EU Greens chief slams Belgian central banker’s claim climate fight will leave EU poorer

The co-president of the Greens/EFA European parliamentary group, Philippe Lamberts, rebuked recent warnings by the head of Belgium’s central bank that the green transition will make Europe poorer, saying that anyone who does not see the transition as a matter of survival should give the floor to “more serious people”.

Talking to Euractiv on Tuesday (13 February), Lamberts challenged Pierre Wunsch’s remarks to the European Parliament’s plenary session on Tuesday that EU policymakers needed to be “more candid” about the climate transition being “a negative supply shock that will reduce [Europe’s] growth potential”.

“If we start saying that basically we cannot afford to invest for [our own] survival then I believe that we need to have a discussion with more serious people,” Lamberts rebutted. [That] Europe should engage full-on in the green transition to me cannot be questioned. It’s a matter of environmental and economic survival.”

Contesting Wunsch’s prediction that the energy transition would not make Europeans “collectively richer”, the Greens MEP said Europe’s failure to confront climate change would be tantamount to “collective suicide”.

Jean-Marc Nollet, co-president of Belgian environmental party Ecolo, echoed Lambert’s warnings.

“It is the absence of a [green] transition that will impoverish Europe and its citizens,” Nollet told Euractiv. “A society that does not invest in the transition is a society that condemns its companies. Conversely, investing means being a pioneer, relocating, and capturing the jobs of tomorrow.”

The price of inaction

Nollet added that Wunsch “should know what the scientists are telling us”, namely that “the cost of inaction is five times higher than the cost of action”.

Antoine Oger, research director at the Institute for European Environmental Policy (IEEP), said yet more daunting forecasts are set to come from a European Environmental Agency (EEA)’s report showing that the accumulated costs of inaction could prove significantly more severe – as much as “one hundred times higher than mitigation measures”.

“It is now clearly cheaper to save the planet than to ruin it.”

Tim McPhie, spokesperson for climate action and energy at the European Commission, declined to comment on Wunsch’s remarks specifically but also warned that the price of inaction is “very important to bear in mind,” he told Euractiv.

He pointed to a Commission communication issued last week which estimated that the cost of failing to facilitate the green transition could knock 7% of the EU’s GDP by the end of this century.

Industrial woes

Wunsch’s remarks, however, channelled widespread worries around the effects the transition will yield on different sectors.

On the industrial front, he suggested that high energy prices may have made European industrial firms permanently uncompetitive compared to those in China and America.

“Before the war in Ukraine [European natural gas] was at around €20 [per MWh]. The new normal is between €30 and €50 [per MWh], and if you add to that carbon capture or the cost of blue hydrogen you need to add another €20 to €30 [per MWh].”

That compares with US natural gas at €10 per MWh, which would make European energy “about five to eight times more expensive than in the US. So yes, one might ask: Is there a future in the EU for energy-intensive firms?”

According to Eurostat, the EU’s official statistics office, Europe’s industrial output fell for the third month in a row in November last year, the latest month for which there is official data. Total industrial output was also found to be 5.8% lower relative to the same month in 2022.

Philipp Lausberg, an analyst at the European Policy Centre, recently noted that there is no “quick fix” to protect Europe’s industry against uncompetitively-high energy prices unless member states are prepared to “massively subsidise” firms’ energy costs.

However, Lausberg, along with a range of other experts, also recently told Euractiv that the new fiscal rules agreed between the Parliament and Council over the weekend will likely prevent the EU from making the public investments required to reverse the bloc’s industrial slump.

Lamberts is also a major critic of the new fiscal rules. In a message posted on X on Saturday (10 February), Lamberts denounced the reforms as “economic suicide”, adding that they would both limit the EU’s ability to protect its industry and invest in the green transition.

“The net result of that is that we are basically cutting our arms and our legs in a 21st century that is full of challenges for the European Union,” Lamberts said.

(Edited by Anna Brunetti, Zoran Radosavljevic)

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