Protecting Europe’s Green Deal

The Future of Europe’s Green Deal

The EU’s Green Deal was aimed at transforming the 27-member bloc into a low-carbon economy, through cleaner air, water, and better health opportunities, whilst still improving the socio-economic prospects and the overall quality of people’s lives. The European Green Deal outlined an ambitious framework of achieving net-zero carbon emissions by 2050, and 50%-55% cut in emissions from 1990 levels by 2030 (European Commission, 2020a). For Europe, this was meant to be the beacon of hope as we entered the new decade. However, the repercussions of Covid-19 on the economy might make Europe’s Green Deal impossible to achieve.

While countries across the EU struggle to cope with the negative impacts of the pandemic, including job losses, deteriorating health and reduced income, the worry is that any stimulus packages (including state aid), will be at the expense of Europe’s Green deal. Currently, Europe has seen a reduction in carbon emissions due to limited travel resulting from lockdown measures. According to the Global Carbon Project (Le Quéré et al., 2020), annual emissions could fall by more than 5% year-on-year, something not experienced since the end of the Second World War.

However, despite daily global CO2 emissions decreasing by 17% at the peak of the pandemic (Le Quéré et al., 2020), the same study also highlights that a return to pre-crisis levels will ultimately prevail when people return to work and the economy grows again. The worry for Europe is that when all lockdowns are lifted, the economy will be the number one focus at the expense of the European Green Deal. Currently, governments across the EU are responding to the crisis by providing the largest stimulus packages seen since the Great Depression. However, these stimulus packages have not been designed to work alongside Europe’s Green Deal, and thus, could exacerbate the climate emergency for years to come.

We are already seeing political leaders from across the EU advocate scrapping the Green Deal to help save the economy from further collapse. These calls were supported by the Czech Prime Minister, Andrej Babiš, who claimed that “Europe should forget about the Green Deal now and focus on the coronavirus instead” (Sanchez Nicholas, 2020). Similar calls were echoed by the Romanian ruling party after a message to their MEPs called for a removal of the Green Deal and a use of the funds for healthcare and economic recovery (Nazare, 2020).

This issue with these calls is that they are misplaced – while both the Czech Republic and Romania are fossil fuel dependent economies, the notion of scrapping the Green Deal for short-term gain seem inadequate solutions when thinking of the longer-term impacts on the environment. Simply put, eradicating the biggest climate change policy for short-term economic gain will not resolve the climate emergency. Coronavirus may well disappear, but climate change is here to stay. Therefore, protecting the European Green Deal will be imperative for not only the future of the natural world, but our society and economy for future generations.

Green State Aid

In response to the pandemic, the European Commission has allowed a temporary lifting of state aid rules to ensure that any economic disruptions can be eased (European Commission, 2020b). Such state aid rules allow for tax and social contribution relief, loans, financial support and wage subsidies. It is crucial that any relaxation of state aid rules is done with the Green Deal in mind, and contains green conditions, so that companies of all sizes can adopt a low-carbon strategy once the crisis is over.

Europe’s Green Deal is currently in significant danger of not being met without these conditions on state aid. IDRN’s recent article on Europe’s response to Covid-19 stressed that any economic recovery package should prioritise the environment over fossil fuel companies that fail to meet the Paris Agreement and Europe’s Green Deal (Mason, 2020). The European Commission is currently exploring ways to re-order its priorities over the coming months in light of the pandemic, with initiatives such as biodiversity strategies being put on hold. The worry is that the Green Deal will be subject to a watered-down environmental policy, similar to those we have seen in the past.

Climate policies may not be the prime concern for European leaders at present, but the danger of putting the Green Deal to one side is that it creates a pathway for a high-carbon future, which would be destructive to the environment and have a long-term impact on the global economy. In response, the European Commission must design a model for state aid rules to allow for the protection of the European Green Deal. These conditions will ultimately be based on the current Green Deal targets, such as mitigating carbon emissions by 50% by 2030. By granting state aid, governments across Europe should ensure that companies adhere to Europe’s Green Deal and reduce their own carbon emissions.

The European Union should ensure that any economic recovery package, including relaxed state aid rules, fiscal support, and bailouts, are compatible with our international commitments on climate change. With the airline industry in deep crisis, green state aid policies could ensure airlines speed up the process of decarbonising aircrafts after the crisis. This would enable one of the largest carbon emitting industries to meet Europe’s Green Deal whilst also protecting current furloughed staff from losing their jobs.

Other sectors could also ensure adequate green state aid policies are implemented. For example, banks could set green conditions on any loans provided during Covid-19 to ensure that companies commit to reducing their carbon emissions. After the 2008 financial crash, the U.S provided state aid to General Motors on the basis that they develop electric cars for the future. Overall, any stimulus packages will impact Europe for decades to come. Therefore, Europe needs to ensure that these packages to support businesses should lead to a greener future, whereby our economy grows sustainably.

