New Green Common Sense

A shift towards green policies in many European countries is going to have a profound impact on their economies and may even influence the way key political decisions are made. Sooner or later this trend will reach the states of Central Europe, and change is just around the corner.

Is there a revolution on the horizon? The Industrial Revolution of the past centuries and the current digital turmoil we are going through might be very soon followed by another upheaval, i.e. ecological transformation. After the era of the steam engine, internal combustion engine, algorithm-based automation and omnipresent digital data, it may very well be that the key role will be played by the carbon footprint. If the last few months are anything to go by, it is more than likely. One would be hard-pressed to find a keynote speaker not alluding to the need to protect the climate for future generations or to develop sustainable economic policies. With this, they also refer to how to bring together an ecological perspective with the mechanics of a market economy. The EU, for example, is planning to allocate tens of billions of Euros to promote the growth of a green economy.

Barring several exceptions, the majority of world politicians will flock together and ascribe to the new worldview. It is not clear, however, whether this will be out of pure conviction or cool pragmatism. In light of the electoral potential of young people gathering every end of the workweek under the banner “Fridays for Future” and voicing their wish to make our society and planet climate neutral, read the latter. This green line was clearly discernible in most of the speeches to be heard in this year’s Davos gathering. Few weighed their words carefully, most were in tune with German Chancellor Angela Merkel who envisaged the gigantic transformation of the world economy necessary to be effective in the fight against climate change.

We are thus bearing witness to extraordinary times. Environmental and climate protection has been a favorite central discussion topic of conferences or discussion clubs for some time, yet has only recently entered mainstream politics and key decision-making. It used to bring in about ten percent of votes in an election cycle and roughly fourth place in a political party contest. Well, those days seem to be long gone. Scorching summers, along with the protest movement for climate protection have pushed Green and like-minded parties into the spotlight and the vote tally is up. In many places they have entered governments, in others they are on the cusp of doing so.

Take the local governments of neighboring Czechia, Hungary and Poland. Green parties have formed governments in the German federal states of Saxony and Brandenburg. They have established themselves as junior partners in coalition with Social Democrats (SPD), and Christian Democrats (CDU). In Austria, they entered the government at the end of 2019 and formed a coalition with the conservative Austrian People’s Party (ÖVP). What ramifications can we expect in Central Europe, and mainly its energy policies? Will it negatively affect major cross-border infrastructure projects that have considerable environmental costs? Will there be consequences for other economic sectors, such as transportation and agriculture?

German Pioneers

The longest experience with the Greens in government in Europe goes to Germany. The first such coalitions with Social Democrats (SPD) in some regions saw the light of day in the 1980s. They would not usually last long, however, as the tensions within the Greens between fundamentalists and political realists were ever present. While the first fraction often strived to tear down the established political structures and market based economy, the pragmatists advocated gradual systemic change. This line of thought seems to have prevailed and has become the foundation for today’s ‘green common sense’.

Despite the ambitious climate goals of the Berlin government, Germany has dramatically diverged from the target of the Paris Climate Accord due to its increased CO2 emissions. Climate theory and realpolitik veered apart.

The Greens made it to the federal government for the first time in 1998, along with SPD Chancellor Gerhard Schröder. They managed to push through two key policies: tax reform imposing levy on industrial activities detrimental to the environment and a decreased social tax at the same time.
This was meant to lower production costs and increase motivation to invest in research and development, not to mention boost hiring. Second, they scored a victory on halting electricity production in nuclear power stations, after a full-blown ideological clash between the left and right. According to their plans, the last one was to be discontinued by the end of 2020.

When the conservatives pulled off a victory and managed to form a government in 2009, one of their key decisions was to backtrack on the nuclear phase-out, and even increase the lifespan of active power stations. Yet the Fukushima disaster in 2011 changed everything again. The same government that had thrown its weight behind nuclear energy production did a complete about-face and declared its end by 2022. Concurrently, investment and subsidies into renewables were massively ramped up, with a focus on wind farms, and electricity from alternative sources was to be given priority in distribution networks. An integral part of this strategy was to offset the irregularities of the renewable energy supply with good old fashioned coal power plants, burning mostly lignite to boot.

The anti-immigration protest party Alternative for Germany (AfD) has styled itself as a champion of coal and other ‘environmentally dirty’ technologies, such as diesel engines.

As it happened, despite the ambitious climate goals of the Berlin government, Germany has dramatically diverged from the target of the Paris Climate Accord due to its increased CO2 emissions. Climate theory and realpolitik veered apart, and being offset with emission allowances ceased to be a viable option. Thus late in 2019 Germany declared a halt on energy production from lignite by 2038, and forty billion euro is to be allocated to transform this goal into reality.

A ‘Kenyan’ Coalition of Convenience

The end of lignite mining is an especially sensitive topic for people in formerly Eastern Germany. Thousands of people are still employed in the mines and entire regions are centered on related industries. Many of them are still not coping very well with the collapse of the centrally planned economies of the Communist regime, which not only led to unemployment, but to the demise of social status and prestige as well. Miners, apart from having had solid wages, used to be portrayed as “ heroes of the modern age”, who with ever y piece of coal “brought progress and advancement to humanity”.

