How the EU is increasingly prioritising the needs of the market above the protection of nature

by Manuel Grebenjak and Michael Torner

The role of the European Union in setting environmental and climate policy

Two of the predecessors of today’s EU, the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (Euratom, which still exists today) were formed to promote economic sectors now regarded as key issues in environmental policy. Environmental matters in and of themselves were not included in the treaty establishing the European Community in 1957. It was only with the EEC Summit Conference in 1972 that they were assigned their own place in European politics.

During the years that followed, environmental policy became increasingly important. In 1987, it began to be regulated as an area of action under primary law. Since then, objectives and priorities have been defined in the form of multi-annual environmental action programmes, while environmental aspects are required to be considered in other relevant policy areas in line with the integration principle.

On paper, EU environmental policy is based on precaution and prevention, the “polluter pays” principle and the approach of combating environmental damage at its roots. While the early days of EU environmental policy focused on reducing local pressures such as air pollutants and waste, climate protection is now the dominant issue. The issue we are currently facing is that in recent decades, environmental policies have become increasingly subordinate to market demands. In 2005, the EU introduced emissions trading, thereby rendering emissions of the greenhouse gas CO2 a tradeable commodity.

Other areas of industry also maintain a prevailing viewpoint that the solution of ecological problems can be reconciled with “sustainable growth”. Current EU strategy papers, such as the biodiversity strategy and “Europe 2020. A strategy for smart, sustainable and inclusive growth”, embed environmental policy with the EU’s neoliberal principles and growth dogma. The “Roadmap for moving to a competitive low carbon economy in 2050” shows that competition is the key factor underlying EU climate policy, even though what this global challenge really calls for is effective cooperation.

Impacts of EU environmental and climate policy and the demands of civil society

One of the foremost achievements of EU environmental policy is the Natura 2000 network of protected areas. Together with the Habitats Directive and the Birds Directive, this forms the basis for nature conservation in the EU. 18 percent of the EU’s total land area and 6 percent of its sea area are designated as Natura 2000 sites. However, it is important to note that the protected areas are drawn from several categories: Natura 2000 includes both strictly protected wilderness areas and sites used by humans, such as agricultural and forest land. Existing and potential protected areas are under pressure due to conflicts of use. As a result of this, their condition is liable to deteriorate and vital expansion of the areas may be slowed down.

Particularly with regard to climate protection and the energy transition, the counterproductive nature of the competition orientation and market logic has now become all too clear. Much of the current progress in reducing greenhouse gas emissions has been achieved through unsustainable measures such as “agrofuels”, whose intensified use has serious consequences far beyond the EU borders. The admixture of plant-based ethanol or oil is carried out with the stated aim of reducing the CO2 emissions of combustion engines across the EU, yet as well as achieving only a marginal reduction, it is partially responsible for land grabbing and the destruction of large forest areas. A prime example of this is Indonesia, where palm oil is produced as a basis for biodiesel. Civil society criticism forced the EU Commission to modify its plans in 2012, since when there has been increased use of second-generation biofuels obtained from straw or waste. However, even this does little to tackle the fundamental problem. Although agrofuels can contribute somewhat to the achievement of intermediate goals, their long-term effect is to delay and hinder the comprehensive formation of alternatives to the internal combustion engine and individual mobility.

The bottom line is that the largest beneficiary of the promotion of biofuels was and still is the all-powerful European automotive industry. New, not-yet-marketable technology for the capture and storage of CO2 will only help perpetuate the existing system. Among other things, this technology can be used by coal-fired power plants and large-scale industrial plants to reduce their CO2 emissions.

In recent years, the EU has increasingly been pursuing plans to expand nuclear power. Despite all the negative aspects of this energy source, it is being touted as a tried-and-tested means of reducing CO2. Membership of Euratom is an automatic feature of joining the EU. Through their contributions to the Euratom budget, even member states that do not use nuclear energy are promoting its expansion and further research. It is due to this policy that new nuclear power plants are now being planned in 14 EU countries. Existing competition rules are also being bent in favour of nuclear energy, for example through the granting of state subsidies for the planned power plants Hinkley Point C in the United Kingdom and Paks II in Hungary.