Towards a Green Future

Despite the resistance to the Green Deal from some European leaders, these so-called “green state aid” and “low-carbon” activities should be the pillar of the EU’s recovery for future growth. This can lead to green jobs being created in new high-tech industries from electric vehicle manufacturing and renewable energy. The future of work can be one in which people thrive within high-tech sectors including digital and advanced manufacturing.

The transition from a high-carbon economy to a low-carbon economy will ultimately change the dynamics of business sectors. This should not be perceived as a threat, but an opportunity for a better and cleaner future. Fossil fuel dependent countries and companies must relish the opportunity to change, but with the assistance of the Green Deal. The President of European Commission, Ursula von der Leyen, called Europe’s Green Deal “a strategy for growth that gives back more than it takes away” (European Commission, 2019). This should be the message from the European Commission, instead of the inadequate relaxation of state aid rules in response to Covid-19. The narrative from the EU should be centred on the financial benefits of the European Green Deal, and the opportunities it creates for green jobs and a decarbonised economy.

Europe should also respond by retraining citizens who lose their job from high-carbon industries that collapse due to the transition to low-carbon. This may seem a daunting prospect from the outset, but green or eco-friendly jobs will allow for a decarbonised economy, a cleaner environment, and better paid jobs, which will help Europe modernise the global economy. As the economy enters into the worst recession seen since the Great Depression, we must remember that a failure to protect the environment now will only further damage the economy in the not-so-distant future.

The European Green Deal can help support the recovery from Covid-19, not exacerbate the economic decline. This is the narrative that Europe should be pursuing in the face of the pandemic. The Green Deal can be the guiding beacon to assist the low-carbon transition that Europe has been ignoring for too long. This pandemic is a crisis, yes, but the climate emergency represents an even greater threat, and one for which there is no vaccine.

Covid-19 should be viewed as an opportunity to modernise the global economy, to decarbonise the way we live, to create sustainable infrastructure, and to provide everyone with a chance of socio-economic success through new green jobs. Countries in Eastern Europe, who are more fossil fuel dependent, such as Poland and the Czech Republic, should be prioritised in Europe’s economic response as a sign of European solidarity.

Concluding remarks

The European Green Deal is paramount to Europe’s economic response to Covid-19. Any watered-down version of the deal would be detrimental to the long-term impact on the global economy, with the repercussions being worse than what we currently face. A vaccination to Covid-19 could be possible within the next 18-months, but there is no vaccination for climate change. The decisions we make now will have a significant impact on the future of the economy and our planet. Towns and city centres must adapt to the changes from Covid-19. Less office space, more people working from home, and an overall culture shift in the way we use transport could be spurred on by Europe’s Green deal.

It is integral that the European Union upholds the narrative of solidarity within the context of the Green Deal. The EU must promote and encourage the various eco-friendly policies that the Green Deal provides, as well as adapting it to the challenges and opportunities that Covid-19 presents for our economy. A better future is possible, but this can only be made secure by protecting Europe’s Green Deal, which will provide global leadership in a time when governance has been abandoned. While the U.S. and China continue their trade disputes, Europe must seize the opportunity to utilise its leadership and promote a better and more sustainable future.

References

European Commission. (2019) Economic and Financial Affairs Newsroom. Available at: ec.europa.eu/newsroom/ecfin/item- detail.cfm?item_id=665465&utm_source=ecfin_newsroom&utm_medium =Website&utm_campaign=ecfin&utm_content=Ursula%20von%20der%20L eyen%20President%20of%20the%20Europ [Accessed 21/05/2020].

European Commission. (2020a) 2050 long-term strategy. Available at: ec.europa.eu/clima/policies/strategies/2050_en [Accessed 20/05/2020].

European Commission. (2020b) Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, Communication from the Commission. Brussels: European Commission.

Le Quéré, C., Jackson, R. B., Jones, M. W., Smith, A. J. P., Abernethy, S., Andrew, R. M., De-Gol, A. J., Willis, D. R., Shan, Y., Canadell, J. G., Friedlingstein, P., Creutzig, F., Perers, G. P. (2020) Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement. Nature Climate Change.

Mason, A. (2020) Europe’s Future: The Impact of Covid-19 on Populism. Available at: http://www.idrneu.org/health-and-sustainability/002 [Accessed 22/05/2020].

Nazare, L. (2020) Is Romania getting cold feet on EU Green Deal? EU Observer, 9 March. Available at: http://www.euobserver.com/opinion/147619 [Accessed 21/05/2020].

Sanchez Nicolas, E. (2020) Will coronavirus torpedo the Green Deal? EU Observer, 20 March. Available at: http://www.euobserver.com/coronavirus/147815 [Accessed 21/05/2020].