Here’s how Brussels will try to avoid new Yellow Vests
The European Commission recognizes that the social impact of the energy transition will be inevitable. The adaptation package includes funds of hundreds of billions of euros. All the details in the El Pais article
The European Commission – reports El Pais – invites governments to put in place mechanisms to financially help the most vulnerable people and to mitigate the social impact of the energy transition.
The bill approved on Wednesday by the European Commission to achieve a drastic reduction in CO₂ emissions will lead to an increase in energy, transport and commons such as cars. Brussels recognizes the enormous social impact of a pioneering global effort and has introduced flexibility measures to mitigate the impact on the most vulnerable families. But EU institutions fear that the tax penalization of essential supplies and services could lead to a revolt similar to that of the yellow vests in France, but on a continental scale.
“It is very easy to make negative propaganda of the proposals we have adopted”, acknowledged the European commissioner for the economy, the socialist Paolo Gentilloni, just 24 hours after the Commission's green light. Brussels barely hides its fears that the ambitious package, which would give the EU global leadership in economic and social transformation to combat climate change, could unleash a wave of public discontent that would make it impossible to reach new ones. aims.
The shadow of the yellow vest uprising against a fuel tax hike in France, which cornered a hitherto popular French president like Emmanuel Macron in 2018, is affecting the minds of European leaders. The risk, warns Gentilloni, is that there is an exploitation "that does not take into account the real content of the proposals or the risks deriving from not acting with sufficient ambition".
Brussels tries to neutralize this danger with the creation of a social fund endowed with 72 billion euros. And it asks governments to allocate a large part of the revenues resulting from the increase in taxation on energy consumption to the poorest families.
Commission studies prior to legislative proposals acknowledge that "an increase in taxation on fossil fuels may have a greater impact on low-income households, particularly for heating". The analysis also shows that the proposal to incorporate buildings and transport into an emissions market would slightly increase the bills of drivers and households if the price per tonne of CO₂ is set at 30 euros. But the increase would be drastic if the emission allowance were increased to 70 euros (up to 22% more for heating with fuel oil or 12% more for petrol).
THE IMPACT OF THE ENERGY TRANSITION
The alarms about the social impact of the energy and industrial transition do not come only from those who oppose change. They are also spreading among those who see it as necessary or inevitable. Cristina Monge, political scientist and executive advisor of the Ecology and Development Foundation (Ecodes), says that "the transition will affect all sectors, even those who do not expect it, and there will be those who are damaged, as in all reconversions".
Monge predicts that "those who have been ill will be even more so", and stresses that the main victims will be people with less training and less income, and the rural world compared to the urban one. "Either the social dimension is strongly embedded or the gaps that already exist will increase."
The risk that implementation of the plan will degenerate into a battle between winners and losers in the transition is increased by the distribution of effort between different income levels. According to Oxfam estimates, published late last year, the richest 10% of people in the EU are responsible for 27% of emissions and have increased emissions by 3% since 1990. The bottom 50% of the population is responsible for another 27 percent after cutting emissions by a quarter.
In the European Parliament, the main political groups (popular, socialist, liberal and green) have welcomed the Commission's plan with considerable satisfaction. And the references to the social divide are back. MEP Dolors Montserrat, head of the PP delegation and member of the Environment Committee, said that "it is a step forward that gives Europe leadership in the fight against climate change, but it cannot be done at the cost of sacrificing. jobs or deindustrialize Europe ”.
Montserrat recalled that in countries like Spain “with the covid-19 pandemic there are already many people who have been left on their feet or who are about to lose their business; if we now ask for another additional effort, the gap will widen ”. He believes the plan should prioritize incentives rather than sanctions. "And provide the necessary training so that the many people who may lose their jobs can adapt to the new working reality."
BILLION EUROS
The European Commission recognizes that the impact will be inevitable and will affect the daily lives of millions of citizens, but underlines the hundreds of billions of euros available to alleviate the consequences. In addition to the € 72 billion social fund, there is a recovery fund of € 750 billion, 37% of which is earmarked for climate change programs. Cohesion (372 billion) and agricultural (291 billion) funds for the period 2021-2027 will also help finance adaptation in many sectors.
Furthermore, Brussels has proposed an expansion of almost 50 per cent of the innovation fund, which is currently expected to mobilize around 20 billion euros between 2020 and 2030. The same is true for the modernization fund, which is intended to helping a dozen countries in Central and Eastern Europe (Poland, Romania, Bulgaria, Hungary, Czech Republic, Slovakia, Estonia, Latvia, Lithuania and Croatia). The expected revenue for this fund amounts to € 14 billion over the decade, a figure that could be doubled with the legislative proposal presented this week by Brussels. Greece and Portugal would be added to the list of beneficiaries.
Gentilloni indicated that "States must adopt compensation measures for the most vulnerable and for those suffering from energy poverty". The Commissioner for the Economy believes that it is essential to achieve "a balance between justice and ambition". Recent controversies in Spain over rising electricity bills and red meat consumption show that any Commission proposal could start a fire that is difficult to control.
The risk of an epidemic is greater in the wake of a health crisis that has increased the number of people at risk of poverty. Even before the pandemic, 7% of the Spanish population were already late on their electricity or gas bills and 9% had difficulty keeping their homes warm in winter, according to the European Fuel Poverty Observatory, a project launched by the Commission. MEP Montserrat predicts that "as the dates of the different goals get closer, people will get very nervous, we can't leave anyone behind."
Brussels is confident, however, that the energy transition itself will help cushion the impact with a gradual reduction in the price of clean energy and more efficient products. European energy commissioner Kadri Simson, a liberal, stressed last week that "renewable electricity is already the cheapest option in many places".
Brussels proposes to increase the production target of renewables from 32% to 40%, an increase that according to Simson "would not only promote cleaner and cheaper energy, but would also boost an economic sector with significant potential to generate jobs, growth and trade ".
GOODBYE TO THE COMBUSTION CAR
The same virtuous circle could occur in the automotive sector, where Brussels proposes a reduction in emissions of 55% by 2030 compared to this year and 100% by 2035. The leap is equivalent to a ban on the sale of petrol and gasoline vehicles. diesel in 2035 . A signal to the market that, according to the Commission, it will have wiped out all combustion engines from European roads by 2050.
Julia Poliscanova, an analyst at Transport & Environment (T&E), a think tank specializing in sustainable mobility, believes that the electric car could face "the Ford moment" that the combustion engine experienced in 1913. The American manufacturer then made the its cheapest vehicles with mass production that in just a decade made four-wheelers available to most of the working population of the United States. "Analyzes show that if we continue to increase the [production] volume of electric cars, they will be cheaper than gasoline cars in just six years," Policanova writes in his assessment of the Commission's proposals.
T&E calculations also downplay the importance of incorporating transportation into the emissions market, a proposition they see as harmless and unnecessary. Buying emission rights by oil companies would mean an increase of five cents per liter for motorists starting in 2028.
European trade unions, on the other hand, foresee a real social fire if the proposals are not changed during their legislative process in the Council of the EU and the European Parliament. Ludovic Voet, confederal secretary of the European trade union confederation, says that "the extension of the emissions market to transport and buildings will fuel a social upheaval similar to that of yellow vests across Europe, and all this for almost no greater environmental efficiency" .
(Extract from the press review of Eprcomunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/unione-europea-transizione-energetica-impatto-sociale/ on Sun, 25 Jul 2021 06:06:29 +0000.