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Columbia Energy Exchange

What the EU’s Conservative Shift Means for Climate

June 18, 2024
Guest

Ann Mettler

Vice President for Europe, Breakthrough Energy

Transcript

Ann Mettler: The Green Deal must remain, but it must also adapt.

Jason Bordoff: At the beginning of June, the European Union held its parliamentary elections. As anticipated far-right parties performed well across the continent. Meanwhile, five years after the Greens increased their seats from 52 to 74, they lost nearly all of those gains. Concerns about energy costs and security and economic competitiveness were top of mind for voters going to the polls. Now a more conservative parliament, along with changes in many national governments, will have ramifications across Europe for both energy and climate change. So what does this election indicate about the shifting political ideology of the European Union? How will this election impact Europe’s relations with the US and with China? And what do these elections mean for European climate and energy policy moving forward?

This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff. Today on the show, Ann Mettler. Ann’s the Vice President for Europe at Breakthrough Energy, a network of investment funds, philanthropies and nonprofits dedicated to scaling low-carbon technologies. She previously served as Director General at the European Commission where she ran an in-house think tank called The European Political Strategy Center. Prior to that, Anne was the Executive Director of the Lisbon Council in Economic Policy Think Tank she founded in 2003. Anne joined me to discuss the results of the recent European elections and her work at Breakthrough Energy. We also talked about economic competitiveness challenges facing the European Union and her views on Europe’s new tariffs on China.

I hope you enjoy our conversation, Ann Mettler, so good to see you again, and thanks for joining us on Columbia Energy Exchange. I know how busy you are, really appreciate your time.

Ann Mettler: No, great to be with you again.

Jason Bordoff: So look, let’s start with the news of the last week or two, which is the elections for the European Parliament. I’m sure everybody listening to this will have seen headlines about right-wing surges, Greens tank have a setback. Take us the next level deeper for people listening about what happened and why it happened and what you think is most consequential about the outcome of these elections. Broadly speaking, but particularly for clean energy policy and climate.

Ann Mettler: Absolutely. So I think it’s been, I would say one has to look at it from two perspectives. Number one is the EU perspective, where broadly speaking, I think the outcome was not quite as bad as we had anticipated. You know that in the run-up, there was a lot of talk about a very, very strong shift to the right. I think that we didn’t see. The center held, however, we have a strengthened extreme right on the European level. One has to recognize that, but it wasn’t as bad as anticipated.

The real earthquake was at the national level and in two countries that are really fundamental to the functioning of the EU. And that’s number one is France, where the party of Marine Le Pen, the national rally, received more than twice as much as many votes as the party of Emmanuel Macron. So that’s profound, and I’m sure you heard that the same evening, President Macron called an election in France, which is going to take place on the 30th of June. So that is actually very, how should I say it? Really, that was almost more upsetting than the broader election outcome at the European level. And the number two shock, I think, was that the extreme right-wing AfD party in Germany came in a second. So even ahead of the party of German Chancellor Scholz. And so I would say broadly speaking at the European level, the center held, even though we’re seeing a shift to the right, and the real earthquake was really in Germany and France.

 

Jason Bordoff: And just again for people listening who may not be entirely familiar with how the European Commission works, talk about when we think about the targets, is it going to be 90% reduction by 2040? Is it going to be something less? Are you going to ban internal combustion engines by 2035? All these European targets, how much of that is determined in the Parliament in Brussels? And what’s the role of national governments when you look at what’s happening in France, what’s happening in Germany? Explain the relative importance of these things in terms of how European climate policy gets made for people who may not be familiar.

Ann Mettler: Well, so the European Commission, which is the executive at the European level, has what we call the right of initiatives. So all of the proposals, the legislative proposals, the regulations will come out of the European Commission. But then you have co-legislators, that’s number one, the European Parliament, which was just reconstituted, elected last week. And you have what is called the European Council or the Council of the European Union, which is where the member states are represented. Then the three of them go through a process that’s called a comitology, and have trial logs. And this is essentially a very complicated, complex, lengthy process where a lot of compromises are made. But this is essentially how European regulations and legislations get underway.

I think it is premature to now speculate what this may mean for phasing out the combustion engine. I think right now there are more very broad considerations, what does this mean for the Green Deal? Because when we had the European Parliament elections in 2019, there was a very strong feeling that essentially the entire raison d’etre of the European project had to be made about climate and about de-carbonisation, and with these very ambitious goals as you put forward. And of course so much happened in the last five years starting with COVID, then not just the one war in Ukraine, now another war. And so, how should I say, that the political attention is very divided now, and I think the relative losses of the Greens in this election are noted.

