Green Deal Reloaded - Avoiding Fractures While Pushing Ahead With Change

The pandemic is acting as an accelerator here. We must ensure that the already very delicate social situation in the European Union, and indeed across the whole world, is not further aggravated by the pandemic and ecological transformation, which is currently a real danger. We should understand that we can take double advantage of this situation: at present, billions in public funds are being injected directly into companies to mitigate the economic consequences of the crisis. It would be foolish not to take advantage of this opportunity to make the necessary forward-looking investments in new climate-friendly technologies and the circular economy, the development of renewable energies and hydrogen technologies, and climate-friendly transport. And despite some criticisms, I generally welcome the common approach taken by France and Germany in these areas.

What are the specific challenges for coal-mining regions in this context, and does a "just transition" concern only these regions?

Wolfgang Lemb

In Germany, the Coal Commission has just agreed to a target of completely phasing out coal-fired power generation by 2038. This political commitment is important, but the actual process starts now: how are we going to use the €40 billion made available for structural change? What will be the consequences for the affected regions of the central German and Rhine basins, as well as Brandenburg and eastern Saxony, where the economy has been based on coal for decades? What is our vision for the future, and what alternatives can be considered? Brandenburg, for example, already has a hydrogen initiative and a Mercedes battery production unit and is considering how it can build on these elements to become an "energy region of the future." I would venture to predict that the next five to ten years will see the implementation of concrete and profound changes in the coal-mining regions. If this is to be successful, new industrial jobs will need to be created and, above all, we will have to get the public to buy into these projects and accept the measures taken. Of course, it is not only the coal-mining regions that face the challenges of a "just transition," quite the contrary. The regions of Lower Saxony, Thuringia, large parts of Bavaria, as well as the tech-oriented Stuttgart region of Baden-Württemberg, are affected by the structural changes in the automotive industry due to changing mobility patterns. There’s also Saarland; many equipment manufacturers are based there and their steel industry is faced with the challenge of producing climate-neutral steel. 

These areas were previously forced to transform themselves upon the arrival of the automotive industry, which is itself now subject to a similar level of change. The industry must change considerably and, in all likelihood, the number of jobs will not be the same as it is today. The coal-mining regions are therefore not the only ones concerned. The agricultural sector, too, is going to have to change dramatically. In fact, I believe that all regions potentially have concerns, including those where there isn’t much current economic activity and where reshuffling the cards presents a potential opportunity for revitalization. Currently, we are seeing a growing number of employees who, through working remotely, no longer need to live around business centers and cities and therefore could be involved in a revival of previously economically marginalized regions.

One year following its announcement, what provisional assessments can be drawn from the implementation of the Green Deal? And according to which criteria should the Just Transition Fund resources be distributed?

Philippe Portier

I think it’s a good start. The plans that have been established at the European level seem to me to be positive, even if there is still room for improvement. A significant increase in resources is needed in addition to those currently available to the European Just Transition Fund - which only targets certain regions - so as to ensure a far more systemic approach. This would require the European Union to be able to boost these resources, and this will require increases in borrowing. Thinking about a carbon tax at the borders is also essential for the financing and success of the transition, as is raising carbon prices. We also need a tax incentive that is significant, although not overly so, and also predictable for companies. Additionally, the public investment bank Bpifrance, which offers export aid to companies, has recently adopted new criteria so that they will now finance more climate-friendly projects. This policy of making public aid conditional on aspects of sustainability shows a real change of mentality and could also be implemented at the European level.

Wolfgang Lemb

Even though only a year has passed since the announcement of the Green Deal, my assessment of this first stage is also positive. No one questions the Green Deal itself or the fact that its implementation will require considerable effort. In practical terms, the European Union must, by 2030, reduce its greenhouse gas emissions by 65%. In the coming months, some practical questions will have to be addressed at the European level, such as what this objective implies for CO2 emission standards that have been imposed on the automotive industry, as well as what it means for the Franco-German hydrogen initiative.

Consequently, the IG Metall union has defined pilot regions whose experiences are to serve as models for the "just transition." These areas include south-eastern Lower Saxony, the Regensburg region, as well as the whole of Saarland. Currently, in the pilot regions, "regional innovation clusters" are being created with continuing education providers and other regional stakeholders. 

Philippe Portier

The nuclear issue certainly remains controversial, and there is still no consensus in France. In reality, though, the country does not really have much choice as almost 80% of its electricity comes from nuclear power, so we cannot really imagine transitioning from those levels down to zero. That is why the debate in France is necessarily different from that in Germany. If we look at the past in economic terms, as well as in terms of CO2 emissions and the casualties that this technology may have caused, the balance sheet for nuclear looks much better than that for coal, but do we want to continue along this path? The issue will come up again for public debate in the next few years since France’s nuclear facilities are aging and a decision will have to be made on whether or not to rebuild new plants. For the time being, a majority of the population would likely be in favor of keeping nuclear energy, but a national debate on the subject may change that. One of the worrying elements that we must closely monitor is the rare material resources that are necessary for the renewable energy sector. Unfortunately, Europe is in a weaker position in this regard, as so few of those resources can be found here. They are concentrated in relatively few countries, one of which is China. It may be that the ecological and economic arguments move even more in favor of renewable energies, as this sector has become considerably cheaper than nuclear power. On the other hand, strategic considerations (such as maintaining energy independence) continue to argue in favor of nuclear power. 

Wolfgang Lemb

There are some projects that are moving in the right direction. One example is the European Battery Alliance, which is a Franco-German initiative. The PSA, Opel, Total and Saft groups have created the Automotive Cells Company (ACC), a joint venture that will manufacture battery cells in both northern France and Kaiserslautern, which should create 2,500 jobs. Emmanuel Macron refers to this project as the "Airbus of electric batteries." Another success has been the Franco-German cooperation on hydrogen, a topic where DENA (the German Energy Agency) and ADEME (the French agency for ecological transition) have managed to agree on a common approach and common objectives and settling their joint investments towards the plan. In addition to these climate initiatives, other Franco-German moves that strengthen the strategic autonomy of European industry should also be highlighted. I am thinking, for example, of the development of the European GAIA X cloud and the CLAIRE initiative, which aims to stimulate research into artificial intelligence.

Philippe Portier

As it is often complicated to reach an agreement with the 27 Member States, the initiatives of the two strongest European economies can generate beneficial dynamics within the EU. This is what drives the Franco-German motor. Co-operative initiatives requiring significant investment, for example, in the fields of quantum computing or cybersecurity, are certainly possible, as demonstrated in the case of hydrogen. Surely the way forward is to create a common body that can reflect and decide on the direction of our industries? We have a working group of French trade union organizations who discuss issues of industrial policy and cooperation between our two governments. The two Ministries of the Economic should also listen to employee representatives, as in terms of equity and democracy, this could make the "just transition" significantly easier to implement. 

COPYRIGHT: JOHN MACDOUGALL / AFP