Brussels has unveiled its financial plan for moving to a green economy and making Europe the first climate-neutral continent.
The European Commission plans to use a mix of public and private funds, dedicating a quarter of its budget to the task, and aiming to get €1 trillion of investment over the next ten years.
The European Green Deal Investment Plan was announced by Commission President Ursula Von der Leyen, setting out how the union will embark on an unprecedented transition to an economy in which there is a balance between the amount of carbon emitted and the amount absorbed,
As part of this aim, it will also outline how it will support regions that rely heavily on coal to make the transition without putting an unfair burden on their economies.
The EU’s Green Deal is targeting a reduction in greenhouse gas emissions, green growth, and carbon neutrality by 2050, as set out by the Paris Agreement in 2016.
It also includes targets for biodiversity and the protection of wildlife.
Von der Leyen made fighting climate change her number one priority when she took office in December 2019, calling the deal “Europe’s man on the moon moment”.
While the Green Deal is aiming to achieve carbon neutrality in the European Union by 2050, the EU also recently increased its emissions reductions target for 2030 to between 50% and 55% compared with 1990 levels.
Commissioners used the slogan “climate cash in order to avoid a climate crash” following the outlining of the funding plans.
Just Transition Fund
One EU member state, Poland, has so far refused to agree to the current timetable, due to its economy’s reliance on coal.
Poland currently produces around 80% of its power from coal.
Von der Leyen has said the transition should “leave no one behind”, and in order to help persuade countries like Poland to get on board with the EU’s climate goals, a €100 million Just Transition Fund has been proposed, as part of the overall budget.
The plan would allocate the money according to specific criteria. For example, regions — where a large number of people work in coal, peat mining or shale oil and gas — would get priority.
Around half of the overall €1 trillion is to come from the EU long-term budget, with national governments contributing €100 billion and €300 billion coming from the private sector.
Another €7.5 billion euros from the 2021-2027 EU budget is earmarked as seed funding within a broader mechanism expected to generate another €100 billion in investment.
The commission says the plan will also be supported by money from EU regional programmes, from the InvestEU program, which mobilises public and private investment using an EU budget guarantee, and the European Investment Bank.
On Wednesday, MEPs will have their say on the Green Deal and vote on a resolution.
The EU aims to have the Green Deal enshrined in law with the first European ‘Climate Law’ by March this year, which it says will set out the conditions for transition, provide predictability for investors, and ensure the transition to carbon neutrality is irreversible.
At the Paris summit in 2015 world leaders agreed to keep global warming below 2 degrees Celsius (3.6 Fahrenheit), ideally no more than 1.5 C (2.7 F) by the end of the century.
Scientists say countries will miss both of those goals by a wide margin unless drastic steps are taken to begin cutting greenhouse gas emissions next year.