However, what I will also say, I purposefully hit the speaking circuit in Brussels and around Europe this week that the Green Deal must remain, but it must also adapt. And I think this is the kind of reflection that’s going to be put forward before a new European commission will then come into office at the earliest 1st of November this year, but also possibly longer if the European Parliament can’t decide.

Jason Bordoff: A lot of the commentary has seemed to go along the lines of there won’t be too much backsliding, but moving the ball forward on climate is going to be much harder. Is that the right way to think about the outcome of these elections at a high level?

Ann Mettler: Well, what I’ve been saying this week is heed the lessons. I think now for the Centre parties to just say we’re going to continue as if nothing had happened, will be a mistake, because I do think the voter was trying to send a signal that the Green Deal, at least as it is currently constituted, is challenging for a lot of people. You may have heard we had these farmers protests. We of course also still have a cost of living crisis. The price of energy is very high. So I mean just pushing on as if nothing had happened, I think will lead to a democratic backlash.

However, as I said, even in the business community, I spoke at a business event this morning, no one wants to see the Green Deal abandoned. They just want to see a Green Deal with a better business case. And here actually I have to say kudos to the Americans because as you know, the Inflation Reduction Act was really a thunderclap on this side of the Atlantic, because people understood that you can actually achieve a lot through incentives, through carrots and not just sticks. And I think that was a real revelation here in Brussels and throughout Europe.

Jason Bordoff: So is that in your view, one of the lessons? We can fill up 20 rooms with papers from economists about how putting a price on carbon is the right approach, and there was a political economy argument that whether you think that’s the right approach or not, that’s not going to work politically and we’re going to need, as you said, carrots, not sticks, subsidies make more sense politically and maybe otherwise, as opposed to carbon taxes, raising prices or mandates for heat pumps or vehicles. Is that the takeaway from the election results in your view?

Ann Mettler: Some of it, I mean, no one is questioning the ETS, the Emissions Trading System. And I think there’s also, broadly speaking, still support for the CBAM, even though we need to see what it will mean once it really kicks the…

Jason Bordoff: Carbon Border Tariff, right?

Ann Mettler: Yeah, Carbon Border Adjustment Mechanism. What this will mean, because right now it’s just sort of in a trial phase. But beyond all the instruments that you list, there’s some very basic lessons. For citizens, they feel energy has become very expensive, which is correct, but that’s not necessarily due to these measures, but more to the war and really profound shifts in how we procure energy. Because the times of cheap Russian natural gas are just over. I mean, so LNG is more expensive, it’s true. And on the side of businesses, I think that everything that’s just sort of been received on their end is just a very high regulatory burden. Some speak about a regulatory tsunami. And it’s just onerous. As I often say for companies in Europe, they face the highest taxes, the highest regulatory burden, the highest wages, non-wage labor costs, the highest energy prices. But then if you look at the actual procurement decisions, they’re always taken on price. So of course we cannot compete.

At the same time you have a trade policy that’s very open and liberal, or it was at least until recently. So as a result, Europe has been deindustrializing. You’ve heard me say this, we are decarbonizing through deindustrialization. No one signed up for that. So we really do need to take stock. What has worked? What do we still need, but where do we need to improve? And here a more incentive-based approach, an approach that doesn’t just always increase the cost of the energy transition, but actually decreases it. Because a lot could be done. You could have Green public procurement, you Green VAT, you could have more digitalization, faster permitting. So here we need to really think about not just more regulation, but more an incentive-based system that works both for citizens and for businesses.

Jason Bordoff: And can the EU afford that? The IRA is somewhere around a trillion dollars and you just spent roughly a trillion Euros subsidizing high energy prices from an energy crisis with Russia’s cutting off gas supplies after invading Ukraine. How feasible is what you just described for European policy moving forward?

Ann Mettler: Well, I mean, the thing to say is that Europe had plenty of subsidies of its own. I mean, the fact that we haven’t used it in a way where it’s really been incentivizing the types of action, at least not at the scale that we wanted to, is pretty much our own fault. But to say that we have completely underspent is probably not correct. I was recently on a panel with someone from the European Investment Bank, and he was bragging that actually Europe has more incentives than the IRA. But who cares if it doesn’t bring about the desired results. However, what is fair to say is that public finances will be more constrained going forward. Also, because of course we have also other priorities now, we know we need to spend more on security.

