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The Big Picture

Europe's Climate Elections

Copyright © 2021 Energy Intelligence Group
Investor Climate Pressure Builds
  • Politics and public sentiment around climate look to be entering a new era in the West.
  • The rise of extreme weather events means climate change is now directly affecting voters’ everyday lives.
  • Upcoming elections in Europe and Canada will signal the extent to which climate concerns will be cemented into the political agenda -- and drive policy.

In Europe, climate concerns are no longer fringe, but mainstream. Right-leaning parties have shifted to become more climate conscious, in line with voters. A wave of elections in Norway, Germany and France could see Green parties emerge as kingmakers, or otherwise shift the electoral calculus. National climate policies, key to underpinning the EU's "Fit for 55 " package, are set to get more real. That evolution is also playing out in North America, but with some key differences.

• North America's split: In the US, climate politics are divided on party lines, with US President Joe Biden pursuing big spending packages to back up the Democrats' climate agenda. Nationally, Republicans have softened their tone on climate but lack proposals to address the scale of the problem. However, that's not seen as a political liability because while voters may support climate action in principle, more view health care and counterterrorism, among other issues, as higher priorities, according to a January Pew Research study. Republicans also skew toward appealing to older voters and a narrow base who are less concerned about climate.

In Canada, by contrast, mainstream parties, as in Europe, now need a credible climate plan to stand a chance of election. The Conservatives, after lagging on this issue in the last vote, have rolled out a plan ahead of Sep. 20 elections comprising carbon pricing, electric vehicles, carbon capture, renewable natural gas and a low-carbon fuel standard. The targets are less ambitious than those of Prime Minister Justin Trudeau’s Liberals and other parties, which are backing more aggressive plans, including a C$170 (US$134) per ton carbon tax for 2030. But the Conservatives have largely neutralized this issue as a political stick for opponents. The Green Party, for its part, has been consumed by bitter infighting.

• Norway's producer path: In Western Europe’s largest oil and gas producer, the climate debate has intensified ahead of parliamentary elections on Sep. 12-13, triggered by the release of the "code red" UN climate science (IPCC) report. Norway’s two biggest parties -- the pro-oil Conservatives and Labour -- may have to rely on smaller green-leaning partners to win a majority and form a government, a dynamic that may have already forced some compromises on oil and gas.

Early this month the Conservative-led coalition government, alongside governing partners the green-leaning Liberals and Christian Democrats, sprang a surprise proposed tax overhaul on the industry -- including cutting tax relief for exploration. Restrictions on new exploration licenses offshore Norway could also be at play in post-election coalition negotiations.

But Norwegian voters aren't aligned on rolling back the sector altogether. Some 55% of respondents to a recent survey by research firm Norstat favored continued oil exploration, with 32% against. The Green party has been vocal in demanding an end to fossil fuel production in Norway by 2035 but only has about 5% of the vote. Politico polls show a new Labour-led government on course to take power after eight years of right-wing rule with about 24% of the vote, followed by the Conservatives on about 20%.

Labour supports a more rapid green transition than the Conservatives but, like them, is keen to preserve the more than 200,000 jobs supported by the country’s oil and gas sector. Labour also insists it will not form a government with parties that want to halt new exploration, including the Greens. Yet one of its potential coalition partners, the Socialist Left, also opposes new exploration.

• Germany's climate coalition: In Europe’s largest economy and natural gas market, the climate crisis is dominating the campaign to see who will succeed outgoing Chancellor Angela Merkel in Sep. 26 and her right-leaning Christian Democratic Union (CDU) party. An early rise in the polls by the Green Party, now polling at around 17%, forced competing parties to showcase their climate change mitigation proposals. And the climate pressure is not going away: A survey by the E.On Foundation in August showed 49% of over 10,000 respondents rated the climate crisis as very important, up from 37% in June before the summer's devastating floods.

Gaffes by the CDU and Greens have propelled the left's Social Democrat (SPD) party to the top of the polls, despite being part of the incumbent coalition government with the CDU. Current electoral polling shows another CDU and SPD coalition government is possible. But a strong showing for the Greens could see them emerge as kingmakers.

The SPD wants 100% renewable power production by 2040 and has pledged to write renewables expansion targets into law. But the SPD, which draws support from mining and industrial workers, is more cautious about exiting coal power before the proposed 2038 end date, which the CDU and Greens believe can be pushed to as early as 2030. Greens in the driving seat in Berlin could also have a big impact on gas, blocking the Nord Stream 2 pipeline project and new LNG import terminals.

• France's lower profile: Because of its heavy reliance nuclear power, France’s carbon dioxide emissions are relatively low, meaning the green impact on April elections might be quite small. Pressure for more renewables is limited. The anti-wind movement, for example, is relatively strong (for aesthetic reasons), and anti-wind activists feel comfortable saying they back climate action -- but via nuclear rather than wind.

What could tip the scale in April is whether the Green and Socialist parties manage to agree a common candidate. Right now, that looks remote. But if it materializes, the resulting joint platform will tilt green -- likely including policies to promote renewables, ban internal combustion engines, improve insulation standards and cut nuclear power. That could raise alarm bells in President Emmanuel Macron’s camp, and prompt him to push green policies more strongly.

Macron cites his green credentials but they are not a priority on the right, where parties haven’t emphasized climate policy. But Macron wants to attract young voters, so expect him to announce some green-tinged policies aimed at countering the official Green platform. A probable second-round runoff against the National Rally’s Marine Le Pen could also see Macron lean green -- in a bid to convince those on the left to vote for him, instead of not voting at all because they feel betrayed by his first-term rightward tilt.

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