(Bloomberg) -- Five years ago, the Green Party celebrated its best-ever result in European elections, winning 74 seats. The headlines called it a “quiet revolution,” and the victory ushered in a new era in the European parliament — one where green policies got a real hearing.

Things look quite different now. With just a month until European parliamentary elections, polls suggest the Greens are well behind where they were in 2019. Farmer protests are stalling the reforms proposed by the EU’s Green Deal, a cost of living crisis drags on, and younger voters are turning to the far-right in growing numbers.

One person hoping to stem the anti-green tide is Bas Eickhout. He’s been a Dutch member of European parliament since 2009. In February, the European Green Party picked Eickhout as its lead candidate alongside German MEP Terry Reintke. Their job now is to sell voters on the party’s vision of a more equal and ecological Europe.

Eickhart told Zero host Akshat Rathi that a big part of his party’s challenge lies in reconnecting with people who feel left behind by economic forces beyond their control. “We as Greens need to be more compelling in selling our long-term answers,” he said.

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Transcript:

Akshat Rathi 00:02

Welcome to Zero, I am Akshat Rathi. This week: Europe’s answer to the green backlash.

Five years ago, Green parties celebrated their best-ever results in European elections. The headlines called it a “quiet revolution.” It ushered in a new era in the European parliament, one where green policies got a real hearing. As a result, the European Green Deal was approved in 2020 and big policies followed. And that work – to put all of it in place – is still going.

But today, it’s not easy being Green any more. 

With just a month until European parliamentary elections, the Greens appear to be polling far behind where they were in 2019. Farmers’ protests are stalling the Green Deal. The cost of living crisis is making the populist argument more attractive. And younger voters, who Greens could count on previously, are turning to the far-right in growing numbers.

You could argue this is how politics goes. It’s a pendulum. But the climate crisis is not. It only continues to get worse. 

One person trying to fight the anti-Green tide is Bas Eickhout. He’s been a Dutch member of European parliament since 2009. In February, the European Green Party picked him to be the party’s lead candidate alongside Terry Reintke (rinet-ke), Germany’s Greens MEP. Their job now is to sell voters on the party’s vision of a more equal and ecological Europe.

I caught up with Bas in Brussels at the European parliament. He told me that, despite the backlash, the message that the Greens have about the long term is even more important today than it was five years ago. So we talked about how exactly it is that he can make a convincing case in a much changed political environment.

Akshat Rathi 2:22

Welcome to the show, Bas. 

Bas Eickhout 2:23

Thank you. 

Akshat Rathi 2:25

Now I know a chemist when I see one. I know you studied chemistry, but of course you are now leading the Greens party into the European elections. Could you just talk us through how'd you go from a chemistry degree to doing what you do now?

Bas Eickhout 2:40

Well, that has been a long journey to be very honest. So no, I think I've always been interested in environmental issues, so to say. So back in my youth already my dream job was going into one of these little Greenpeace boats and then blocking whale hunters basically. That was my first ideal dream. Then it turned out I'm not such a hero, so probably I had to drop that idea quite quickly. And I noticed that I can do something with my head, so to say. Then I studied and went to university. And I thought what’s the most complicated thing I can do? Because if I can manage that, probably the rest can only get easiest. That’s when I decided to go to chemistry. I sometimes regretted that idea, by the way, it wasn’t always a pleasure. But the idea was always to end up in a job where I do environmental research basically. And in the Netherlands I ended up at an agency doing climate change research. So I really was a computer modeler, really nerdy stuff and, and I really liked that during my well, my research and my working period, I got more and more frustrated basically about the inaction of politics and that led to a certain moment the decision maybe I should, instead of getting old and cynical and complain about politicians, maybe first try it on that side before I get old and cynical. So that's how I ended up in politics basically.

Akshat Rathi 4:15

Well, Europe is gearing up for the parliamentary elections in June this year. You, along with Terry Reintke, are set to lead the European greens.

Currently the Greens hold about 74 seats in a 750 seat parliament and that's helped you push the climate agenda to the center of European politics. The European Climate Law passed with a majority, even though Greens did not support it, because you thought it wasn't going far enough. And so you've clearly had a huge amount of success in pushing other parties to build up to doing more on climate. Now polls do suggest that the Greens are set to take a beating. What do you think you need to do to turn the tide and perhaps even gain seats rather than, as the polls say right now, lose them?