So what this means is we need essentially make Europe more attractive as an investment destination, especially for let’s say countries that are our allies. We need to think about financial instruments that are very cost- efficient, I would say. One of them is certainly public guarantees, because these guarantees only kick in if projects go astray. So hopefully they won’t do that. So a first-loss guarantee, which is something that, for instance, in the last European Commission we had with what was known the Juncker Plan, which was a big investment program for Europe. So we need to be creative. The times are tough, public finances are constrained, security is precarious, voters and politicians very distracted.

However, the climate concern in Europe remains prevalent. I don’t see large parts of the population saying this is no longer important. Quite to the contrary. But I think the way to do this now is essentially to build programs and instruments that combine the climate aspects, but also security and competitiveness. And here clean technologies, especially emerging clean technologies will be very important to hit those three targets.

Jason Bordoff: So help me understand how to rationalize what you said, which is climate is more important than ever, not less. And the Greens lost, I think, all the gains they made five years ago. Is that about the approach taken to climate policies that are seen as too extreme? How would you describe?

Ann Mettler: Well, that was a little bit my point. I mean, it’s been seen as too onerous. It’s seen as too difficult, which is why I am saying we need to maybe less mandates and micromanagement and targets that have led de facto to some de-industrialization. And the feeling like this is not working for me, to something that I believe can work for people and that we must pursue now. I call it the Green Deal 2.0, which would be based around investments, which would be based around technology innovation, public-private partnership, all that is possible. But we need really a different type of approach.

And here, one of my own, as you may know, I used to be a director general at the European Commission running the internal strategy department, I think we need real improvements in policy planning. Because if I look at the relative success of the IRA, which did bring about real change in one legislative mandate, and I also have to give some credit to China, for their five-year plans in China 2025. That’s the type of policy planning that actually delivers some results. And here I think we need to take some inspiration. We need to have policy planning that aligns trade and state aid policy, energy, innovation, research, industrial policy in ways that we haven’t done to date. But if we do that, I believe those three targets, climate, competitiveness and security, by all means can be met.

Jason Bordoff: We’ll come to several of those topics in a minute, China industrial competitiveness. Just help us understand, we’ve talked a lot about the role of climate policy in these election results, but help our listeners put that in perspective. There were a lot of factors that drove these election results. There’s inflation, there’s supply chain problems, there’s war in Europe. Explain what the farmer’s protests are about for people who may not be familiar with it. And to what extent did the sense people had that Green policies were hurting them in their pocketbooks? How big a factor was that in these results?

Ann Mettler: Well, I mean a couple of points on. So the results were not only driven by the Green Deal or frustration about the Green Deal. You also have to understand that we are inundated here on this side of the Atlantic with disinformation. There is really a lot of meddling also on social media, and that leads to the strengthening of the political fringes. So we can’t blame everything on the Green Deal. But it’s fair to say that there is, broadly speaking, quite a bit of frustration. Coming to the farmers, I would say wasn’t one reason why this happened. It ranged from provisions in the Netherlands to try to reduce the amount of nitrogen in soil to other provisions, which I believe would foresee that 4% of the land that farmers possess would have to be essentially devoted to biodiversity. So there wasn’t one reason, it was more, this is hard, this is too onerous. And it led to really, I think we were surprised about the degree of frustration among the farmers, and have subsequently lowered some of those thresholds and have given in.

This is very disappointing to some people because we want to be leaders. But suffice it to say, the very tough way of bringing about this energy transition, which is essentially around a lot of individual changes at both household level and firm level, has not proven to be that successful. So that’s why I am saying we need to try to figure out politically how to do this in a way that’s more palatable. And I think that is possible, including with a different narrative. I mean, if I look at this last legislative term and when, for instance, Poland still had an extreme right wing government, they were actually the leaders in Europe in installing heat pumps.

Why? Not because they were so concerned about climate, but because of essentially security considerations. They wanted to get rid of Russian natural gas and fossil energy more broadly. So we now need to see also how can we play these policies to different audiences, political audiences. And at the end of the day, and I think this will also be something that will be a prevalent argument on your side of the Atlantic, is we’re going to see sizable new markets emerge. We’ve already have it in solar and wind and EVs, electric vehicles. There’ll be heat pumps, electrolisers, so we want to get in the game and we want to be part of those markets, and we will decarbonize, but we will also shore up our competitiveness. And this is where we finally need to go.

