author of several previous reports on Just Transition, including  Phasing out Coal – A Just Transition approach (2019) and  Greening Industries and Creating Jobs (2012).

In his introduction, he states:

” ‘Just transition’ has become the main concept and strategy tool for managing the transformation towards a net zero-carbon economy in a way that is both balanced and fair, but it is also clear that this concept is developing in a too broad and general, and often even over-stretched, manner. In order to discuss it meaningfully, we need to turn to specific case studies. Coal-based energy generation on the one hand and the automobile industry on the other do not only represent two sectors that are responsible for a large part of total GHG emissions, they also illustrate what is really meant by the different contexts of just transition.”

The report chapters, available individually for download here, are written by European experts, and will provide English-speaking readers with access to some of the research written in the European languages.

Part 1 updates the well-researched decarbonization of the coal industry, in Poland, Germany, France and Italy.

Part 2 breaks newer ground, as it “delivers an account of the revolutionary change taking place in the automobile industry, proceeding from a European overview (chapter 6) to insights both from France (chapter 7) and from Germany, the latter with its central eastern European supply chains (chapter 8). Chapter 9 then gives the view of IG Metall, a trade union which has a key role in managing change in the automobile industry in an active and forward-looking way.”   Regarding the automobile industry, the introduction states: “With digitalisation and decarbonisation, the industry faces unprecedented challenges in the near future that will re-write its entire business model, redefine work and redraw its value chains. Managing this change requires innovative approaches from the main actors and new forms of relationships between the actors.”  Germany’s social partnership bargaining structure is the framework for the innovative initiatives described at the EU, federal, regional and plant level.

The report is summarized by Mr. Galgóczi  in “Why should just transition be an integral part of the European Green Deal?”,  which appeared in Social Europe on December 4.

European Industrial Policy report calls for social dialogue, shared responsibility for skills training in transition

Industry 2030 just transition graphicA Vision for the European Industry until 2030, released by the European Commission on June 27,  is the final report of a High-Level Industrial Roundtable working group of 20 members from business and academia, and also including the General Secretary of industriAll Europe  and the former Deputy General Secretary of the European Trade Union Confederation (ETUC).  The press release from the ETUC  is titled “Industry 2030 report is a step towards just transitions”, and states: “The comprehensive report puts European industry on a path to an “innovative, sustainable, competitive and human-centered collaborative economy [that] respects planetary boundaries…. It proposes an action plan which includes massive investment in innovation on digital and zero or low-carbon technologies, a commitment to fair and rules-based international trade and to social inclusiveness that leaves no worker or region behind.”

The report is wide-reaching, and includes a strong awareness of environmental and climate change imperatives – for example, amongst the the “game-changing actions” recommended are: Carbon-leakage 2.0 plan: ; a Green Deal with industry which shares risks and benefits, drawing on the principles of the  “Entrepreneurial State” concept outlined by Mariana Mazzucato; standardized carbon reporting; and a Circular Economy leadership role for Europe by 2030.

Some statements on the issue of  Social Dialogue: 

“Climate, energy, raw materials, and bio-economy policies are key areas considered essential for the future of EU industry in terms of challenges and opportunities. They need to go hand in hand with industrial policy and a societal dialogue on what emission reduction and other environmental policies mean in terms of costs, benefits and behavioural changes for everyone. (p. 13)

Considering the speed with which technologies and new business models transform entire industries, planning structural disruption regularly and proactively is key. The establishment of a culture of social dialogue at all levels (company, sector, regional, national) becomes imperative to ensure smooth and just workforce transitions, to help re-train those whose jobs are at risk and to support the regeneration of adversely affected regions.”(p. 19)

Ensure social fairness of industrial transition:  Foster a culture of constructive and effective social dialogue at all levels of the economy (company, sector, country), according to national industrial relations systems and timely information and consultation processes as key elements for anticipating and managing change, i.e. skills.”

Selected statements from the extensive proposals re education and training: 

“Link education and training  policy more strategically to the industrial policy for instance by reinforcing cooperation between companies (especially SMEs), social partners & industry and education and training providers.

