This change is fueled (no pun intended) by many recent reports on the irreversible effect of the greenhouse gases (GHG) already emitted, and their predictable effect on global warming. It is also fueled by the fact that the effects of climate change (temperature rise, heavy storms, droughts) are becoming quite apparent in everyday life.
It is reflecting the fact that we need to step up our efforts to reduce greenhouse gas emissions before the effects become irreversible, which according to the IPCC report released in October 2018 will become a reality in less than 12 years. The social and economic effects will be devastating, I am convinced.
It is also in this light that in the Netherlands, the government and its social partners have come to a climate accord reflecting their efforts to reduce CO2 emissions in 2030 by 49% compared to 1990, and a final goal of 95% fewer CO2emissions in 2050. At the end of June, the Dutch cabinet presented the final framework. Both consumers and companies will bear the costs of the transition.
As of 2021, CO2 taxation for companies should lead to reducing emissions in line with the Paris Agreement to limit global warming to 2 degrees Celsius or less above pre-industrial levels. The price is set at EUR 30 per ton of CO2 emitted above their allowance, rising to EUR 125-130 in 2030. Out of the proceeds, subsidies will be paid for renewable energy and improving eco-efficiency in industrial sectors.
Other important aspects are the focus on (electric) mobility, sustainable agriculture and a preference for ’green’ solutions over carbon capture and storage solutions. However, half of the target for industry still needs to come from storage. In good Dutch tradition, the accord is based on the ’Poldermodel’ – reaching a compromise. For green parties and NGOs, it does not go far enough, but for rightwing and populist parties, there is no necessity to do anything. Personally, I am happy that the Dutch have come to an accord, and with all its pros and cons, will start working on improving our climate.
As an addendum to the Dutch climate accord, the country’s financial industry on 10 July signed a climate commitment in the presence of the Netherlands’ minister of finance. This obliges asset managers to make an effort to contribute to achieving the climate goals. Three points are key:
Asset managers have committed to report on the progress made in these efforts in their annual reports, or on their websites.