When in doubt, complicate
“If a robust, resilient, sustainable and innovative economy is our goal, then dogmatically clinging to our existing business models, whatever their past successes, is not the solution.”
The profound words of wisdom come from EC president Ursula von der Leyen in a letter to member states. The goal of the letter is to appease those among them worried that a planned expansion of the carbon market in the EU would hurt people financially.
The letter was quoted copiously by Politico, which sought to help President von der Leyen in her reassurance effort, also featuring the heartfelt statement that “no one should be able to submit our economic and social fabric to so much tension that it breaks down.” Which is absolutely hilarious.
The planned expansion of the carbon market, also known as the Emissions Trading System, would cover, in addition to heavy industries, transport and buildings, meaning heating. The less green your car and your heating system, the more you pay for both, per the plan. Per reality, higher prices are not going to be welcome. So von der Leyen has promised to cut carbon costs before the expanded market comes into effect in what must be a first in the history of trade.
“What we need is a transition that is just and fair, whereby especially vulnerable households, small companies and regions that are most exposed to structural changes are protected and supported,” von der Leyen also said in her letter, apparently thinking that stringing together buzzwords — or what passes for buzzwords in Brussels — would be enough for Eastern and Central European countries to calm down and say “That’s all right, then.”
When it comes to actual measures to ensure the ETS expansion does not plunge even more people into poverty, there is precious little to report. Per Bloomberg, “The commission will enhance the role of a reserve pot of permits under ETS2, known as the Market Stability Reserve, von der Leyen said. The bloc’s executive branch is also exploring the possibility of front-loading auctions of permits, which could also curb price rises. The European Investment Bank would play a role, she added.”
In short, the Commission doesn’t know what the hell it’s doing but it’s doing it anyway. Or at least talking about it. It’s complicated. The EU likes complicated. It helps the people running the show pretend they know what they are doing. It’s a fun show.