Bas Eickhout 5:05

Well, first of all, I'm not too pessimistic yet about the elections. It's clearly going to be much more of an uphill battle than it was in 2019. I do remember that in 2019 we got questions of journalists: ‘Do you still need Greens for a green agenda?’ Right. So I think there's always a question whether we are required or not. And back then I already said, ‘Well, you know, it's great to see many parties going for green policies.’ I mean, we can only welcome that of course. But that's usually with a lot of politicians, they follow where the wind takes them, right? So in 2019 it was very clear those were climate elections. So everyone was talking about climate and it was everyone's priority, but then you already knew that when it's gonna get tough and the wind might be changing, then of course you need also Greens in the parliament that stay on the course.

So I think that's, that's exactly the moment where we are now. So the wind has changed, there is more resistance and that requires Greens to maintain this political agenda. What we started in 2019 was of course a transformation of our entire economy. So basically we started the marathon in 2019 and we are now probably five kilometers down that marathon. The good news is that meanwhile the United States has joined the marathon – by throwing a lot of money, so they do it in their way, but they joined the race. And also China is more and more of course continuing and, and really getting into this global green race, I would say.

So basically we have a marathon. We started, we are five kilometers down the road and now some people are saying, oh, maybe let's take a break. Let's take a pause. Let's push the pause button. But that's a weird way if you want to win this race, right? So I think that's the moment where we are now. And what I would hope, and what I also expect, is that some companies are now starting to get nervous as well and start to speak out because I think the only future for European industry is if they really embrace this green innovative agenda. So when they are starting this, this green deal and this race, they should get nervous if Europe now after five years are saying, ‘Oh, now we're gonna change course,’ because it's exactly the unpredictability, the unclarity where Europe is going, that has been and it still is one of the biggest problems for our European industry. So I think it needs to become clear in this campaign that the green agenda and what we Greens are fighting for is probably the best agenda for the future of our industry and that the Greens are the better ally of industry than what conservatives claim to be.

Akshat Rathi 7:46

But let's look at the EU’s largest economy: Germany. The Green Party was voted in with a big mandate in 2021. However, given all that has happened since – the Ukraine war, energy crisis inflation — it's not been a great time to be in power. Most recently that's showing up in large amounts of deindustrialization across the country. It's not green policies alone that can be blamed, but far-right parties are certainly using it as ammunition to say, ‘222This is what can happen across the EU if climate warriors go too far.’ So you are saying that it is the green agenda that will get European industries the future they need in the 21st century. And yet given we are seeing industry shut down, especially in Germany, the powerhouse of European industry, how do you fight against that narrative?

Bas Eickhout 8:47

Well, I think by first making very clear that the closing down of industry in Germany is exactly because of a lack of a green agenda or a very late starting of the green agenda. Just two examples. First of all, why is there such a problem with the German industry? It's the energy prices. Where does that come from? The energy price, of course the inflation that we have seen on energy is mainly because of the high reliance of the German economy on Russian gas. That was a political decision by the conservatives. I mean, I do remember that during the election campaign it was Annalena Baerboch who was there sitting between two old gray men, [Armin] Laschet and [Olaf] Scholz, and she was explaining the problem with Nord Stream 2 and she exactly explained, basically she predicted the future. She was explaining why Nord Stream 2 was such a problem and such a mistake.

And you saw those two guys looking at her like, ‘Ah, little girl, we’re gonna explain you big politics one day because you're totally wrong.’ So it was the Greens exactly warning for making your economy vulnerable and dependent of a Russian dictator, right? And that's what happened, Nord Stream 2 was canceled. But of course when your entire economy is built on Russian cheap gas and that suddenly changes, then you need to adjust massively. I don't think any German government would've had an easy job in doing this transition in a very fast way if greens would've been in power much longer before this transition could have been prepped, could have been, you know, phased in. Now suddenly you were forced because of those circumstances to do your transition in a very short while with of course big consequences for energy. So that is a big problem. Absolutely. But I wouldn't say that's a problem because of green policies.

