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Vote on the EU taxonomy: nonsense, painted green


For or against gas and nuclear? The EU Parliament wants to decide which technology deserves a sustainability label. This is pure planned economy.

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Protest against EU taxonomy plans in Munich in February

Photo: Max Ludwig / mufkinnphotos/ aal / IMAGO

This week in the European Parliament in Strasbourg there is a vote that quite a few stylize as a choice between good and evil.

It is about the question of whether electricity from gas and nuclear power is classified as sustainable in the new so-called EU taxonomy.

Those in favor see themselves as advocates of a realistic environmental policy in the interest of business and consumers.

Anyone who rejects the EU plan advocates consistent climate protection without making lazy compromises.

Greenwashing, no thanks, says the environmental movement's campaign.

In fact, the conflict highlights one of the most dangerous technocratic aberrations in recent EU history.

With its taxonomy, the confederation of states wants to classify all technologies, industries and products on the continent as green or non-green so that banks and insurance companies can invest their customers' money in a climate-friendly manner in the future.

Can an eco-label for green financial investments boost business?

That doesn't just sound like a planned economy, it is a planned economy.

And just as the actually existing socialism has not reached its goal, the taxonomy of the environment will hardly be of any use either.

If the project is serious, it will pave the way for a monstrous climate bureaucracy that will impose pointless additional burdens on companies in the midst of the greatest restructuring phase in industrial history.

The craziest thing is that the green variant of the planned economy was not conceived by communist business leaders, but by an assertive alliance of environmental activists and lobbyists from the financial industry.

Their calculus went like this: because customers increasingly have the well-being of the planet in mind when making investments, it would promote their own business considerably if the state issued a kind of eco-label for green financial investments.

And so they took the idea to the responsible departments of the EU Commission years ago, which in turn saw the concept as an opportunity to strengthen the European financial sector in international competition.

If the taxonomy were to become a global standard, this could give the continent's banks and insurance companies an advantage over their competitors from Great Britain or the USA: anyone who wants to invest their money sustainably could feel safe in Europe.

The only problem is that the EU Commission has long since taken a different path towards a climate-neutral future.

With the specifications, bans and price signals of the Green Deal, it has long since set the economy a state framework for ecological conversion.

If the plan works, Europe will be climate-neutral by 2050 at the latest.

The financial industry would only have to follow the market signals to make its contribution to saving the global climate.

In the long run, only what is green is lucrative, that is the logic of the Green Deal - it simply makes the taxonomy project superfluous.

What further complicates the situation: Because fossil fuels will still be needed for a transitional period, investments in climate-damaging gas or coal technologies are unavoidable.

Especially if Europe wants to make itself independent of Russian energy supplies.

This puts taxonomists in a dilemma.

If they classify gas and nuclear as "sustainable," they are guilty of greenwashing among environmentally conscious investors.

If they decide against it, they make investments that are needed in the semi-fossil transformation economy more difficult.

At the same time, they are setting up a new climate administration in the name of green investment.

For example, around 70 members from companies, associations and environmental organizations have been discussing this for years on the responsible »Platform for Sustainable Finance«.

They have formed six working groups and published an initial report with an almost 600-page "technical appendix" that poses a lot of puzzles for practitioners.

How can it be that many wind turbine operators are dismissed as "unsustainable" because they have fewer than 500 employees and do not issue bonds or shares?

Is it true that an electric car is green per se, but the axle for the car is not?

There is talk of an "unsustainable state of affairs" in the supplier industry, just as in mechanical engineering, whose diverse technologies cannot be clearly classified by the taxonomists.

Now many companies fear that they will get poorer credit terms from the banks in the future.

In return, the project favors large corporations whose PR departments have long been trained to depict the sustainability of their actions in beautiful brochures.

The EU taxonomy directs investor money towards green stamp companies, while companies from the fossil sectors of the economy tend to be undervalued.

This pleases those hedge funds that like to bet against the trend - which in turn encourages speculation.

When the fund industry is cheering, caution is advised

And so it is perhaps not surprising that the EU taxonomy is currently being welcomed by hardly any other segment of the industry as enthusiastically as by the German state banks.

During the financial crisis, the institutes gained the reputation of representing “dumb German money”.

Bayern LB, for example, now advertises itself to its medium-sized corporate customers as “a strategic partner for sustainable finance”.

Your advisors, wrote the CEO recently in the green newspeak of the financial industry, see themselves as “enablers” of the taxonomy in order to “make their regulatory requirements tangible”, for example when issuing “green loans”.

The sober officials of the Federal Audit Office, on the other hand, view the project from a much greater distance.

Years ago you presented a 30-page expert report on the EU taxonomy, which amounts to a total scathing review.

The project, they warn, could "soften up" the current financial market regulation and "pose risks for the German economy and the federal budget."

Particularly curious: When it comes to its own green bonds, the EU consistently ignores the taxonomy requirements, as the Bonn financial controllers have shown in a recent study.

For the private sector, on the other hand, other requirements should apply.

That is double standards and would - if one were to take it seriously - require an EU-wide control bureaucracy that need not fear comparison with the planning commissions of former Eastern Bloc countries.

It is to be welcomed if citizens want to invest their money sustainably.

And the financial industry should endeavor to make its customers reliable offers for this.

A government seal is not needed for this, regardless of whether it contains gas and atom or not.

The taxonomy sets up a green backdrop to promote financial industry business at the expense of the real economy.

That doesn't exactly sound like the best idea for a confederation of states that claims to want to help Europe's industrial renaissance.

At the same time, it should have been clear since the financial crisis at the latest: When banks and the fund industry push ahead with regulation, extreme caution is required.

Nonsense is nonsense, even if it is painted green.

Source: spiegel

All business articles on 2022-07-05

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