Enhance industry’s active role in upskilling and skills development. EU citizens of all ages need to be sensitized to engage in lifelong learning. At the same time, private sector, in collaboration with EU, national and European social partners, should be encouraged to provide training and life-long learning opportunities for all workers. This could be done by establishing new and innovative educational programmes and solutions to complement the role of academia and scaling-up successful existing initiatives, e.g. work-based learning and dual systems , modularized learning offer, e-learning; promotion of quality and effective apprenticeships; promotion of sector-specific training initiatives; providing adult learning opportunities to prevent skills obsolesce and support employability; installing a culture of lifelong learning, including through the promotion of the internal mobility of workers inside the company….

Maintain or increase the employability of the workforce, especially in sectors in transition, by up- and reskilling of the workforce to the jobs of the future, and supporting a smooth transition from one job to another (group outplacement, employment cells, tailor-made training programmes, job search assistance). This should be a shared responsibility between industry and the public sector.”  (p.32)

Build a pan-European coalition involving the EU, Member States, regions, industry, education and training systems and trade unions to take a systemic approach to skills…. Under the coalition, the EU will build on existing instruments to further facilitate flexibility and fast response mechanisms to react to changing labour market needs through procedures for the certification and compatibility of skills
and qualifications across borders and industrial sectors, e.g. using skills badges, which shall recognize informal learning, e.g. by working in a company. (p.33)

Climate change and health: more evidence of the dangers of extreme heat for workers

european health reportThe Imperative of Climate Action to Protect Human health in Europe was released on June 3  by the European Academies Science Advisory Council, urging that adaptation and mitigation policies give  health effects a greater emphasis, as well as proposing priorities for health policy research and data coordination in the EU.   The report also acts as a comprehensive literature review of the research on the present and future health impacts of climate change in EU countries.  It documents studies of direct and indirect health effects of extreme heat, forest fires, flooding, pollution, and impacts on food and nutrition.  Some of these impacts include communicable infectious diseases, mental illness, injuries, labour productivity, violence and conflict, and migration. It identifies the most vulnerable groups as the elderly, the sick, children, and migrating and marginalized populations, with city dwellers at greater risk of heat stress than rural populations.

construction drinking waterHeat as a Health risk for workers:  Although the report doesn’t highlight outdoor workers such as farmers and construction workers as a high risk group, it does weigh in on heat effects on labour productivity for indoor and outdoor workers.   For example,  “Even small increases in temperature may reduce cognitive and physical performance and hence impair labour productivity and earning power, with further consequences for health. Earlier analyses had concentrated on the effects of heat on rural labour capacity, but now it is appreciated that many occupations may be affected. For example, recent analysis by the French Agency for Food, Environmental, Occupational Health and Safety (ANSES 2018) concludes that productivity and health of workers in most business sectors will be affected in European countries by 2050. The effects of indoor high temperatures in terms of altered circadian rhythms were recently reported (Zheng et al. 2019) as part of a broader discussion of the literature on indoor high temperatures and human work efficiency. For temperature rises greater than 2°C, labour productivity could drop by 10–15% in some southern European countries (Ciscar et al. 2018). Meta-analysis of the global literature confirms that occupational heat strain has important health and productivity outcomes.”Canada Post Strike 20160705

Also: “with 1.5°C global temperature change, about 350 million people worldwide would be exposed to extreme heat stress sufficient to reduce greatly the ability to undertake physical labour for at least the hottest month in the year; this increases to about one billion people with 2.5°C global temperature change .”

And also: Hot and humid indoor environments may result in “mould and higher concentrations of chemical substances. Health risks include respiratory diseases such as allergy, asthma and rhinitis as well as more unspecific symptoms such as eye and respiratory irritation. Asthma and respiratory symptoms have been reported to be 30–50% more common in humid houses.”

Calls to improve heat standards for U.S. workers : A report in 2018,  Extreme Heat and Unprotected Workers , stated that  heat killed 783 workers in the U.S. and seriously injured nearly 70,000 between 1992 and 2017. The report was published by  Public Citizen, a coalition of social justice groups and labour unions. They continue to  campaign  for a dedicated federal standard regarding heat exposure – most recently with a  letter to the U.S. Department of Labor on April 26, 2019 which states: we “call on you to take swift action to protect workers from the growing dangers of climate change and rising temperatures in the workplace. …. The Occupational Safety and Health Administration has an obligation to prevent future heat-related injuries, illnesses and fatalities by issuing a heat stress standard for outdoor and indoor workers.”  The campaign is described in   “Worker advocates burned up over lack of federal heat protections” in FairWarning (May 9), with examples of some U.S. fatalities.  Notably, the death of a  63-year-old postal worker in her mail truck in Los Angeles in July 2018  resulted in  H.R. 1299,  the Peggy Frank Memorial Act, which was introduced in the House of Representatives in February 2019 and would require any Postal Service delivery vehicle to include air conditioning within three years. (It has languished in the House Standing Committee on Oversight and Reform since.)

