Sometimes laws make progress when no one expects it: This was the case with the Climate Protection Act on Monday. In the morning, the Expert Council for Climate Issues explained why it was a bad idea to abolish the binding sector targets. In the afternoon, the news came that this was exactly what had been decided. Malte Kreutzfeldt analyzes the details for you.
On the occasion of this week’s Spring Meetings of the World Bank and the International Monetary Fund, Bernhard Pötter also explains the current state of the climate-friendly restructuring of the international financial architecture. In this context, we also look at how high levels of debt are holding back climate investments by poor countries.
We also take a look at China with Federal Chancellor Olaf Scholz, who is currently traveling: The country is now producing solar technology at dumping prices. We explain who benefits from this. And we take a look at Australia, where the government is now also planning green economic development programs à la IRA and Green Deal.
We wish you a good start to the week!
This Monday, we saw how quickly the political situation in Berlin can change: In the morning, the Expert Council had once again provided good reasons why the planned amendment to the Climate Protection Act is a bad idea when it presented its latest review report on the 2023 climate balance at the Federal Press Conference: this would remove “the specific responsibility of a ministry”, Brigitte Knopf had warned as deputy chair of the committee. At the same time, she made it clear that – contrary to what Minister Volker Wissing claimed last week – there was no threat of driving bans even with the existing law, as it already offers some flexibility.
Environmental and climate protection associations then increased the pressure once again and demanded that the Greens not approve the planned amendment. “Who is the problem? Volker Wissing – What is the solution? Climate Protection Act”, chanted activists, including Luisa Neubauer from Fridays For Future, in front of the Federal Press Conference building. Lutz Weischer from Germanwatch demanded: “The year-specific sector responsibilities of the Climate Protection Act must be retained even if the law is amended. Otherwise there is a risk of flying blind on climate policy and an expensive awakening.”
Because even if Germany abolishes the national sector targets, high payments can be expected at EU level if the transport and building sectors do not significantly reduce their emissions. According to Weischer, the Chancellor must therefore “support the negotiators from the SPD and Green parliamentary groups who are defending the Climate Protection Act as the basis for predictable and legally secure climate protection“.
A few hours later, it was already clear that the warnings of the Council of Experts and associations had not been heeded: The deputy parliamentary party leaders of the SPD, FDP and Greens announced an agreement on the Climate Protection Act in a joint press release. The interpretation of the agreement was once again quite contradictory: While Lukas Köhler for the FDP welcomed “the abolition of the annual sector targets”, Julia Verlinden for the Greens declared that the bill “renews the binding nature of each sector”.
The new legal text is not yet available in writing. However, the information available so far shows that the FDP’s interpretation is much closer to reality than that of the Greens. The sector targets remain in the law, so there is transparency about where there are deficits. However, the fact that the transport sector once again missed its target by a wide margin in 2023, as the Expert Council confirmed once again on Monday, no longer has any direct consequences as a result of the amendment.
This is because the conditions that must be met for an emergency program to be adopted will be completely different in the future:
In the past, the Greens, including Minister Robert Habeck, argued that the change would not make a big difference. After all, the Minister for Transport had not submitted any effective measures under the previous regulation either, even though the climate target in his sector had also been missed in the two previous years.
However, the situation has changed due to the fact that this inactivity has since led to several lawsuits. In the first instance, the German government had already been ordered to comply with the requirements of the law. It would therefore not have been possible to sit the matter out for much longer under the existing law – which explains why Wissing has increased the pressure in recent days by warning of the alleged threat of driving bans.
The Greens also see it as a major improvement that in the future – in contrast to the cabinet draft for the new KSG from last summer – not only the expected compliance with the climate target for 2030 is to be reviewed, but also the target for 2040. “In view of the much stricter climate target for 2040, more must happen, especially in the transport sector”, explained Julia Verlinden. However, this also only applies to the distant future: according to information from coalition circles, compliance with the 2040 target is to be reviewed for the first time in 2030, meaning that Volker Wissing has nothing to fear from this regulation either.
What the Greens actually got in return for their approval of the watered-down Climate Protection Act was the FDP’s approval of Solar Package 1. This had also been approved by the cabinet in the summer of 2023; however, the FDP had made its approval conditional on the Climate Protection Act being reformed. As the package provides for many simplifications for solar system operators, it has been urgently awaited by the industry.
