Former PM: New climate law opens door to arbitrary state
Former Estonian Prime Minister, member of the European Court of Auditors Juhan Parts criticizes the draft Climate Resilient Economy Act, saying it lacks a detailed effects analysis and clashes with the aims of reducing red tape and boosting Estonia's competitive ability.
The authors of the climate law promised a bill that would fundamentally change life in Estonia, make us live and think differently. Reading the draft law today, it rehashes things we all know in a rather verbose manner. We know that we need to make more effective use of natural resources, live sparingly, and that new clean technologies are always welcome as long as they're cheap and available. What is your opinion of the text?
There are several ways to read the bill. The new government has declared new priorities, which are in stark contrast with the text of the draft law. The effects analysis is primitive to say the least, but looking at what has happened in other countries, Estonia's competitiveness is set to take a hit. Yet, we were recently promised efforts to improve competitive ability!
The bill instead betrays efforts to contribute to sprawling bureaucracy, with a host of wasteful investments planned. Life will become more expensive for people in Estonia if what the law proposes is executed.
There have been efforts to paint the climate law as a vision for the economy. There is nothing of the sort here. We can only find such peculiar items as giving companies the right to draw up roadmaps working with ministries etc. After a year of work, what we expected was a concretized vision of green economy. None of it is there.
If the goal is to improve the state of the economy, public finances and security, this law is pretty much useless. Instead, it will only add to already unprecedented levels of insecurity, which is something countries that are a few steps ahead of us on this road have already experienced.
We need to look at what is happening in the wider world – fossil fuels use is growing and CO2 emissions along with it. Does anyone really believe that our tiny input will somehow fix the planet?
The IPCC and the whole structure of fighting climate change is entering a major crisis. Twenty-eight meetings of world leaders have failed to produce meaningful results, with greenhouse gas emissions set to grow until at least 2050.
Meanwhile, we're trying to ram through an alternative truth, which has nothing to do with real life. It is perhaps possible to continue pushing this political science for another five years. But soon the situation will resemble that in the UN Security Council, which was created to prevent war and resolve conflict but has by today no influence on any of it.
The climate law's explanatory memo is extremely regrettable, a salad of words where propagandist claims are presented as final truths. As a naive person, I had believed the people at the Ministry of Climate capable of rationally analyzing the global situation.
And of shaping clear positions for Estonia, as we have done in national security. We look at military conflicts and clashes in the world through our local prism, which is just what we should do in climate and energy.
Things are changing in Europe too. The new European Commission president had to assure everyone that the green course will be maintained. The reality check will come in three to five years. It may prove possible to maintain these efforts for a few more years after that. Europe's competitiveness is another matter, and one that has clearly been harmed by the green transition.
Coming back to your question – it is always possible to analyze bills paragraph by paragraph, but I'd rather commission some music to go with it from a composer. It's that void of any meaningful content and a hilarious example of legislative writing.
The bill also provides a list of goals we're supposed to hit. What will including percentage climate targets in legislation bring? For example, if we were to mandate emissions reductions at the level of the law?
I can tell you why it is being done, it creates new risk. I would not call it the deep state but rather the arbitrary state. We don't know how these things can or will be interpreted.
Existing examples of the arbitrary state include whether an environmental permit will be granted or not. It's a process of the rule of law becoming the arbitrary state, while I also believe there are enough lawyers in Estonia capable of seeing through it and stopping it from happening.
I noticed the same thing in the implementing provisions, where section 53 states that "the Ministry of Climate in collaboration with the Ministry of Economic Affairs and Communications and the Ministry of Finance will determine by January 1, 2027, which economic measures have an adverse effect compared to climate and environmental goals, in order to phase them out by 2035 at the latest." People emit CO2 simply by existing, while having a major dairy herd increases one's carbon footprint by hundreds or thousands of times. Who will decide that we need to limit such activities, and how will the decisions be made?
Let us look at it through the prism of humor. I also noticed that section, which reads like a secret coup attempt. It allows ministries to do what they want and give it legislative power. It is also where the so-called independent climate council enters play. It comes off as a comedy about a coup attempt. It quickly escalates to absurdity. Closing hospitals can also help reduce the carbon footprint...
In all seriousness, the text has been compiled by crafty people who have mixed vague paragraphs open to interpretation with more concrete things, such as shutting down oil shale power plants or only using electric vehicles as taxis.