The article also reports that in April,  California released a draft standard: Heat Illness Prevention in Indoor Places of Employment  which, if approved, would make California the first U.S. jurisdiction to cover both indoor and outdoor job sites. The proposed standard would require water and rest breaks for workers when indoor temperatures reach 82 F degrees, with additional requirements when temperatures hit 87 F. It is noteworthy that this is a slow process – even in progressive California, which has had heat protection for farm workers on the books since 2006,  the Advisory Committee leading this initiative has been meeting since 2017, and the draft standard still under consideration has been revised numerous times .

ETUC Guide to best practices for union impact on EU climate change and Just Transition policies

etuc logoAt a conference in Brussels on May 15, the European Trade Union Confederation (ETUC) released  Involving trade unions in Climate action to build a Just transition,  a Guide which makes the arguments for why unions should care about climate change, and provides recommendations and best practice examples from unions in the European Union.  The ETUC press release summary is here, in which the ETUC General Secretary states: “The ETUC’s new guide is about the policies, initiatives and governance involved in a just transition. At the end of the day our key message is that there is no just transition without workers participation. Imposed solutions do not work, we need dialogue to make climate progress.” A YouTube summary from ETUC is here.

The 48-page guide is packed with information and examples where trade unions have made impacts on national policies.  It began with a questionnaire circulated to ETUC affiliates, and also includes insights from five workshops involving experts from EU  unions and “relevant institutions”, organized around five thematic areas: employment and working conditions; governance and trade union participation; education; training and skills; social protection; and internal capacity building for trade union organizations (how to mobilize and prepare unionists to engage in the transition).

The Guide offers analysis about the role of trade unions, and states that union involvement in climate change policy development is on the rise, though it varies widely across EU member countries. The main message is that a Just Transition requires workers’ participation and dialogue. Some of the specific thematic recommendations include:

Promote economic diversification in regions and industries most affected by the transition;

Negotiate agreements at sectoral and company level to map the future evolution of skills needs and the creation of sectoral skills councils, using the ETUC guide on “Restructuring and collective competences” (2013) ;

At sectoral and workplace levels, extend the scope of collective bargaining to green transition issues to discuss the impact on employment and wages of the decarbonisation process and the impacts on skills needs and health and safety at work;

Establish dialogue with all relevant stakeholders and regional authorities to identify and manage the social impacts of climate policies;

In line with the ILO guidelines on a just transition , promote the establishment of adequate social protection systems based on the principles of universality, equal treatment and continuity, providing healthcare, income security and social services;

Encourage internal union capacity and increase members’ participation by developing and strengthening a network of  green representatives at the workplace level,  and involve workers in concrete actions aiming to reduce the environmental footprint of their company.

EU Industry pledges no new coal plants as Australians mobilize to fight the giant Adani coal project

The Union of the Electricity Industry (EURELECTRIC), representing 3500 companies across Europe, released a statement on April 5, pledging that no new coal-fired plants will be built in the EU after 2020.   “The European electricity sector believes that achieving the decarbonisation objectives agreed in the Paris Agreement is essential to guarantee the long-term sustainability of the global economy. EURELECTRIC’s members are committed to delivering a carbon neutral power supply in Europe by 2050, and to ensuring a competitively priced and reliable electricity supply throughout the integrated European energy market.” Poland and Greece remain outside the agreement, and apparently outside the mainstream.

The Guardian calls the EU position   a “death knell for coal”,    and in a separate piece, summarizes the decline of coal-fired electricity around the world.  “Coal in ‘freefall’ as new power plants dive by two-thirds”  (March 22)    quotes a new report by Greenpeace  , Sierra Club USA,  and Coalswarm   :  Boom and Bust 2017: Tracking The Global Coal Plant Pipeline.   Its findings show a 62 percent drop in new construction starts, and an 85 percent decline in new Chinese coal plant permits. A senior Greenpeace official states: “2016 marked a veritable turning point”.  “China all but stopped new coal projects after astonishing clean energy growth has made new coal-fired power plants redundant, with all additional power needs covered from non-fossil sources since 2013. Closures of old coal plants drove major emission reductions especially in the U.S. and UK, while Belgium and Ontario became entirely coal-free and three G8 countries announced deadlines for coal phase-outs.”