I would say it's a problem because of lack of green policies and heavy reliance on a fossil economy that turned out to be much more vulnerable than the conservatives said. That was one example. The other example is the German car industry. And the German car industry is of course very proud of its very strong and reliable cars, but has always been built on the combustion engine. They have been relying on this combustion engine for a very long while, even to the extent that when we were having some policies to clean it up, to clean the diesel up, they decided to cheat on it instead of cleaning up the diesel. Right? Dieselgate and politicians were too weak to act on that. So there was a kind of a false impression to the German car industry that they could do business as usual for a very long while. While the German car industry was basically asleep in its combustion engine, China was heavily investing in electrification, not only in the batteries, but also the entire supply chain. So going to Africa and getting into its supply chain relations with countries in Latin America, et cetera. 

So really classic industrial policy on the electric car. What do we see now the biggest increase of exporting nation on cars? China. So again, a lack of clear policies for innovation within Europe is now the price where the German car industry is suffering from. So I think what we see now is that all these problems are coming together. So it's then of course a very nice narrative to blame the Greens, but I think you have to go into your analysis and then the narrative behind it and see what went wrong. And then I think it's quite often a lack of green policies that is now hitting the German industry.

Akshat Rathi 12:33

The far-right parties have clearly a lot of fodder right now to walk against green policies. The most recent one that we've seen is….farmers and agriculture. Now let's just take the case of your home country, the Netherlands. The elections last year led to the far-right party under Geert Wilders winning the most number of seats. And if I compress events just a little bit, because politics can be complicated, one big reason for that electoral surprise and huge loss for the leading center right party is how the government handled deployment of some climate policies, specifically those tied to nitrogen emissions that were brought up with little consultation with farmers, with very little time to actually get the emissions reductions leading to huge protests and change in the mood of a whole country. Now those protests have spread out across the EU. Why do you think the far-right has been able to capture the narrative on the continent that has led the world on climate action?

Bas Eickhout 13:41

Yeah, no, and that, that's of course the $1 billion question to be very honest, because I do think that also in the agriculture story, there are very clear reasons why indeed politics has failed. But quite often it has been conservative politics. And if I may, just on agriculture very briefly, I think the biggest problem that we see there is that on the one hand, in our economic policies, we are forcing farmers to go to larger scale farming, partly because of our subsidy system. You know, the more acres you have, the more money you get. So in that subsidy system, they are pushing farmers to make themselves bigger, but also in our entire economy model, where are the profits in the food chain? The profits are not with the farmers, they are with the retailers, they are in the financial sector, they are in the inputs, right?

So of chemicals and fertilizer, that's where the profits are. So the big players. So for a farmer, in order to get a little bit of the profit still enough to feed their own family, they need to enlarge as well because the profits are not enough anymore. So you just produce more in order to reap some more profits. So economically, they are forced into large scale farming and then comes in the green policies. The green policies are there to address, you need to deal with climate change, climate extremes. So you need more diversified agriculture. Then of course for biodiversity you need more nature, inclusive agriculture. So all these kind of models are more small-scale farming, more diverse and less, less monocultures. 

So basically the economic system is pushing the farmer in a certain direction and the green policies are pulling it in another direction. Then don't be surprised that the farmer at a certain moment feels like, but where do I need to go now? I don't know anymore. You are already with the back against the wall and then you come up with new policies that are only making it more complicated. 

I think then it's very easy for a politician that is pretending that there is a simple solution and a simple solution is, ‘All those politicians are lying to you. We have a simple answer to you, you can just stay on your model that your parents worked on and you don't have to change anything.’ That's a very appealing story. If I feel the pressure and with my back against the wall, I also would love to have that story — I don't need to change — but I think it's a lie, which is not helping any farmer for the future either. So I think what our biggest challenges, and here comes the challenge, is that our answers are usually long-term, future oriented, but also you need long answers like I'm giving now. Whereas the counterpart is just saying, ‘It's all nonsense, it's rubbish, and you don't need to change anything and you are free.’ That's so much easier and so much more appealing if you are uncertain about your own future. And I think this is really going to be our biggest challenge, whether we can break that simplistic narrative of a false romantic, you know, back to the future, back to the past. And that we as Greens need to be more compelling in selling our long-term answers basically.

