Dutch climate and energy policy is rooted rooted is policy and energy climate Dutch challenges. societal major in tackling all stakeholders engage to strives government future’, the the in ‘Confidence slogan the by Guided ( Agreement 2021 Coalition 2017– in the four issues key of the one is policy and energy climate ever. Integrated government Dutch greenest the as itself 2017, in October power to came profiling is which government, III Rutte centre-right The Introduction 2015. an as EU member Additionally, of Agreements Climate Paris UN the implement to commitment national in the A lesson learned from the Dutch case is that setting ambitions may be relatively easy, relatively may be ambitions setting that is case Dutch the from learned A lesson industry. by favoured those notably society, civil by developed of 2017, agreement coalition proposals of the some and adjust constituting of its assumptions key change had to government Dutch the deal, apolitical out hammer to Inorder allocated. be should they and how policies of climate costs the on focused debate societal of the element Akey sectors. and agriculture housing transportation, energy, industrial, the especially target policies The society. and civil government between process negotiating in an extensive War’, World pre-cooked was Second the since of the refurbishment ‘biggest the as to referred agreement, This Agreement. Climate national the policies: of climate package acomprehensive on reached was agreement and political party, aclimate-sceptical by won were elections provincial Bill, aClimate adopted Parliament Dutch the 2019. period this During mid-September until developments recent most the on focuses brief policy This 2017 autumn of 2018. end and the between made proposals and policy context political 2019the with January in dealt published was and first The Netherlands. in the development policy climate on Brief Policy Clingendael second the is This political decisions have to be taken on who will pay for what. for pay what. will who on taken be have to decisions political when particularly job, atougher is action climate effective into them translating but (part two) (part Climate politics in the Low Lands Are the Dutch really going green? 2019SEPTEMBER Regeerakkoord ). ). per per 55 to EU ambition overall the enhance to partners European among support seeking by frontrunner, aEuropean be to wanted it that indicated also government new The 2030. by cent per of 49 reduction a achieve aim to the and set Agreement Paris the to fair share its contribute to Netherlands for the needed be would more that acknowledged government Dutch the time, that At cent. per minus 40 was target 2017, in office took government this EU new the When 1990 levels. to compared as 2030, by cent 42 per least at by emissions gas greenhouse reduce to agreements EU to adhere must Netherlands the state,

Paul Hofhuis Policy Brief Clingendael Policy Brief

cent in 2030. If that European-wide vague: the Bill creates hope but no guarantee ambition turns out to be unrealistic, that the targets will be met.3 the Netherlands would still try to find agreement on additional efforts with like- The Climate Bill provides a framework and minded countries. long-term timeline for the national climate policy process. This includes a Climate In October 2017, the Rutte government Policy Plan every ten years (the first for embarked on this course of translating 2021–2030), a revision of this Plan every its ambitions into tangible policies five years (starting in 2025), and every year and measures, of fitting them in a a Climate Policy Brief assessing current comprehensive national Climate policy developments within the context Agreement and of framing its ambition for of the ten-year plan. This frame and the longer term in a national Climate Law. timeline correspond with EU regulations, This Clingendael Policy Brief elaborates especially those regarding the governance on what happened between January (i.e. monitoring and reporting) of the Energy and mid-September 2019, especially Union: member states inform the European with regard to the Climate Law and the Commission by means of a ten-year National policy package assembled in the Climate Energy and Climate Plan (NECP – the first, Agreement. It looks at how the proposals for 2021–2030, is due to be sent to Brussels relate to climate policy debates at the EU at the end of 2019), and every two years with level, and illustrates how difficult it can be a report on the national policy proceedings. – politically – to agree on ambitious climate and energy policies. According to this framework, the Rutte government has to send its first yearly plan to Parliament during autumn 2019. A few A national Climate Law months later, it needs to send its ten-year plan to Parliament and to the European After adoption by the Second Chamber Commission. It is expected that these plans of Parliament on 21 December 2018,1 the will be based upon the national Climate Senate passed the Bill on 28 May 2019 Agreement, which is currently still subject with a vast majority. Only the climate- to a final check with participants of the five sceptical, right-wing PVV, the Christian so-called ‘climate tables’ – the negotiation SGP and the animal rights party PvdD setting with stakeholders from civil society. voted against. The final version of the Bill breathes compromise rather than ambition. Instead of binding targets, it includes The Urgenda case ‘policy intentions’ to achieve a 49 per cent emission reduction by 2030, and 100 per The Dutch government is pressured to