Compared to the cabinet version, the agreement reached by the parliamentary groups provides for changes to many details; however, the key points have remained unchanged:
The Green parliamentary group’s wish to include the so-called resilience bonus in the draft bill was not fulfilled. This would have meant that operators of solar installations would have received higher remuneration if the modules were manufactured in Europe. The company Meyer Burger, among others, had pushed for this and threatened to close sites if the demand was not met.
However, the FDP had long announced that it would not support such a regulation; parts of the solar industry were also critical of it, fearing that it could reduce demand because potential customers would wait for domestic solar modules that were not sufficiently available. According to information from ministry circles, Minister Robert Habeck, who had also campaigned for the resilience bonus, now wants to try instead to promote the domestic solar industry as part of the EU’s Net Zero Industry Act, which provides for investment support and improved credit programs.
How is the global financial system adapting to combat the climate crisis? This is one of the key questions for the spring meeting of the World Bank Group (WBG) and the International Monetary Fund (IMF) this week in Washington. It is clear that the transformation has begun, but is still in its infancy. While World Bank CEO Ajay Banga emphasizes how much has already been achieved, critics complain that the reforms are too slow and not far-reaching enough.
In the coming years, financial issues will dominate global climate policy on the one hand and the climate crisis will put financial policy under pressure on the other. The question of how the World Bank and multilateral development banks (MDBs) deal with public climate aid, private investment in the green transition and the debt of developing countries is also considered a key issue. UN Climate Chief Simon Stiell had warned before the meeting that there were only “two years left to save the world“. The finance meeting was not a “dress rehearsal” and not a “speech fest”; the states would have to raise “hundreds of billions of dollars” in climate financing.
At the fall meeting in 2023, the World Bank decided on structural changes and a new motto: Ending poverty “on a habitable planet“. The World Bank is making great efforts to bring its new mission to life and reform the bank, explained the new head Ajay Banga, who has been in office since summer 2023, before the start of the conference. “Every dollar we get, we will leverage six to eight times that amount over the next decade”, Banga promised.
A capital increase by the Bank, which many experts believe is necessary, is currently difficult to implement due to geopolitical tensions. However, in view of the climate crisis, the World Bank is changing its internal structures and processes:
“The new President Banga is also putting a lot of pressure on the World Bank to implement these changes”, Michael Krake, German Executive Director at the World Bank, told Table.Briefings. “Milestones” are being set, but there is still a lot of work to do, because it is about “changing the DNA of an institution” that will be 80 years old this year.
Critics, on the other hand, are skeptical. For them, an “opportunity for a far-reaching reform of the World Bank is being missed”, as the development organization World Economy, Ecology and Development (WEED) puts it. Banga’s plans for a “better bank” are primarily aimed at “lending larger amounts of capital with less effort and in less time“, without questioning the objective.
The criticism mainly relates to these points:
After all, another acid test of how seriously the industrialized countries take aid for the Global South is coming up by the end of the year. The 21st replenishment round for the International Development Association (IDA) is due to take place every three years. Which countries give how much will be one of the central informal topics at the spring conference.
It is one of the hot topics of the spring: Should Germany support its own solar industry in order to maintain its competitiveness against China’s dumping modules? The question is also likely to be a topic on Olaf Scholz’s three-day trip to China. Solar manufacturers such as Meyer Burger are very concerned about Chinese competition. Installers, on the other hand, are warning against protective measures that could make cheap Chinese modules more expensive and slow down the energy transition.
China’s overcapacity in green industries is also causing headaches for US politicians. “I am particularly concerned about the global impact of the overcapacity we are seeing in China”, said US Treasury Secretary Janet Yellen recently at the opening of a solar module plant in the US. In the past, the Chinese government’s support in industries such as steel and aluminum had already led to considerable overinvestment. “Now overcapacity is being built up in ‘new’ industries such as solar, EVs and lithium-ion batteries.” This warning is justified, as there is already overcapacity in batteries and solar systems in particular.
Last year, Chinese production capacity for batteries was already more than twice as high as demand. And the difference continues to grow: Next year, capacity will be three times greater than demand, according to figures from the British industry service CRU Group. The situation is similar for solar panels: China would have had enough manufacturing capacity for panels with a nominal output of 861 gigawatts last year. However, only 390 gigawatts were installed globally. This was a new record and exceeded the previous year’s global installations by almost 40 percent. But even that was not enough to even come close to utilizing the existing production capacities in China. And these will continue to grow: This year alone, 500 to 600 gigawatts of production capacity are to be added.
