Who will pay for the Dutch climate agreement?

Who will pay for the Dutch climate agreement? This was the question asked in the Dutch newspaper Trouw last Wednesday. If major polluters remain unwilling to pay their share for climate policy, Dutch households may have to pick up the tab. This sabotages a definitive climate agreement, warns Kitty Jong of the Netherlands Trade Union Confederation [FNV] and Donald Pols of Friends of the Earth Netherlands [Milieudefensie]. After all, a sustainable future is only possible if the costs and benefits of the energy transition are fairly shared. The government also must take responsibility and invest in a skilled workforce.

OPINION (Trouw newspaper, 14 July 2018)

In recent months, all Dutch social partners have been working on negotiations for the climate agreement. Yesterday, the results of the first phase were enthusiastically presented. Plans for the built environment and electricity generation are quite advanced. Little, however, has been decided about mobility, agriculture and industry. The main stumbling block: the reluctance of major polluters to pay their share. The parties that are responsible for the majority of CO2 emissions cannot be allowed to pass on all the costs to taxpayers and small and medium-sized enterprises.

If the benefits and the burdens of climate policy are unfairly distributed, people will turn their backs on it. Together with many other civil society organisations, Milieudefensie and FNV have calculated how the climate agreement can be implemented as fairly as possible. Polluters should pay for CO2 pollution via climate taxes. Part of the yields could be given back to citizens and businesses as compensation or incentives to stimulate climate measures. Climate policy impacts on income and industrial policy in one way or another. A fair climate policy then has a positive effect.

In theory, everyone agrees with this. People have already started to warm to the main ideas of the agreement. But the major polluters refuse to make their contribution. They don’t want to pay climate taxes. On the contrary, they demand subsidies: up to €1 billion per year in 2030.

The message is that climate policy must cost industry virtually nothing. Otherwise, they won’t be able to survive – they would lose their competitive edge. These are the same arguments used to defend the dividend tax exemption and Shell’s €7 billion tax deal. These are the same arguments which have stalled efforts to increase sustainability for polluters for decades, resulting in high CO2 emissions that have remained unchanged for the last 25 years. Just last week, the Netherlands Environmental Assessment Agency [Planbureau voor de Leefomgeving] concluded: ‘Polluters pay too little’. And polluters do all they can to keep it this way. But business and industry should be robust enough to carry the load: the tax burden for businesses has been reduced over the last 20 years, while it has been raised for individuals. And the Netherlands ranks fifth on the dubious list of international tax havens.

We want a sustainable future where the costs of the transition are fairly shared; only then will people support it. That is why we must also look at another key area for future success: the labour market. This has been neglected until now, but it is crucial.

A shortage of skilled labour threatens to undermine implementation of the climate agreement. The Dutch Cabinet wants to cut spending on practical training, but it should be investing in this, particularly in education focused on a clean economy. The jobs that will bring about the transition must also be sustainable. We want these to have good terms of employment, safe working conditions and fully fledged labour relations. While the number of green jobs is increasing, jobs in fossil fuel industries are disappearing – first of all, in the coal sector. A ‘coal fund’ is needed for retraining, for work-to-work plans and, where needed, support for the social consequences. In Germany, discussions on a coal exit are currently at a standstill, because no solution has been found for regional job losses. Let us not make the same mistake in the Netherlands.

This shared task demands that all parties in society are prepared to contribute to a solution. This includes government: it must invest in skilled labour. The refusal of major polluters to seriously engage regarding their contribution to financing climate policy is irresponsible, unacceptable and sabotages the agreement.

Kitty Jong, Vice Chair, FNV
Donald Pols, Director, Milieudefensie