Stop-Adani-LogoYet in Australia, environmentalists are waging an epic environmental battle against a giant, $16.5-billion coal mine adjacent to the Great Barrier Reef, proposed by Indian energy conglomerate Adani. Government supporters, including the Prime Minister and politicians in Queensland, have argued that the mine would bring jobs and would not increase GHG emissions globally because Australian coal is cleaner than any other that India would be able to source from other countries; see an article in Climate Home for the rebuttal to that.  Voices in opposition include Bob Brown, a former Green Party leader, who states  : “This is the environmental issue of our times and, for one, the Great Barrier Reef is at stake. The Adani corporation’s dirty coalmine is an impending disaster with effects which will reach far beyond Australia.”  Or read:   “It’s either Adani or the Great Barrier Reef – are we willing to fight for a Wonder of the World?”   in The Guardian.   Thirteen community groups, claiming to represent 1.5 million Australians have joined the Stop Adani Alliance since its launch in March, and the Australian Conservation Foundation is behind another high-powered campaign . For context, see “The coal war: Inside the fight against Adani’s plans to build Australia’s biggest coal mine” from the Sydney Morning Herald.   For a catalogue of “the ten most-absurd things about the Adani mine ” , see “Australia’s Climate bomb: the senselessness of Adani’s Carmichael coal mine”    in The Conversation (April 12).

UPDATE:  An April 24 analysis  of the bleak prospects of the Carmichael Mine proposed by Adani for Australia  “Adani: Remote Prospect: Carmichael Status Update 2017”  .

Is Europe on track to meet its Paris commitments? Is Canada?

Carbon Market Watch released a policy briefing report in March which found that only Sweden, Germany and France are making successful efforts towards meeting their Paris Agreement targets.   EU Climate Leader Board: Where Countries Stand On The Effort Sharing Regulation – Europe’s Largest Climate Tool  ranked the EU nations  for their actions towards meeting the Effort Sharing Regulation (ESR), currently under negotiation  to set binding 2021-2030 national emission reduction targets for sectors not covered in the Emission Trading Scheme (ETS), including transport, buildings, agriculture and waste.    “Only three member states on track to meet Paris goals“, appeared  in the EurActiv newsletter, summarizing  the report and pointing  to many failings by member nations, including some “who exploited loopholes in United Nations forestry rules to pocket carbon credits worth €600 million”.   The National Observer noted the Climate Market Watch report in “Here`s How Europe ranks in the race against climate change” ,  and  asks “Where does that leave Canada?” .  As part of its own answer, the article  cites a report in The National Post newspaper on March 30: “Secret briefing says up to $300-per-tonne federal carbon tax by 2050 required to meet climate targets” . The article is based on a briefing note to the Minister of  Environment and Climate Change in November 2015, obtained through a Freedom of Information request.  The briefing note tells the Minister that in order to meet Canada’s 2030 emissions targets, a carbon price of $100 per tonne would need to be in place by 2020, with a price as high as $300 per tonne by 2050. The current national price for those provinces who agreed to the the Pan-Canadian Framework is $10 per tonne, rising to $50 per tonne by 2022.

Another  answer to the question, “where does that leave Canada?”  might  be the report released by Environment and Climate Change Canada: Canadian Environmental Sustainability Indicators: Progress Towards Canada’s Greenhouse Gas Emissions Reduction Target , which shows that Canada could be emitting at least 30% more GHG emissions than promised by 2030.  The report, however, is based on the policies in place as of November, 2016 –  before the current Pan-Canadian Framework on Clean Growth and Climate Change.  The government is downplaying its own report, calling it only a set of “plausible outcomes”, rather than a forecast.

