European climate change law: consensus politics is powering the EU towards net zero, but will others follow?

The European Climate Law requiring binding action from EU institutions and member states to achieve net zero carbon emissions by 2050 is the result of years of negotiation and dialogue
Most importantly, it rests on the recognition of a shared vision to slow climate change. Other major economies should commit to this transition in their own interests

Stephen Minas

Published: 11:30pm, 1 Jul 2021

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The world’s largest economic bloc is officially going “climate neutral”. Last week, the European Parliament endorsed the European Climate Law, which sets a binding objective to reach net zero greenhouse gas emissions in the European Union by 2050. Representatives of the 27 EU member states approved the law on Monday, paving the way for its entry into force.

Net zero or climate neutrality means remaining emissions are balanced out by the removal of greenhouse gases from the atmosphere into “carbon sinks”, such as forests.

The law is a milestone in the global transition to climate neutrality. In response to the Paris climate agreement and the mass protests in favour of tougher climate action, EU leaders in December 2019 committed to a climate-neutral EU by 2050.

This political commitment has since been matched by many other advanced economies, including Japan, Canada and South Korea, as well as developing countries. Importantly, the international momentum for net zero has increased rather than slackened during the pandemic, despite some fears that the health crisis would force climate policy onto the back burner.

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The election of Joe Biden as president saw the US rejoin the Paris Agreement and committing to deeper emissions cuts. Today, there are few OECD countries that have not adopted a target of net zero by 2050.

Political commitments matter only if they are implemented. The climate law converts the EU’s net zero target from aspiration to obligation.

The law creates a five-yearly process for reviewing progress towards climate neutrality. It subjects any draft laws or budgetary proposals to a test of consistency with the net zero objective.

It strengthens the EU’s 2030 emission reduction target to 55 per cent compared to 1990 levels and requires a review of EU laws to make them consistent with this goal.

As a result, new legislative proposals in the coming weeks will include a strengthened EU Emissions Trading System and more ambitious renewable energy and energy efficiency targets.

In short, the climate law puts the EU – one of the three largest economies in the world alongside the US and China – on a legally binding pathway to net zero by 2050.

For this reason, it was described by European Commission vice-president Frans Timmermans as “the law of laws”, which “will discipline us in the years to come to stay within the boundaries we’ve set”.

Joao Pedro Matos Fernandes (left), the minister for the environment and climate action of Portugal, and European Parliament president David Sassoli (right) sign the European Climate Law at the European Parliament in Brussels, Belgium, on June 30, with member of parliament Pascal Canfin looking on. Photo: EPA-EFE

For other countries, and particularly for fellow democracies, the way that the law was adopted should be just as noteworthy as what it contains. The climate law was approved in parliament with the support of conservatives, social democrats and liberals.

The support of the three largest EU political groupings, which regularly compete for office in national elections as well as for seats in the European Parliament, is a powerful example of the broad-based political consensus needed for major and enduring reforms.

This consensus was built through years of negotiation and dialogue between the political parties and between 27 member states with very different economies, per capita incomes and energy mixes.

Clearly, the political parties each have their own particular priorities and some member states have been much more forward-leaning on this agenda than others. However, the continual work of maintaining and extending a shared vision on climate has created conditions of stability for investment and provided a strong signal to the market.

Today, the EU has the world’s deepest capital markets in sustainable finance and a progressively strengthened carbon pricing regime. It has also demonstrated that economic growth can be decoupled from emissions on a durable basis.

In the years between 1990 and 2019, the EU economy grew by 60 per cent while emissions fell 24 per cent.

The rising sun illuminates buildings in the banking district in Frankfurt, Germany, on February 14. The EU has demonstrated that economic growth can be decoupled from emissions on a durable basis. Photo: AP

It is crucial to intra-EU consensus that the transition is not being imposed at the expense of the most vulnerable. Thus, workers and regions that currently depend on fossil fuel-intensive industry and energy will be supported through a multibillion-euro Just Transition Mechanism.

The goal is to pursue net zero in a socially cohesive manner, while creating new economic opportunities in the communities most affected by change.

Of course, it would be pointless to cut emissions in the EU only to have polluting activities migrate offshore. Or for European companies making the effort to cut emissions to be undercut by competitors with no such obligations.

That’s why the European Commission will soon be proposing a carbon border adjustment mechanism, to create a level playing field on the cost of emissions.

Time to make carbon polluters pay, not just talk emissions cuts

Every country has its own political system and culture. It would be wrong to suggest that the process in the EU could or should be copied elsewhere.

Nevertheless, the European Climate Law points to the value of negotiation and consensus. With goodwill and a proper awareness of the stakes, political competitors can hammer out an agreement on truly existential issues.

While some continue to deny the need for net zero, the net zero economy that the world needs is already under construction. All major economies should commit to this transition in their own interests.

Negotiating with the planet on climate change is not a smart move. Politicians should instead be negotiating with each other to identify and implement credible pathways to net zero. The climate crisis requires no less.

Dr Stephen Minas is associate professor at the Peking University School of Transnational Law and has worked on several EU climate processes. This article is written in a personal capacity