The part that deals with using oil shale for electricity generation and oil production completely ignores the global fuels forecast. I mentioned earlier how the use of fossil fuels will only continue to grow until 2050.
Estonia has had a technology with which to turn a local resource into fuel. We could say that we've issued a good number of oil shale permits in advance, and they'll remain valid for decades.
But why are we banning the sector in the first place? We have three companies engaged in the field, we have a lot of scientists at TalTech, and we're simply pulling the plug. And we're supposed to be happy to boot? Who are we selling this so-called success to?
I mean if we had an alternative... like cars replacing horses, or the internet and mobile technologies revolution. But the situation today is that the solution we're being offered are half-baked.
The people who are doing the banning write that they're saving the world. Norway, Canada, even the United States, despite what Biden says, are moving forward with [oil] investments. Donald Trump has promised to invest even more in securing fossil fuels. While we're banning ours. What is that? Why are we doing it is what I would like to understand.
If mining oil shale makes no economic sense, it will soon disappear anyway. Allow me to be clear – no one can imagine the world without fossil fuels today.
Listening to the spokespeople for the powers that be, one gets the feeling they are either stupid or bought. They talk of a green economy, while they have nothing to show for it. We've heard about a magnet factory to be built in Narva from five ministers.
Elsewhere in Europe, major green projects have required insane government subsidies. The €100 million EISA has spent in Estonia pales in comparison. Then somehow there appears a news story about a man who wants to build a major factory in Pärnu. But they have nothing concrete to show.
I see that you remain extremely critical of developments in energy?
Every new step coming out of the Ministry of Climate or Elering confirms it – Estonian energy is headed for bankruptcy. Energy [policy] starts with fixing base criteria for energy security. It is the foundation. If we want to be an independent country, we need enough dispatchable capacity to cover peak demand plus 10 percent.
Everything Elering is doing – we learned of new balance fees last week – they're emergency measures in an attempt to keep things under control. Every new step takes us further from meeting these fundamental energy security criteria.
And everyone is keeping quiet to avoid questions of whether they'd like to return to polluting oil shale instead. Whereas I'll tell you right now that I have no such desire.
But we need to lock down supply security. We need to be able to forecast energy prices, as it is a cornerstone of our competitive ability. For example, the explanatory memo of the bill includes a table that promises Estonia will build natural gas power plants. It is explained that there will be cheap electricity. It is just not true.
Because the price of electricity based on the plan we are being offered today – renewables plus reserve power stations and storage – will be exorbitant. The OECD said it back in 2018.
There will be massive efforts to muddy the water. Estonia's competitiveness is poor and the situation requires us to be frank with ourselves. We need to take an honest look at the technologies we have, also in terms of environmental requirements.
Installing a wind or solar farm in Estonia will not stop global greenhouse gas emissions. While emissions will be reduced in Estonia, other environmental effects of these technologies are kept out of sight.
Talk of renewable energy being the cheapest is nonsense. We need to look at the entire cost of renewables. First, energy return on investment, which everyone can find out for themselves is so low for wind and solar to make them unsustainable.
Wind and solar energy is unreliable and requires spending huge amounts of money on reserve capacity, long-term storage and infrastructure investments. All of it needs to be factored in when calculating the price. They also have a shorter life cycle.
If we add all of this up, we arrive at a simple truth, and one the OECD has confirmed – wind and solar energy are the most expensive ways of generating electricity. And the more such capacity you connect to your energy system, the more expensive it gets.
The effect of expensive electricity on the economy and companies is inhumane and works to impede economic development.
There are two solutions. We can invest in research and development for an eventual energy revolution. Until that happens, we need to continue investing in existing capacity to make it cleaner and more efficient.
We should have national courses on that and explain it also in Brussels.
Energy and supply security must come first. Minimizing environmental and climate effects is only possible if electricity is reliable and affordable. The Ministry of Climate and Elering are trying to move in the opposite direction, but you need to look at the entire value chain, not just a single component when it comes to energy.
But we have section 21 where it says that energy efficiency will be increased in all stages, from generation to consumption, in order to achieve climate neutrality.
As I've said, wind and solar sport the lowest energy generation efficiency. Why are we investing in low energy return on investment technologies? No one seems to want to answer that question.
