How to minimise backlash against green policies

Over the summer, a new word entered the EU's political lexicon: greenlash. Popularised by Italian political scientist Nathalie Tocci, the term refers to the political and social backlash against "green" policies. It can be local, as when citizens oppose certain clean mobility policies such as congestion charges; national, as when the Yellow Vests movement grew out of the French attempt to increase the carbon tax; and European, as when centre-right parties represented in the European Parliament attempt to repeal European Green Pact policies such as the phase-out of internal combustion engine vehicles or the Nature Directives.

The EU has made the Green Pact — a comprehensive set of policies to tackle climate change and environmental degradation — a political priority. The aim is to achieve zero net carbon emissions by 2050. To achieve this goal, it is necessary to accelerate decarbonisation in sectors that have lagged behind in reducing emissions. Decarbonisation in sectors such as road transport and buildings falls directly on households, while in agriculture and heavy industry it affects specific business interests. Governments are asking households and these businesses to change their behaviour and invest heavily, hence the backlash.

It is therefore important to understand the extent of this reaction and the types of policies at stake. It is not inevitable that the EU's environmental and climate agenda will slow down. Contrary to the claims of the Green Pact's opponents, an ambitious green agenda is essential for the well-being of citizens and the competitiveness of European businesses.

The varying degrees of backlash against green policies

Critical statements by heads of government about the EU Green Pact are not the same as a broad social backlash or a sense of scepticism about certain environmental and climate policies.

Among EU leaders, French President Emmanuel Macron and Belgian Prime Minister Alexander De Croo called for a pause in new European green initiatives last summer. They did so after the EU adopted a "wave" of new policies to meet its 2030 climate targets: their argument was that governments and businesses needed time to implement and adapt to the new rules. In addition, they argued that the EU should keep up the regulatory pressure or risk losing industries to other jurisdictions with more lenient green policies. De Croo later qualified his remarks, saying that while reducing carbon emissions was absolutely essential, adding further restrictions on biodiversity protection or chemicals regulation could be overly ambitious and counterproductive. This suggests that some political leaders are concerned about alienating particular interest groups, such as farmers, who may be harmed by certain Green Pact policies.

Right-wing populist leaders such as outgoing Polish Prime Minister Mateusz Morawiecki and Hungarian Prime Minister Viktor Orbán have long been critical of European energy transition policies. Morawiecki called for a cap on carbon prices set by the EU Emissions Trading Scheme, but lost his crusade. Orbán tried to blame rising energy prices on the EU's climate policy rather than Vladimir Putin's manoeuvres over gas flows.

For European citizens, climate action remains a top political priority: 29% of EU citizens surveyed by Eurobarometer in the autumn of 2023 believe that climate action is one of the most important issues to be addressed by the European Parliament, after poverty, social exclusion and public health, but on a par with support for the economy and job creation. Although this figure is 10% lower than in November 2021, the order of priorities has not changed.

However, in a climate survey conducted in summer 2022, Eurobarometer found that while most Europeans are optimistic that the energy transition will create more jobs than it destroys, only 46% are convinced that sustainable energy, products and services will be affordable for all. Europeans are concerned about the costs of climate action and their fair distribution. This fear is also reflected in a more recent survey conducted by the Tempo project in November 2023: the main drivers of the recent backlash against green policies are voters who already feel economically insecure and alienated from politics. These are the so-called "forgotten voters,” who make up 20-30% of the active EU electorate. These figures suggest that the "fatigue" caused by green policies in general will be a major issue in the 2024 European election campaign.

Green policy "triggers”

In order to understand and address the green backlash, we need to be more specific in identifying the policies that trigger it when they are poorly designed and implemented.

First, policies that directly affect the cost of living — such as carbon taxes or carbon prices resulting from emissions trading schemes like the one in the EU — are particularly likely to trigger a backlash. In 2018, Macron's announcement to increase the carbon tax from €44.6 to €86.2 per tonne of CO2 sparked yellow vests protests across France over fears of higher fuel prices. The French government decided not to raise the tax.

