The European Commission has taken a political lead with the European Green Deal by setting ambitious international standards and making the EU a global leader in the fight against climate change. The massive implications of this legislative initiative for EU member states and the private sector are only now becoming apparent. While companies will have to make significant investments in climate-friendly technologies, EU member states will be forced to thoroughly adapt their national regulations. The recent ruling of the German Federal Constitutional Court on the Climate Change Act, which requires the German government to take earlier, more concrete and stricter action, serves as a foreshadowing of the far-reaching consequences of climate legislation. However, as European governments and businesses must try to survive in a world of growing geo-economic competition, climate action can only be successful if it has broad international support and strikes a balance with economic viability.