What is the European Green Deal?
The economist explains
CLIMATE ACTIVITIES, policymakers and delegates from European cities come together (virtually) for European Union Green Week, an annual discussion workshop. This year’s event is dedicated to finding ways to stop air, water and soil pollution (previous themes included how to implement environmental laws and make cities climate-friendly). This objective aligns with another adopted by the EU as part of the European Green Deal. The deal emerged from the European Commission (the EU’s executive arm) in December 2019. It is the bloc’s most ambitious attempt to date to tackle climate change and environmental degradation. . All 27 Member States, with the exception of smog-ridden Poland, are backing it. What does the case really involve?
The European Green Deal is a thin 24 page document with enormous scope and lack of detail. The main goal is for the EU to reach zero net greenhouse gas emissions by 2050, with the aim of keeping global temperatures between 1.5 and 2 ° C above pre-industrial levels. At the base of this are a multitude of interconnected goals covering almost every element of society and the economy. These include decoupling economic growth and resource consumption by moving to a “circular” economy that increases recycling and reduces waste; prevent biodiversity loss and deforestation; the overhaul of agriculture and the electrification of transport.
The agreement itself is not a piece of legislation but a set of agreed objectives. Achieving this will require radical new rules. The most important of these is a European climate law that enshrines the goal of net zero emissions for 2050, the details of which were approved by European politicians in April 2021, including an interim obligation for member states to reduce their emissions by “at least” 55. % compared to 1990 levels by 2030. It is part of a wave of green regulation that is making its way into the Brussels bureaucracy.
The European Green Deal also demands masses of money. The investment plan that supports it proposed 1 billion euros ($ 1.2 billion) of investment over ten years. Of this amount, around half is supposed to come from the European Emissions Trading System and the EU budget. In the budget, much of the promised funding seems to have been evoked by re-labeling money that would have been spent anyway, for example on infrastructure and agriculture. The rest depends on the mobilization of unprecedented private investment. The committee itself has previously estimated that the bloc will need 260 billion euros per year to meet its climate and energy targets by 2030. Even if such sums are increased, member states will find it difficult to get down to it. agree on how they should be spent. Those in the north and west want to focus on investing in technologies such as batteries and power grids; poorer states in the south and east are wondering how to support their economies during the transition. Poland has already declared itself exempt from the 2050 target.
Surprisingly, the covid-19 pandemic could help overcome these disagreements. Countries that hope for a reduction of the 672.5 billion euros in grants and loans in the bloc’s stimulus fund will have to spend it on plans approved by Brussels, of which 37% are earmarked for climate-friendly spending and all subject to a “do no harm” principle that should, in theory, prevent money from being used for projects that run counter to climate goals. The need for liquidity could lead even the most recalcitrant countries to align. Extraordinary times can still prove the conclusion of the Green Deal.