Hungary has taken a major step in the fight against climate change

Recently, the National Assembly is among seven countries in the world that has enacted legislation on achieving climate neutrality by 2050 in the country. By this, it has anticipated countries like Germany, Austria and Holland. This law is an important milestone in Hungarian environmental regulation, clearly marking Hungary’s path for future development, and providing an appropriate legal basis for the Government to develop and apply the means necessary to achieve the objectives. The point of interest is that, although the proposal was submitted by the representative of Párbeszéd, its final form was outvoted by the entire left, arguing that the final form of the law differs from their ideas on too many points.

The original proposal included several points that are important and forward-looking for Hungary, so they were included in the final law. Perhaps, the two most pronounced are the climate neutrality target by 2050, and the further development of the country’s climate adaptation program. Primarily, the former has a guiding significance, because Hungary is among the first European countries to declare in its legislation that it is committed to achieving the European Union’s common climate protection goals. The latter is perhaps the highest priority issue regarding the living standard of Hungarian people in the future, because climate exposure in the Carpathian Basin is exceptionally high at a European level.

The final document also includes comprehensive proposals for action, such as efforts to improve the energy efficiency of companies, awareness-raising programs, or measures to increase the environmental activity of residential energy consumers (for example, promoting backyard and community energy production). There have already been government programs launched for some of these, but there is no doubt that further action is needed in these areas to achieve the goals. The promotion of green financing included in the draft is, basically, also present in the adopted law, in a modified form (in the form of green bonds). Finally, both documents include that, in the future, related policy regulations (such as transport and energy policy or waste management policy) will need to be amended on the basis of sustainability aspects.

Several important novelties, which were not included in the initial draft, have been included in the final law. A substantial development is that the adopted document seeks to protect not only Hungary but the entire Carpathian Basin in terms of climate adaptation. In addition to cultural and historical traditions, this is important because the region is expected to face relatively uniform, coherent challenges from a nature conservation point of view.Thus, they should be managed jointly, regardless of national borders. The payment by the polluter principle, and the effort to have proportionate and realistic interventions, have been included in the law, providing that the costs of climate change are borne by its actual causes. Finally, the authors of the document have recognized that technological innovation can be of great help in solving ecological problems, thus, the encouragement thereof has also been included in the law.

Three main differences can be identified between the original proposals and the adopted law: Emotion-charged passages with little professional content and lacking legislative power have not been included, and the commitments have been modified. The final version of the former title, “Act on the Declaration of the Climate Emergency”, which can be listed in the sentimental category with no content, has become Act on Climate Protection. The change is certainly due to the fact that, while we do not know exactly what the former means and what tasks it entails, the latter is clear and unambiguous. The aspect of "climate justice" has also been removed from the draft, as it can rather be interpreted globally (for example, in relation to India and the US), and its domestic meaning is rather vague. The principle of the polluter paying is much more important and much clearer.

According to the adopted legislation, instead of setting up new ministries and further increasing bureaucracy, the primary task is to accurately set goals, actions and rules, in the absence of which even an independent ministry would not do anything better or otherwise. In addition, as environmental protection is a horizontal task (i.e. linked to the activities of each ministry), the current domestic practice may prove to be better, in which it appears as a separate task in each ministry. Therefore, a separate organizational unit ensures that natural considerations appear in the decisions.

Several points have been removed from the final act that are classically not legislative but policy tasks, for example, supporting or penalizing certain energy production technologies, modifying the tax system, or modernizing buildings. These issues should not be regulated under the law, because they would make the system inflexible in the long run and deprive the policy of the opportunity to adapt its programs to the changing technological environment as quickly as possible. In addition, the solutions proposed by the left have in some cases contradicted each other. For example, it is not clear how to ensure that raising fuel taxes does not increase the vulnerability of poorer social groups.

Finally, the biggest debate was about setting goals: The 2030 emission reduction target (compared to the value of 1990) is 40 percent, and the 2030 renewable target is 21 percent. These are ambitious goals. In addition, the original draft included a passage that would provide for a 30% reduction in energy consumption (but what it is compared to was not clear). Instead of this, the adopted document undertakes that if energy consumption exceeds the 2005 level, the increase can only be covered by clean energy. All the agreed values are in line with the goals currently set in the European Union, so the debate is more about whether it is significantly worth going beyond them in the commitments.

Since, from a global climate change point of view, it is not conclusive which objective will be met (Hungary's contribution to global emissions is negligible), and, to the best of our knowledge, each additional percentage will add huge costs to the economy and the society, the policy should handle reckoning cautiously. In the current technological environment, the objectives of the previous draft are unrealistic. However, responsible commitments that are uncertain to be implemented cannot be made. Of course, this does not mean that we should not strive for exceeding the targets, but in this area, making additional commitments is simply irrational.

The fact that the entire left voted unanimously to reject the bill, and after its adoption, they labeled the law in a less elegant tone, in a bidding war, is hard to explain with professional arguments – as it is a pioneering step. The reactions are probably based on political considerations: The main goal of the left is to appropriate the subject, even if it is detrimental to the cause. One of the important advantages of Hungary, compared to Western countries, and especially to the USA, is that the people's attitude towards nature conservation is not politically polarized. That is, while in the United States or Germany, the majority forms an opinion on climate issues based on partisanship, in Hungary, for the time being, nature conservation is important to the vast majority, regardless of political views. As addressing ecological problems will be one of the most important and difficult challenges in the coming years, maintaining national unity is important because only this can give the actors currently in power legitimacy in making difficult decisions. The left has, in fact, attacked this value by rejecting the bill. The question is how far the left is willing to go in faultfinding in environmental policy, to demonstrate a protest attitude towards the government. Anyway, it is a frightening snapshot that left-wing MPs are opposed not only to environmental arguments but also to themselves in order to confront the government.

Author: Olivér Hortay, Head of Division, Energy Business Sector at Századvég Economic Research Institute