This is reflected in the prices: Solar cells have become two-thirds cheaper in the last twelve months. The situation is similar for batteries: Their price halved last year. The price of lithium helped: It rose massively from mid-2021, reached an all-time high at the end of 2022 and has since fallen by more than 80 percent. Although the price of lithium is unlikely to fall any further, the slide in battery prices continues. CATL, the Chinese global market leader for batteries, expects prices to halve again this year. A price war is therefore looming, as the second largest battery producer, the Chinese car manufacturer BYD, is also aggressively cutting costs in order to survive.
There is a method to the overcapacity and price wars: China’s government is curbing consumption in favor of investment. This accounts for 42 percent of the country’s gross domestic product (GDP). In Germany, the figure is just half that. For a long time, these investments flowed mainly into the real estate sector and triggered a gigantic boom there – but this is over. Investments are now being channeled into the industry, resulting in overcapacity being built up there. “In contrast to other economies that have undergone a drastic adjustment of their real estate market, the investment rate in China is not declining”, says Frederic Neumann from the British bank HSBC. “Instead, investment is shifting towards infrastructure and, above all, the manufacturing industry.“
History is repeating itself – at least for solar installations. After Germany introduced a feed-in tariff for solar and wind power in 2000 and countries such as Spain and Italy followed suit, a market for solar systems developed in Europe. This allowed them to break out of their market niche and enter the mass market. However, the European solar boom was then stifled again by governments. For some years now, China has been responsible for the next step in the development of the solar market: With subsidies such as tax breaks or cheap loans, manufacturers are being encouraged to build ever larger factories in order to keep costs down.
This is a problem for Western industrialized countries such as Germany, as they also want to build up production capacities for batteries and solar panels. For other countries, however, the Chinese overcapacity and rapidly falling prices are positive, says Gary Hufbauer from the US think tank Peterson Institute: “If China pursues a massive ‘export solution’, this will hurt manufacturing companies in Japan, the EU, Korea and other industrialized countries. But low prices will be welcome in many developing countries in Latin America, Africa and Asia.”
In contrast to the industrialized nations, it is illusory for these countries to invest billions in their own production facilities. And so China’s overcapacity could ultimately lead to a division of the global market for products such as batteries and solar panels: The industrialized countries seal off their markets, for example with anti-dumping duties, and build up their own industries. And all other countries gratefully buy the very cheap Chinese products. If this accelerates the global energy transition towards renewables, there would also be a clear winner from China’s economic policy: our planet.
The European Court of Human Rights (ECtHR) set new standards last week with its ruling in favor of Swiss climate activists. At the same time, it missed a great opportunity for more climate justice by not even allowing the complaint of Portuguese teenagers and young adults to be heard.
First the positive: In the case of the elderly climate activists against Switzerland, the Court established what national constitutional courts had already decided: Climate change is a reality. It threatens human rights. Because states must protect the fundamental rights of their citizens, they are obliged to take appropriate measures to reduce climate-damaging emissions with a view to the 1.5-degree limit of the Paris Agreement.
The ruling only affects Switzerland directly. But it sets standards that are also binding for all member states of the Council of Europe. Courts in other countries will also take its arguments into account in their decisions. The ECtHR’s decision is therefore a groundbreaking success that is likely to strengthen climate complaints around the world.
But the court could have achieved much more for the climate – if it had dared to incorporate the global dimension of the climate crisis into its reasoning as strongly as it should have done.
The case of the young people from Portugal provided it with the ideal opportunity to do so. The young people had argued before the ECtHR that their human rights were being violated not only by Portugal but by all 32 member states of the Council of Europe, all of which have signed the European Convention on Human Rights (ECHR). According to the complaint, all of these states are responsible for climate change. This means that they all have a duty to consider the impact of the climate crisis on young people in Portugal in their policies.
Because we at the European Center for Constitutional and Human Rights (ECCHR) find this argument for more extraterritorial obligations of states so trend-setting and important, we have also supported this complaint (as well as that of the elderly climate activists) in the form of an amicus curiae brief.