Jason Bordoff: What do these election results mean for specific European climate policies moving forward? I mentioned some of the questions about the target. Is it going to be as ambitious as 90% reduction by 2040, internal combustion engines by 2035? Just give us a sense of, and the policy mechanisms to achieve those reductions, what do you think is going to happen from this point forward and what significant changes might result in terms of the specific policies that get put in place?

Ann Mettler: So what I’m saying now, I say as someone who spent more than two decades working on EU policies. The fact that you set an ambitious target doesn’t mean you achieved that target, because Europe is really good at setting really targets that one should aspire to and then routinely fails them. So I’ve always been less impressed with these over ambitious targets. So I don’t think we should spend an extraordinary amount of time now, is it 90%? Is it 80%? Is it this, that? But it is really about the larger energy transition. If we don’t want to get rid of the combustion engines, so be it. But the global trend is towards electromobility.

My point is we don’t need to micromanage everything. The trend towards global electromobility is happening with or without the Europeans. If we want to be in denial, let us be in denial. But it’s like the fine gravity. So my point is I think what we will have in the future going forward, also recognizing the electoral mandate is now with the EPP, those are the center right conservatives at the European level, I think they will continue to have ambitious targets, but they will leave it more open-ended how users and companies will get to these targets. So there will be less micromanagement, more incentive-based, and maybe also more technology neutral and just saying, let’s have these targets, let’s work towards it, but let’s be less prescriptive, less onerous, less expensive.

Jason Bordoff: And that point you made about technology neutrality. So I mean, I think EU policy has for a long time given main emphasis, tell me if you disagree, to renewables, maybe not always as much attention to nuclear carbon capture and storage, blue hydrogen as part of the pathway to green hydrogen. Do you see that changing?

Ann Mettler: Yes. I think there’s a new realism in Europe also around nuclear. A few years ago, you couldn’t even really mention nuclear in this town. This is now is completely accepted. A few weeks ago, months ago, we had a nuclear summit here in Belgium, which was very well attended by heads of state and government. So what we’re seeing I think, is less ideology in energy policy. We are starting to realize we’ll need everything. All the mature technologies I think, also broadly speaking, when people look to Germany and their decision essentially first to double down on Russian natural gas, then get out of nuclear perfectly functioning nuclear plants, to now really double down on LNG. Build a new power plants that someday are supposed to run on grain hydrogen, which you know is exceedingly expensive still.

NO one’s following really the German blueprint in the energy transition. That’s what I’m saying, there’s a new realism about this. If I look at the country where I live in Belgium, they also, they were going to get out of nuclear and then decided not to get out when the energy crisis hit. So there is a new sort of realism I would say, or as I also, sometimes I call it ideology meets reality. I mean, it’s that kind of moment, right.

Jason Bordoff: You mentioned LNG. What does that new realism mean for policy approaches toward natural gas in the energy system trying to both meet climate goals, but also energy security affordability?

Ann Mettler: Yeah. Well, for me, honestly, one of the big disappointments and also missed opportunities was that when the price of natural gas in the summer of 2022, so remember the war started in February, by the summer of 2022, the price of natural gas was six times what it was before the war. Six times. I mean, imagine this for if you are operating in heavy industry, what that means. So there was really the prospect that we were just going to deindustrialize honestly in a matter of weeks. And facilities did curtail their production, some even shut down. And that would’ve been the moment to really say, what are the emerging clean technologies that can reduce the demand for natural gas that we need to invest in now? So for instance, long duration energy storage. For instance, clean industrial heat.

I even started an initiative at the time called the Energy Resilience Leadership Group, which did precisely that and said, you use these technologies, you’ll be reducing the demand for natural gas, you’ll be improving your climate performance. You’ll be shoring up energy security resilience and you will increase your competitiveness. That opportunity was lost. And I think that’s shameful. To give you, just some staggering figures. In 2022, the value of fossil fuel imports to Europe soared to 640 billion euros. 640 billion euros. Was 4.1% of GDP. It subsequently went down. It was 2.4% of GDP last year. But nonetheless, we’re paying a lot for energy. And we don’t have fossil energy. So not only are we paying a lot, we’re also increasing our dependency.

We are still dependent on Russian LNG, and we are now dependent on places like Azerbaijan, Qatar. I leave it to others to say, is that a good thing? But my point is to invest in our homegrown clean technologies. That would’ve been the moment, it’s this combined climate security competitiveness crisis and doubling down instead of paying that much, not only for the fossil imports, but also for subsidies. We have spent more than we are around 600 billion euros in subsidizing fossil energy since the war began.

