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What EU the Elections Mean for Sustainability
Tim Mohin
14 Jun
Over the last few years, Europe’s “green deal" produced a plethora of sustainability policies. It seemed like every week, we reported on a new, far-reaching, world-leading sustainability regulation. Now that the EU elections have produced an anticipated rightward swing, will these policies be rolled back or stalled?
While the Greens lost seats, the political center held - meaning that it’s very unlikely the EU Parliament will seek to roll back the sustainability rules already passed. It’s equally unlikely that they will introduce a raft of new ESG policies. In other words, Europe will now shift its focus from creating new laws to implementing the existing Green Deal rules. Bas Eickhout, head of the European Parliament's Greens lawmaker group, said, "I don't think that we'll be rolling back on (climate) policies. But I do think that it will be more complicated to get new policies off the ground."
Source: Statista
Dubbed the “greenlash,” the election confirmed the anticipated lurch to the right. The Greens lost more than a quarter of their seats while far-right groups won big, especially in Germany, France, and Italy. They now make up almost a quarter of all seats. But that doesn’t tell the full story. Greens actually gained seats in some Nordic countries, and the far-right groups that got voted in are made up of such a broad field that it is unlikely they will be able to unite under a single powerful voting bloc.
Although most green policies approved in the previous Parliament should be safe, there are two at risk: The goal to reach 90% emissions reductions by 2040 now looks in jeopardy as it still needs to be approved by the EU Parliament and member states. Plus, the 2035 ban on new petrol and diesel cars, which conservative Italian Prime Minister Giorgia Meloni, called “an ideological folly, which absolutely must be corrected," could well be halted or weakened when it goes up for review in 2026.
Widespread Implications
As the world’s sustainability standard bearer for the last five years, a slowdown in EU policy could have global implications. Without the EU setting a strong example, other nations may not feel the pressure to keep pace, leading to increased environmental impacts worldwide.
The rightward shift has also empowered conservatives in Europe like Italian Prime Minister Meloni, who is reversing the country's solar rollout, saying it is a “threat to our food sovereignty” – a claim denied by farmers and energy experts. In France, the election results prompted President Emmanuel Macron to call a snap election, sparking worries that right-wing leader Marine Le Pen will seize power and make good on her pledge to halt wind energy subsidies and even tear down existing turbines.
California Set to Seize Oil and Gas Cash
California’s lawsuit against fossil fuel companies took a turn this week when California’s Attorney General Rob Bonta announced that the state would seek to seize cash from oil and gas companies “illegally obtained profits.”
California started its lawsuit against oil and gas firms last September, claiming they embarked on a multi-decade deception to decouple their products from climate change. In the wake of a new law targeting company profits, if they violate consumer protection and advertising laws, the state updated its case to include seizing profits to set up a restitution fund that would help families affected by climate-related disasters. If successful, this will set a precedent for multiple similar cases against fossil fuel companies nationwide.
Swiss Parliament Refuses Climate Ruling
Earlier this year, a landmark case in the European Court of Human Rights (ECHR) sided with more than 2,000 elderly Swiss women, saying that the Swiss Government’s climate policies had not done enough to protect their human rights. But this week, the lower house of the Swiss Parliament voted against additional climate actions mandated by the court. Swiss politicians said that the ECHR should not interfere with Swiss democracy and partake in what one politician called "judicial activism."
"It's really disgraceful what just happened," said a plaintiff in the case, Stefanie Brander, 68 - adding, "It's an insult and a lack of respect for our rights, which were confirmed by an international court." No country has ever refused to implement a judgment by the ECHR, and Switzerland has a legal obligation to implement the ruling as it signed the European Convention on Human Rights in 1974.
The Swiss government has two options: to leave the ECHR, which is unlikely, or to give them a plan in October on how they will enact the court ruling…get the popcorn.
Clean Energy Investment Doubles Fossil Fuels
Image by American Public Power Association on Unsplash
The International Energy Agency (IEA) released its annual World Energy Investment Report for 2024. The report revealed that investments in clean energies will reach $2 trillion for the first time, doubling investments in fossil fuels. Fatih Birol, IEA’s executive director, said, “For every dollar going to fossil fuels today, almost $2 are invested in clean energy.”
Another IEA report released this week warned that oil could face a surplus by 2030. With demand for oil plateauing in the upcoming years, production is set to surge, causing an oil surplus that will likely drive prices down.
New US Fuel Efficiency Rule
The Biden Administration released a new rule late last week requiring cars built after 2031 to have a fuel economy of 65 miles per gallon and 45 miles per gallon for trucks and SUVs. Despite weakening the rules after lobbying from the auto industry, most see this as a huge win in reducing emissions and protecting the Environmental Protection Agency's tailpipe emissions limits announced earlier this year from litigation. Some were still not happy: Dan Becker of the Safe Climate Transport Campaign called the updated rule “weak” and said the administration “caved to automaker pressure.”
In another auto-related move, New York Governor Kathy Hochul reversed her plan to create the US’s first congestion charge less than a month before it was due to start. The congestion charge, which has been effective in reducing traffic and emissions elsewhere, would have charged $15 for drivers entering lower Manhattan. In a move aimed at protecting Democrats running for office, Hochul indefinitely paused the program, saying it would “break the budget of a working-or middle-class household.”
The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.
Other Notable News:
The EU is ill-prepared to implement its own deforestation rule, says a grain trade association. The EU’s Deforestation Rule (EUDR), which comes into play in 2025, will require importers of certain products to prove there is no deforestation associated with their supply chain. The lack of preparation may lead to the law being weakened or postponed.
New research finds that less than a third of companies are ready for ESG assurance despite upcoming regulations requiring third-party assurance.
This week, BlackRock released a series of five new exchange-traded funds offering investors exposure to companies that are working on transitioning to a low-carbon economy. The iShares MSCI Climate Transition Aware UCITS ETFs will include companies that match criteria, such as having an SBTi-aligned net zero plan or at least 20% of sales coming from green revenues.
Africa’s “Great Green Wall,” created to deter the growing Sahara, will miss its 2030 goal. So far, the Great Green Wall is only 30% completed and running out of funds.
Direct Carbon Capture company Climeworks announced they have upgraded their carbon capture technology. Its third-generation module can capture double the amount of carbon as its predecessor.
Climate change is coming for your favorite food items. From cocoa to olive oil and coffee, the changing climate is making it harder to get some of the finer things in life, making them more expensive.
Notable Podcasts:
This week’s edition of Outrage and Optimism starts with hosts Paul Dickinson and Tom Rivett-Carnac discussing the global elections and their implications for the climate. Then, it features an interview with Christiana Figueres and Ian Bremmer, President and Founder of Eurasia Group and GZERO Media, as they discuss why a Trump administration might not be all that bad for the climate.
This week’s episode of the Harvard Business Review’s The Climate Rising podcast is the third edition in their series on decarbonizing supply chains. This week, the focus is agriculture. They talk to Christopher Marquis, a professor at Cambridge Judge Business School, who explains regenerative agriculture and introduces his book “The Profiteers,” which highlights the need for companies to be accountable for their environmental and social impacts and exposing "corporate gaslighting" tactics used to shift responsibility.
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