"We Need to Be More Like Europe"
California's governing class spent a decade envying the European energy model
How California's governing class spent a decade treating the European energy model as a template for the future — and what it looks like now that Europe has abandoned the template itself.
I. The Aspiration and Its Apostles
In September 2022, the same month California's Air Resources Board adopted the most aggressive vehicle electrification mandate in the world, Governor Gavin Newsom flew to New York for Climate Week and declared that California was setting "world-leading climate goals." He had spent the preceding two years weaving a specific geopolitical narrative around California's energy policies: that the state was not merely responding to domestic pressures but was consciously modeling its approach on the European experience — on Germany's Energiewende, on the EU's Green Deal, on Brussels' Emissions Trading System, on the European commitment to hard regulatory deadlines over market-contingent frameworks.
The phrase was not always spoken literally. More often it was embedded in the structure of official announcements — the celebratory joint press releases with European Commission officials, the Memoranda of Understanding with EU member states, the speaking invitations at European forums, the explicit comparisons between California's climate regulatory apparatus and the Brussels model. The implicit claim was consistent and unmistakable: Europe had shown the way, California was following it, and together they were demonstrating that aggressive decarbonization mandates were compatible with — indeed, generators of — prosperity, innovation, and economic growth.
That claim was always partially true and partially aspiration. By June 2026, it is almost entirely ironic. The European model that California's governing class held up as a template has, in the intervening four years, produced two consecutive years of German recession, a deindustrialization crisis across the EU's manufacturing heartland, industrial electricity prices more than double those of the United States, the largest political surge by far-right parties in postwar European history, and — most starkly — the formal abandonment by the European Commission of the very 2035 internal combustion engine ban that California is still fighting in federal court to preserve. The model is in retreat. The student is still enrolled.
II. The Template Years — What Was Actually Said
The official record of California-European climate coordination is extensive and unambiguous. It is worth documenting in some detail, because the rhetoric has continued largely unchanged even as the underlying reality has transformed.
In October 2023, Newsom traveled to China and declared: "We're moving markets nationally and globally. That's an example of California punching above its weight." The framing was of California as a peer of sovereign nations on climate — a subnational government exercising the geopolitical weight of a country, partnering with European capitals as equals in the project of setting the global standard for decarbonization.
In May 2024, Newsom traveled to the Vatican for a climate summit where he "called out the propaganda and lies from Big Oil" and signed a Planetary Compact alongside Pope Francis. The Governor's official press release quoted the Pope: "The refusal to act quickly to protect the most vulnerable who are exposed to climate change caused by human activity is a serious offense and a grave violation of human rights." The moral framing was explicit: speed of decarbonization was itself a measure of ethical seriousness. Conditionality was weakness. Hard deadlines were virtue.
In September 2023, Newsom's office announced that California was "the first world's largest economy to have been powered by two-thirds clean energy," and trumpeted that the state had "run on 100% clean electricity for part of the day almost every day." These achievements were presented as vindication of the European-style approach — heavy investment in renewables, aggressive regulatory mandates, integration of the state's energy policy with international climate frameworks.
In November 2025, as California's refinery crisis was deepening and the state had already lost the Phillips 66 Los Angeles facility, Newsom flew to Belém, Brazil, for COP30 — the UN climate conference the Trump administration declined to attend — and signed Memoranda of Understanding with Nigeria, Brazil, Colombia, and Chile on zero-emission transportation and clean energy cooperation. His official statement: "While Donald Trump skips the world stage, California is showing up — leading, partnering, and proving what American climate leadership looks like."
In February 2026 — with the Valero Benicia refinery having just ceased operations on January 31, with California gasoline prices having surged 40 cents in two weeks, with a Republican leading the state's gubernatorial primary on a platform of reversing the entire regulatory framework — Newsom flew to Munich for the Security Conference. There he met with Germany's Environment Minister and the EU's Climate Commissioner, and pledged to deepen cooperation on "zero-emission vehicles, carbon pricing, and climate collaboration." His official statement from Munich: "While Donald Trump continues to demonstrate that he is unstable and unreliable, California is leaning in on the partnerships that make California stronger, Americans safer, and our planet healthier."
The European partners he was meeting with were, at that precise moment, presiding over the wreckage of the model California was pledging to deepen. The German Economy Ministry was reporting its second consecutive year of GDP contraction. The EU had formally scrapped its 2035 ICE ban just eight weeks earlier, in December 2025. The Deloitte-Cefic Antwerp Declaration Monitoring Report, released in Brussels three days before Newsom arrived in Munich, found that for 83% of key performance indicators, there had been no improvement or deterioration since the European industrial competitiveness declaration of 2024. Energy remained, in the report's words, "a critical pain point."