Jason Bordoff: And despite all of that, we put out a paper not long ago, you may have seen, about industrial competitiveness, how much of the decline in industrial gas use in Europe, for example, is structural. How much might come back if prices go down? And the takeaway was not great for Europe’s industrial economic outlook. So what you mentioned a moment ago, competitiveness is front and center now. What does that mean in the face of these declines in industrial activity, economic activity in Europe, and what’s that going to mean for policy climate and otherwise moving forward?

Ann Mettler: Well, I mean for starters that we recognize again that manufacturing and industrial base is important to us. There’s a lot of talk now about reindustrialization. Just today, actually, you may know that Mario Draghi, the former head of the ECB, the European Central Bank, he’s now writing a very important report on European competitiveness for the president of the European Commission. And he said cheaper energy is a key priority for him, and also by Europe provisions. So there is a profound concern about the loss of the industrial, the manufacturing base. But where I think we don’t have enough recognition is what exactly a prioritization of what needs to happen now.

I go back to what I said earlier. The priority in 2022 needed to get off natural gas. We could have, instead of spending all this money on fossil energy, if we had just taken a fraction and put it in these emerging clean technologies like long duration energy storage, clean industrial heat, we would be in a better place today. And so it’s not too late, but it’s not great because a lot of the loss of the industrial base, my prediction, is permanent. And apart from the cost of energy, one also has to see just the volatility of LNG. I mean, this is a very volatile product both in price and availability. And to base your industrial policy on that, it’s just not a good idea.

Jason Bordoff: Yeah, yeah. And I guess maybe that, well, you mentioned China before, I guess everything you just said comes to that a little bit. Maybe you can explain what just happened with the large tariffs put on imports from China for, say, electric vehicles. And help me think about the same conversation we’re having in the United States, how do you think about attention if there is one, between the idea that the transition is seen as too expensive, we want it to be as cheap as possible, but you just talked about building domestic manufacturing capacity and you don’t want cheap imports from China either. How do you see the geopolitics and the desire for more domestic industry? Is that lowering the cost of the transition, is it making it harder or easier?

Ann Mettler: That’s a good question. That is frankly is not known at the current moment. However, I was just on a panel this morning with the Head of the European Automotive Association, and broadly speaking, I think they are not enthusiastic about the tariffs, but also are not in a very competitive situation with or without the tariffs, to tell you the truth. So a lot of what is happening now, because, by the way, it’s not just those tariffs, it’s also investigations into various sectors, is just a realization, I think, A, that we haven’t had a level playing field in trade that it has disadvantaged our own companies that we kept markets open while there wasn’t reciprocal access to other markets, et cetera.

But everything that comes now is awfully late and it remains to be seen. The tariffs in the United States are even higher, if I understand correctly, I mean twice as high. So what one person was saying this morning in the audience was that speaking about another product, even with a high tariff, people are still buying Chinese because it’s still cheaper than the European competitors. And here, I think coming back to this issue of competitiveness, if Europe is too expensive, then it’s really the role of the policymaker to figure out how can we become cross-competitive. One of the real challenges here for Europe is essentially, if you look at the innovation cycle, we’re good at the R&D phase. That’s well known in the early stages of the innovation cycle. But we are notoriously bad at the scaling up and commercialization phase.

And if we could do that better, the price would come down, we would be more competitive. But for that, we would really have to have policies that decisively move us up the value chain into new emerging markets where there’s demand. And so it’s very complex. I mean, you’re talking about industrial policy, and I would say that these tariffs are a crude measure, but not entirely unwarranted. But the bottom line is there is a trend towards electromobility. It’s good that China is reducing its CO₂ emissions. We will need electromobility to reduce our own CO₂ emissions. And as I said, completely irrespective of combustion ban or not, there is a global trend towards electromobility. Automotive is an important sector in Europe. We need to pay attention to that. So that is the way forward.

Jason Bordoff: You’ve spoken and written a lot about the importance of innovation in this transition. Of course, that’s a big part of what Breakthrough Energy and your boss, Bill Gates, thinks about every day. Do you view tariffs on things like EVs as a necessary part of an innovation policy to build European industry?

