European Green Deal
The new European Commission (EC) has set itself a big objective: to assume the global leadership in the fight against climate change. The president Ursula von der Leyen promised at the European Parliament (EP) to make a real transformation in the European Union for the next five years, based in a new European Green Deal, which will be a strategic tool for innovation and employment to boost growth and green economic development.
The strategy will be led by the European Investment Bank (EIB), which will become a “green bank”, with the ability to finance projects that aim for the energy transition. The Commission’s Vice-president, Valdis Dombrovskis, stated to the Financial Times that he wanted to propose a cut in capital payments on loans favourable to the energy transition. According to the Vice-president, this kind of initiatives would encourage banks to finance energy efficient homes, zero emissions transports and other green investments.
European political families have made a commitment to the energy transition, which in practice has translated into proposals on the design of the next Multiannual Financial Framework. It is not a coincidence that 21.1% of the next European budget will be assigned to climate.
Moreover, the bet will inevitably go by the development of cohesion funds allocated to environmental convergence between Member States and Horizon Europe, the biggest bet of the EU in terms of innovation, technology and science to create value in the solutions of goods and services, and to stimulate the exchange of information between universities, research centres and companies. Technology and investment will be the pillars of this transition process, which will necessarily have to coexist.
Von der Leyen recently announced the roadmap for achieving carbon neutrality by 2050. The European Green Deal includes 50 measures to combat climate change and therefore “reconcile the economy with the planet”. The most shocking measure, which aims to make irreversible the transition to a new green paradigm, is related to the presentation of the first European Climate Law in order to give legal force to the Commission’s design (carbon neutrality by 2050). The presentation is scheduled on March 2020, with the aim of achieving a reduction of 55% of the emissions by 2030. This new target could change all National Integrated Programmes of Energy and Climate (NIPEC), that Members States submitted previously in Brussels. Regarding the rest of actions, they will be distributed in several pillars, covering all sectors of the economy, from agricultural production to transport.
The action plan of this Deal will need large investments. According to the European executive, this effort will require an annual increase of € 260 billion in investments (corresponding to 1.5% of European GDP by 2018). To this end, a Fair Transition Mechanism will be established for the Members States that are more dependent on fossil fuels and that have been more reluctant, as the Visegrad countries, to be compensated in some way. This portfolio will be led by the Commissioner for Cohesion and Reforms, Elisa Ferreira, and the amounts will be accessible through a new Fair Transition Fund; originated on the InvestEU Programme (financed by the Commission and the EIB).
All this reconfiguration is the result of the climate emergency, but also of the social movements that have exerted great pressure on policy makers. Environmental awareness was once a “niche” issue, defended and reinforced only by a small part of society, however, it is now a cause that has spread to the majority of citizens.
In short, Europe has said yes to the calls of citizens who have identified the climate as a priority; and the European Commission pretends, through the distribution of EU funds, to encourage Member States to adopt a new policy, not only environmental but also economic, which will mark the next great investments of the European countries.