The climate law's explanatory memorandum mentions a pumped storage hydropower plant in Paldiski as Estonia's preferred storage solution. But its energy return on investment is even lower /.../ What the climate law should state is that we need constant, fair and unbiased technology monitoring to help pick technologies, which are sensible and which Estonia can afford in the long run.
Right now, we're being sold the idea of investing billions in technologies which have no long-term potential. Let us take the next example. The construction of a natural gas reserve power station is also mentioned in the memo. What this constitutes is switching to an imported fuel the emissions effect of which is the same as that of the local fuel. Why are we doing this?
To really pull the wool over our eyes, we're told, and I've heard it from the mouths of Eesti Energia executives, that we'll start using hydrogen down the line. The energy return on investment of hydrogen is in the red. But the wise men in the government are earmarking dozens of millions of euros for hydrogen projects. And everyone's happy, especially those getting the money.
I don't know who is behind Estonia's energy lobby today. While wind energy companies are interested in securing favorable conditions for themselves, they care nothing about energy and supply security. It is the same in the rest of the world. Go talk to German or Danish businesses. It is a powerful and influential climate industry complex.
Should the draft law include calculations in terms of the cost of implementing what it outlines? Whether life will become more expensive or cheaper?
Yes, I also looked for it. While the effects analysis part references some studies, the level of superficiality is such to warrant firing these people. It does not include a single proper analysis in full. Let it be said as a side-note that the European Union also carried out no effects analysis when it laid down its climate neutrality deadlines. A similar kind of political-ideological text.
There should, of course, be a proper effects analysis. For example, a thorough energy plan that displays every component as parts of a whole.
The explanatory memo came off downright arrogant. The new climate minister and their team also take an arrogant tone. They address the public as if we were a bunch or morons who have it all wrong. They just keep hammering their talking points home.
The climate law has long been a ship full of promises to take politicians far. Conservationists and those who take a greener look are also angry and disappointed. They ended up writing something that will have little bearing on everyday life, should it be passed. In truth, some politicians have taken advantage of climate anxiety.
Climate anxiety first surfaced in the West in the 1970s. At first, they feared climate cooling, while its warming now. The Reform Party adopted it, probably following political considerations, which is peculiar as those spreading climate anxiety have traditionally been deeply left-wing forces, often with Marxist roots.
We need to address the climate matter, but we need to stay calm and use common sense. I did not take part in the climate law debate events, while entrepreneurs have told me that no big picture formed there. All those treks and journeys, which amounted to an embarrassing circus.
People who believe the world is about to end and were expecting radical decisions are also disappointed. However, it would have been possible to alleviate these fears had we taken a frank and serious look at problems.
The sheer level of wishful thinking in Estonia and Europe has caused the deviation from reality to become too big. We saw it in farmers' protests this spring. We'll soon see protests in the automotive industry and energy where things cannot remain the same. Electricity costs many times more in Europe than it does in the U.S.
But the law now makes it easier for those who say that a new oil plant will reduce young people's chances of living on a clean and diverse planet to turn to court. There have even been calculations of how many people the plant will kill during its lifespan. Will the climate law provide endless work for green lawyers?
Of course. Legal activism has become an industry unto itself and very professional. The climate law creates a trap, which already exists in the European Green Deal, of tying economic, political, ecological and other goals to the principle of the rule of law. It's like hostage-taking.
We might as well provide at the level of legislation that the economy must grow by 5 percent annually, and if it doesn't, we have the right to go to court. It is a similar situation with the climate law targets.
The law's explanatory memo also references the unfortunate German Federal Constitutional Court ruling and a European Court of Human Rights decision, which, by the way, the Swiss parliament just ignored. Judges tend to be superficial and go along with the utopia. But the truth will prevail one day.
Listening to your criticism, I suppose you would throw out the law were you Estonia's climate minister.
The draft law is useless, as the government needs to chase its declared priorities. If the government goes down the path of just ramming the bill through parliament, I suppose we can congratulate [opposition leader] Urmas Reinsalu right now.
People will come together, talk about it and conclude that these things simply aren't possible.
The government should concentrate on its priorities, such as Finance Minister Jürgen Ligi's (Reform) promise to fix state finances. He said that the plan is to find two-thirds from austerity and the rest as revenue. There is no emergency situation in which this formula will not be used.
Whereas it is obvious where cost-cutting should start – climate councils, endless reports and annual analyses of ministries' carbon footprints. We can simply not do any of it.
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Editor: Valner Väino, Marcus Turovski