Akshat Rathi 16:45

Yeah, it is kind of surprising when I looked at numbers. A third of the EU’s budget is dedicated to providing subsidies to farmers. That is a lot of money. Of course, if the EU succeeds at its current climate plan by 2040, agriculture would account for the bulk of the block greenhouse gas emissions. So if they are currently believing the lies and yet they have to be part of the solution to reduce emissions because without that there is no way to net zero. How do you cut agricultural emissions without such a backlash?

Bas Eickhout 17:25

Well that's, that's, that's not an, that's not an easy question, right? But I do think that the first thing you need to do is being honest. I mean, and this is a lesson from the Netherlands, right? So our problem was not climate, but it was nitrogen, as you said. So we have too many nutrients. We are basically importing nutrients from the rest of the world through feed, and then we raise the cattle and we keep the literally in our country and we have an overload of our nutrients and basically that's our biggest problem. We are piling up nutrients in our country. This was a model that we built upon as the Netherlands. We have had quite some economic successes with it, but it was also environmentally unsustainable. We all know that for more than 20 years. Read all the reports that were there.

However, politicians kept on promising the farmers, ‘No, you'll be fine. We will work on innovation, we will, you know, all kinds of cleaning technologies, they will solve the problem of too many nutrients.’ Whereas of course in the end you can put it to the left or to the right. In the end there are too many nutrients in our country, so something needs to give. But the politicians never gave that message to the farmers. And even worse, the farmers meanwhile were stimulated to get bigger, to grow bigger. The banks were giving loans in order they would even get into bigger farm settings, et cetera. So increasing debt, more and more stuck in this model and politicians promising that there would be no problem. Until the court stepped in, because at a certain moment you just have some laws that you can't stretch them anymore. And then it's the court saying, sorry, but now you're not allowed anymore. And suddenly the farmers from one day to the other were not, their model basically was called bankrupt. 

Then of course all those farmers were like, but sorry, I indebted myself so what do I do now? So basically the lying of politicians, this false pretending that they don't need to change, only increased the crisis we are having in the Netherlands, not only environmentally but certainly also for the state of where farmers are now in the Netherlands. If now in Europe we're going to make that same mistake on climate. And basically the commission, when they are now discussing their 2040 target, agriculture is hardly mentioned. It's kind of, okay, don't mention it. That's exactly making the same mistake as we did in the Netherlands. By not mentioning it. By not talking about it, the problem is not going away.

And this is my biggest warning also to farmers. You may turn against the Greens because they are ready to talk to you and say, Hey, let's change the model and how can we do that? But you probably have a better ally with the Greens because they are willing to talk about it now and also put your subsidy scheme towards it instead of politicians that are pretending that there is no problem, they give you a false hope, you can continue like it is. But then in five, 10 years time, suddenly you will get the hard message and then the change is much more complicated and, and this is really the biggest lesson for Europe on climate: Don't make the same mistake as we did in the Netherlands.

Akshat Rathi 20:38

Europe has a head start in the climate race, but the rest of the world is starting to catch up. After the break, Bas tells me how Europe can stay competitive. And by the way, if you like this episode, please take a moment to rate or review the show on Apple Podcasts and Spotify. 

Akshat Rathi 21:02

This is a worry that is not just there in agriculture, but all kinds of economic systems where people want an orderly transition. Yeah, there is a polluting technology and then there's a clean technology and you want to move from the polluting to the clean and the as smooth away as possible. That requires time. And so you are saying because the Netherlands dragged its feet on trying to deploy policies to reduce nitrogen emissions and then the courts forced them to suddenly bring those policies down. That's what led to the backlash. And now if you do the same thing with the 2040 targets, the EU could be facing a similar tragedy.

Bas Eickhout 21:44

Absolutely, yeah.

Akshat Rathi 21:45

But talking about emissions is the hard part right now. It's the narrative that if you fight for just the emissions, then you're going to take our earnings away, our income away. It's the narrative that is winning. So how do you break the gridlock? You're making a logically smart point, but you still need to be able to cut through and actually have those conversations, what will allow you to cut through.

Bas Eickhout 22:11

But I think that's, that's, that's the classic part where if we Greens would only talk about emissions and reduction percentages, et cetera, indeed, then we're not cutting through. But I think we also need to talk about, okay, but how can we make sure that the farmers can have an honest living? And this is also by addressing the economic system. This is also by addressing the problems in the entire food chain. And this is also addressing the power position that retailers are having, right? And until now, and it is those same conservative politicians who are claiming I'm on your side, they never dare to break the economic power of retailers and banks, et cetera. And this is exactly why the Greens are also always making the very clear case. A green deal can only survive if it's a socially just green deal. And for agriculture, I think it's a case in point very clearly.