 

 

 

 

European Union votes on reforms to Emissions Trading System

On February 15, the European Parliament adopted draft reforms of the EU’s emission trading system (ETS), the centrepiece of European emissions reduction policy – choosing the less ambitious proposal of a reduction on the cap on emissions of only 2.2% per year until at least 2024. Climate Action Network Europe’s  Letter to Policymakers   ahead of the vote outlined the arguments and proposals for environmentally-ambitious change, including a higher price on carbon and inclusion of the cement, aviation and shipping industries. Its reaction after the vote   stated: “It is shocking that the Parliament chose to bow to the interests of polluting industries instead of protecting citizens from a catastrophic climate breakdown. The Parliament has completely failed the first test of its commitment to the Paris Agreement. The proposed reforms will keep the carbon market ineffective for a decade or more. We urge progressive EU governments to finally turn the ETS into a functioning tool and create a stimulus to ditch old models and move to green economy.”    One of the  three reforms urged by 31  environmental organizations in  an Open Letter to the MEP’s in November 2016 had been the establishment of the Just Transition Fund for  communities and regions which need support to transition away from coal.  The reforms will be debated next at the Council of Environment Ministers on 28 February; the  EU’s 28 governments must negotiate further to finalize the legislation.

Canada Pension Plan Investment Board lags international financial community on recognition of climate change risks and stranded assets

In what the WWF has called   “a landmark moment for responsible investment in Europe” , the European Parliament voted in November 2016  to mandate that all workplace pension administrators must consider climate risk and risks “related to the depreciation of assets” -stranded assets-  in investment decisions.  It also requires greater transparency about investment policies. Individual governments of the EU now have two years to pass into national law this updated version of the  existing Institutions for Occupational Retirement Provision (IORP) Directive. Currently, the directive would affect occupational pension plans affected covering approximately 20% of the EU workforce, mostly in the United Kingdom, the Netherlands, and Germany .  A September 2016 Briefing Note from the European Parliament  details the administrative/political evolution of the Directive; a December  article from Corporate Knights  or  Go Fossil Free or Reuters  provide summaries.

In December 14, 2016, the Task Force on Climate-Related Financial Disclosure, chaired by Michael Bloomberg,  released its report and recommendations  to the Financial Stability Board, a G-20 organization chaired by Mark Carney. An article by the two men appeared in The Guardian, capturing the gist of the work:  “We believe that financial disclosure is essential to a market-based solution to climate change. …. A properly functioning market will price in the risks associated with climate change and reward firms that mitigate them. As its impact becomes more commonplace and public policy responses more active, climate change has become a material risk that isn’t properly disclosed.” The Task Force calls for companies to make voluntary disclosure of climate risks to their business,  to help  investors, lenders and insurance underwriters to manage material climate risks, and ultimately to make the global economic and financial systems more stable.   A 60-day public consultation period began with release of the report; an updated report, incorporating that input,  will be released in June 2017.  The Task Force report was summarized in   “Climate disclosure framework creates a better environment for investors” in the  Globe and Mail Bloomberg News also reported on another recommendation, “Carney Panel Urges CEO Compensation Link With Climate Risk ” , stating that the time has come for organizations to provide detailed reporting of how manager and board member pay is tied to climate risks.  (See a Dec. 1 Reuters article about Royal Dutch Shell’s moves to link CEO bonuses to GHG reduction).

In Canada, the Canada Pension Plan Investment Board, which administers the assets of the national public pension fund, seems to be standing on the sidelines.  A recent article in the Globe and Mail was written by the director of the CPPIB Sustainable Investment department , which is described in  more detail in their 2016 Report on Sustainable Investing . The report states (page 11)   “ CPPIB has established a cross-departmental Climate Change Working Group to consider how physical risks, as well as technological, regulatory and market developments will impact climate change-related risks, and create opportunities, in the future. …. This review, which will take some time, is being done from a long-term perspective in light of how the gradual transition to a lower-carbon global economy might unfold….  On the topic of divestment and climate change, research has shown that investors with longer horizons tend to be more engaged with the companies that they invest in, and CPPIB is a case in point. As responsible owners, we believe that in many cases selling our shares to investors who might be less active in terms of considering material risks, including climate change, would be counterproductive.”   In light of this very slow approach, Friends of the Earth (FOE) has been frustrated in its divestment campaign for the CPPIB in 2016 ;  FOE maintains a petition website, Pensions for a Green Future, which calls for the CPPIB to, among other things,  “report immediately to its 19 million members on the carbon footprint and exposure to climate solutions of our CPP investment portfolio” and “to replace climate polluting investments with those in green energy, technologies and infrastructure that support Canada’s commitment to act to avoid 1.5°C of warming.” The CPPIB discloses the companies it is invested in here  .