Not everyone in Europe is affected by the climate crisis to the same extent. Government resources to enable effective climate protection are distributed very differently. Portugal is one of the countries suffering the most from the climate crisis in Europe, for example due to forest fires or heatwaves. In Germany, on the other hand, the effects of global warming are far less noticeable – at the same time, Germany contributes far more to climate change than Portugal and, as a wealthier country, has more resources at its disposal to protect its own population.
This is why the young people and young adults argued: Each member state of the ECHR must introduce appropriate climate protection not only with regard to its own territory, but also with regard to the populations of other member states. In essence, this is about a fair distribution of climate protection obligations.
If the court had followed their reasoning, the German government would now have to formulate much stricter emission reduction targets – precisely because it would have to consider the consequences of its policy for people living in Portugal, not just its own population. As is well known, the Federal Constitutional Court found in its own climate ruling in 2021 that a maximum warming of two degrees is still reasonable for people in Germany. Whether this is the case remains to be seen. But in Portugal, the effects will be much worse in any case – and therefore unacceptable.
While the number of extreme weather disasters is increasing, many EU member states – including Germany – are on a path towards three degrees of global warming. In view of this, case law would have been sorely needed to set ambitious targets for the human rights obligation to protect the climate and distribute them fairly among the member states. As the European Court of Justice, the ECtHR would have been in a position to do this.
However, the court opted for the safe route. It dismissed the complaint from Portugal because the previous criteria for extraterritorial state obligations were not met. In the future, Portuguese citizens will therefore only be able to demand that their own state protect their fundamental rights.
The Court’s argument is indeed legally justifiable. But in its ruling, it ignores the fact that the climate crisis does not respect national borders. It has thus missed the opportunity to establish human rights standards for a fair distribution of the Europe-wide responsibility of states for the global effects of climate change. It must therefore be stated that it is good that the Court has taken a leap in terms of climate policy. In view of the challenges, however, it has unfortunately fallen short.
Miriam Saage-Maaß is a lawyer and Legal Director at the European Center for Constitutional and Human Rights (ECCHR), where she established the program area for business and human rights. ECCHR supported the climate complaints from Switzerland and Portugal before the ECtHR.
Sometimes laws make progress when no one expects it: This was the case with the Climate Protection Act on Monday. In the morning, the Expert Council for Climate Issues explained why it was a bad idea to abolish the binding sector targets. In the afternoon, the news came that this was exactly what had been decided. Malte Kreutzfeldt analyzes the details for you.
On the occasion of this week’s Spring Meetings of the World Bank and the International Monetary Fund, Bernhard Pötter also explains the current state of the climate-friendly restructuring of the international financial architecture. In this context, we also look at how high levels of debt are holding back climate investments by poor countries.
We also take a look at China with Federal Chancellor Olaf Scholz, who is currently traveling: The country is now producing solar technology at dumping prices. We explain who benefits from this. And we take a look at Australia, where the government is now also planning green economic development programs à la IRA and Green Deal.
We wish you a good start to the week!
This Monday, we saw how quickly the political situation in Berlin can change: In the morning, the Expert Council had once again provided good reasons why the planned amendment to the Climate Protection Act is a bad idea when it presented its latest review report on the 2023 climate balance at the Federal Press Conference: this would remove “the specific responsibility of a ministry”, Brigitte Knopf had warned as deputy chair of the committee. At the same time, she made it clear that – contrary to what Minister Volker Wissing claimed last week – there was no threat of driving bans even with the existing law, as it already offers some flexibility.
Environmental and climate protection associations then increased the pressure once again and demanded that the Greens not approve the planned amendment. “Who is the problem? Volker Wissing – What is the solution? Climate Protection Act”, chanted activists, including Luisa Neubauer from Fridays For Future, in front of the Federal Press Conference building. Lutz Weischer from Germanwatch demanded: “The year-specific sector responsibilities of the Climate Protection Act must be retained even if the law is amended. Otherwise there is a risk of flying blind on climate policy and an expensive awakening.”
Because even if Germany abolishes the national sector targets, high payments can be expected at EU level if the transport and building sectors do not significantly reduce their emissions. According to Weischer, the Chancellor must therefore “support the negotiators from the SPD and Green parliamentary groups who are defending the Climate Protection Act as the basis for predictable and legally secure climate protection“.
