The main problem with the current government's climate policy is that the biggest risks are left to people with lower incomes. The European Union's new ETS2 carbon pricing system was meant to offset this. Abandoning it would put economically vulnerable households at greater risk and make climate policy more unfair.

The message from both the prime minister and the minister of climate and energy — that Estonia's first preference is to scrap ETS2 — is not just a technical dispute over an EU instrument. It is also another political signal of where the Reform Party's values are moving. What was once a liberal and at least rhetorically progressive party is becoming one that increasingly mimics EKREIKE (a coalition of the Center Party, Isamaa and EKRE from 2019-2021 - ed.)-style populism: first sow fear, then promise to solve a complex problem with one sweeping "cancellation."

The ETS2 system is not perfect, but the alternative is not for the government to follow right-wing populists behind the slogan "let's cancel it." Instead, Estonia needs a plan for using EU funds and quota revenues so people can make their homes warmer, lower their bills and improve mobility.

Scrapping ETS2 would prolong dependence on fossil fuels and give up real funding intended to protect people from rising costs. Estonia is set to receive about €186 million from the Social Climate Fund, which could be used for home renovations, heating upgrades, energy efficiency improvements, and support for lower-income families' heating and transport costs. Losing this funding would mean missing an opportunity to reduce both household bills and dependence on expensive fossil energy. Those who would lose the most are people whose homes need insulation or new heating solutions but who cannot afford them.

At this point, the government's message contradicts what has previously been considered reasonable in Estonia. The existing ETS system has been financially beneficial. Between 2021 and 2024, Estonia received significantly more in quota revenues than its companies spent on buying allowances, resulting in a net gain of nearly €800 million.

The main quota costs do not fall on Estonian business as a whole, but largely on Eesti Energia's fossil-fuel-based power plants. This shows clearly that Estonia's interest is not to dismantle the system, but to accelerate renewable energy development and reduce costs where they actually arise.

Anti-ETS populism would mean giving up hundreds of millions of euros while prolonging dependence on polluting fossil energy, increasing costs without lowering utility bills for consumers.

Social Democrats have repeatedly stressed that renovating apartment buildings is not only climate policy but also about improving quality of life and health, increasing property values, and ensuring regional fairness. Comprehensive renovation means warmer homes, proper ventilation, lower energy bills and a better living environment. This is especially important in large apartment districts where people have long needed real support from both the state and local governments.

The Social Democratic view on ETS2 and building renovation has been clear: the state must help people move away from expensive fossil energy. If a housing association cannot undertake full renovation at once, support must be flexible. If a pensioner or a lower-income family fears taking a renovation loan, the state or local government must step in directly, rather than leaving decisions to the uncertainties and resistance within housing association meetings.

Instead, the Reform Party is taking Estonia in the opposite direction — not forward, but backward. The same pattern is visible in the climate law, where earlier ambitions have been rolled back and real responsibility shifted into vague road maps. Ahead of the last parliamentary elections, the Reform Party presented the green transition as a new economic opportunity. Now it is framed as an inconvenient obligation imposed by Brussels to be delayed, diluted or canceled. This increases uncertainty rather than supporting businesses, despite the party's claims.

When the government signals that renovation is a priority but then calls for scrapping one of the key European funding instruments behind it, trust among people and businesses declines further.

Most cynical is how the call to cancel ETS2 is presented as social concern. In reality, it is a convenient way to avoid more difficult state responsibilities — such as targeted support, improving public transportation, addressing rural needs, and protecting lower-income families. If the Reform Party truly cared about people's bills, it would not focus on canceling ETS2 but on ensuring every euro of climate funding reaches those who need it most to renovate their homes or adjust daily travel.

In an ERR radio program, journalists asked Prime Minister Kristen Michal directly where funding for home renovation would come from if ETS2 were scrapped. He avoided a substantive answer, saying it would come from the state budget.

However, the budget is already under strain. The Reform Party has pushed the deficit to the EU's allowed maximum. Estonia's national debt has quadrupled in six years, and this year's deficit will require additional borrowing. By 2030, interest payments could reach €650 million. At the same time, the governing party is undermining EU climate policy and funding mechanisms that could help many people improve their living conditions. This amounts to irresponsible fiscal and economic policy.

The greatest risk in climate policy remains that Estonia does too little, leaving only the familiar right-wing populist refrain that someone somewhere is forcing us into decisions while local leaders claim to defend the people.

But protecting people requires responsible governance. Estonia does not need EKREIKE populism repackaged by the Reform Party. It needs a government that is not afraid to say reducing dependence on fossil fuels is a matter of security, the economy and people's everyday well-being.

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