In contrast to the CPPIB, the Caisse de dépôt et placement du Québec (CDPQ),  the second largest pension fund manager is Canada,  is highlighted in a new report by the World Economic Forum  as “ one of the most important institutional investors in wind power” for its investment of  close to $2.5 billion (US) in both onshore and offshore wind projects in Europe and North America, starting in 2013 with a tentative investment in the Invenergy , and now including the London Array wind farm in the outer Thames estuary.  The Caisse statements on environmental and social responsibility are here ; it is a signatory to the U.N.  Principles for Responsible Investment (PRI), a member of the Carbon Disclosure Project and the Carbon Water Disclosure Project, and endorses the Extractive Industries Transparency Initiative , which monitors the oil and gas industry .

EU trade unions and the transition to low carbon industry: an opportunity to create jobs

In introducing a new report on October 5, the Confederal Secretary of the European Trade Union Confederation (ETUC) said, “Most trade unions see the transition to low-carbon industry as an opportunity to create industrial growth and jobs, but many workers understandably fear widespread job losses.”  The report, Industrial regions and climate policies: towards a just transition? , summarizes the results of questionnaire sent to ETUC affiliates in 17 countries. 31 responses were received, and the report provides case studies from  seven, in the following  regions: Yorkshire and the Humber in the UK, North Rhine Westphalia in Germany, Asturias in Spain, Antwerp area in Belgium, Norbotten in Sweden, Stara Zagora in Bulgaria, and Silesia in Poland. They generally provide an overview of the low-carbon policies of unions, government policies, and union involvement with policy formation in each region.  Overall in the EU, responses indicated  trade unions were involved in the development process of a national industrial strategy  in 75% of cases, usually through tripartite bodies.   There were few responses regarding training initiatives.  In conclusion, the ETUC  calls for a socially just transition to low-carbon economy which will include consultation and participation of trade unions and employers to  manage decarbonization of industry; accelerated deployment of breakthrough low-carbon technologies; investment in skills for a socially just transition to a low-carbon economy;  attention to the social impacts of decarbonization .

This report updates the information from a 2014 report, and is the result of a two-year research project.

 

Canada votes to ratify the Paris Climate Agreement

The Paris Climate Agreement will enter into force on November 4, 2016, now that 73 nations accounting for nearly  57%  of GHG emissions have formally ratified it: most recently, India, the European Union and Canada.  According to an October 5 article in The Guardian, even if Donald Trump were to win the U.S. presidency, the U.S. would be locked into the commitment for four years at least. See also “The Paris Climate Agreement is entering into force. Now comes the hard part ” from the Washington Post (Oct. 4). Next step: the COP 22 meetings scheduled for Marrakesh, Morocco from November 7 – 18, which  will  include the first meeting of the Parties to the Paris Agreement (CMA 1).

In Canada,  Members of Parliament voted by a margin of 207 to 81 to approve the Paris Agreement on October 5  – see the brief  government press release, or  read  the CBC report; or  coverage at the National Observer , or the Globe and Mail .  Transcripts of the debates in the House of Commons are here,  for October 3  (Trudeau’s carbon pricing speech) , October 4 and October 5  (when the vote was held) .

Leading up to the Paris vote, in what has been called a “bombshell”, “ultimatum”, and “his government’s most consequential and surprising day to date”   , Prime Minister  Trudeau announced  the “Pan-Canadian Approach on Pricing Carbon Pollution”  in the House on October 3, requiring  that provinces implement either a carbon tax (at a  minimum price of $10 a tonne in 2018, rising each year to $50 a tonne by 2022) or a cap and trade system.  “If neither price nor cap and trade is in place by 2018, the government of Canada will implement a price in that jurisdiction” . Provinces will retain revenues from whichever system they choose to implement.

An article at the CBC   states that, “Trudeau’s pre-emptive announcement landed like a grenade”  in the midst of the the Canadian Council of Environment Ministers’  meeting in Montreal, being chaired by Environment and Climate Change Minister McKenna.     Delegates from Saskatchewan, Newfoundland and Nova Scotia walked out of the room.  For a summary of the political fight, see “Premiers draw battle lines as Trudeau seeks support for carbon-pricing plan”  in the Globe and Mail (Oct. 4). And see the Alberta government press release   of October  3,  which states , “Alberta will not be supporting this proposal absent serious concurrent progress on energy infrastructure, to ensure we have the economic means to fund these policies…..Albertans have contributed very generously for many years to national initiatives designed to help other regions address economic challenges. What we are asking for now is that our landlock be broken, in one direction or another, so that we can get back on our feet.”   A tough demand to meet, according to David Hughes’ report in June  “Can Canada Expand Oil and Gas Production, Build Pipelines and Keep Its Climate Change Commitments?” .