A few hours later, it was already clear that the warnings of the Council of Experts and associations had not been heeded: The deputy parliamentary party leaders of the SPD, FDP and Greens announced an agreement on the Climate Protection Act in a joint press release. The interpretation of the agreement was once again quite contradictory: While Lukas Köhler for the FDP welcomed “the abolition of the annual sector targets”, Julia Verlinden for the Greens declared that the bill “renews the binding nature of each sector”.
The new legal text is not yet available in writing. However, the information available so far shows that the FDP’s interpretation is much closer to reality than that of the Greens. The sector targets remain in the law, so there is transparency about where there are deficits. However, the fact that the transport sector once again missed its target by a wide margin in 2023, as the Expert Council confirmed once again on Monday, no longer has any direct consequences as a result of the amendment.
This is because the conditions that must be met for an emergency program to be adopted will be completely different in the future:
In the past, the Greens, including Minister Robert Habeck, argued that the change would not make a big difference. After all, the Minister for Transport had not submitted any effective measures under the previous regulation either, even though the climate target in his sector had also been missed in the two previous years.
However, the situation has changed due to the fact that this inactivity has since led to several lawsuits. In the first instance, the German government had already been ordered to comply with the requirements of the law. It would therefore not have been possible to sit the matter out for much longer under the existing law – which explains why Wissing has increased the pressure in recent days by warning of the alleged threat of driving bans.
The Greens also see it as a major improvement that in the future – in contrast to the cabinet draft for the new KSG from last summer – not only the expected compliance with the climate target for 2030 is to be reviewed, but also the target for 2040. “In view of the much stricter climate target for 2040, more must happen, especially in the transport sector”, explained Julia Verlinden. However, this also only applies to the distant future: according to information from coalition circles, compliance with the 2040 target is to be reviewed for the first time in 2030, meaning that Volker Wissing has nothing to fear from this regulation either.
What the Greens actually got in return for their approval of the watered-down Climate Protection Act was the FDP’s approval of Solar Package 1. This had also been approved by the cabinet in the summer of 2023; however, the FDP had made its approval conditional on the Climate Protection Act being reformed. As the package provides for many simplifications for solar system operators, it has been urgently awaited by the industry.
Compared to the cabinet version, the agreement reached by the parliamentary groups provides for changes to many details; however, the key points have remained unchanged:
The Green parliamentary group’s wish to include the so-called resilience bonus in the draft bill was not fulfilled. This would have meant that operators of solar installations would have received higher remuneration if the modules were manufactured in Europe. The company Meyer Burger, among others, had pushed for this and threatened to close sites if the demand was not met.
However, the FDP had long announced that it would not support such a regulation; parts of the solar industry were also critical of it, fearing that it could reduce demand because potential customers would wait for domestic solar modules that were not sufficiently available. According to information from ministry circles, Minister Robert Habeck, who had also campaigned for the resilience bonus, now wants to try instead to promote the domestic solar industry as part of the EU’s Net Zero Industry Act, which provides for investment support and improved credit programs.
How is the global financial system adapting to combat the climate crisis? This is one of the key questions for the spring meeting of the World Bank Group (WBG) and the International Monetary Fund (IMF) this week in Washington. It is clear that the transformation has begun, but is still in its infancy. While World Bank CEO Ajay Banga emphasizes how much has already been achieved, critics complain that the reforms are too slow and not far-reaching enough.
In the coming years, financial issues will dominate global climate policy on the one hand and the climate crisis will put financial policy under pressure on the other. The question of how the World Bank and multilateral development banks (MDBs) deal with public climate aid, private investment in the green transition and the debt of developing countries is also considered a key issue. UN Climate Chief Simon Stiell had warned before the meeting that there were only “two years left to save the world“. The finance meeting was not a “dress rehearsal” and not a “speech fest”; the states would have to raise “hundreds of billions of dollars” in climate financing.
At the fall meeting in 2023, the World Bank decided on structural changes and a new motto: Ending poverty “on a habitable planet“. The World Bank is making great efforts to bring its new mission to life and reform the bank, explained the new head Ajay Banga, who has been in office since summer 2023, before the start of the conference. “Every dollar we get, we will leverage six to eight times that amount over the next decade”, Banga promised.