Akshat Rathi 23:05

So one of the biggest reasons for Europe's success in reducing emissions is down to the emissions trading system. That's provided businesses with certainty about the direction of travel and does incentivize them to cut emissions. So far it's been focused on power production, on industries, aviation shipping. Now it's set to expand to road transport and buildings. How do you think agriculture could be brought into the emissions trading system? Because that could prove to be one way in which emissions are reduced in the most economically efficient way.

Bas Eickhout 23:40

Can I challenge you there? Because this mantra that it's the ETS, the cornerstone that is providing the success and the clarity, this is exactly what I would like to challenge. Because the only clarity that companies are having on ETS is okay, ‘I will get less allowances in Europe.’ So yes, probably we are going to meet the ETS targets for 2040, which is zero emissions because the allowances go to zero in 2039. So you have that certainty, but then you do not know exactly, but what does that mean for my business case. I might also leave Europe, because then within Europe you have zero emissions, but the industry is not in Europe anymore. And this is exactly the problem by only relying on ETS. So it's very good to give carbon pollution a price, but it's insufficient to act. 

And I think the best example is energy because why are we so successful in our energy transition? Is that really because of ETS, the big steps in the energy transition we're being made in the zeros and in the beginning of the 2010s, that's when the real transition started and now we are all benefiting from that. In that period, the ETS price was close to zero. It was not the ETS price that was driving it, it was policies on the renewable energy directive. It was policies in Germany really by the way, by greens in government in the 90s, by pushing for the renewable developments that really made the price of renewable energy go down to the levels we're talking, we are seeing now. So it was not ETS, it was policies on renewable energy that was driving that transition. And that was the most successful policy I think we've had in Europe.

Akshat Rathi 25:26

But one other way to argue for the ETS here is that the economic sectors that cannot move outside Europe are the ones that would benefit most from an emissions trading system. Power production has to happen on this continent. You can't be producing power in the US and then transporting it to Europe. The same thing goes with agriculture. Yes, you could import a bunch of food and that happens, but a lot of the food will have to be produced domestically for it to be price competitive. And so isn't it a good case for the ETS to actually be applied to agriculture?

Bas Eickhout 26:06

Well, I'm not necessarily saying that we don't need a CO2 price. My only debate here is if we're only going to rely on a CO2 price, we will be doing insufficient. And that's the same with agriculture. Because also there, yes, I do think that there is an economic problem with the incentives we're giving, but not always giving the right incentives. So yes, a carbon price could help there, but it will be insufficient. Like it is insufficient for industry. Our industry doesn't only need to know what the carbon price is going to be in the future. They also need to know what kind of energy will there be because it matters a lot. What kind of energy infrastructure will there be in order that I know how my production process will look like? So I'm very nervous and very negative about the future of our industry. But that's because of the lack of these kind of policies. And that's where for me, green industrial policy comes in.

Akshat Rathi 26:56

Heavy industry does have a challenge in front of it, right? If you're going to reduce emissions from steel or cement, you have very few options. And those options are expensive, especially where the technology is today. Agriculture is often considered as a hard-to-abate sector, but if you look at the solution set, it's actually much easier to try and tackle emissions from agriculture, which could even become a carbon sink. The very solutions to try and tackle some of the biggest challenges that we face around biodiversity around soil are the solutions that will also reduce emissions. Not just emissions that are produced on the farm, but perhaps even make the farm carbon negative. And finally, unlike in the industry where subsidies or technology development weren't available, agriculture already has so much that is being supported through subsidies. They could be redirected in a sensible way. So the conversation around agriculture seems to me has been made to be perhaps considered too difficult, but it isn't. It's just that it needs to be done in the right way. That there needs to be a deadlock that is to be broken. And once you do break it, you could actually find solutions much faster.