III. What Europe Actually Looked Like — The Data Record
The contrast between California's official portrait of European climate leadership and the documented industrial reality of Europe deserves systematic presentation, because the two pictures have been running in parallel with almost no acknowledgment of the tension between them.
- EU industrial electricity prices in 2024: €0.199/kWh vs. €0.082/kWh in China and €0.075/kWh in the U.S. — 2.6x the U.S. level (BusinessEurope / IEA)
- EU natural gas prices for industrial users in 2024: 4.6 times higher than in the U.S. (Deloitte/Cefic Antwerp Declaration Report, Feb. 2026)
- EU average wholesale electricity price in 2025: ~$95/MWh — roughly twice the U.S. level (IEA Electricity 2026)
- German GDP growth: −0.3% in 2023, −0.5% in 2024 — two consecutive years of recession; first back-to-back contraction since the early 2000s
- German manufacturing gross value added: fell 3.0% in 2024; automotive and mechanical engineering fell further
- German foreign direct investment: fell from €150+ billion in 2021 to €43 billion in 2024
- EU energy-intensive industry jobs lost since 2008: 1.5 million; production levels in 2025 down up to 40% in some sectors vs. 2018 (CEPI joint statement, Feb. 2026)
- EU share of global manufacturing value added: declined from 20.8% in 2000 to 16.3% in 2023 (World Bank)
- Antwerp Declaration KPIs showing no improvement or deterioration since 2024: 83% (Deloitte/Cefic, Feb. 2026)
The Draghi Report on European competitiveness, commissioned by the European Commission and released in September 2024, is itself an extraordinary document in this context — not because it is critical of climate policy, but because its author, one of Europe's most credible mainstream economists, produced what amounts to a systems-thinking indictment of exactly the model California had been praising. The report identifies the widening gap between the EU and the U.S. in terms of productivity and income growth, and warns of the existential risk posed by stagnation in innovation, energy transition, and geopolitical security. Draghi called for investment at a scale not seen since the Marshall Plan. The European Commission's own president called it a "wake-up call."
None of this found its way into California's official messaging about the European partnership. The Governor's office continued issuing press releases about "shared leadership" and "proving what American climate leadership looks like" as the shared leader's economy contracted for the second consecutive year and its flagship automaker — Volkswagen — announced plans to close German plants for the first time in the company's 87-year history.
IV. Germany's Nuclear Reckoning — The Cautionary Analog
Of all the parallels between European energy policy and California's trajectory, the German nuclear closure story is the most instructive — and the most directly relevant to California's own Diablo Canyon decisions.
Germany's nuclear phase-out began with legislation in 2002, was accelerated after the Fukushima disaster in 2011, and concluded on April 15, 2023, when the last three reactors — Isar 2, Emsland, and Neckarwestheim 2 — were permanently shut down. The decision was made despite warnings from grid operators, economists, and engineers that closing zero-carbon baseload generation while simultaneously mandating renewable buildout would create an energy security vulnerability. The Green party, whose ideological opposition to nuclear was the political driver of closure, was in the governing coalition at the moment the last plants were switched off — at the precise historical moment when energy security had become Germany's most acute economic and strategic problem, following Russia's invasion of Ukraine and the cutoff of pipeline gas that had previously supplied approximately 40% of German imports.
The consequences are now measurable. A PwC analysis cited by the Spanish nuclear forum finds that if nuclear plants had remained operational, emission-free power generation in Germany in 2024 could have reached 94% — compared to the actual mix, which required maintaining coal and gas capacity as backup. Industrial electricity prices would have been approximately 23% lower in 2024 if the 2010 nuclear fleet had remained operational. The new German Chancellor, Friedrich Merz, called the decision "a huge mistake" in January 2026, and proposed construction of new small modular reactors (SMRs) as part of his economic recovery platform.
California's parallel: Diablo Canyon Nuclear Power Plant, the state's last operating nuclear facility, was scheduled for closure in 2025 under a decommissioning agreement signed in 2016. In 2022, as the grid reliability crisis became undeniable and the EV mandate created new demand projections that the grid could not absorb, the state reversed course and extended Diablo Canyon's operating license to 2030 — a decision that Newsom took significant political heat from environmental allies to make. That decision was correct in systems terms and belated in policy terms. It acknowledged, implicitly, the same logic that Germany had rejected and then been forced to confront at far greater economic cost.