Ann Mettler: No, I don’t. But I do consider the level playing field to some extent a requirement, because if essentially the way we operate now with so much regulation, with so many costs, I mean, it’s like fighting a global fight with your hands tied. This is what a lot of our companies are facing. And if you then add to that what I said previously, that we can’t scale up that we have completely fragmented markets within Europe, then it just becomes too difficult, it becomes too onerous. And so my number one message is really we need much more aligned policymaking that takes all of this into consideration where trade policy and perhaps even tariffs can be part of it, but not as a standalone single isolated policy, but rather as a coherent overarching policy that can help our own company succeed.

Jason Bordoff: And how do you think the election results will change the policy landscape that you’ve been a strong advocate and champion for the innovation ecosystem in Europe?

Ann Mettler: Well, everyone’s talking more about innovation, but as I know, innovation comes and goes as a policy priority. If we’re really serious about it, we need to make it part and parcel of policymaking, which right now it is not. So for instance, we have a legal requirement to adhere to what is called the precautionary principle, which is part of our legal body that underpins the European Union. In my time in the European Commission, I had a legal advisor. Essentially there’s also a legal basis in our treaties for an innovation principle, and we made that very clear. However, the policymaker never took the innovation principle as seriously as a precautionary principle. There are not enough stakeholders that advocate the innovation principle on par with those stakeholders here that would advocate for a precautionary principle. So you get a completely distorted policymaking process where politicians might talk about innovation, but what comes out is actually stifling and slows innovation down.

And unless we can really bridge that gap between aspirations and rhetoric and how we actually do things, I am not optimistic that things can change, but it makes it all the more important that we really dig a little bit deeper and not just use innovation as a slogan. Because another reality of innovation is that failure is an integral part of innovation. There’s very little acceptance of that. So you have, for instance, in the US you have DARPA, you have ARPA-E, all of these systems. They don’t work the same over here.

Jason Bordoff: You mentioned nuclear before and the shift in attitude. What do you think that’s going to mean in terms of specific policies toward nuclear? Of course people remember Germany deciding to move away from nuclear. Do you think new nuclear, expanded nuclear capacity is coming? If so, in which countries? Or do you think this is some countries that we’re going to move away from it won’t do that now? What does it actually mean for the role of nuclear, you think, in the next 10, 20 years?

Ann Mettler: Yes. I think there are three elements. One I already mentioned, countries that have said they want to get out will not get out in the short term. Belgium is one of them. The second element is essentially prolonging the existing nuclear fleet. And the third is what you mentioned, is the building of new reactors. And I think there’s a lot of interest and openness to that. I see it, I mean, France is the foremost advocate here, but countries in the East and in Central and Eastern Europe are very strong proponents. But we need to see how that plays out because there are different technologies for these small modular reactors, but there’s definitely interest.

And there’s now also at the European level, we have what we call the taxonomy, which is essentially a regulatory framework that says which technology can be considered sustainable. And nuclear is part of the taxonomy. That also means that countries can financially support the technology. And so there’s a lot of momentum, I would say. Also the European Investment Bank, which hitherto has completely stayed away from nuclear, I think is now more open to it. So as I said, it’s a new pragmatism, but it doesn’t have yet very much to show for.

Jason Bordoff: Does Ursula von der Leyen remain President of the European Commission?

Ann Mettler: It looks like it. She has, I told you, the center held in the elections, so provided that the parties that have to support her, which is her own political group at the center right, and as well as the social Democrats and the liberals, they should have the votes together. Those three parties have 407 votes in the European Parliament, she needs 361 votes. So I would say broadly speaking, it’s looking good. If not too many members will choose not to vote for her. And my prediction is then that in the coming weeks and month, Brussels will be completely consumed with this jockeying for jobs and who gets what. But right now it looks like she’ll get a second mandate, absolutely.

Jason Bordoff: Would that include Giorgia Meloni’s party or no?

Ann Mettler: Well, this is the big question because Ursula von der Leyen said she wouldn’t rule that out. She doesn’t need it. I mean, if the center holds her own, if those three parties elect her, she doesn’t need Maloney, who is part of what we call the ECR, so a more extreme party, but extreme center right. But there’s even one more further to the right. So we need to see, but if that happens, the socialists have said they will not vote for von der Leyen. So it’s exceedingly complicated. It’s very European, and let’s see how it unfolds.

The leaders are coming together in Brussels on Monday for first discussion, and there is some hope and expectation that as early as July, that Ursula von der Leyen may be reappointed for a second term to run the European Commission.

Jason Bordoff: And if she is or isn’t, or the coalition that comes together includes or doesn’t include different parties, what does that mean for say, where climate and clean energy policy will head? Is it very significant or it’s not really going to change too much?