cent CO2-neutral electricity production act on climate change not only by public by 2050.2 The Senate spent much time opinion, but also by a court judgment in a debating the question of to what extent the case filed by concerned citizens gathered Bill assigns sufficient power to Parliament in the non-governmental organisation to interfere in – and steer – situations Urgenda. The government has to deal with when agreed policy intentions may not be a 2018 Court of Appeal ruling to deliver achieved. The answer stayed somewhat on its intended emission reductions by 2020.4 A Supreme Court ruling requested by the government on 16 November 2018, on whether political (policy) decisions 1 See Paul Hofhuis and Louise van Schaik, ‘Are the by government can be overthrown by Dutch going green? Climate politics in the low lands heading towards crunch time’, Clingendael Policy Brief, January 2019, at https://www. clingendael.org/sites/default/files/2019-01/ 3 Jesse Klaver (one of the initiators of the Bill and PB_Are_the_Dutch_going_green.pdf. leader of the Green Party) in the Senate debate. 2 Later, even less ambitious wording than ‘policy 4 See Hofhuis and van Schaik, ‘Are the Dutch going intention’ was used. green?’, pp. 2–3.

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a court verdict, is still pending. In the facilitate the 2050 ambition of 95 per cent meantime, the government has set aside reduction. Furthermore, the assessment an additional budget and indicated predicted a slight decrease in purchasing options for extra measures to reach the power of households, especially for lower- national 2020 emission reductions target. income groups. Finally, the PBL and CPB No action has been taken, however, as of concluded that ‘it now takes political action yet. This triggered parliamentarian/societal (i.e. not technical measures)’ to reach the unrest about a supposed lack of urgency in decisive stage of ambitious climate policy the government’s activities to implement the development. ruling of the Court of Appeal. In early July 2019, Parliament applied pressure on the Campaigning towards regional and issue, by adopting a resolution urging the senate elections government to bring to the table concrete The assessment was presented in the final actions that would lead to the emission days of the campaign for the provincial reductions agreed upon for 2020 no later elections of 23 March 2019. Climate policy than the end of September 2019. had emerged as a major issue in the campaign, with polls predicting a win for the right-wing, climate-sceptical opposition. The road to a national Climate In this dynamic setting, the government Agreement prepared its response to the PBL/CPB assessment in record time. Within a few hours of the assessment’s publication, Assessment of the Draft Climate Prime Minister and Minister Agreement for Economy and Climate Eric Wiebes The end of December 2018 saw the announced that the government ‘took its publication of a Draft Climate Agreement. (political) responsibility’ and would amend This draft agreement was the outcome the draft proposals to bring them better in of negotiations with stakeholders in five line with issues raised earlier in the election key economic sectors on sector-specific campaign by the left opposition(!). policies and measures,5 which should reduce greenhouse gas emissions on This government move was quite surprising. Dutch territory, applying cost-effective It clearly intended to genuflect to the left- solutions.6 After publication of the Draft wing opposition. The changes announced Climate Agreement in December 2018, by Rutte and Wiebes were quite substantial: the Netherlands Environmental Assessment a lowering of energy taxes for households;

Agency (PBL) and the Central Planning the introduction of a CO2 levy for industry; Office (CPB) took some time until restrictions for carbon capture and storage early March 2019 to assess its effects.7 (CCS); the skipping of proposals for extra The main conclusion of their assessment mobility taxes; and a feasibility study on was that ‘big steps forward are possible, road pricing with the intent of enacting but the main targets will not be achieved’. such a policy at a later date. In addition, The proposals would reduce emissions the government announced that the adjusted in 2030 by approximately 43 per cent, package would address – more effectively – which falls below the government’s the concerns on achievability (of emission ambition (49 per cent), and which will not reduction targets) and affordability (referring to the effects on purchasing power). Finally, the government emphasised that the adjustments were based on changes 5 See Hofhuis and van Schaik, ‘Are the Dutch going in the 2017 political Coalition Agreement green?’, p. 3. (Regeerakkoord) on climate and energy 6 The side-effect of setting a high priority for cost- policy, which were major issues in the effectivity was a lower priority for energy efficiency and the use of renewable energy. constitution of the Rutte government at that 7 See https://www.pbl.nl/sites/default/files/ time. Notably, this regarded the potential cms/publicaties/pbl-2019-effecten-ontwerp- comeback of road pricing and the setting of

klimaatakkoord_3619.pdf. a CO2 tax for industry.

