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Economy

The European Union is shifting back towards fossil fuels

Published

1 month ago

5 minute read

From Resource Works 

In 2024, the EU shifted towards a cautious, fossil fuel-inclusive energy strategy amid rising costs and public unrest

In 2024, the European Union’s shift back towards fossil fuels began to solidify in earnest.

Over the past few years, Giorgia Meloni has become the Prime Minister of Italy, Geert Wilders’ party is the senior partner in the governing coalition of the Netherlands, and Friedrich Merz is poised to ascend to the leadership of Germany’s government. All three figures are on the political right and are far more nuanced or sceptical of renewable energy, depending on whom you speak to.

The EU’s once ironclad commitment to rapidly replacing fossil fuels with renewables has cracked and given way to a more cautious and inclusive strategy to keep homes heated and industry powered. There is also growing resistance to the sacrifices being asked of ordinary EU citizens to meet the demands of aggressive green policies, which helped fuel their rise—no pun intended.

Prime Minister Giorgia Meloni of Italy reiterated her government’s ambition for Italy to become a hub of natural gas in Europe. Meloni’s government has signed a important deal with Libya and reaffirmed Italy’s partnership with Algeria across the Mediterranean to grow imports of natural gas to Italy.

Meloni herself has labelled EU climate policies as “disastrous” and has pledged to revise them, while her government has prioritized energy security and economic pragmatism. Her push to boost Mediterranean gas development is in large part a reaction to the Russian invasion of Ukraine in 2022, which led to severe restrictions on imports of Russian gas.

While many critics charge Meloni’s approach to fossil fuels as short-sighted, her approach resonates with many Italians and other Europeans who will no longer tolerate economic disruption due to energy shortages.

In the Netherlands, Geert Wilders’ Party for Freedom (PVV) has been the senior partner in the governing coalition since October 2023 and is far more hawkishly contrarian when it comes to EU climate policies. Wilders has dismissed proposed new investments in offshore wind turbines, solar farms, and other measures as “pointless climate hobbies.”

The PVV’s manifesto proposes abolishing Dutch climate laws, removing the country from the Paris Agreement, and growing fossil fuel extraction in the North Sea. Wilders is likely to face resistance from his more moderate coalition partners, but his electoral success is another indicator that green policies are no longer deal-breakers for European voters.

To the east, in Germany, Friedrich Merz and the Christian Democratic Union (CDU) are heavily favoured to return to power in the 2025 election after just four years out of government.

Merz opposes the EU’s mandated ban on combustion engines by 2035 and is open to reviving nuclear energy, which was controversially phased out under the current Social Democratic Party-led government after pressure from the Green Party, a junior coalition partner. As a junior partner in the current governing coalition, the Greens are unlikely to join a CDU-led government if the party secures a plurality in the upcoming election, as they have never formed a coalition with the CDU before.

Under Merz, the CDU advocates for “technological openness,” which opens the door to a host of alternatives to heavy-handed energy phaseouts. Like Meloni in Italy, Merz remains committed to EU climate goals, but the CDU’s pro-business outlook could very well slow the pace of renewable energy adoption in favour of economic and industrial goals.

Germany has a special role in the EU as the largest economy and has acted as its unofficial leader for decades. The decisions made by a likely Merz-led CDU government will have a huge impact across the bloc, even if his approach may be tempered by his coalition partners.

The approach of Merz, Meloni, and Wilders reflects a broad reorientation in Europe due to rising energy costs, stagnating economies, geopolitical uncertainty, and public backlash.

This shift is not indicative of climate denial or an abandonment of the EU’s commitment to climate neutrality by 2050, but the pathway is far murkier. Global energy leaders should take note and ponder what role they can play with the EU’s more inclusive approach to energy security.

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Business

Worst kept secret—red tape strangling Canada’s economy

Published on February 22, 2025

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From the Fraser Institute

By Matthew Lau

In the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S.

According to a new Statistics Canada report, government regulation has grown over the years and it’s hurting Canada’s economy. The report, which uses a regulatory burden measure devised by KPMG and Transport Canada, shows government regulatory requirements increased 2.1 per cent annually from 2006 to 2021, with the effect of reducing the business sector’s GDP, employment, labour productivity and investment.

Specifically, the growth in regulation over these years cut business-sector investment by an estimated nine per cent and “reduced business start-ups and business dynamism,” cut GDP in the business sector by 1.7 percentage points, cut employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points.

While the report only covered regulatory growth through 2021, in the past four years an avalanche of new regulations has made the already existing problem of overregulation worse.

The Trudeau government in particular has intensified its regulatory assault on the extraction sector with a greenhouse gas emissions cap, new fuel regulations and new methane emissions regulations. In the last few years, federal diktats and expansions of bureaucratic control have swept the auto industry, child care, supermarkets and many other sectors.