The German nuclear story is not merely an analog. It is a preview. When a governing coalition makes an ideologically-driven energy decision that ignores the feedback loops connecting it to industrial competitiveness, grid reliability, and economic growth, the consequences do not arrive immediately — they arrive after the political cost of reversing course has become prohibitive, at which point the decision's architects have either left office or reframed the crisis as someone else's fault. The German Greens blamed Russian aggression for the energy crisis. California's climate advocates blame oil companies and Trump for the refinery crisis. Both attributions contain partial truth and profound evasion of institutional responsibility.
V. The Pivot That Wasn't
What is perhaps most remarkable about the California-Europe climate partnership narrative is not that it was wrong — selective application of international comparisons is a normal feature of political rhetoric — but that it has not substantively adjusted even as the evidence has accumulated. The official messaging has continued, essentially unchanged in tone and framing, as each data point that would require updating the narrative has appeared and been absorbed without comment.
In December 2025, the European Commission formally scrapped the 2035 ICE ban — the EU's single most visible symbol of the regulatory approach California had been presenting as a global model. The Commission replaced it with a 90% CO₂ reduction target allowing plug-in hybrids, range extenders, and vehicles using sustainable fuels to continue being sold after 2035. VW described the proposal as "economically sound." The European Parliament's largest group, the center-right EPP under Manfred Weber, had been among the most vocal advocates for the reversal, citing tens of thousands of industrial jobs at stake. The decision was widely characterized as the EU's "most significant retreat from its green agenda in recent years."
Eight weeks later, Newsom was in Munich deepening California's climate partnership with the officials who had just orchestrated that retreat — with no public acknowledgment that the template had been revised, no statement that California might consider similar flexibility, no adjustment of any kind to the official narrative that California was the reliable standard-bearer for a model Europe had embodied and the Trump administration was betraying.
In the same month, the Antwerp Declaration Monitoring Report was released, finding that 83% of EU competitiveness indicators had shown no improvement. The IEA's Electricity 2026 report confirmed that EU industrial electricity prices remained more than twice U.S. levels. The California attorney general was arguing in federal court that the ACCII waiver repeal was "unprecedented" and that California's EV mandate was "vital to cleaning up polluted air" — the same mandate the EU had, in practical terms, just abandoned.
In Brussels (December 16, 2025): The European Commission formally scraps the 2035 ICE ban, replacing it with a technology-neutral emissions reduction target. VW, BMW, Renault, and Stellantis welcome the "pragmatic" decision. Reuters reports the move "bowing to intense pressure from Germany, Italy, and European automakers struggling against Chinese and U.S. rivals."
In Sacramento (December 2025 – January 2026): California Attorney General Rob Bonta argues in federal court that Congress's revocation of ACCII waivers is illegal and that the California EV mandate must be preserved. The state presses forward with litigation to restore the mandate the EU just voluntarily gave up.
In Munich (February 13, 2026): Governor Newsom meets with EU Climate Commissioner Wopke Hoekstra to "deepen EU–California climate cooperation" and discusses "California's progress on zero-emission vehicles." No public mention that the EU had scrapped its own EV mandate eight weeks prior.
VI. The Political Symmetry — Far Right as Feedback Signal
The political consequences of Europe's energy and deindustrialization crisis are not incidental to the policy story — they are the story's most important output, because they reveal what happens when governing coalitions impose concentrated economic costs on working populations while remaining ideologically insulated from the feedback.
The European far-right surge of 2024-2026 is not primarily about immigration, though immigration is its most visible platform. It is the political expression of communities whose economic identity was restructured — sometimes destroyed — by deindustrialization driven by energy cost differentials that the governing class created through policy and then denied caused harm. The steel workers of the Ruhr Valley, the chemical workers of the Rhine corridor, the automotive workers of Stuttgart and Wolfsburg who watched investment flee to lower-cost jurisdictions — these are not ideological radicals. They are workers who were told for fifteen years that the green transition would create better jobs than the ones it was eliminating, and who have been waiting for those jobs while watching their plants close.