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The national Climate Agreement of 28 June 2019

Overview of intended key policies and measures by the economic sector

Buildings • Enhancing the energy efficiency of 1.5 million homes and 1 million utility buildings • New buildings will no longer be heated with natural gas • Municipalities take the lead in a local, participatory approach

• Stronger tax incentives for energy efficiency and CO2 reduction Mobility • All new passenger cars to be emission-free by 2030 • Tax incentives for electric vehicles, including for second-hand cars • 1.8 million charging stations by 2030 • Modal shift from car to bicycle/public transport • Smart logistics solutions to enable more efficient and sustainable transport Industry • Introduction of a carbon levy, starting at €30 per tonne in 2021 and rising to €125–150 per tonne in 2030

• Subsidy scheme for renewable energy and CO2 reduction options in industry, such as carbon capture and storage • Funding for innovations to enhance the use of hydrogen and other sustainable fuels Electricity • Phasing out coal-fired electricity generation by 2025/2030; first plant to be closed by 2020 • Accelerating investments in offshore wind power and in onshore wind and solar energy • Subsidies for additional renewable energy capacity (wind and solar) until 2025; target: 70 per cent renewables’ share in electricity production by 2030

• Introduction of a minimum CO2 price for electricity production Agriculture and land use • Enhancing sustainable heating in greenhouse horticulture • Reducing methane emissions from livestock through improved manure processing • Carbon storage in soil and vegetation through pilot programmes for climate-friendly land use • Incentives for climate-friendly food consumption and reducing food waste

Based upon: https://www.government.nl/topics/climate-change/news/2019/06/28/ climate-deal-makes-halving-carbon-emissions-feasible-and-affordable

The unexpected move by Rutte’s government Third, it gave the right-wing, climate- had multiple effects on the heated climate sceptical opposition an extra campaign debate during the March 2019 election boost. And finally, not all stakeholders that campaign. First, it invalidated the fresh, had participated in the climate negotiations still wet PBL/CPB assessment, because earlier, notably industry and transportation of substantive modifications to the policy groups, were pleased with the government’s package. Second, it disarmed the election U-turn. campaign strategy of the left opposition, as the main climate issues of its campaign The government announced its intent to

– a CO2 tax for industry and lower costs for present – at the end of April 2019 – a final households – were now incorporated in the Climate Agreement, in which its amendments revised government proposals, supported would be incorporated, and with which the by the four coalition parties in Parliament. 2030 and 2050 emission reduction targets

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could be achieved ‘without bankrupting the sector approach is a unique concept that is country’. to date unprecedented in European climate policy development. In the Netherlands the Election result, and its impact package is considered to be the ‘biggest The rapid government response to the PBL/ refurbishment of the Netherlands since CPB assessment just ahead of the March the Second World War’, since it has huge 2019 elections was considered by some to implications for inter alia housing and office be a masterful political move. It did indeed building (for example, heating and cooking), disarm the leftish opposition. However, mobility and transportation modes, land it arguably also helped the most explicit use and industrial production. It will hence climate-sceptical new Forum for Democracy have implications for the daily life of all the (FvD) party to become the largest party. country’s citizens. Because of the link between provincial elections and seat assignment for the Senate, Finally, and not a minor detail, the revised this unprecedented win meant that FvD package was not yet supplemented with a obtained twelve Senate seats, just as much proper assessment, ‘because of insufficient as Prime Minister Rutte’s own VVD party. capacity of the PBL’.10 As a result, a profound The left-wing opposition (GL, PvdA, SP and comparison with the earlier draft proposals is PvdD) lost two seats (2019: 21; compared not yet available. with 2015: 23), and the centre-right governing coalition (VVD, CDA, D66 and A Parliamentary debate on the new package, CU) lost six seats (2019: 32; compared with hastily scheduled on 3 July 2019, showed 2015: 38). A crucial effect of this outcome is that a vast majority urged the government to that the four-party government coalition is deliver the missing assessment as soon as no longer supported by a Senate majority, possible. Furthermore, the debate brought to even though three FvD senators split from light that only a small majority of the Second their party later during summer 2019. Chamber – that is, the four coalition parties – In practice, the election outcome means supported the new package proposals. that implementation by regulation of certain As highlighted above, the implementation elements of the Climate Agreement will only of crucial elements of the package will be possible with votes from the left-wing need extra support from opposition parties opposition in the Senate(!). in order to obtain a majority in the Senate. Leader of the Green Party (GL) Jesse Klaver New, amended final (?) Climate stated during the 3 July 2019 debate that the Agreement revised package is ‘a government proposal, Just days before Parliament left for summer not a broad-based agreement’. Minister recess, four Cabinet ministers presented the Wiebes confirmed later that not all of the revised Climate Agreement.8 In the months stakeholder organisations that participated and weeks before, rumours about laborious in the negotiations had shown their full meetings of the various involved political commitment to the amended agreement.11 parties, and even a looming government ‘It is inevitable that full implementation of the crisis on the issue, remained constant. package will include some command-and- control legislation’, Wiebes added during However, the government presented the debate. As already emphasised, such an impressive package of 237 pages, command-and-control legislation will require containing comprehensive proposals for support of the Second Chamber and the policy action in five key economic sectors: Senate, notably of the Green Party and the buildings; mobility; industry; electricity; Labour Party. The four coalition parties have and agriculture.9 This comprehensive five-