A capital increase by the Bank, which many experts believe is necessary, is currently difficult to implement due to geopolitical tensions. However, in view of the climate crisis, the World Bank is changing its internal structures and processes:
“The new President Banga is also putting a lot of pressure on the World Bank to implement these changes”, Michael Krake, German Executive Director at the World Bank, told Table.Briefings. “Milestones” are being set, but there is still a lot of work to do, because it is about “changing the DNA of an institution” that will be 80 years old this year.
Critics, on the other hand, are skeptical. For them, an “opportunity for a far-reaching reform of the World Bank is being missed”, as the development organization World Economy, Ecology and Development (WEED) puts it. Banga’s plans for a “better bank” are primarily aimed at “lending larger amounts of capital with less effort and in less time“, without questioning the objective.
The criticism mainly relates to these points:
After all, another acid test of how seriously the industrialized countries take aid for the Global South is coming up by the end of the year. The 21st replenishment round for the International Development Association (IDA) is due to take place every three years. Which countries give how much will be one of the central informal topics at the spring conference.
It is one of the hot topics of the spring: Should Germany support its own solar industry in order to maintain its competitiveness against China’s dumping modules? The question is also likely to be a topic on Olaf Scholz’s three-day trip to China. Solar manufacturers such as Meyer Burger are very concerned about Chinese competition. Installers, on the other hand, are warning against protective measures that could make cheap Chinese modules more expensive and slow down the energy transition.
China’s overcapacity in green industries is also causing headaches for US politicians. “I am particularly concerned about the global impact of the overcapacity we are seeing in China”, said US Treasury Secretary Janet Yellen recently at the opening of a solar module plant in the US. In the past, the Chinese government’s support in industries such as steel and aluminum had already led to considerable overinvestment. “Now overcapacity is being built up in ‘new’ industries such as solar, EVs and lithium-ion batteries.” This warning is justified, as there is already overcapacity in batteries and solar systems in particular.
Last year, Chinese production capacity for batteries was already more than twice as high as demand. And the difference continues to grow: Next year, capacity will be three times greater than demand, according to figures from the British industry service CRU Group. The situation is similar for solar panels: China would have had enough manufacturing capacity for panels with a nominal output of 861 gigawatts last year. However, only 390 gigawatts were installed globally. This was a new record and exceeded the previous year’s global installations by almost 40 percent. But even that was not enough to even come close to utilizing the existing production capacities in China. And these will continue to grow: This year alone, 500 to 600 gigawatts of production capacity are to be added.
This is reflected in the prices: Solar cells have become two-thirds cheaper in the last twelve months. The situation is similar for batteries: Their price halved last year. The price of lithium helped: It rose massively from mid-2021, reached an all-time high at the end of 2022 and has since fallen by more than 80 percent. Although the price of lithium is unlikely to fall any further, the slide in battery prices continues. CATL, the Chinese global market leader for batteries, expects prices to halve again this year. A price war is therefore looming, as the second largest battery producer, the Chinese car manufacturer BYD, is also aggressively cutting costs in order to survive.
There is a method to the overcapacity and price wars: China’s government is curbing consumption in favor of investment. This accounts for 42 percent of the country’s gross domestic product (GDP). In Germany, the figure is just half that. For a long time, these investments flowed mainly into the real estate sector and triggered a gigantic boom there – but this is over. Investments are now being channeled into the industry, resulting in overcapacity being built up there. “In contrast to other economies that have undergone a drastic adjustment of their real estate market, the investment rate in China is not declining”, says Frederic Neumann from the British bank HSBC. “Instead, investment is shifting towards infrastructure and, above all, the manufacturing industry.“
History is repeating itself – at least for solar installations. After Germany introduced a feed-in tariff for solar and wind power in 2000 and countries such as Spain and Italy followed suit, a market for solar systems developed in Europe. This allowed them to break out of their market niche and enter the mass market. However, the European solar boom was then stifled again by governments. For some years now, China has been responsible for the next step in the development of the solar market: With subsidies such as tax breaks or cheap loans, manufacturers are being encouraged to build ever larger factories in order to keep costs down.
This is a problem for Western industrialized countries such as Germany, as they also want to build up production capacities for batteries and solar panels. For other countries, however, the Chinese overcapacity and rapidly falling prices are positive, says Gary Hufbauer from the US think tank Peterson Institute: “If China pursues a massive ‘export solution’, this will hurt manufacturing companies in Japan, the EU, Korea and other industrialized countries. But low prices will be welcome in many developing countries in Latin America, Africa and Asia.”