Marine Le Pen's Rassemblement National won the popular vote in France's 2024 European elections. The Alternative für Deutschland came second in the German federal elections. Italy's Giorgia Meloni — leading a party with neo-fascist roots — has governed since 2022. Austria's Freedom Party won its parliamentary election. In Sweden, the far-right Sweden Democrats prop up the ruling government. In each case, energy affordability and the costs of the green transition were significant factors in the electoral shift, operating beneath the more visible immigration debate as a structural economic grievance.
California is not Europe, and the comparison has limits. American federalism, California's Democratic supermajority, and the state's technology-sector wealth concentration create a different political environment than the EU's multi-party parliamentary systems. But the mechanism is identical: when governing elites impose costs that working populations cannot absorb and cannot escape, and when those elites respond to the resulting discontent by doubling down on the policy rather than updating the model, the discontent eventually finds political expression. The form that expression takes — in Europe, nativist populist parties; in California, a Trump-endorsed British former TV host leading a gubernatorial primary — is less important than the underlying cause.
The European far-right is, in this reading, not a cause of Europe's energy and industrial policy failure. It is a lagging indicator of it — the political consequence arriving years after the economic consequence, whose arrival was itself the predictable result of policies designed without adequate attention to the coupled systems they were disrupting. California is watching this process play out in real time across the Atlantic. The political class continues to interpret it as evidence that European voters have been manipulated by disinformation rather than as evidence that working populations correctly identified that policies were being imposed on them without adequate regard for the costs they would bear.
VII. The Mirror Nobody Looked Into
The deepest irony of the California-Europe climate partnership narrative is not that the model has failed. Complex policy experiments frequently fail, and the appropriate response is to update the model rather than to abandon the underlying goal. Decarbonizing transportation remains a legitimate and urgent objective. The irony is that the failure of the European model was being generated by the exact same institutional pathology that drove the ACCII mandate in California — single-variable optimization in a coupled system, with the coupling treated as externality rather than constraint.
Germany shut down nuclear power because the political coalition behind closure was better organized than the coalition behind engineering rigor. California adopted the ACCII mandate without grid capacity preconditions because the political coalition behind the hard mandate was better organized than the coalition behind conditional framework language. In both cases, the inconvenient truths about second and third-order system effects were present in official analyses — the German grid operators' stress tests, California's own LAO projections on gas tax erosion — and were set aside because acknowledging them would have required either modifying the policy or honestly confronting costs that the governing coalition's political base did not want to hear about.
There were people in Germany who said, when the nuclear closure schedule was being written, that closing zero-carbon baseload generation while mandating renewable expansion was an energy security risk that would drive up industrial costs and make the country strategically vulnerable. They were dismissed as fossil fuel apologists, nuclear-risk denialists, or enemies of the energy transition. Chancellor Merz, in January 2026, said shutting down those plants was "a huge mistake." He was not saying anything that hadn't been said in 2011 by the same critics who were dismissed then.
There were engineers and transportation planners in California who said, when ACCII was being designed, that a hard 2035 mandate without grid capacity preconditions, without transportation funding replacement mechanisms, and without market penetration contingencies would destabilize the refinery industry, erode road funding, and impose unworkable costs on working-class Californians who couldn't afford EVs and didn't have access to charging infrastructure. They submitted comments into CARB proceedings that documented these concerns with specificity. They were characterized as industry-funded obstructionists. The invoice for setting those concerns aside is now being paid at $4.58 per gallon, and rising.
The phrase "we need to be more like Europe" captured something real in 2020 and 2022 — a genuine aspiration toward the kind of long-term regulatory commitment and industrial policy integration that the European Green Deal represented at its conception. What it missed was the conditional nature of any model's validity. The European model was worth emulating insofar as it demonstrated that integrated, economy-wide decarbonization planning could be institutionalized. It was not worth emulating insofar as it demonstrated that ideologically-driven hard mandates imposed on tightly coupled systems, without accounting for industrial competitiveness, energy security, or the economic circumstances of working populations, produce deindustrialization, political radicalization, and ultimately policy reversal.
California has now received both the lesson and the counter-lesson from Europe simultaneously. The model it was following has revised itself. The revision includes exactly the kind of technology neutrality, flexibility, and acknowledgment of market reality that California's own critics had been advocating for years. The EU's new framework — 90% emissions reduction target, multiple pathways to compliance, acknowledgment that plug-in hybrids and sustainable fuels have a continuing role — is structurally similar to what a conditional ACCII mandate would have looked like.
Europe arrived at that framework by living through the failure of the hard mandate. California is arguing in federal court to preserve the version Europe has abandoned.
