Unfortunately, Dutch climate policy has already failed. According to calculations by the Plan Bureau for the Environment (PBL), the climate plans of the Cabinet are insufficient to halve CO2 emissions by 2030.
In addition, the House of Representatives adopted a motion this week imposing a bomb under the controversial climate plan to remove 1.7 million homes from natural gas. Because the Chamber demands a government guarantee that the housing costs for residents remain the same in this plan, ‘gas-free’ can enter the trash. This requirement is priceless. A political majority also believes that the Cabinet should stop paying expensive subsidies for electric plugs
the Research Institute TNO also warned against the negative consequences of climate policy. Due to the increasing energy costs, 650,000 households will no longer be able to pay their energy bills. More than 60% of energy costs consist of energy taxes. The message of Dutch business is also clear; the heavy climate burdens they face leads to a significant loss of jobs.
No money for climate
Recently, an official Committee on Budgets has calculated that the new cabinet, partly in view of its low growth and deficits, has no money for additional public spending. Nor is it for annual climate expenditure of around EUR 3 billion. These are only possible if other expenditure is cut. There is a good chance that the new coalition will opt for spending on job creation rather than the climate after the elections. Other European countries have already made this choice.
The coalition‘s original enthusiasm for ambitious climate policy has completely disappeared. This has not only to do with the coronacrisis, but mainly with the problems surrounding climate plans and the fact that they hardly contribute to a reduction in emissions and a healthier living environment. Polls also show that a large majority of citizens are unwilling to spend extra money on climate. Nevertheless, the urgency to tackle warming is only increasing.
We are seeing dramatic consequences throughout the world: extreme weather types, floods, drought, decline in agricultural production, economic damage, etc. To contain these consequences, 195 countries plus the European Union (EU) signed a historic agreement in Paris in 2015 to bring together reduce greenhouse gas emissions, such as CO2. These gases are held responsible for global warming.
The signatories to the agreement must take measures to ensure that global warming remains well below 2 degrees by the end of the century. They can decide for themselves which climate measures they take.
The core of climate policy in most countries, including the Netherlands, consists of a traditional approach that mainly consists of higher environmental and climate levies on citizens and companies and climate regulations in order to reduce CO2 emissions. This policy leads to substantial increases in burdens and citizens and businesses who are protesting against it. A well-known example is the so-called ‘yellow vests‘ that forced the French government to reverse climate burdens. Politics in other European countries have also given way to social pressure to reduce these burdens. Due to the coronacrisis, this pressure has increased further and burden-relief is in the forefront of increasing numbers of governments.
Worldwide economists in climate policy have rightly argued for a shift in burden rather than an increase in burdens. The proceeds from CO2 taxes and environmental taxes that inhibit emissions should therefore be channelled back to citizens and businesses. That would have led to fewer protests.
Tech Policy and Climate Neutrality
Recent studies show that with the current ‘old-fashioned‘ climate policy, the world is heading for global warming that can reach up to 4 degrees. More and more countries come to the conclusion that higher climate burdens do not make an effective contribution to reducing CO2 emissions. This increased burden also has many drawbacks, such as lower economic growth, loss of jobs and less purchasing power for people. The “best” climate policy includes load shifts, but above all accelerated digitisation of production and business processes and smart investments in innovative technologies such as artificial intelligence, smart sensors, low-energy business processes, etc. energy transition from fossil to CO2-free energy sources (renewable energy such as solar, wind and nuclear) will be accelerated. But also by stimulating R&D in the field of climate technology.
In international business, there is already a tech revolution that should lead to a climate-neutral business.Climate neutrality becomes a must and a central element in the latest business models. This greening policy is not the result of corporate directors becoming more climate-friendly, but simply based on hard business economics. These show that climate neutrality for companies leads to a stronger international competitiveness, with lagging behind among the losers.
Companies that lead the way with the use of digitisations and innovative climate tech are also at the forefront of tech policy and achieve good returns. They are also given additional impetus through four international developments. Firstly, the EU’s climate plan, the so-called European Green Deal. The second impulse comes from Joe Biden, the predicted new US president who announced that the US will rejoin the Paris Global Climate Agreement. In addition, Chinese President Xi Jinping recently announced that through billions of investments in the energy transition, China will be energy-neutral by 2060. At the end of October 2020, the new Japanese Prime Minister Suga promised that his country will be CO2 neutral by 2050.
Lessons for the Netherlands
Stop the current disastrous climate policy and invest in digitisation and innovative technologies together with the business community. International practice already shows that this approach will be the fastest way to reduce CO2 emissions and accelerate the energy transition. Use the EUR 20 billion from the Wopke-Wiebes Fund to finance these investments. The benefits speak for themselves: we meet the climate targets, we simultaneously modernise our future economy and create jobs.
Willem Vermeend is an internet entrepreneur and part-time professor of economics at the Open University. He was Secretary of State and Minister. Rick van der Ploeg is an economist and former Secretary of State, currently professor at the University of Oxford and the VU. Respond? Mail to email@example.com.