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    EC Faces Nuclear and Gas Taxonomy Fallout

    Stockholm (NordSIP) – Following the publication of the European Commission’s consultations on the role of gas and nuclear activities in the green taxonomy, investors, politicians and climate specialists expressed their discontent and outrage at the proposal.

    Market Fears Greenwashing

    “Magic. I cannot think of another word to describe how politics can solve problems. Simply by using different definitions. And gone is the problem. At least in the political world,” Triodos’ Chief Investment Strategist, Hans Stegeman, commented ironically. “Nuclear energy has suddenly become green. And so has natural gas. Political horse-trading between the French (nuclear) and Eastern Europe (natural gas). You could argue in favour of nuclear energy that it contributes to a reduction of greenhouse gas emissions. But as long as there is no solution for nuclear waste it remains unsustainable. And admittedly, natural gas is better than brown coal but it is definitely not green. This is typical for European politics: to confuse less unsustainable with sustainable.”

    “And so we carry the taxonomy to its grave. Because if politics so obviously uses greenwashing, how can we prevent companies from following suit? (…) Political reality is very flexible, but the limits of our ecosystem are unyielding. Political compromises do not move those limits. Only the problems,” Stegeman warned.

    Sasja Beslik, Head of Sustainability at PFA, previously at Bank J. Safra Sarasin and  Nordea Wealth Management, echoed Stegeman’s worries, noting that for all the institutional intricacies of the regulatory landscape, “the EU has agreed that it is only Germany and France that decide in the EU,” he writes in an opinion article for Realtid.

    Specialists Worry

    Specialists were also displeased by the proposal. “The new proposal from the European Commission fundamentally alters the future use and impact of the EU’s taxonomy framework. It disregards four years of rigorous scientific, financial analysis and stakeholder dialogue, which had aimed to support the mobilisation of capital away from stranded assets into truly sustainable and low carbon economic alternatives,” Sandrine Dixson-Declève, co-president of the Club of Rome and member of the European Commission’s Platform on Sustainable Finance commented.

    “As proposed, the Delegated Act could change the taxonomy from a useful tool for financing long-term sustainable economic activities, such as wind and solar, to one which constrains the transformation of the economy,” Dixson-Declève added.

    According to Andreas Hoepner, Professor at University College Dublin and independent member of the European Commission’s Technical Expert Group on Sustainable Finance “up to 1.4 billion tonnes of carbon dioxide equivalent emissions (CO2e) shall be defined “green” if the EU proceeds with a leaked proposal for a second delegated act of the taxonomy.”

    Politicians Threaten

    According to Sweden’s Energy Minister, Khashayar Farmanbar, nuclear power is neither green nor renewable. Commenting to SvD on the latest draft taxonomy from the European Commission, he said he had no plans to go back to the Riksdag to change any decision.

    Austria’s reaction was more muscular. “We will examine the present draft carefully and have already commissioned a legal opinion on nuclear power in the taxonomy. If these plans are implemented in this way, we will sue. Because nuclear energy is dangerous and not a solution in the fight against the climate crisis,” Austria’s climate protection minister, Leonore Gewessler, published on Twitter.

    Meanwhile, Steffi Lemke, Germany’s Federal Environment Minister, announced Germany’s incoming government would respond with a “clear no” against the EC proposal.

    Image courtesy of AlexAntropov86
    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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