Ann Mettler: Honestly, we need to see. First of all with who will elect her? So if she makes concessions to the, let’s say the ECR, so the Maloney fraction of the European Parliament. But that being said, what I question a little bit is that the old Green Deal was really the path to decarbonization and reaching our climate goals. It led to deindustrialization. So I am not sure that something that makes a better business case that is more incentive-based, more investment-based, won’t do a better job. So I think we need to honestly see where things are heading, but need to be very clear that five years of more of the same, essentially primarily regulation without much else is not the way forward. So I think there’s consensus around that, also in the centrist parties.

Jason Bordoff: You mentioned earlier at the start of the conversation, Macron dissolving the National Assembly. What do you expect on June 30th? What are the different scenarios in terms of what happens in France?

Ann Mettler: Well, this is, if you ask me what really upset people more than the outcome of the EU elections, it’s this, because that is really a wild card. Some people feel like he made the right call to just really confront people with reality. Are you really sure you want this? But I would say the majority of people that I’m speaking to think it was too much of a risk at this current moment. You have to understand this is a very volatile situation over here. I was at the Ukraine Recovery Conference in Berlin on Monday, and these are tough times for Europe. And to just throw the dice like this and accept that things can go terribly wrong. Because if the electoral success of the National Rally, so Marine Le Pen’s party, will be repeated in the elections on the 30th of June. It means essentially that you will have what the French call cohabitation.

You will have a president who is from one party and you will have a Prime Minister in parliament that essentially is from another party and has very different objectives. So it makes policymaking, and by the way, I think you know this on the other side of the Atlantic, it’s not conducive for very decisive policymaking, which is in many ways what Europe and what France needs now. So it’s a huge gamble and remains to be seen how it will pan out. But that being said, the President himself has said he will stay in office also because we had this week really also some jitters on the markets, because France has a very high debt-to-GDP ratio, and the finance minister warned this can lead to essentially a financial crisis. So the stakes are very high, very, very high.

Jason Bordoff: Just for people who may not be following closely, explain how you see the bet that Macron is making. Is it that they will not perform well, the right in the June 30th elections? Is that even if they do then in 2026, people realize the mistake, have gotten this out of their system? How do you see the scenarios playing out and what bet Macron’s making?

Ann Mettler: Well, maybe just to remember that Macron has taken really, really bold political bets in the past. He founded a new party, a centrist party in a country that was always governed by either the right or the left. What he’s doing now is essentially risking the implosion of his own party and the strengthening of the extreme left and the strengthening of the extreme right. So there are four leftist parties that have said they’re going to come together now and form sort a block. And then of course you have the, as I said, the national rally, which right now, or at least in the European Parliament elections, was extremely strong with more than 32% of the vote. Now remains to be seen, whether that can be repeated in a national election. But suffice it to say that the expectation is that his own party, his own centrist party, will not be doing well, and that could well lead to the strengthening of the political fringes.

Jason Bordoff: We’ve talked about France. What national governments should our listeners keep in mind that you think are particularly noteworthy in terms of what the election result was that was surprising or consequential? Which particular countries in what just happened do you want to highlight for people?

Ann Mettler: Well, I spoke about Germany already, where the three governing parties, the social Democrats, the Liberals and the Greens didn’t do well. So that’s noteworthy. And then of course, because President Macron resigned, there were immediately speculations, well, this happened in Germany, it’s not happening in Germany. But definitely the government there didn’t get a big boost from the European Parliament elections. That’s fair to say.

The other noteworthy for me is actually is Italy, where Prime Minister Maloney had a strong showing. So that’s unusual because oftentimes when you are in power, opposition parties do better, but it didn’t happen in Italy. So she is emerging actually as quite a powerhouse, I would say. You see now the G-Seven is convening in Italy as we speak, and she’s the only one who has a very strong electoral mandate right now of all of the leaders. The other one is Poland, where the party of Donald Tusk did also well, and that’s the governing party. And it’s of course a country that prior had an extreme right-wing government.

So interesting just to see what’s happening across Europe. And as always, really you see just the sheer diversity of views. And on the one hand, I’ve been working on the EU for so long, it’s inspiring, but I know that in the day-to-day, this diversity of views and different countries and different perspectives makes governing and managing the European integration process very difficult.