In contrast to the industrialized nations, it is illusory for these countries to invest billions in their own production facilities. And so China’s overcapacity could ultimately lead to a division of the global market for products such as batteries and solar panels: The industrialized countries seal off their markets, for example with anti-dumping duties, and build up their own industries. And all other countries gratefully buy the very cheap Chinese products. If this accelerates the global energy transition towards renewables, there would also be a clear winner from China’s economic policy: our planet.
The European Court of Human Rights (ECtHR) set new standards last week with its ruling in favor of Swiss climate activists. At the same time, it missed a great opportunity for more climate justice by not even allowing the complaint of Portuguese teenagers and young adults to be heard.
First the positive: In the case of the elderly climate activists against Switzerland, the Court established what national constitutional courts had already decided: Climate change is a reality. It threatens human rights. Because states must protect the fundamental rights of their citizens, they are obliged to take appropriate measures to reduce climate-damaging emissions with a view to the 1.5-degree limit of the Paris Agreement.
The ruling only affects Switzerland directly. But it sets standards that are also binding for all member states of the Council of Europe. Courts in other countries will also take its arguments into account in their decisions. The ECtHR’s decision is therefore a groundbreaking success that is likely to strengthen climate complaints around the world.
But the court could have achieved much more for the climate – if it had dared to incorporate the global dimension of the climate crisis into its reasoning as strongly as it should have done.
The case of the young people from Portugal provided it with the ideal opportunity to do so. The young people had argued before the ECtHR that their human rights were being violated not only by Portugal but by all 32 member states of the Council of Europe, all of which have signed the European Convention on Human Rights (ECHR). According to the complaint, all of these states are responsible for climate change. This means that they all have a duty to consider the impact of the climate crisis on young people in Portugal in their policies.
Because we at the European Center for Constitutional and Human Rights (ECCHR) find this argument for more extraterritorial obligations of states so trend-setting and important, we have also supported this complaint (as well as that of the elderly climate activists) in the form of an amicus curiae brief.
Not everyone in Europe is affected by the climate crisis to the same extent. Government resources to enable effective climate protection are distributed very differently. Portugal is one of the countries suffering the most from the climate crisis in Europe, for example due to forest fires or heatwaves. In Germany, on the other hand, the effects of global warming are far less noticeable – at the same time, Germany contributes far more to climate change than Portugal and, as a wealthier country, has more resources at its disposal to protect its own population.
This is why the young people and young adults argued: Each member state of the ECHR must introduce appropriate climate protection not only with regard to its own territory, but also with regard to the populations of other member states. In essence, this is about a fair distribution of climate protection obligations.
If the court had followed their reasoning, the German government would now have to formulate much stricter emission reduction targets – precisely because it would have to consider the consequences of its policy for people living in Portugal, not just its own population. As is well known, the Federal Constitutional Court found in its own climate ruling in 2021 that a maximum warming of two degrees is still reasonable for people in Germany. Whether this is the case remains to be seen. But in Portugal, the effects will be much worse in any case – and therefore unacceptable.
While the number of extreme weather disasters is increasing, many EU member states – including Germany – are on a path towards three degrees of global warming. In view of this, case law would have been sorely needed to set ambitious targets for the human rights obligation to protect the climate and distribute them fairly among the member states. As the European Court of Justice, the ECtHR would have been in a position to do this.
However, the court opted for the safe route. It dismissed the complaint from Portugal because the previous criteria for extraterritorial state obligations were not met. In the future, Portuguese citizens will therefore only be able to demand that their own state protect their fundamental rights.
The Court’s argument is indeed legally justifiable. But in its ruling, it ignores the fact that the climate crisis does not respect national borders. It has thus missed the opportunity to establish human rights standards for a fair distribution of the Europe-wide responsibility of states for the global effects of climate change. It must therefore be stated that it is good that the Court has taken a leap in terms of climate policy. In view of the challenges, however, it has unfortunately fallen short.
Miriam Saage-Maaß is a lawyer and Legal Director at the European Center for Constitutional and Human Rights (ECCHR), where she established the program area for business and human rights. ECCHR supported the climate complaints from Switzerland and Portugal before the ECtHR.
