Europe's green backlash was priced in a long time ago

Welcome to Carbon Risk — helping investors navigate 'The Currency of Decarbonisation'! 🏭

If you haven’t already subscribed please click on the link below, or try a 7-day free trial giving you full access. By subscribing you’ll join more than 4,000 people who already read Carbon Risk. Check out what other subscribers are saying.

You can also follow my posts on LinkedIn. The Carbon Risk referral program means you get rewarded for sharing the articles. Once you’ve read this article be sure to check out the table of contents [Start here].

Thanks for reading Carbon Risk and sharing my work! 🔥

---

***

Wicked Problems

was kind enough to interview me after reading this article. Check out my interview at 25:46, or listen to the whole podcast. Highly recommended podcast on all things climate tech! ***

ClimateX's £18m A round, Political Risk, and London Climate Week

---

Estimated reading time ~ 6 mins

“Our brain uses a really clever and almost science-fictional trick that prevents us from living in the past: we look into the future. Our visual system is continuously predicting the future, and the world that you are now perceiving is the world that your visual system has predicted to be the present in the past.” - Magician Gustav Kuhn

As most readers will no doubt know, Europe’s Green parties suffered a serious backlash in the recent European Parliament elections. In Germany their share of the vote fell from 20.5% in 2019 to 11.9% in 2024, while in France it dropped by 8 percentage points to 5.5%. The overall number of Green seats in the EU Parliament fell from 74 to 53, one more than their position prior to the 2019 elections.

EU elections normally struggle to get much attention. Domestic priorities and political stories tend to take precedence. Not this time. As the surprise decision by President Macron to hold legislative elections later this month suggests, the political reverberations from the European Parliament elections may only be beginning.

It’s worth taking a step back and looking at what the world was like a mere five years ago. The strong performance by the Greens in 2019 occurred during a remarkable period of benign macro and political conditions. It’s hard to look back at that time now and not appreciate just how good things were.

Alas, periods of calm tend to sow their own demise. It wouldn’t be long before pandemic induced lockdowns, conflict infused energy price shocks, and a migration fear-led swing to far-right political views would take over the narrative.

The year 2019 may prove to be a high-water mark for European climate ambition, one that could take years to return to.

But that doesn’t mean Europe regresses, just that it doesn’t move forward at the speed that many expected (and hoped for) a few years ago. European policy is characterised by slow and deliberate movements forward. Higher climate ambition may be kept in check, but that does not mean that the current set of policies will be unwound.

It’s with that context in mind that we look at the EU’s Green Deal. To recap, the Green Deal was unveiled in late 2019 by Ursula von der Leyen, days after she became president of the European Commission (EC). It’s a package of policy initiatives which aim to set the EU on the path to reaching climate neutrality by 2050. For von der Leyen, the Green Deal was (and still is) her flagship project.