On Monday 5 February, the Mouvement écologique (Meco) issued a statement which called for a debate and rethinking on economic policies which should take environmental issues more into account.

The NGO argued that the so-called Rifkin conformity with diversification policies was not sufficient and not the be-all and end-all.

Rifkin does not challenge the growth question

The Rifkin study, which was commissioned by the government to offer suggestions on how to shape economic policies over the next 40-odd years, was based on considerable population and jobs growth.

Meco questioned these assumptions and wanted a public debate on the desirability of these increases:

“The question is whether Luxembourg can ‘digest’ all this, considering the current mobility problems, the housing shortage, the additional infrastructure needed, the increasing construction of the landscape and reduction of biodiversity, and whether this is desirable?”

The Rifkin study is blind on the environmental eye

The environmental lobby group cannot find a satisfactory basis in the study for judging whether a company is environmentally sustainable or not, or whether it has an added value in terms of social policies or in the regional economy.

The criteria contained in the study, the group stated, ar:

“too vague, too general, e.g. concerning ecological issues. Apart from the commitment to ‘circular economy’, to energy efficiency or the goal of 100% organic farming, the study lacks binding goals or goalposts for sustainable development from an ecological and social standpoint.”

The NGO states that this lack of criteria meant that the Google data centre, which is set to be based in Bissen, near Mersch, could be classified as conforming to the Rifkin objectives, despite its high land, energy and water use. Furthermore, the economic benefits, beyond an initial €1bn investment, have not been made clear. If the European Commission implements its intended higher taxation of internet companies, what use would Google bring, except image gains and possibly attract other firms in that area, Meco asked in its paper.

It would be unwise to bank only on global players and tax dumping.

Other instruments, which the government has subscribed to, should not be forgotten, such as the national action plan on climate protection, the national development plan, and other environmental measures.

Suggestions

The environmental NGO argued for a listing and qualifying of the possible measures that the government has at its disposal to direct economic policy. This would also enrich the debate on a “qualitative growth”, which is set to become an election issue.

Regional companies and SMEs should also get more support from the government.

The mid- and long-term financing of the social security system

The current financing model of social security is based on continued population and economic growth; Meco called therefore for changing the paradigms, and for an analysis of alternative additional financing models. A higher capital and financial transaction tax should not be a taboo anymore in Luxembourg: “the discrepancy between the high burdens on labour compared to that of capital is not acceptable.”

To take into account the impact on the environment when companies get their planning permission, the NGO advocated implementing two measures, specifically to set binding quantitative environmental goals on energy, resource and land use; and to reform the legal framework for planning permissions and planning extensions by including these environmental goals.

The current DP-LSAP-Green coalition government had promised a tax reform which included sustainable development criteria, but the green lobby group stated that while some isolated measures had been implemented, a fundamental reform had not taken place:

“This despite the fact that environmental taxes in 2014 only constituted 5.25% of revenues, the relative burden on capital had fallen to a historical low of 21.2% and 50.4% fell onto the factor labour. If you use the term qualitative growth, you must tax the environmental use a lot more, and thus relieve the social security system.”