In an illuminating article by Tilak Doshi in Forbes, Europe’s economic trajectory under the weight of environmental policies is critically analyzed. Doshi painted a clear picture of what he described as a self-inflicted wound to Europe’s industrial base, caused by strict regulations and a shift away from reliable energy sources.
“Voltaire famously said that ‘common sense is not so common.’ Nowhere is this adage more relevant than in the field of energy policy in the European Union. These policies have been pursued most vigorously in Germany – Europe’s industrial powerhouse – since it adopted the energy law of 2010. ‘Green’ regulations and mandates were passed while opposing fossil fuels and nuclear energy. energy (German for ‘energy transition’) refers to the ongoing energy transition to an imagined future of environmentally friendly, reliable, and low-carbon energy supplies. good price”.
Doshi’s analysis starts with Germany, the center of Europe’s industrial power, which has seen a significant decline in industrial output since 2017. This decline is due to the Energiewende, a Policy initiative aimed at transitioning to renewable energy sources but leading to high economic efficiency. energy costs and reduced competitiveness in global markets.
“German industrial production peaked in November 2017 and by the end of last year had fallen to levels last seen in 2006 outside of the global financial recession and the Covid-19 years. The country’s industrial sector contracted by nearly 14% in the six years through December 2023.
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Energy-intensive commercially oriented industries, involving both small and medium-sized enterprises as well as corporate giants such as BASF, have been hit the hardest, as high energy prices have left many Germany’s manufacturing sector became less competitive. The self-inflicted economic crisis in pursuit of ‘net zero’ policy goals has gone beyond Germany. Industrial capacity is being withered across Europe.”.
Furthermore, Doshi points out that these economic policies are not only difficult for industry but also have broader socio-political implications. Growing discontent among Europeans is evident, especially among those most affected such as farmers and small business owners, who are increasingly opposed to what they see as the legal framework. burdensome and unrealistic.
“Since summer 2023, the European Green Deal has been on a regulatory pause, as EU governments face a ‘green backlash’ against environmental policies. In the face of energy and cost-of-living crises, farmers, consumers and trade groups are starting to resent the heavy costs of rampant environmental regulations across the continent. Nowhere is this sense of discontent more evident than in Europe’s great peasant uprising, as farmer protests have escalated across the continent since they first began in the Netherlands in September. October 2019”.
Doshi does not stand alone in his criticism. He quotes other commentators as suggesting that a review of energy policies may be imminent in Europe, perhaps influenced more by economic necessity than environmental idealism.
“The heavy costs of halting fossil fuel use while promoting intermittent, weather-dependent renewable energy technologies over the past decade have been disguised and diffused by hidden fees and financial transfers to powerful constituencies. But over time, ‘net zero’ climate policies have become increasingly unpalatable to ordinary people as they extend beyond the electricity sector to cover agriculture, transport, homes and buildings ”.
This reflection on Europe’s economic and industrial decline under the pressure of green policies serves as a cautionary tale about the unintended consequences of well-intentioned government policies. but poorly done. Strict enforcement of these policies, without full consideration of economic realities and the underlying energy needs of a developed economy, could lead to what Doshi calls economic suicide. His article calls for a balance – a realignment of environmental goals with the real need for stability and economic growth, reflecting the view that perhaps the pendulum of environmental policy has swung too far. distant.
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