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What to expect from the European Green Deal?

What to expect from the European Green Deal? 24 janvier, 2020

European Green Deal

Ursula Von der Leyen, as new President of the European Commission (EC) in the Berlaymont since December 1st, recently presented her “European Green Deal”. It is a strategic plan to better apply the United Nations 2030 program and to reach carbon neutrality by 2050. How the Green Deal will be implemented is not clear yet. This article aims to recall the guiding objectives of the Green Deal but also to highlight its shortcomings and grey areas that remain, which the European Commission could resolve by concrete in the coming weeks/months.

 

Last December, Ursula Von der Leyen presented a very ambitious plan, which can only be accomplished on two conditions: its funding and the full participation of the member states of the European Union. This plan does not only foresee measures of unprecedented scale to protect the climate, it will also attempt to reform and redirect European Union’s existing legislative texts, plans, and policies which are no longer in step with the times. Let us take a closer look at the Green Deal, its ambitions, shortcomings, and possible solutions to overcome remaining obstacles.

 

The ambitions of the Green Deal

The Green Deal has not been officially launched and can therefore still be improved. How exactly to reach climate neutrality remains vague, but the high ambition of the European Commission on this objective has the support of all the member states (except Poland), the European Parliament (which voted a resolution declaring the “climate emergency” in Europe) and especially European citizens, happy to see that their climate protests have finally been echoed.

In order to achieve the Green Deal objectives, concrete measures have been announced by the President and Vice-Presidents of the European Commission on the 11th of December and the 13th of January.  Transforming the European Investment Bank into a Climate Bank is one of them. The EC is planning a coordinated EU-wide fiscal stimulus plan to support the bank and its environmental and social transition projects. A European wealth tax and / or a carbon tax will generate financial resources if funding is not sufficient.

Another advantage of the Green Deal relies on the fact that it reaches many sectors: energy policy, industry, construction, transport, water, among others. Initiatives to connect Europe by train, promote the use of sustainable raw materials, review the Construction Products Regulation, and increase the number of charging stations for electric cars are on the agenda of the Green Deal. The EC’s plan to reduce Co2 emissions by 55% in 2030 instead of 40% is backed by nine member states.

To reach carbon neutrality by 2050, the EC plans in the long run to dedicate 25% of the EU budget to environmental transition with around 300 billion euros per year to reach. To avoid imbalances between countries/regions, a 100 billion “just transition” mechanism and fund for the 2021-2027 Budget have been proposed. President Von der Leyen provided details (as the funding of the Just Transition Mechanism) on the 13th of January at the European Parliament in Strasbourg. Indeed, Frans Timmermans, the Commissioner in charge of the green transition, said: “The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”.

Another important aspect is the objective to include sustainability and environmental protection in future free trade agreements that the European Union will conclude, in line with the Green Deal objectives. The recently concluded agreement with the Mercosur member countries from South America was discussed and heavily criticized in Parliament, the most active body on the environmental question. Even though the agreement includes a sustainability chapter, it has been considered as going against the promises of the Green Deal by many MEPs. Pascal Canfin, President of the Committee on the Environment, Public Health and Food Safety, insisted on that a few days ago: « Agriculture, trade policy, economic governance – these must now be seen and analyzed in the light of the Green Deal. »

 

Shortcomings of the Green Deal

It should be recalled that the Green Deal ultimately relies on member states cooperation and political willingness. Indeed, the implementation of the Green Deal will be done at the national, regional and local levels. The European Union provides the guideline, the objectives, and financial support, but the real work is done at the lower levels. Moreover, member states need to deal with opponents of environmental transition policies at national level.

One of the first obstacles relies on the climate law which the European Commission is to propose in March 2020. Unfortunately, Ursula Von der Leyen has clarified that no exact numbers on CO2 reductions will appear in the March 2020 legislative proposal. The lack of these details risks undermining the scope and ambition of the Green Deal.

Concerning the “just transition” mechanism, questions remain and will be brought up in March: Who is contributing? Germany already states that it wants to draw from the cohesion funds (contributing a lot to Poland and Hungary). The second question remains on the attribution (for who?). Indeed, there are no criteria explaining who will have the right to receive the funds (will some countries be set aside if they are already green?). Details must be provided in the coming weeks.

Another shortcoming of the Green Deal is located at the decision-making level of the European Union. The European Parliament and the Council of the EU co-decide on European legislative proposals from the European Commission. Certain “sensitive” issues require unanimity of the member states, such as the directive on energy taxation (has not changed since 2003!), which must be discussed in June 2020. The financing of the Green Deal also requires clarification, thus being a Damocles’ sword hanging over the initiative. Frans Timmermans recalled that investments would not only be public but also be private. The latter would be analyzed in-depth on sustainability criteria. Another crucial area is the common agricultural policy, which must be reformed not only in order to avoid funding fraud but also to make agriculture greener.  Despite the increase of the CAP budget, it remains unclear how exactly this is going to change, and divergent approaches on how to improve sustainability endure. Finally, the Green Deal lacks a tax on kerosene and a minimum price for carbon in the EU, both asked by many Europeans.

In addition, the Green Deal is already undermined by the time during which it will be launched. Indeed, a lot of time will pass until more concrete agreements on the Green Deal are concluded. Meanwhile, critics have plenty of time to attack the plans and undermine public support, especially in Central and Eastern Europe. These latter are an additional obstacle as their economies very much depend on coal (inexpensive and very polluting). Reaching agreement on a new climate target for 2030 in less than six months for the next European Council is therefore very difficult. The Glasgow COP26 in November 2020 might not get the spotlight it deserves because of the many events that precede it (Council of the European Union, EU-China summit, EU-USA).

 

To sum up, this Green Deal is an ambitious plan, supported by most of the European institutions and member states. However, many obstacles must be overcome, consensus be found and objectives be defined more clearly. The first objective of the Commission will be to reduce tensions between states on the funding of the Green Deal before going any further. Even after the precisions given on January 14th, a lot remains to be done, such as convincing Poland to join carbon neutrality objective by 2050.

 

Thomas Rambaud is a second-year student at the Institute for European Studies.

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