The planned coal phase-out has seemed to reinforce already existing fault lines in the society which are being reflected in everyday politics. The anti-immigration protest party Alternative for Germany (AfD) has styled itself as a champion of coal and other ‘environmentally dirty’ technologies, such as diesel engines, which are being pushed out of the centers of German cities. AfD is also set against phasing out of nuclear and coal energy production.

The popularity of AfD has reached such levels in some regions that if they are to be kept away from partaking in government it is necessary to build wide coalitions, and they now include the Greens. They are then called ‘Kenyan coalitions’, reflecting the colors of the parties (black-red-green) and that of Kenya. They currently run affairs in Saxony, Brandenburg and Saxony-Anhalt, although the Greens do not have enough votes to set the overall environmental agenda, which is still being decided in Berlin and not in Dresden, Magdeburg or Potsdam.

A New Role Model from Austria

When it comes to the political ‘green wave’, the eyes of many have been turned towards Austria lately. Earlier this year the Greens entered government for the very first time, as a junior coalition partner of conservatives (ÖVP). The reaction, mainly in Czechia, has been alarm that Sebastian Kurz’s government would wage an anti-nuclear campaign similar to the one at the turn of the millennia. Border crossings were repeatedly blocked by protesters, as the then Czech government was launching the nuclear power plant Temelin in southern Bohemia and was refusing to pay serious attention to the safety concerns of its Austrian neighbors.

When it comes to Austria, the anti-nuclear attitude appears to be a consensus shared across society and this sentiment is fanned by the most popular tabloid Neue Kronen Zeitung.

It is unlikely, however, that similar passions will flare again. The Austrian president is the former chairman of the Green Party Alexander Van der Bellen, and is not a particularly passionate nuclear-basher. When it comes to Austria, the anti-nuclear attitude appears to be a consensus shared across society and this sentiment is fanned by the most popular tabloid Neue Kronen Zeitung. It is relatively easy for local politicians to score some points with readers when they declare the need to “immediately shut down” these installations in neighboring countries, be it in Temelin, Dukovany, (Czechia), Mochovce (Slovakia) or Krsk (Slovenia).

It may seem paradoxical, but it is hard to imagine the Austrian Greens as tabloid-friendly. Even the anti-nuclear bill from 1986 was passed when they had been in the parliament only for a few months.

Rather than fighting for a EU without nuclear energy, the Austrian government is more than likely to focus on bringing together carbon neutrality and principles of the market economy while keeping a balanced budget—and this should be of interest for Central and Eastern Europeans.

Rather than fighting for a EU without nuclear energy, the Austrian government is more than likely to focus on bringing together carbon neutrality and principles of the market economy while keeping a balanced budget.

The Best of Both Worlds

Many more eyes will be turned to Austria of course and this mainly in Germany, where the young Chancellor Kurz has been enjoying the image of a ‘role model’ in the local media since the migration crisis in 2015. This is partly due to the different nature of the Austrian coalition. Whereas local ‘Kenyan coalitions’ in Saxony or Brandenburg are built on the basis of the lowest common denominator, which will lead to a great number of unfulfilled promises and explaining to the voters, the Austrian Chancellor has charted a different course.

Kurz gave the Greens space to show what they are made of and provided them with space in their key domain. In return, he received a promise of not meddling in his strict immigration and security policies, which has led to two election victories thus far. As he himself recently proclaimed: “We brought together the best of the both worlds”, i.e. the environmental and conservative.

Donald Tusk, the new chair of the European People ́s Party (EPP), an umbrella for christian, popular and moderate parties, will be watching as well. Shortly after becoming chair of the largest group in the European Parliament in 2019, he declared that member states have to do more in climate and environmental protection, and take initiative on this highly emotional subject stirring the public and mainly the young. The main rationale for this charge is to employ market principles and mechanisms, not to go against them.

Mr. Tusk seems to know what he is talking about. Long gone are the days of eccentric green revolutionaries, such as Daniel Cohn-Bendit. Instead, moderate pragmatists are finding their way into the spotlight and are able to attract formerly conservative voters. The best example might be the Prime Minister of Baden-Württemberg Winfried Kretschmann. He is well into his second term in a region home to three large automakers and intensive agriculture industries. It had been reliably held by conservatives for decades, until the Fukushima disaster. Out of the blue, Kretschmann stole the lime-light and has not let it go since. Local companies, carmakers included, dance to his tune and in return he lavishes them with praise for their innovation and creativity. One hardly remembers different days.

Long gone are the days of eccentric green revolutionaries, such as Daniel Cohn-Bendit. Instead, moderate pragmatists are finding their way into the spotlight and are able to attract formerly conservative voters.

It has even gone so far that some German media, initially over the moon about the new Prime Minister, now warn the Greens against so-called ‘Kretschmannisation’. What they mean, of course, is a criticism of compromise and desertion of pure ‘Green Ideas’. He is against, for example, the ban on domestic flying, and seems to agree with the agrarian industry that it is impossible to remain competitive without the use of artificial fertilizers.

His popularity seems to show how to make the transition to a market economy compatible with the goals of sustainable development palatable for the majority, while not risking the prosperity of future generations.