Such policies, such as fuel taxes or carbon taxes, highlight the cost of carbon emissions and force up the price of carbon-intensive goods, such as petrol cars. Such policies aim to encourage a shift away from polluting technologies, but higher transport or heating costs can be a particularly heavy burden on lower-income households, who tend to use less energy-efficient cars or heating systems and may lack the financial capacity to switch to cleaner ones. For this reason, such policies may appear socially unfair if they are not accompanied by measures to help poorer households make more sustainable choices.

Second, bans on carbon-intensive technologies can also provoke negative reactions because they clearly restrict consumer and business choice, rather than suggesting or encouraging change. The backlash can be particularly strong if phase-out mandates are implemented without accompanying measures to help households and businesses replace banned technologies with cleaner and more affordable options. For example, in the summer of 2023, the German coalition government, under pressure from the Green Party, had tabled a proposal to ban the installation of gas and oil heating systems by 2024 and require households to install new “green” systems, such as heat pumps, instead. This was rejected by the political opposition, businesses and a large proportion of the electorate. The government eventually revised the law to still allow new gas and oil heaters to be installed in certain circumstances (e.g. if they can be converted to hydrogen) and to shift the burden from households to local councils, which will have to submit plans outlining how they will decarbonise heating.

Another example is the phasing out of sales of internal combustion engine (ICE) cars by 2035, which the EU approved earlier this year to boost sales of electric vehicles (EVs). Germany's last-minute opposition led to the inclusion of an exemption: ICE cars will be allowed to remain on the market as long as they run exclusively on carbon-neutral synthetic fuels, a niche technology that is not expected to reach the mass market. Italy's attempt to get a similar exemption for biofuels failed. It is clear that these reactions were driven by car industry lobbyists, demonstrating the extent to which organised interests can hold back attempts at green reform.

Third, the flip side of banning “brown” technologies is legislation that mandates that all current goods be “green.” Such mandates, like bans, embody a policy strategy known in environmental economics as "command and control": they require individuals to change their behaviour or "clean up" their act within a given time frame. An example of this strategy is legislation requiring the renovation of buildings to make them more efficient and less energy intensive. This was one of the basic concepts of the EU directive on energy efficiency in buildings, but the legislator watered it down after a strong reaction from some member states led by right-wing governments. The Italian government, for example, was very critical of the attempt to force people to make changes to their homes. In the end, the obligation to renovate residential buildings to improve their energy efficiency by 2035 will only apply to the "least efficient,” i.e. less than half of Europe's housing stock.

A fourth type of policy that can trigger a backlash are those that directly affect special interest groups, such as farmers. These groups are powerful enough to have avoided major decarbonisation targets, but now have no choice but to contribute to climate action. Last spring's provincial elections in the Netherlands saw the unexpected rise of the Farmer-Citizen Movement, which channeled farmers' outrage at the government's plan to reduce livestock numbers to curb nitrogen pollution. The election result reverberated across the EU: to avoid the anger of farmers, the centre-right European People's Party (EPP) tried — in vain — to kill the Nature Protection Act in the European Parliament. This legislation aims to set targets for improving and restoring biodiversity habitats such as wetlands and forests. But farmers remain a powerful constituency. In her State of the Union address in September, Commission President Ursula von der Leyen made sure to praise the role of farmers in ensuring food security, while insisting that "agriculture and nature conservation go hand in hand.”

But a backlash against green policies is not inevitable. The results of the above-mentioned Eurobarometer and Tempo surveys show that most citizens are concerned about climate change but are afraid to change their habits and are unable or unwilling to pay the higher costs. The main driver of the backlash against green policies is not the naysayers, so what can be done to prevent or at least manage the backlash?