Some reactions to the federal carbon pricing announcement:  From the Canadian Labour Congress:   “The CLC applauds carbon pricing targets …. “As a next step, the CLC calls for a federal strategy to guarantee new opportunities for workers and communities impacted by the transition to a low-carbon economy.”  From the Climate Action Network ;  from the Pembina Institute  (“Pan-Canadian carbon price is big, positive news for economy and environment” );   from DeSmog Canada   (The Good, bad and the ugly)   .  Generally supportive reaction also came  from Smart Prosperity, a group composed of  twenty-two prominent business and civil society leaders (including WWF, Broadbent Institute, Clean Energy Canada, and the Pembina Institute) .   Yet Marc Lee of the Canadian Centre for Policy Analysis  nails it in  “A Reality Check on a national carbon price”  ( October  4) :    “It’s good news that Canada is starting to listen to climate science, but we are still left with a problem around the climate math”  – which requires  no new fossil fuel infrastructure.    Bill McKibben, populizer  of the term “climate math”, also panned the Trudeau announcement in the National Observer on Oct. 3.  Read McKibben’s article  “Recalculating the Climate Math: The numbers on global warming are even scarier than we thought”   in the New Republic (September 22),which updates his earlier, frequently cited piece.

A useful overview  to understand the Canadian situation: Race to the Front,  released by the Pembina Institute on September 28, with recommendations for the politicians and policy-makers  in their Fall  working meetings to finalize  a “Pan Canadian”  policy.  Race to the Front summarizes Canada’s progress at reducing carbon pollution over the last decade, evaluates trends in Canada’s greenhouse gas emissions inventory, and summarizes existing national and provincial  climate policy .

 

 

 

What does Brexit mean for Climate goals?

union jackWith Europe reeling from the results of the British referendum vote to leave the European Union on June 23 2016,  most reports focus on the considerable political  and economic  upheaval to come.   A sampling of  insight into potential impacts on climate and energy policy: from From Phil McKenna at Inside Climate News (June 24) , “Brexit Sparks Worry About Fate of Global Climate Action”    – with a subtitle, “many fear the wave of nationalism will harm international efforts to halt global warming” ; from The Guardian on June 27, “EU Out Votes Puts UK Commitment to Paris in Doubt” ; also,    “UK votes to Leave EU: Fears grow for Climate Ambition” , and “5 Ways Brexit will transform Energy and Climate” from Politico Europe .    For European energy policy,  from Climate Change News,   the  “impact on the EU’s faltering carbon price would be ‘calamitous’”, and a considerable voice for low-carbon policies will be lost at the EU.  Domestically,  there are also fears  that the government’s new Energy Policy, scheduled for Fall 2016, will  be modelled on  the energy manifesto of the “Fresh Start” conservative coalition,  which includes eliminating the 2020 targets for renewables and investing in shale gas and new nuclear.

 

New European Targets for Emission Reductions and Renewables

On October 24, members of the European Union reached agreement on new emissions targets for 2030: 40% cuts to greenhouse gas emissions, 27% target for the renewable energy market share and, an optional target of 27% increase for energy efficiency improvement. The EU is holding up the agreement as a model for other countries in advance of the Paris climate talks of 2015, though like all politically-driven compromises, it has its critics. According to Greenpeace EU: “People across Europe want cleaner energy, but EU leaders are knocking the wind out of Europe’s booming renewables sector”, and from the European Green Party, “It is shameful that the council gave veto power against better goals to Poland on renewables, to France on interconnectors, and to the UK on efficiency. […] We used to have a polluter-pays-principle; now we’ve gotten a polluter-vetos-principle”.

See The Guardian at: http://www.theguardian.com/world/2014/oct/24/eu-leaders-agree-to-cut-greenhouse-gas-emissions-by-40-by-2030; Statements and Reactions are found at: http://www.euractiv.com/sections/eu-priorities-2020/eu-leaders-adopt-flexible-energy-and-climate-targets-2030-309462.