Dutch Protest as Backlash Grows Over the Price of a Cleaner Economy

(Bloomberg) -- The Netherlands is facing up to the economic costs of protecting the environment.

A backlash is growing after the country’s highest court laid down a decision on nitrogen pollution, partly a fallout of aggressive Dutch farming practices. The ruling has put hundreds of construction projects on hold and risks hurting the economy.

Thousands of builders clad in orange overalls arrived in The Hague on Wednesday, bringing their equipment with them and following angry farmers onto the streets of the Dutch capital earlier this month. Both groups are asking lawmakers to shield them from the effects of the ruling.

“Policy has mainly focused on short-term economic gain, with questions of health and sustainability put off for the long term,” said Jeroen Candel, an assistant professor of public administration at Wageningen University. “That’s now coming back to hit us like a boomerang.”

In May, the Netherlands’ highest administrative court invalidated the way permits for construction projects close to designated natural areas accounted for nitrogen deposits, saying the system breached European rules. ABN Amro estimates the decision may result in lost revenue for the building industry of 14 billion euros ($15.6 billion) over the next five years.

The Netherlands has more people, cows and motorways per square kilometer than any other major European economy. In order to protect natural environments, the country has set aside 15% of its territory as protected areas and laid down climate goals supported by Prime Minister Mark Rutte’s coalition government.

Calls for Cuts

Environmental campaigners have called on the government to slash the number of cows, pigs and chickens reared in the country. D66, one of the four parties that make up the coalition government, has called for a 50% reduction in the Dutch livestock industry, comments that helped trigger the farmers’ protests.

Dutch agriculture contributes 46% of nitrogen emissions, and construction less than 1%, according to environmental research institute RIVM.

On two separate occasions, tractor-driving protesters have taken to the streets of The Hague this month. The farmers lost some public support during the second protest, when a video showing a home-made cardboard coffin with the name of Greens leader Jesse Klaver circulated on the internet. In response, the lawmaker said he’s still convinced the Dutch system of industrialized agriculture is unsustainable.

ABN Amro has claimed that the country’s agricultural industry has the lowest environmental impact per unit of any country in the world. That means that if Dutch agricultural production was moved elsewhere -- something parties such as the Greens and the Animal Party want -- it might just transfer the environmental impact across the border.

While the impact of the May ruling took months to fully sink in, the building industry has now become vocal in warning of a prolonged construction freeze. That would hurt the economy at a time when concerns about global trade are already weighing on the export-driven country. ABN Amro estimates some 70,000 construction jobs are at risk.

‘Self-Inflicted Recession’

“Before you know it, we’ll be in a self-inflicted recession if we continue like this and don’t come up with speedy solutions with the cabinet and provinces,” Hans de Boer, president of employers organization VNO-NCW, told De Telegraaf newspaper earlier this month.

Agriculture Minister Carola Schouten told protesters on Wednesday that she will soon announce a revised threshold for nitrogen that should benefit “most building projects.” That didn’t stop the crowd urging her and her colleagues to speed things up by chanting “Now, now, now, now!”

“It’s embarrassing. We’ve been waiting for months for a solution for the nitrogen problem,” Maxime Verhagen, who heads construction industry group Bouwend Nederland, said at the event. “Construction isn’t the cause of the problem, but we are the victims.”

To contact the reporters on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net;John Hermse in The Hague at jhermse@bloomberg.net;Joost Akkermans in Amsterdam at jakkermans@bloomberg.net

To contact the editors responsible for this story: Katerina Petroff at kpetroff@bloomberg.net, Andrew Blackman, Chris Reiter

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