Managing the green backlash

To prevent or at least manage the backlash, it is essential to help households and businesses that cannot afford the technological changes needed to decarbonise. Last winter, Europe experienced a sharp rise in energy prices, which governments tried to mitigate with generous subsidies and price caps. These income support measures were largely unconditional, meaning that all households benefited regardless of their income. This made them easier to implement, but it also put a strain on public finances.

In the future, income support should be focused on those who need it most, such as the poorest consumers who have difficulty paying their bills. Investment support measures should be targeted, income-sensitive and conditional on the replacement or renovation of older assets with more efficient ones. For example, subsidies for poorer households to insulate their homes or upgrade their heating systems. France offers different levels of renovation subsidies depending on household income and the energy savings associated with the renovation. In contrast, Italy offered very generous subsidies for home renovation, but without an income limit, not only for the main dwelling, and without a requirement for ambitious energy efficiency improvements.

Investment support should be focused on facilitating improvements that require a large initial outlay and a long payback period. For example, the purchase of an electric vehicle is a smaller investment than a complete renovation of the house and has a shorter payback period, as the running costs of an electric vehicle are already lower than those of a conventional car. Germany, which is struggling with budget problems, has frozen investment subsidies for home renovation and heating decarbonisation, but is maintaining subsidies for electric vehicles, but this is a bad decision.

When carbon is priced, whether through taxation or emissions trading, its regressive effects can be more than offset if the revenue raised is put to good use. For example, these revenues could be used to finance cash transfers to the entire population. Since the transfers are all of the same amount, but the overall price of carbon depends on how much each person pollutes, those who pollute the least can end up with a net benefit, while those who pollute the most bear the heaviest burden.

The EU has adopted a very selective strategy. From 2027, it will introduce an EU-wide carbon price for transport and heating through a new emissions trading scheme called ETS2. But to reduce the burden on the poorest, part of the revenue from auctioning ETS2 permits will be used to help vulnerable households and businesses switch from carbon-intensive transport and heating (e.g. by replacing petrol cars with electric cars and gas heating with heat pumps). The main instrument for this campaign is the new Social Climate Fund (SCF), but with a smaller budget than originally proposed by the Commission, it may not be enough to help all consumers in need, so it will have to be supplemented or complemented by national campaigns.

But money, whether in the form of transfers or subsidies, may not be enough to overcome the backlash against green policies. As the Tempo Project survey shows, voters also want to see that the energy transition has wider social benefits, that it can have a positive impact on their personal situation and the economic prospects of their community. The argument that Europe has an obligation to reduce its emissions, and to do so sooner rather than later because it has an international commitment, may convince some voters, but certainly not all.

This is why it is important for legislators to better explain the benefits of climate action, both economic and otherwise. For example, for households, investing in energy efficiency may involve some disruption to the home, but it will improve comfort and reduce energy bills. In addition, renovating buildings creates local jobs, which can be a good argument in their favour. It is important for governments to explain the economic benefits of climate investment: industrial decarbonisation can put Europe at the forefront of new sectors such as clean steel, while reducing its dependence on imported fossil fuels, which have high and volatile prices. Politicians must not hide the costs of climate action, but they must also make clear the full direct and indirect benefits beyond emissions reductions.

Finally, it is important that politicians talk openly about the social costs of inaction on climate change: Europe has suffered in recent years from a series of extreme weather events, from floods to forest fires, which are becoming more frequent and will become more frequent as a result of climate change, as well as the damage they cause and the costs of repairing them. This means that Europe cannot be completely safe from climate change, but it can do what it can to reduce its emissions and adapt to the inevitable damage.

Putting the brakes on decarbonisation to appease those leading the backlash would do Europe no favours. It would not alleviate rising living costs, because relying on fossil fuels is expensive and risky, as the energy crisis of the past two years has shown. Nor would it make Europe more competitive by slowing or paralysing climate action when the US and China are heavily subsidising green technology sectors. Business as usual, by rolling back energy and climate legislation already adopted or “pausing” on necessary future changes, is not an option.