8 See https://www.klimaatakkoord.nl/documenten/ 10 Minister Eric Wiebes in parliamentary debate on publicaties/2019/06/28/national-climate- 3 July 2019. agreement-the-netherlands. 11 Parliamentary debate in the Second Chamber on 9 The textbox provides an overview of the package. climate and energy policy on 4 September 2019.

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to live with the fact that this support cannot transferred into laws and regulations, while be taken for granted. they are based only on ‘indicative targets’, in line with the 2019 national Climate Law. With regard to this issue, the government In splendid isolation or in a made a remarkable statement in June 2019, European context? saying that ‘the emission reduction target of 49 per cent for 2030 is not yet final and may be influenced by the outcome of international It is not yet fully clear how the national debate’.14 This would imply that the targets climate proposals position the Netherlands can still be adjusted, upwards or downwards. within the European climate policy context. At its start in 2017, the Rutte III government In this respect it is interesting to follow to set the ambition for the Netherlands to what extent the new European Commission become a leader on climate change within will be able to stick to its bold climate and the EU. The Netherlands would demonstrate energy ambitions for 2019–2024, announced that it is possible within one generation by its new President Ursula von der Leyen. (that is, 30 years) to transform the economy The new Commission Executive Vice- to climate neutrality and maintain the President definitely has country’s international competitiveness. a challenging portfolio here, particularly in While doing so, the Netherlands would forging a real European Green Deal. In the lobby other European member states to join same context, Minister Wiebes recently its ambitions,12 by advocating for setting stated that ‘he is hoping that EU climate EU-wide emission reduction targets of policy – particularly on the EU’s emissions minus 49 per cent or even minus 55 per trading system – will develop so fast that a 15 cent by 2030, and minus 95 per cent (that is, national CO2 levy will be unnecessary’(!). climate neutrality) by 2050. The government Again, this triggers the question of to what considers the revised Climate Agreement extent the Netherlands’ ambitions to lead the as a major step towards delivering on this European policy developments are realistic. promise.

A ‘reality check’ on this international/ What comes next? European ambition drew some media attention, but so far it has not filtered Now that the revised Climate Agreement through to the political debate. has been agreed upon by the four political The European diplomatic lobbying power parties supporting the Rutte III coalition, of the Netherlands can be questioned, the road ahead lies open. However, some however, and mainly on two points. obstacles are looming on this road. First, monitoring data of the Netherlands’ factual climate policy performance, recently A first hurdle to be taken is a renewed PBL/ published by the European Commission,13 CPB assessment of the revised package, show that the country does not perform with a focus again on achievability and very well, especially on energy efficiency affordability. On 3 July 2019, Parliament and the use of renewable energy. Second, asked the government to table the in legal terms the proposals still have to be missing assessment as soon as possible. On 10 September 2019, Minister Eric Wiebes informed16 the Parliament that the PBL will not be able to assess the full package. 12 The most recent lobbying activity was a bilateral Netherlands–Germany meeting on 22 August 2019, when Dutch Prime Minister Rutte and German Federal Chancellor Angela Merkel discussed 14 See Cabinet’s letter to Parliament, accompanying climate issues behind closed doors. the Climate Agreement, 28 June 2019. 13 See the European Commission’s assessment of the 15 Parliamentary debate in the Second Chamber on draft NECP for 2021–2030, 18 June 2019, available climate and energy policy on 4 September 2019. online at https://ec.europa.eu/energy/sites/ener/ 16 See Minister Wiebes’ Letter to Parliament, files/documents/necp_factsheet_nl_final.pdf. 10 September 2019.

