By: Robert Roos MEP, Honorary Distinguished Fellow
For decades now our Western society has made a success out of democracy and an economy based on free market forces. It is no coincidence that the two go hand in hand, because in an environment where people have the freedom to think and act, innovation and progress arise. Another key component of this success was affordable and reliable energy. The prosperity that these three components have brought us has also ensured that we have made great strides in improving the environment and living standards especially in the Western part of Europe.
But the economic freedom that has brought us so much may well be over. Today, 'Fit for 55' is presented as part of Frans Timmermans' Green Deal, a mega package of legislation from the European Commission to 'green' the economy.
Updates to existing EU laws:
● Revision of the EU emission trading scheme (EU ETS)
● Revision of the regulation on land use, land use change and forestry (LULUCF)
● Revision of the effort sharing regulation (ESR)
● Amendment to the renewable energy directive (RED)
● Amendment to the energy efficiency directive (EED)
● Revision of the alternative fuels infrastructure directive (AFID)
● Amendment of the regulation setting CO2 emission standards for cars and vans
● Revision of the energy taxation directive
New legislative proposals:
● New EU forest strategy
● A carbon border adjustment mechanism (CBAM)
● A Climate Action Social Facility
● ReFuelEU Aviation – on sustainable aviation fuels
● FuelEU Maritime – on greening Europe’s maritime space
The Commission claims that this package will modernize the economy, stimulate innovation and provide a competitive advantage over other economies. But when politicians (especially EU politicians!) talk about innovation and competitiveness, alarm bells go off in my head.
A European planned economy and a display of lost faith in the free market
All aspects of our economy will be affected by this proposal. The European Commission is embarking on a risky venture in which it not only says 'what' should be done, but also 'how' it should be done. The government seizes the entrepreneur's seat and consumers’ hands are guided with respect to their consumption behaviour. Fit-for-55 is an outright planned economy. Progress happens when creative entrepreneurs have the space to turn ideas into reality. Regulation follows innovation, not the other way around. That should be the guiding principle. What the package makes clear is that the European Commission has definitively lost its faith in the free market.
What does this mean for the climate?
The EU itself estimates that this increased ambition from 40% to 55% reduction of greenhouse gases compared to 1990 will cost 1,300 billion euros. However, according to the more realistic estimate of Bjørn Lomborg, the costs will amount to 4 to 5 thousand billion euros. If all EU targets are met, the final result will be an immeasurably small temperature reduction of just 0.04°C. Environment, nature and landscape will suffer major damage and there will be no sign of a temperature reduction.
The Commission's climate plans are insanely expensive, will take away many of our freedoms and have next to no effect on the climate. Our economy is being put at risk with production costs and consumer prices rising sharply. If this new ‘green economy’ really is the revenue model the Commission believes it to be, we would not need all this legislation. There is a real danger that the competitive position of the countries within the EU will be damaged compared to China, the United States and also emerging economies such as India.
Nuclear power is the only option
Does that mean we should do nothing then? No, certainly not, we must continue what we were doing, which is investing responsibly in an even better future. Politicians may determine the real goals, but in a technologically neutral way. The execution should be left to the market. After all, every investment must be able to be recouped properly and subsidies should never become a permanent instrument. This applies to both energy generation and investments in insulation.
The proposed solutions must contribute to a better future, but the Commission continues to insist on biomass as a large component on the path to carbon neutrality. Complete forests go into the oven, which is at odds with the set goals. Trees absorb CO2 and are important for biodiversity. Combustion for energy generation also releases more CO2 and air pollution than gas. Wind turbines and solar meadows are not efficient, and generating energy in this way comes at the expense of nature, landscape and public health.
In fact, investing in nuclear energy is currently the only solution to phase out fossil fuels in the long term. Nuclear energy is reliable, has a high energy density and is therefore efficient, so that nature and landscape are spared. It also emits no air pollution at all and, contrary to what activists say, the waste is very manageable. France has proven this for decades.
But the Commission, with all its ambitious plans, has not yet included this form of energy generation in its taxonomy plans. As a result, there is no economic level playing field with respect to solar, wind energy and biomass.
Recently, two EU scientific councils published their conclusions on nuclear energy. In general, the reports confirm the previous conclusions of the Commission's Joint Research Center (JRC) that nuclear energy is an important tool in phasing out fossil fuels and does not cause serious damage to the environment. This means it meets an important condition for being included in the taxonomy. Nuclear energy is also part of the solution in the IPCC scenarios, and NASA previously calculated that current nuclear energy has saved millions of lives because it has prevented air pollution.
In summary, all major success factors of our Western society are currently under pressure because of these Fit-for-55 plans. Free market forces are changing into a planned economy and energy generation is becoming less efficient and therefore more expensive for companies and consumers.
But the greatest danger lies in the threat to democracy. With this package of measures, citizens will no longer have any say in what our society should look like for the next 30 years. That has already been determined in the Berlaymont building. And that is eerily similar to the situation that the people of the former Soviet Union left behind 30 years ago.
Robert Roos worked for ten years as an employee in engineering and construction companies on big projects in the oil and gas industry and also in the infrastructure industry. Now as a Member of European Parliament, he sits on the Committee on Industry, Research and Energy. Roos is a Honorary Distinguished Fellow at the Gold Institute for International Strategy.