Communia

Around midnight last night the European Parliament and Council (states) hurriedly reached an agreement to implement an increase in the emissions reduction target for 2030 in order to present it at Cop27. This new agreement marks the launch of Fit for 55.

A move in 2030 from 29% to 40% compared to 2005 emissions should be good news. But no. The Green Deal is not really about curbing climate change, but about organizing a transfer of income from labor to capital and distributing it among sectors and countries.

So the question today is how Fit for 55 will change the lives of European workers and whether the war with Russia in Ukraine and the inflationary wave it has generated had moderated somewhat the brutal blow anticipated by the plan presented by the von der Leyen Commission in 2021.

Can a regulation be that important?

Yes. The language of the EU is deceptive because it is designed to defuse fears in the countries on the real powers of the fabric of the Union.

An EU regulation does not entail a minor development of the details of the application of a law, but is rather a pan-European law that applies automatically and uniformly in all countries from its entry into force, without the need for states to adapt it and pass a national law as directives do. As soon as it is officially published, it becomes directly and literally law in each of the member countries.

What are the major changes that have been approved?

Emission reduction quotas by country

Emission reduction targets by country. In blue those existing up to now, in green the new targets approved in the new regulation.

First, the regulation sets emissions targets by country and year, but allows them to accumulate, put a certain amount on account and even buy up to 10% of reductions from other members. In other words, if a country did not reduce enough to reach its target, it can pay another country that reduced beyond the target up to 10% of what it failed to reduce.

New sectors enter the speculative emissions market

New sectors added to the speculative emissions market.

The driving force behind the European Green Deal is the emissions market. In order to carry out certain polluting activities, it is mandatory to buy emission allowances. By controlling the total number of emissions in the market and gradually reducing them, the Commission hopes to meet its aggregate targets. The starting point was the electricity generation market.

Problem: we are talking about leaving an essential part of the production costs in the hands of a pure speculative market. The European states loved the idea from the outset because it is yet another artificial sinkhole in which to place huge masses of capital with assured profit. But it is also a real danger. It is leaving the (financial) sharks in charge of the fish farm.

Result: In 2021 the massive arrival of capital in the emissions market sparked the escalation of electricity prices, which, if not already destructive enough, encouraged Russia - the main gas supplier to the EU - to play its cards by participating in the artificially created profit party and ended up motivating the US to accelerate its own bets on European energy. The emissions market, exciting all the sharks, ended up being one of the main accelerators of the war in Ukraine.

Following the success of the experience, that market is now being extended to road transport, domestic shipping, housing, agriculture, waste management and industrial SMEs.

Forestry and forestry

European forest map. There is no longer a surplus of primary forests. But they continue to be left to burn and logging is increasing by 15%.

Today's prevailing emissions accounting system absurdly rewards the burning of forest biomass. The result is that it is de facto wiping out Europe's CO2 sinks.

To top it off, escalating fossil fuel prices are driving skyrocketing prices for firewood, which is the backup heating fuel in much of Central and Eastern Europe. In other words, not only is it clear that the system is poorly designed, but it also creates incentives for deforestation.

What does Fit for 55 do in that context? It authorizes a 15% increase in harvesting and logging. The reason is obvious: sustaining and caring for native forests, which are very different from the fast-growing timber plantations of the paper industry, are not a niche for large-scale capitalization. Big capital and corporations do not know how to make forest care and non-predatory forestry profitable, and ideologues, who falsely oppose Humanity with Nature, are incapable of thinking of forests as centers of knowledge and learning.

Thus, beyond empty declarations and emission targets of more than dubious calculation, in practice, their fundamental role in absorbing CO2 is ignored and a nefarious policy perseveres and is aggravated.

What does this mean for us in practice?

From now on we will have to pay emission allowances for emissions related to our homes. For example, we will pay for emissions from heaters and heating systems.

Another brilliant idea: artificially increasing the production costs of agriculture and livestock. You don't have to have much imagination to predict the outcome. We are already enjoying the fruits of the rise in the cost of inputs such as fertilizers.

It will impact livelihoods and access to basic consumption, especially in everything related to livestock. In the end, meat and dairy will become more and more expensive in order to create new opportunities for massive capital placement and to make profitable necessarily ultra-centralized and hyper-capitalized industries such as lab-grown meat.

The rising costs of waste management, as well as maritime and national road transport, will also affect the cost we have to pay for basic consumption and the price of municipal taxes we pay every year. Especially in countries, such as Spain, where road transport is the backbone of the distribution networks.

And finally, increasing the costs of industrial SMEs, those which are not part of the core of national capital for which strategic policies are reserved, not only puts on the ropes a part of the petty bourgeoisie, but will accelerate the deindustrialization in progress by increasing unemployment which, once again, strains the prices of consumer goods.

Because, all this suction of labor incomes will inevitably manifest itself as a reinforcement of inflationary tendencies and a lowering first of the purchasing power of real wages and immediately afterwards as a lowering of those same real wages.

What do we have to remember about "Fit for 55"?