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EU Eyes Softer Climate Policies To Fuel ‘Industrial Renaissance’


As Europe starts to emerge from its worst recession since the Second World War, policymakers are reconsidering the EU’s global leadership on climate change for fear that it might hinder the fledgling recovery.

Inspired by France and Germany, which are seeking ways to re-start European manufacturing to fuel a new generation of jobs, the talk in Brussels is now all about re-balancing business and environmental objectives.

“Several member states pointed to the need for a more balanced approach between the EU’s industrial, energy and climate policies,” stated the EU’s 28 industry ministers after a meeting of the Competitiveness Council in Brussels last week (20-21 February).

Policymakers should take “a systematic consideration of competitiveness concerns across all policy areas,” said the ministers, who were preparing for a discussion on industrial policy among the European heads of states and governments later in March.

Antonio Tajani, the EU commissioner in charge of industry and enterprise, has taken several initiatives over the past years to tackle Europe’s industrial decline. In a new policy strategy unveiled in October 2012, he declared the aim to raise industrial activity to 20% of EU gross domestic product by 2020, compared to 16% today, taking it back to pre-crisis levels.

According to the Italian commissioner, those initiatives are starting to pay off politically, with a growing realisation that manufacturing activity in Europe also generates investments and jobs in other sectors, including services.

Political climate is ‘totally different’

For industry ministers, this means environmental policies such as climate change need to be considered in a broader context, which also looks at their impact on industrial activity.

“The political climate is totally different” today than it was before the financial crisis erupted in 2008, said Kostis Hatzidakis, the Greek minister for development and competitiveness who chaired last week’s ministerial meeting.

“There is a shift towards industrial policy,” Hatzidakis added. “I think all of us have realised the mistakes committed in the past.”

Underlining this new approach, Tajani said the European Commission’s industrial renaissance strategy, unveiled in January, for the first time looked at energy policy, climate change, and shale gas “altogether” in a single package, putting them on equal footing.

“It’s important to have an achievable target for our companies,” he added, referring to the EU’s proposed new climate and energy objectives for 2030.

Music to the ears of business

The ministerial statement is music to the ears of employer association BusinessEurope, which has long been pushing for the EU to reconsider its “unilateral” stance on climate change.

Business groups have long complained about the EU’s 2020 climate policy, which commits European manufacturers to reduce carbon dioxide emissions by 20% by the end of the decade. Competitors in Asia or the US have no such commitments, warns BusinessEurope, making investments in Europe less attractive.

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