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However, ‘a qualitative analysis and – where play a role, which may influence the lasting possible – a quantitative interpretation support of the centre-right parties in the of major package revisions’ will become Rutte III coalition for the Climate Agreement. available before the end of 2019. Whether Parliament will accept this, will become In this context, the aforementioned and just clear when Minister Wiebes’ letter will be as bold climate promises of new President discussed later this autumn. of the European Commission von der Leyen to the European Parliament may A second hurdle is the implementation have induced some feelings of comfort on of the package itself. This will be a step- the part of Dutch policy-makers. However, by-step process. Parts of it require (only) as on the national level, the proof is in the a majority in the Second Chamber, while pudding in Brussels, too. The support of the other parts require amending existing or European Council is so far uncertain. And in establishing new regulations, which will the European Parliament the Greens/EFA need additional majority support in the may have won 23 seats (increasing from Senate. As highlighted above, such Senate 51 to 74) in the 2019 elections, but eleven of support requires additional opposition votes. these 74 seats come from the UK! A crucial On 10 September 2019, the government has question is whether the green power of the sent a legislative agenda for the Climate European Parliament has increased enough Agreement to Parliament. This agenda to make von der Leyen’s ambitions come includes crucial building blocks of the true.17 agreement, such as funding proposals in the 2020 Government Budget, a proposal for amending energy taxes on households In summary: complicated and proposals for a CO levy for industry. 2 politics ahead All of these issues will require approval from the Second Chamber and the Senate. Additional implementation hurdles are the As highlighted above, the national questions of whether central, regional and Climate Agreement includes very high local governments have sufficient capacity, ambitions and an impressive package of expertise and financial means for the comprehensive policy proposals. Generally immense implementation challenge of the speaking, it is already politically complicated package, and to what extent the ruling of to implement such a policy package. the Supreme Court in the Urgenda Case However, the sequence of events around – expected before the end of 2019 – will the March 2019 elections have made influence the implementation debate. implementation even more complicated, both on the national and European levels. Third, interaction may occur between Dutch national decision-making and the progress The most important complication on the the EU will make on the Union’s climate national level is the issue of allocating ambitions for 2050 and 2030. The Dutch implementation costs to economic sectors climate lobby in the EU for very ambitious and consumers. Here, political consensus is emission reductions by 2050 and 2030 may still far away. Solutions at this point are not no longer be as effective, now that Prime included in the Agreement, and the election Minister Rutte remains in office in debates in March have made the issue very instead of moving to the new European precarious. The battle has already started, political constellation in Brussels. It remains for instance on a minor point of whether to be seen what will happen to support for green households that shift from gas to the bold national ambitions of, in particular, electricity must pay to shut down their gas Dutch industry when the EU compromises connection. on less-ambitious targets for 2030 and 2050 than now are included in the Dutch climate agreement. Industry’s argument for the need to maintain a proper European economic 17 See ‘Von der Leyen’s climate promises run into level-playing-field could then start again to Brussels reality’, in Politico, 5 September 2019.

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On the European level, a key complication is the issue of Dutch credibility within the EU as an advocate of high climate ambitions for the EU. As long as the implementation process of the Dutch national Climate Agreement cannot show concrete results in terms of emission reductions, higher energy efficiency and/or a higher use of renewable energy, the Netherlands’ ambitions as a leader for Europe will inevitably have to be somewhat moderate.

For 2020 and beyond, key challenges for the Rutte III government are, first and foremost, to deliver the concrete results that were promised to voters on the national level, and to show to other EU member states that it really is possible to reach broad societal consensus on the urgent need to achieve decarbonisation of the Dutch economy without ruining its competitiveness. Effective diplomatic and international lobbying power starts and finishes with charisma, enthusiasm and success at home. If Rutte’s government manages this correctly, they might receive a place in history books. Europe is watching!

8 About the Clingendael Institute Clingendael – the Netherlands Institute of International Relations – is a leading think tank and academy on international affairs. Through our analyses, training and public debate we aim to inspire and equip governments, businesses, and civil society in order to contribute to a secure, sustainable and just world. www.clingendael.org  @clingendaelorg [email protected]  The Clingendael Institute +31 70 324 53 84  The Clingendael Institute

About the author

Paul Hofhuis is senior research associate at the Clingendael Institute. Between 2011 and 2015 Hofhuis was counselor strategic foresight at the Netherlands’ Permanent Mission to the European Union in Brussels, in the section for Infrastructure and Environment Policies. Prior to his posting in Brussels – between 1986 and 2011 – he was involved in policy development of the Netherlands’ central government, in several areas (environment, climate change, taxation, mobility, strategic planning). He held several positions (including middle manager, program manager, director and counselor) in The Hague and abroad (Netherlands Embassy, Washington D.C.).