Bas Eickhout 28:07

Yeah, but I am still coming back to the point of how do farmers feel that they can have an honest earning and this is now, where subsidies are being seen almost as something they have the right to, because otherwise they don't earn enough, right? So as long as that feeling is there, talking about redirecting subsidies will just cause this, this protest. So this is, I absolutely agree with you. I think we can do much better things with our subsidies.  

Akshat Rathi 28:36

And if we look into the future, the 2040 climate targets that are not yet in law but are proposed to be 90% reduction relative to 1990 levels are according to science still on the lower ambition side, sure, but according to where we are currently, pretty ambitious. And yet because of all these protests in Germany and Belgium and France and Poland, where not, where not, yeah. The pharma protests have caused the European commission to delete mentions of agriculture in those targets. One of those deleted mentions is about healthier diets and reducing meat consumption. Of course it's not said reduce meat consumption. It's a euphemistic phrase around alternative proteins, but it's not a problem that's going away. So if you think about it in the future, what must European politicians do to even have a conversation with citizens about changing diets?

Bas Eickhout 29:34

Well, I would say this is exactly the discussion you need to have. So by deleting it from a document, that's one thing, right? And I mean I think it's a mistake, but okay, it's only a document, right? It matters. Now what we're gonna do in the next term. And that's why these elections in June are so crucial because it determines basically how this decade we will, you know, steer some of the changes that will take shape in the thirties and forties and we'll determine whether we will reach climate neutrality as an economy, yes or no. So the coming five years are very fundamental there. And I think in the agriculture system, but this is again also broader. Politicians are always afraid to talk about consumption. So we have a lot of technocratic politicians who love to talk about pricing that sounds very neutral.

You just price pollution and, and will all be solved, right? And we don't need to do anything. Okay? Then maybe on top we do a policy for setting some standards that's, that's probably then the max we can go. But we also know for example, in cars, again, maybe we need to discuss a bit the future on SUVs because otherwise, yes, it's great that we are having more and more electric cars, but if meanwhile we are going to have big electric cars, we have a resource problem. So maybe we should talk about the size of the cars and with food, well, let's be honest, we need to talk about our diets. Not only because of climate, also because of our health. Every, every doctor will tell us that we have a two, you know, calorie full diet so that it's not healthy either. So maybe the combination of health, environment and our own sustainability, we need to have these kind of discussions.

But that means that politicians need to get out of their comfort zone. And probably this is the point where we as greens are more open to have those discussions out of your comfort zone. But then of course in times when people already feel a bit insecure and are not, you know, so positive about the future, then talking about what you eat, how you eat, oh get real. And this is where, you know, extreme right is kind of, you know, the greens want to take everything away from you, even how you eat. Well then of course you get the reaction that we're seeing. So I don't think that in this campaign we will put consumption at the forefront of our campaign because it's quite suicidal in the current mood. But I do think that we cannot escape these kind of discussions if you look into the future. And I think that's something where politicians need to be honest about as well.

Akshat Rathi 32:06

Now if you look at the history of the Greens, for the longest time you stood in the wings pushing parties to take climate seriously over the past few years, finally that case has sunk in and the EU as a whole has done more than most countries and most regions to set out clear targets and clear policies. Maybe not the perfect policies, but at least some concrete policies. The rest of the world is starting to catch up. You said it's a race now. China has already been investing a ton in green technologies. The US is the most recent entrant with the US’s Inflation Reduction Act. Now it comes as hundreds of billions of dollars of tax credits. It's all carrots, very little stick. But then the criticism is the EU’s Green Deal is on the other hand mostly stick, very little carrots. That tension is starting to play out with some green businesses choosing to go to the US rather than scale up here in the EU. What do you think EU's response should be to the IRA?

Bas Eickhout 33:11

Well, I do think that, I mean in general it's gonna be difficult to win this subsidy race, right? I mean that's a bit of a danger that we will see a global subsidy race and then who, who throws most of the money at it. But it's absolutely true that Europe needs to develop an investment program because that's basically the carrot we're talking about. But a European investment program can only work if you also really have a European industrial program. And that's our biggest problem right now. We are still having 27 member states who think they can have the luxury of looking at their own industry and thinking, okay, what can I do now for the future? And then you see what's happening right now, Germany can throw most of its money at it, but, but it's, it's not helping anyone because we need to have European strategy on it. And this is also for me, very clear that we are only going to develop a credible carrot for industry if there is a credible European strategy behind. So it's not only money, it is also money, but it's certainly, and it starts much more with a European strategy that is absolutely lacking up.

