On May 21 released its Briefing Note No. 12 entitled “Energy Taxonomy Poses Serious Challenges to EU’s Economy” which was sent to its Members on the same day. This latest Briefing Note deals with the “hot” subject of the creation of a common classification system for sustainable economic activities, known as “EU taxonomy”.
According to European Commission’s thinking and in order to meet the EU’s climate and energy targets for 2030 and in line with the European Green Deal, it is important to direct investments towards sustainable projects and activities. “The current COVID19 pandemic has reinforced the need to redirect capital flows towards sustainable projects in order to make our economies, businesses and societies, in particular health systems, more resilient against climate and environmental shocks and risks with clear co-benefits for health”, underlines the EC. To achieve this, a common language and a clear definition of what is “sustainable” is needed.
With the final proposal still pending, the task at hand is to ensure that taxonomy criteria and thresholds are established with foresight and broaden the scope of technological climate solutions. The EU taxonomy has the potential to be a game-changer, but it must adopt a holistic approach, examining all possible solutions to meet climate objectives, moving beyond a narrow confine with labels such as a “brown list” that appear to dictate what is “good” and “bad” technologies.
But there is a much broader critique at play and this has to do with EC’s increasingly interventionist role when it comes to micromanagement and basic planning and the urge by EU bureaucrats to control everything that moves. In this sense, there is growing criticism by several economists who argue that EU’s obsession with an ever-expanding list of prohibited activities for the shake of climate change policies and precise guidance on doing things in core power generation activities, is reminiscent of Soviet era type central planning.
IENE’s latest Briefing Note can be found here: https://www.iene.eu/1/briefing-notes-c24.html