Industry, electricity production and intra-European air traffic in the EU are subject to an emissions trading system aimed at regulating around 45 percent of EU greenhouse gas emissions. As a first step in this process, an EU-wide emissions cap was established for these sectors. Under the system, companies are required to purchase certificates for CO2 emissions, but are also assigned large CO2 allowances free of charge. Now, thirteen years after its introduction, it seems evident that EU emissions trading has not been a success. An oversupply of certificates and low prices did not create the desired incentive for companies to reduce their greenhouse gas emissions. Instead, emissions trading has brought in billions in profits, even for some of the larger carbon emitters.

In contrast, the demands of a globally-minded civil society are focused on sustainable structural change. If we want to stem climate change, the fossil energy system, which is dominated by a few large corporations, must be transformed into a decentralised, democratically organised system of renewable energies. Nuclear phase-out has been a central struggle of environmental movements in many countries for decades. New technologies with damaging effects, such as CO2 storage and emissions trading at the expense of the Global South, are met with similar disapproval from civil society. In place of these things, we hear calls for investments in reducing energy demand, such as the thermal insulation of buildings or the expansion of public transport systems. Faced with the progressive destruction of natural habitats and increasing soil sealing, EU citizens are fundamentally calling into question the current trajectory of growth.

What can we expect from the EU?

The EU has pledged to reduce its emissions by 80 to 95 percent of 1990 levels by 2050 as a contribution to limiting global warming to two degrees. By 2030, the aim is to have reduced emissions by 40 percent. However, current greenhouse gas reduction strategies will soon reach their limits and are not compatible with the much-needed socio-ecological transformation.

If the EU continues to pursue its neoliberal growth policy and press ahead with market-oriented strategies, none of our most pressing environmental and climate problems will be resolved. Even flagship projects like the Natura 2000 network, anchored as they are in the neoliberal approach, will not be able to reach their goals. The diversity of habitats, species and genetic traits continues to be placed under threat. 17 percent of mammals and more than one third of all habitats in Europe are classified as endangered, while almost half of Europe’s fish stocks are considered overfished.

To compound this, environmental guidelines themselves are being placed under pressure. As part of the REFIT process launched in 2012, the EU Commission has conducted audits of numerous policy areas within the framework of reviews known as “fitness checks”. A process that is outwardly sold as simplification and optimisation is actually being used to undermine social and environmental standards. A rolling-back of nature conservation directives of this kind appeared imminent in 2016. It was eventually able to be prevented, but only through major involvement by civil society and a campaign by environmental NGOs.

Little positive development seems likely in the near future. On the contrary: 20,000 corporate lobbyists from the fossil, automotive manufacturing and energy supply industries are currently working to influence the actions of the European Commission and the European Parliament. Free trade agreements are heralding fears of the further watering down of policy under the guise of harmonisation. The extension of market mechanisms to other areas of environmental policy is undermining sustainable steps to reduce CO2, as are “flexible mechanisms” such as the ability to offset environmental damage with land use measures. The previous principles of the EU environmental policy – most notable, the precautionary principle – are being eroded by EU trade policy.

As the planet’s natural limits for pollution are exceeded, the EU’s environmental challenges will only increase. When formulating plans to deal with them, it is crucial that we do not rely on technical progress and the healing powers of the market. Instead, the question will be how quickly we can create sustainable structures and production and consumption patterns – patterns within which a good life for all can be reconciled with the preservation of natural bases of life.


Institute for European Environmental Policy (2013) Report on the influence of EU policies on the environment.

Tom Delreux, Sander Happaerts (2016) Environmental Policy and Politics in the European Union. Palgrave Macmillan. Basingstoke.

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