Jason Bordoff: So when you look ahead to transatlantic cooperation, of course there’s a big uncertainty on this side of the Atlantic with what happens in November, but we’ll have new leadership in Brussels, many EU member states maybe in Washington. What are the most important areas where you think they can all be working to collaborate more closely? What forms of collaboration do you think that could take and would be most productive?

Ann Mettler: Absolutely. So first of all, I won’t speculate about the outcomes of the US elections, that’s not for me to do. What I will say is that completely irrespective of who will be president, there are certain just realities, and I mentioned them before. In clean technologies, they are increasingly important. They are building out entire new sectors of the economy where there’s a lot of opportunity and growth and potential for companies to thrive, not only in their domestic markets, but worldwide. And right now in clean technologies to the extent that they’ve ever been deployed at scale, manufactured at scale, and the cost brought down that has happened in China. I mentioned before, wind, solar, EVs, batteries, also China’s dominant road in critical minerals.

So looking at DEU and the US, we are both starting from behind, I think it’s fair to say. I think it’s also fair to say we both want a piece of the pie because we have a strong manufacturing basis, we have strong industrial basis. We’re good at deep tech, we care about climate, so we need to get in the game. And one of my lessons also from my previous jobs, is that the global economy is changing in profound ways. And what was once a really sizable market, the EU internal market, is today not so big if you consider the Chinese market or you consider the Indian market. This is why I think you know I have advocated a clean transatlantic marketplace, essentially short of an FDA, short of a free trade agreement, just saying, what can Europe and the United States do together to align the IRA and the Green Deal, to have a more joint up value chain to help our companies on both sides of the Atlantic with joined up regulations, aligned standards with really smart investment opportunities.

And this is for me, low-hanging fruit. There is of course this process that underpins the transatlantic relationship. It’s called the EU-US Trade and Technology Council. It’s been going for a few years. If that continues, and irrespective of the leadership on both sides of the Atlantic, I think it needs to double down on that, because these are new markets, there’s real opportunity, a bigger, more aligned regulatory space of what just really be such a boon to our start-ups and established companies, because that would make the market so much bigger. You’d be looking at 800 million consumers over one-third of the global economy, and I think there would just be bottomless opportunity. And the only way, if I can say that, to really catch up.

Jason Bordoff: Yeah. I’m lucky I have the chance to run into you at numerous conferences around the world over the course of each year and just always learn an enormous amount, Ann Mettler, by talking to you as I have in the last hour, and I know all of our listeners have. So thanks for being so generous with your time today and always, and thanks for explaining what’s happening on your side of the pond. We’ll see what happens on this side in November and what that means for how we work together to address the climate crisis and energy security and more moving forward. Really grateful to you for this conversation.

Ann Mettler: And thank you for the important work that you do.

Jason Bordoff: Thank you again, Ann. And thank you for listening to this week’s episode of Columbia Energy Exchange. The show is brought to you by the Center on Global Energy Policy at Columbia University School of International and Public Affairs. The show is hosted by me, Jason Bordoff, and by Bill Loveless. This episode was produced by Aaron Hardick, Sean Markwand and Daniel Waldorf from Latitude Studios. Additional support from Martina Chow, John Elkind, Ansofie Corbeau, Pierpaolo Cazzola, Victoria Prado, Lily Lee, and Caroline Pittman. Roy Campanella engineered the show.

For more information about the podcast or the Center on Global Energy policy, please visit us online at energypolicy.columbia.edu, or follow us on social media at ColumbiaUEnergy. And please, if you feel inclined, give us a rating on Apple Podcasts, it really helps us out. Thanks again for listening. We’ll see you next week.

Recent elections in the European Union shook up the continent’s climate politics. Far-right parties performed well in both the EU’s parliament and national governments, and the Greens lost nearly all of their gains over the past five years in the European parliament. Voters pointed to energy costs, security, and economic competitiveness as key factors in their decision-making.

So what do these elections indicate about the shifting political ideology of the European Union? How will they impact Europe’s relations with the U.S. and China? And what do these elections mean for European climate and energy policy?

This week, host Jason Bordoff talks with Ann Mettler, vice president for Europe at Breakthrough Energy, a network of investment funds, philanthropies, and nonprofits dedicated to scaling low-carbon technologies. She previously served as director-general at the European Commission, where she ran an in-house think tank called the European Political Strategy Centre. Prior to that, she was the executive director of The Lisbon Council, an economic policy think tank she founded in 2003.

Jason and Ann discuss the results of the recent European elections, the economic competitiveness challenges facing the European Union, and Ann’s views on Europe’s new tariffs on China.

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