A Green New Deal

The Green New Deal is a comprehensive response to the crises we face. It aims to reconcile our lifestyles – the way we live, produce and consume – with the physical limits of our planet.

It is a transformational journey consisting of sweeping, interlinked reforms at all levels and all sectors, the end result being a more harmonious relationship with nature.

During the next year we should be hearing about the formulation of a strategy for an EU Green New Deal. Ursula von der Leyen, has an ambitious target: her aim is to have an EU blueprint for a Green New Deal ready for discussion within the first hundred days of the new EU Commission being in office. Without a shadow of doubt this will have an impact on all member states of the EU, so as a result we should expect that, during the year, the Maltese Government will also publish its own proposals on the matter.

The European Greens have been advocating such a roadmap for years, and it is certainly no coincidence that the new EU Commission’s vision comes so soon after the Green Group in the European Parliament increased substantially in size.

A Green New Deal is much more than dealing with climate change – it also signifies a focus on the economic model underpinning the accumulating environmental degradation.

In his concluding remarks in the budget debate, for example, the Prime Minister explained that the electrification of private transport signifies much more than importing electricity-driven cars, and the development of an infrastructure for charging points.

It also implies doing away with car registration taxes as well as forgoing taxation collected from the sale of fuel which, for the year 2020, is estimated at €157 million, according to the budgetary estimates which the Finance Minister recently tabled in Parliament. To this substantial sum one must add the projected vehicle registration tax, which is estimated at €55 million and the circulation licence taxes estimated at €85 million for the financial year 2020. This signifies that €297 million of government income projected for 2020 is dependent on cars, mostly private cars and indicates the potential financial impact of the electrification of private transport, which will undoubtedly be spread over a number of years.

In order to incentivise the take-up of electric cars, an exemption from registration taxes on electric cars has been in effect since 2018. Similarly, an exemption on the payment of circulation taxes for the first five years is currently applicable – hence the argument that the issue is much more than climate politics. Consequently, it is also about economics and finance as the government will need to find a substitute for these taxes

Clearly, Frans Timmermans’ brief indicates that his Green New Deal proposals will be focused towards climate change politics and the EU’s attainment of a carbon neutral status by 2050. It is, however substantially more than that. In fact, Ursula von der Leyen states in Timmermans’ mission letter dated 10 September 2019 that “ we must look at everything from how we use and produce energy, unlock private investment and support new clean technologies, all the way through to the transport we use, the food we eat and the packaging we throw away.” This will include responsibility for both the blue economy and the circular economy.

Subsequently, von der Leyen emphasises carbon emission reduction targets must be increased to at least 50 percent by 2030. She furthermore underlines the need for focusing on cushioning against social impacts through ensuring a just transition – in particular in the industrial, coal and energy intensive regions to which will be added a focus on protecting our biodiversity and a zero pollution ambition.

An interesting twist is von der Leyen’s instruction to Timmermans to ensure “that our tax policies enable us to deliver on our climate ambitions.” This signifying that there will be considerable pressure on the Maltese government to seek a cure for its allergy to taxation, particularly environmental taxation, which is an important and effective tool in the implementation of environmental policy.

We await Timmermans’ proposals and the interesting debate that will undoubtedly follow.

published on The Malta Independent on Sunday : 27 October 2019

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