Again, the negative results are evident. Over the past nine years, Canada’s cumulative real growth in per-person GDP (an indicator of incomes and living standards) has been a paltry 1.7 per cent and trending downward, compared to 18.6 per cent and trending upward in the United States. Put differently, if the Canadian economy had tracked with the U.S. economy over the past nine years, average incomes in Canada would be much higher today.

Also in the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S., and only about two-thirds as much new capital (on average) as workers in other developed countries.

Consequently, Canada is mired in an economic growth crisis—a fact that even the Trudeau government does not deny. “We have more work to do,” said Anita Anand, then-president of the Treasury Board, last August, “to examine the causes of low productivity levels.” The Statistics Canada report, if nothing else, confirms what economists and the business community already knew—the regulatory burden is much of the problem.

Of course, regulation is not the only factor hurting Canada’s economy. Higher federal carbon taxes, higher payroll taxes and higher top marginal income tax rates are also weakening Canada’s productivity, GDP, business investment and entrepreneurship.

Finally, while the Statistics Canada report shows significant economic costs of regulation, the authors note that their estimate of the effect of regulatory accumulation on GDP is “much smaller” than the effect estimated in an American study published several years ago in the Review of Economic Dynamics. In other words, the negative effects of regulation in Canada may be even higher than StatsCan suggests.

Whether Statistics Canada has underestimated the economic costs of regulation or not, one thing is clear: reducing regulation and reversing the policy course of recent years would help get Canada out of its current economic rut. The country is effectively in a recession even if, as a result of rapid population growth fuelled by record levels of immigration, the GDP statistics do not meet the technical definition of a recession.

With dismal GDP and business investment numbers, a turnaround—both in policy and outcomes—can’t come quickly enough for Canadians.

Matthew Lau

Adjunct Scholar, Fraser Institute
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Business

‘Out and out fraud’: DOGE questions $2 billion Biden grant to left-wing ‘green energy’ nonprofit`

Published on February 22, 2025

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From LifeSiteNews

By Calvin Freiburger

The EPA under the Biden administration awarded $2 billion to a ‘green energy’ group that appears to have been little more than a means to enrich left-wing activists.

The U.S. Environmental Protection Agency (EPA) under the Biden administration awarded $2 billion to a “green energy” nonprofit that appears to have been little more than a means to enrich left-wing activists such as former Democratic candidate Stacey Abrams.

Founded in 2023 as a coalition of nonprofits, corporations, unions, municipalities, and other groups, Power Forward Communities (PFC) bills itself as “the first national program to finance home energy efficiency upgrades at scale, saving Americans thousands of dollars on their utility bills every year.” It says it “will help homeowners, developers, and renters swap outdated, inefficient appliances with more efficient and modernized options, saving money for years ahead and ensuring our kids can grow up with cleaner, pollutant-free air.”

The organization’s website boasts more than 300 member organizations across 46 states but does not detail actual activities. It does have job postings for three open positions and a form for people to sign up for more information.

The Washington Free Beacon reported that the Trump administration’s Department of Government Efficiency (DOGE) project, along with new EPA administrator Lee Zeldin, are raising questions about the $2 billion grant PFC received from the Biden EPA’s National Clean Investment Fund (NCIF), ostensibly for the “affordable decarbonization of homes and apartments throughout the country, with a particular focus on low-income and disadvantaged communities.”

PFC’s announcement of the grant is the organization’s only press release to date and is alarming given that the organization had somehow reported only $100 in revenue at the end of 2023.

“I made a commitment to members of Congress and to the American people to be a good steward of tax dollars and I’ve wasted no time in keeping my word,” Zeldin said. “When we learned about the Biden administration’s scheme to quickly park $20 billion outside the agency, we suspected that some organizations were created out of thin air just to take advantage of this.” Zeldin previously announced the Biden EPA had deposited the $20 billion in a Citibank account, apparently to make it harder for the next administration to retrieve and review it.

“As we continue to learn more about where some of this money went, it is even more apparent how far-reaching and widely accepted this waste and abuse has been,” he added. “It’s extremely concerning that an organization that reported just $100 in revenue in 2023 was chosen to receive $2 billion. That’s 20 million times the organization’s reported revenue.”

Daniel Turner, executive director of energy advocacy group Power the Future, told the Beacon that in his opinion “for an organization that has no experience in this, that was literally just established, and had $100 in the bank to receive a $2 billion grant — it doesn’t just fly in the face of common sense, it’s out and out fraud.”

Prominent among PFC’s insiders is Abrams, the former Georgia House minority leader best known for persistent false claims about having the state’s gubernatorial election stolen from her in 2018. Abrams founded two of PFC’s partner organizations (Southern Economic Advancement Project and Fair Count) and serves as lead counsel for a third group (Rewiring America) in the coalition. A longtime advocate of left-wing environmental policies, Abrams is also a member of the national advisory board for advocacy group Climate Power.

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