How to fix Eastern Europe’s problem with 2050 climate neutrality

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Hungary's Viktor Orbán got re-elected in 2014 to a great extent thanks to his policy of significant end-user energy price cuts. And other governments in the region also work hard to make sure that heating and power prices remain bearable, writes István Bart. [Shutterstock]

A radical, one might say populist, solution to solve the Eastern blockade on climate neutrality would be to set up a European Climate Solidarity Fund, writes István Bart.

István Bart is director of the Climate Strategy 2050 Institute.

The EU’s lofty climate ambitions are frequently thwarted by its Eastern Member States. The latest failure came in June when European Council conclusions to support climate neutrality by 2050 floundered on opposition from Poland, Czech Republic and Hungary.

Why is this so?  If we want to move towards stronger action on climate change, it is worth considering the reasons for these countries’ recalcitrance. Their leaders are not ideological on climate matters, on the contrary, they have very practical considerations:

First of all, for better or worse, their electorates are much less concerned about climate change than those in the West. For example, the green wave of the 2019 EP elections did not happen in Eastern Europe: the Green fraction of the new European Parliament will have very few Eastern faces: one Green Party MEP from Lithuania, three Pirate Party MEPs from Czechia, and a representative of the Russian party from Latvia.

Politicians in Eastern Europe rarely score points with voters by being progressive on climate. It is not that these electorates are not concerned about climate, it is rather that they are less convinced that their governments can do much about it, and in any case, many of them have more urgent matters to worry about.

This is the second point: energy prices. In many Eastern Member States, there are so many poor people that a change in energy prices can win or lose elections. Orbán got re-elected in 2014 to a great extent thanks to his policy of significant end-user energy price cuts, and other governments in the region also work hard to make sure that heating and power prices remain bearable.

While the average EU household spends about 4% of its budget on energy, this figure is around 8% for Poland, 7% for Czechia, and 5% for Hungary (down from 7% after the price cuts).

Clean energy transition ‘is a social policy issue’, Poles insist

The social policy dimension was largely overlooked when the European Union decided energy and climate change objectives for 2030, Poles have warned, calling on policymakers to endorse a “just transition fund” to support the country’s coal phase-out.

And these are the averages: for poor people, energy costs can be much higher. Western visitors to Eastern Europe who come to the capitals or bigger cities are probably not aware of the levels of poverty and deprivation prevalent in some of the regions. In such declining regions jobs are scarce, the population is ageing and declining; energy poverty is widespread.

Renovation programmes will not be able to help the poorest residents in these areas: no bank would lend them money and many houses are worth little more than the insulation that is needed for them. The supporters of Morawiecki, Babis and Orbán come in disproportionate numbers from those older, rural, less educated groups who often also have difficulties with paying energy bills.

Thus, when it comes to climate policy objectives, the first thought of any sensible politician from the east is on household energy prices. Orbán said as much after the Council vote: he indicated that the climate goals need to be reached in a way that has no impact on the energy costs of Hungarian households, and this requires funding from the EU.  Morawiecki also indicated that a 2050 climate neutrality goal is only possible if there are “very concrete compensation packages.

Climate cash cow: Where EU countries can get their funding

Europe’s green ambitions will largely hinge on being able to finance a transition away from polluting energy sources. But where will the money actually come from?

While this might sound to Western ears like just another shakedown of Western taxpayers, there is some logic to it: in these countries, especially in Poland, climate action will come at a high political cost, with limited electoral benefits.

How to fix this situation? I propose a radical, one might say populist solution. The EU should address this problem directly and start subsidizing the energy costs of the poorest households in Eastern Europe through a new European Climate Solidarity Fund.

Poland’s multi-billion-euro clean air quest in peril

A €25 billion clean air programme launched by the Polish government is in danger of losing EU support. Warsaw has until Friday (21 June) to prove its commitment, according to a letter sent by the European Commission and seen by EURACTIV.

People should receive direct payments from the EU via Member States’ social support systems. This would be a recognition of the reality that the climate transition will have significant social costs, and we cannot always renovate our way out of these.

Such a system would also be an improvement upon current EU funding methods: direct payments are largely immune to corruption, and they support the economy by boosting spending. The Climate Solidarity Fund would thus not only reduce corruption and make the EU more popular but could also turn climate foot-draggers into champions.

Radical? Maybe. But it could secure Eastern European support for 2050 climate neutrality.

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