Akshat Rathi 32:25

One place where solutions are being focused on, which is to try and move the German auto industry to make more electric cars, for example, or to try and figure out how to deal with the US Inflation Reduction Act. And its huge amount of subsidies is to create policies that look to the rest of the world. A little bit protectionist. One of the ways is to do a carbon border adjustment mechanism where you actually tax imports coming from say China or India because they have higher carbon intensity relative to the same product being produced here in Europe. Whether European producers are paying a carbon price. How do you think protectionism in a world that is trying to deal with the global challenge is going to look and you know, what must be done to ensure that even as these policies are sensible and required, they're done in a way that are politically acceptable around, with your allies? 

Bas Eickhout 35:21

No, I think that's a good question because I do think there needs to be found a new balance here in kind of, you know, a global world where we as a world are working together and getting to the best technologies in the most efficient way. Wherever you are in the world and you are dependent of each other. But at the same time, Europe has been quite naive by thinking that the entire world is on its way towards this global market, which is not the case. First of all, the United States have never been that. They always claim to be this very, you know, liberalized country. But America is totally not a liberal country there. It's a very protectionist country. But at the same time, also China is of course always very, very industrial policy. So it's making clear that their, all their policies are kind of in the line of, of creating these production chains where China can profit from.

And on top of that you have a Russia who is willing to misuse the power once they are having power over you, be it with gas. So this shows that the world is not a bright place and Europe has been maybe a bit too naive in thinking that we are in the direction of this globalized economy. And I think that deserves and requires a rebalancing. And that means that there will be some reshoring and some more protectionist policies of Europe to make sure that the industry that we want to maintain within Europe is also protected while we are asking them to green and to innovate.

Akshat Rathi 36:46

In 2023 EU countries spent about $350 billion on all things energy transition. This is every solar panel, wind turbine, electric car. This is government spending, private spending. In the next decade the EU targets say that it'll have to spend $1.6 trillion on its own between 2031 and 2040 each year. That's how much the world as a whole spent on the energy transition in 2023. So what do you think the EU can specifically do over the next few years to increase investments at the pace needed?

Bas Eickhout 37:24

Well, I think there are two things. First of all, we need a fundamental debate whether our public debt is now really our biggest problem. And I tend to say it's not our biggest problem. It's also very clear that if you look at the debt levels we're seeing in Europe, they are still lower than what's there in Japan or the United States. And even China is now increasing its debt levels. So I think we have a bit of an unhealthy obsession with lowering our public debt, which in a time when we are basically restructuring our whole economy in a couple of decades. And on the top of that we have a security challenge with a neighbor that is willing to fight us. And on top of that, we have a very vulnerable Ukraine next to us that needs a lot of money to rebuild the country.

Basically this, these are really indeed trillions of euros that need to be found. So if at the same time then we are going to say, oh, but we also need to cut our public debt and we need to, we need to have the stability and growth back to even tougher. That's one big problem we're having, which needs to change. That's on the one hand, I think we need to reinvent the story on why are public investments a good thing and not only a bad thing. That's, that's one part. The other part is of course redirecting some of the bad spending that we're seeing. We're still having hundreds of billions of fossil subsidies. So while we are promoting a clean economy that is, that is going away from fossils, we are meanwhile still subsidizing fossils. That's of course an untenable situation. And here we also need to look at the redirecting of financial flows where a lot of money is still going in the wrong direction. And I think that combination, that's a dual agenda that we are needing right now. So in the end it really boils down to political will that is still there insufficiently. And that brings me back to the point where maybe Greens are still needed.

Akshat Rathi 39:22

Thank you, Bas.

Bas Eickhout 39:23

You are welcome. 

Akshat Rathi 39:32

Thank you for listening to Zero. If you liked this episode, please take a moment to rate or review the show on Apple Podcasts and Spotify. Share this episode with a friend or with a recovering chemist. You can get in touch at zeropod@bloomberg.net. Zero's producer is Mythili Rao.

Our theme music is composed by Wonderly. Special thanks to Kira Bindram, John Ainger and Alicia Clanton. I am Akshat Rathi. Back soon.

--With assistance from Alicia Clanton.

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