VIII. What Sound Alignment with Europe Would Look Like Now
The case for California-European climate cooperation is not destroyed by the failure of the hard mandate model. It is clarified by it. The genuine lessons from Europe's experience — now including the painful ones — constitute a more useful guide than the selective admiration that characterized the 2020-2024 period.
A California that genuinely learned from Europe's experience would acknowledge that energy transition without energy security is not transition — it is deindustrialization by another name. The EU's post-Draghi framework centers on competitive energy prices as a precondition for industrial decarbonization. The Antwerp Declaration, the Clean Industrial Deal, the Industrial Accelerator Act — all reflect a belated recognition that mandating emissions reductions while allowing energy costs to price domestic industry out of global markets does not reduce global emissions. It relocates them. California's refinery closures do not eliminate the demand for refined petroleum products in the Western United States. They shift production to Asia, increase import dependence, raise consumer prices, and eliminate the high-wage jobs that California workers held in those facilities. The carbon accounting that would show this inconvenient truth is not performed in any CARB analysis.
A California that genuinely learned from Germany's nuclear experience would recognize that zero-carbon baseload generation is a precondition for the EV transition, not an obstacle to it. Diablo Canyon's extension to 2030 was the correct decision, arrived at late. Extending it further, or investing in the small modular reactor technology that Chancellor Merz is now proposing for Germany, would be consistent with what Europe's own governing class has concluded after paying an enormous price for the error in the other direction.
A California that genuinely learned from the EU's ICE ban reversal would recognize that the 90% emissions reduction framework — technology-neutral, market-responsive, with multiple compliance pathways — is not a retreat from decarbonization. It is a more sophisticated version of it, one that achieves the environmental objective while preserving consumer choice, industrial employment, and the market conditions under which investment in alternatives can actually occur. That framework was available to CARB in 2022. It was rejected. Europe has now adopted it. The question is whether California can update its model while litigation and politics are still pulling in the opposite direction.
None of this requires abandoning climate ambition. It requires taking systems seriously — all of them, not just the ones that fit within a single agency's regulatory jurisdiction. It requires treating the coupled industrial, fiscal, grid, and social systems as design constraints rather than externalities. It requires, in the phrase that should have been California's operating principle throughout: aspirational timelines, technology-dependent triggers, conditional escalation, and honest accounting of who pays the costs of getting the sequencing wrong.
Europe learned this the hard way, at the cost of two German recessions, a million and a half industrial jobs, and a continent-wide political radicalization that has not yet fully resolved. California is still deciding whether to learn it from observation or repeat the experiment in its own economy, with its own working class bearing the costs of the lesson.
"We need to be more like Europe" was never wrong as a direction. It was wrong as an instruction to copy the specific policies that Europe itself was already revising. The more accurate version, available now with the benefit of a few years of painful data: we need to be more like what Europe is becoming — not what it was declaring in 2019.
Comparative Tracker
| Policy Dimension | EU Position (2022–2023) | EU Position (June 2026) |
|---|---|---|
| ICE vehicle sales ban | Hard 2035 ban on new ICE vehicle sales (100% ZEV) | Scrapped December 2025; replaced with 90% CO₂ reduction target; plug-in hybrids, e-fuels, and biofuels permitted |
| Nuclear power | Germany completing nuclear phase-out; Green Deal silent on nuclear | Germany Chancellor calls closure "a huge mistake"; SMR construction proposed; EU taxonomy includes nuclear as green investment |
| Carbon pricing / ETS | Escalating ETS carbon prices driving industrial decarbonization | Energy-intensive industries call for emergency suspension of ETS benchmark reductions; Draghi Report warns carbon costs are anti-competitive |
| Industrial policy framework | Green Deal as primary policy driver; competitiveness considered aligned with decarbonization | Clean Industrial Deal pivots to treating competitive energy prices as prerequisite for decarbonization; Draghi Report calls for Marshall Plan-scale investment |
| Energy prices vs. US | Premium characterized as transition cost; renewables to close gap | EU industrial electricity 2.6x US levels; gas prices 4.6x US levels; characterized as "critical pain point" threatening industrial base |
| EV market penetration | Mandate trajectory seen as achievable through regulatory pressure | Over 60% of new EU car sales still ICE or mild hybrid as of late 2025; mandate revised to reflect market reality |
| Political direction | Green parties in governing coalitions; climate policy mainstream consensus | Far-right parties governing or propping up governments across EU; Green parties in opposition; mainstream parties adopting energy affordability platforms |
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