Volt's Position on Green Taxonomy
Volt's Position on Green Taxonomy
The EU now decided to include nuclear power and gas as "green" in the taxonomy list. What is at stake? The taxonomy is intended to provide citizens and investors with clear information on which financial products benefit climate protection. The EU wants to become climate neutral by 2050. According to EU Commission estimates, this will require around 350 billion euros in investments per year - an enormous sum that is to be mobilised with the help of the taxonomy. All environmentally and climate-friendly sectors of the economy are to be listed in it to make it easier for investors and citizens to put money into the right projects. Large companies, banks and funds are to indicate what proportion of their activities is in line with the taxonomy. In future, investors should also be able to see whether their activities are related to gas or nuclear power.
Although Luxembourg has so far voted against this decision and is also threatening to appeal the decision to the European Court of Justice, Volt has taken a more differentiated position in this controversial decision.
Climate crisis and European responsibility
According to most projections, global heating caused by human activities will bring the ecosystems our societies depend on to the brink of collapse. Thus, we are in crisis. As one of the biggest greenhouse gas emitters, as one of the leading economies, as a hub of science and innovation, the EU has a global responsibility to act. Reaching fast decarbonisation is not only a necessity to avoid the worst of the consequences of human made climate change in Europe. It is also a moral imperative, as climate change, on a global scale, will hit those hardest, who have the lowest resources to prepare themselves. Despite decades of political inaction and indecisiveness on climate change, we believe that the EU has the economic, political, and technological resources to pursue an ambitious campaign towards decarbonisation successfully.
The need of a taxonomy
Reducing greenhouse gas emissions is the most important step towards meaningful climate crisis mitigation. Corresponding efforts must be supported by substantial and coordinated investments into technologies that are instrumental to decarbonisation. EU-wide rules governing such investments are therefore essential, and as such, we support the idea of a taxonomy classifying investments regarding their usefulness in reducing the EU’s carbon footprint.
Investments in nuclear energy are needed for decarbonisation
We believe that investments in nuclear energy rightfully should be part of such a decarbonisation taxonomy. Not only is nuclear energy currently an essential low carbon energy source of the European energy mix. More importantly, the IPCC reports demonstrate that most paths compatible with the goal of limiting global warming to 1.5°C rely on nuclear energy. It is thus our opinion that nuclear energy will be needed in Europe on our way to decarbonisation. In consequence, nuclear energy will necessarily stay an essential part of the European energy mix in the future decades. Once accepting nuclear energy as a part of our future European energy mix, it becomes a necessity to facilitate investments into the nuclear energy infrastructure for reasons of efficiency, safety, and innovation.
Conceptual flaws of the Green Taxonomy as proposed by the EU commission
While we believe that a decarbonisation taxonomy that guides investments towards climate crisis mitigation is obligatory, we think the inclusion of gas and nuclear energy into the “Green Taxonomy” as developed by the EU commission is not fit for purpose. Instead of focusing on what is essential for European decarbonisation, it leads to a conceptually incoherent definition of “sustainable activities”, after which investments both in nuclear energy as well as in fossile gas would be included. Furthermore, there are numerous technical inconsistencies introduced by the inclusion, as the EU Platform on Sustainable Finance demonstrates in their report published on January 24th.
Whereas we acknowledge that gas may be needed in certain European countries on their path to decarbonisation as a transitional power source, we think that the inclusion into the taxonomy opens a political door to keep carbon-intensive gas infrastructure longer than necessary. Moreover, we fundamentally disagree with calling investments in gas “sustainable activities”, and therefore believe that the taxonomy does not contribute to a clear understanding of what is needed to avoid the disaster awaiting us, if we do not rapidly proceed to zero net emissions.
In contrast, we believe that investments in research on nuclear energy fully qualify for being “sustainable activities” and “green”, as they contribute to tackling the negative effects of having to rely on nuclear energy for decarbonisation. However, we acknowledge that it is highly controversial across Europe to call investments in nuclear energy “sustainable activities” without differentiation. By name-tagging nuclear energy in this way, the Green Taxonomy shifts the discussion unnecessarily towards the meaning of ideologically loaded nomenclatures. Instead, we should discuss what we need to decarbonise fast enough. Thus, the inclusion of nuclear energy into the Green Taxonomy does not serve the goal of uniting Europeans behind an ambitious climate crisis mitigation policy. The latter is truly important: Climate crisis mitigation is a collective effort that needs broad societal support. Transparent and understandable communication is essential for achieving public support for climate crisis mitigation policies, which often will be painful for many citizens. For many Europeans, accepting nuclear energy as a part of the future European energy mix is a painful measure; something we have learnt also from discussions with European citizens on social media and our internal platforms in the last weeks. The EU owes its citizens clarity and argumentative transparency - the inclusion of gas and nuclear energy into the Green Taxonomy does not deliver in this respect.
Therefore, we believe it is right to vote against the inclusion of nuclear energy and gas into the Green Taxonomy, as it is proposed by the EU commission. This comes with no stance against nuclear energy. On the contrary, the case for investments into nuclear energy should be made. It should just not be made in this way.
In this respect, the introduction of a separate label for nuclear energy is the right solution. This additional label would be reserved for low carbon technologies that are needed for decarbonisation without demanding that they fulfil all criteria of “sustainable activities”, namely the “do no significant harm criterion”, and thus can be considered as “orange”. That would provide the needed room for investments into nuclear energy in the name of decarbonization of the European energy mix. We think that the “orange” category should cease to exist in 2045 in favour of fully sustainable options. However, we believe that nuclear energy has the potential to become a fully sustainable energy source through research and innovation. We want to ensure in particular that corresponding research efforts are well-funded, also in light of the global responsibility of the EU to contribute to a safe and effective decarbonisation world-wide, where according to most projections nuclear energy will play a central role.