The Green Transition: EU-Turn to the right (and that £28bn)
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday. Jonny Ball here, associate editor of Spotlight. I’m back from my holiday, and happy to be back in charge of the Green Transition. As ever, you can find our policy coverage on our section of the New Statesman site.
Unless you’ve been actively avoiding the news, or any other kind of media for that matter, you may have noticed that Keir Starmer has now definitely, positively, properly dropped his £28bn-per-year green spending pledge. Regular readers will know that the fate of the flagship policy, the one that distinguished Labour most obviously from the current occupants of Downing Street, has been a hot topic for the GT for some time.
The U-turn has been slow, but at least now we’ve been put out of our misery — though the dithering revealed serious splits at the top of the Labour Party, as my colleague George Eaton explained on the cover of this week’s issue of the New Statesman. The saga also raises questions over the party’s claims to a “securonomics” agenda. Last year, one Labour adviser promised “Bidenomics on steroids”. Now we’re getting something more like Bidenomics on the keto diet. A Goldman Sachs report last year claimed that the US Inflation Reduction Act would cost around $1.2trn. The president’s bipartisan Infrastructure Investment and Jobs Act was a cool trillion. Then there’s the Chips and Science Act, coming in at $280bn. Added together, the US federal government is running a deficit of almost 7 per cent of GDP. That’s a spending gap that would make Liz Truss blush (and it’s the former PM’s mini-Budget that Labour is blaming for this week’s policy downgrade).
The party is claiming that their clean power by 2030 mission still stands (read George’s run-down of what Labour’s new green policy is). But if it can be accomplished with less than £28bn a year then why was so much money committed in the first place? Only the Labour gods know. It might be because delivering extremely complex mega-projects to transition a large economy away from a two-century addiction to fossil fuels involves big, highly skilled workforces in a tight labour market. It might also be because said mega-projects involve expensive materials and technologies. Maybe “crowding in” private capital requires quite a lot of consistent, patient public capital. Maybe achieving clean energy would require upping public investment to somewhere approaching OECD averages (which is what the £28bn would have done). Maybe regulatory tweaks, small pots of cash, and planning reform won’t be enough. Only time will tell.
Anyway, it’s good to be back.
Jonny
EU-Turn to the right?
In the heady days of the People’s Vote marches, when interminable, late-night parliamentary sessions drove sleepless politicos half-mad, it was thought that Britain was becoming a basket case. The House of Commons refused to back any Brexit agreement or a second referendum as the country hurtled towards no deal. Brexit, some said, was a hard-right project to remove us from the orbit of an institution supposedly characterised by adherence to liberal-democratic and progressive values.
There were flaws in this argument, but since then they have only multiplied: Alternative for Germany (AfD) is polling higher than the governing social-democratic party of the chancellor Olaf Scholz; Geert Wilders just won the Dutch election; Giorgia Meloni, whose political roots are in a neo-fascist party, is Italian prime minister; and the populist-nationalist Swedish Democrats are propping up a centre-right government in Stockholm. Add that to Marine Le Pen’s National Rally, the rise of Vox in Spain, as well as the continued presence of illiberal, authoritarian governments in the former Eastern Bloc, and it looks like the far-right is on the march across the continent. What does that mean for Europe’s green agenda?
In June, the EU elects a new parliament. If the polling bears out, two right-wing blocs will likely perform well. The European Conservatives and Reformists (ECR) group, co-chaired by a Vox politician (who counts historical leaders of Spanish fascism as his heroes) is set to come third. The equally unsavoury Identity and Democracy group will probably increase its seat tally — a bloc which includes Le Pen’s outfit as a member, as well as the Italian La Lega. Speculation abounds that these two groups could merge post-election. This would make it extremely difficult to prevent the EU’s direction of travel from lurching to the right and the position of the centre-right EU Commission president, Ursula von der Leyen, would be under threat. An elected EU Parliament dominated by the hard right would be far less likely to ratify her reappointment by the unelected EU Council, sparking a crisis of democratic legitimacy.
The EU’s Green Deal, which has been championed by Von Der Leyen, would come under further scrutiny, too. Already, farmers’ protests in Germany, the Netherlands, and now France, have led to a watering down of key provisions in green legislation. Last week, after blocking roads and dumping produce in their home countries, protestors descended on a square in Brussels, lit bonfires, and pulled down a statue, before being water-cannoned by Belgian police. Their opposition to additional green regulations led the EU Parliament president Roberta Metsola to say: “We see you, we hear you. If you want your voice to be heard, make it heard also in June, when you vote for the European Parliament elections.”
They may well do just that, and if recent results in the EU’s constituent member nations are any indicator, we’re in for a shock. Part of Von der Leyen’s green push involves a commitment to emissions reductions of 90 per cent by 2040, but that will be in doubt if the European right get their way. Meloni, who acts as president of the ECR as well as Italian PM, has described the Green Deal as “climate fundamentalism”.
The legislation, originally backed by “at least $1trn” worth of investment, was billed as an answer to the US’s Inflation Reduction Act. Von der Leyen promised to “keep supporting European industry” through the green transition. But critics had already derided it for its failure to “end fossil fuels or industrial farming”. In the face of yet more concessions, the growth of discontent in the heavily polluting agricultural sector, and the potential victories of right-wing populists in June, even the limited scope and path to net zero set out in the original deal looks littered with obstacles.
In Brief
Bye-bye billions: Spotlight sustainability correspondent Megan Kenyon has this great in-depth read on the nitty-gritty detail of the £28bn, asking if Labour’s climate mission is achievable without it.
An awfully good idea: Megan has also got this report on the cross-party Environmental Audit Committee, as part of our Parliament Brief series. Graham Stuart, the net zero and energy minister, was in the hotseat.
Who’ll retrofit my house? On his Substack Election Energy, Sam Alvis, gets detailed about the green jobs we would need for the home retrofitting element of the green transition.
Biden 2.0: The polls aren't looking good, and the president's physical and mental fitness to govern is increasingly being called into question, but the Economist asks what a second term of radical Bidenomic interventionism might look like, should Trump's second coming be forestalled in November.
***For more on how our advertising services can support your organisation, please visit our page on Spotlight Marketing Solutions or contact us at client.solutions@newstatesman.co.uk***
The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
Thank you for reading.
Please send any news or comments to: jonathan.ball@newstatesman.co.uk