Despite the uneven level of development between the Member States, the European Union has undoubtedly become a global leader in the fight against climate change and the prevention of environmental degradation. The central policy initiative which the EU uses in this regard is the "European Green Deal", which was presented by the European Commission in December 2019. This plan is, in fact, a development strategy of the European Union which aims to transform the economies of the Member States in accordance with the principles of sustainable development. However, in the past two months, the pandemic of virus COVID-19 has had a paralyzing effect on the economies of these countries.  This, in turn, has put a great risk on the implementation of the previously set goals, as well as the achievement of new progressive policies, such as the ones concerning climate.

What is the European Green Deal?

The European Green Deal seeks to transform the EU's economy in accordance with the principles of low-carbon development and circular economy, as well as to restore biodiversity in the Member States and reduce their greenhouse gas emissions[1]. For the plan to be successfully realized, coordinated efforts in almost all of the sectors of economy will be required as well as investments, which, according to the European Green Deal Investment Plan, will amount to over one trillion euros[2]. The European Green Deal proposes reforms in several distinct policy areas, in which they will be carried out through the means of new progressive public policies. These areas are clean energy, sustainable industry, building and renovating, sustainable mobility, biodiversity, Eliminating pollution, climate action, sustainable agriculture and the “From Farm to Fork“ program for ensuring more sustainable food systems.

The central place, among the proposed initiatives, holds the plan to achieve climate neutrality by the year 2050. If the EU were to meet this goal, it would make of the Old Continent, the first climate-neutral continent. In order to make this plan legally binding, in March 2020, the European Commission has drafted proposal for the first Climate Law and submitted it to the European Parliament and the Council of the European Union for deliberation[3]. The European Parliament and the European Council have in recent months both expressed their support for this law, making its adoption likely[4].

The planned reforms will accelerate the continent's energy transition, they will reduce the dependence of the Member States on fossil fuels and irreversibly change their energy mix. Such measures will have the greatest impact on the communities living in coal depended regions of Europe. In 2015, there were as many as 128 operation coal mines across the EU, which employed more than 238,000 workers[5]. The forthcoming reforms will most likely lead to the closure of mines which operate to this day. In turn, this will lead to many job loses, not only in those mines but in the sectors directly related to the coal sector.  In order to protect these communities and ensure a fair energy transition, the European Commission has integrated an idea for a strong social program into the European Green Deal. The main financial instrument used for this purpose will be the Just Transition Mechanism. Through this instrument, the EU will seek to create new jobs in high-tech industries such as renewable energy, electric vehicle manufacturing and sustainable building[6]. Resources will also be allocated with the purpose of new retraining programs.

The plan of the European Commission is to mobilize a minimum of one hundred billion euros in the period of 2021 to 2027 through the Just Transition Mechanism[7]. An amount of the 7.5 billion euros will be provided to the affected regions through the means of Just Transition Fund. This Fund will be financed from the new long-term budget of the European Union. The remaining funds from the Just Transition Mechanism will come from other sources, namely private investments.

Is this optimism omnipresent in the EU?

The proposed idea for a comprehensive transformation of the European Union's economy has provoked resistance from many decision-makers, businesses, social groups and others. While in principle, all the Member States support the European Green Deal, many of them are sceptical about their chances for dramatically reducing greenhouse gas emissions[8]. Namely, Hungary, Estonia, Czech Republic and the especially vocal Poland have in June 2019, vetoed the proposal for achieving climate neutrality of the European Union by the year 2050[9]. When the agreement was finally reached in December of the same year, it was done without Poland, which refused to participate in the consensus.

Behind the Hungary's initial opposition were concerns that the program could contribute to rising food and energy prices in the long run[10]. On the other hand, behind the continuous opposition of Poland are concerns over the foreseeable closures in the coal sector.  Coal remains a sector of high importance to Poland as it is a relatively cheap source of energy, which also enables the government to maintain social peace. Major changes to the energy system will also pressure countries such as Bulgaria, Romania and even Germany. In the case of Germany, having the largest economy in the EU comes with the price. At the moment, it is by far the largest contributor to the EU's overall greenhouse gas emissions, among the Member States. So when the broad ruling coalition in the German Bundestag recently questioned the proposed increase in the country's climate ambitions by 2030, it raised the concern of many[11].

Dissatisfaction present in Germany and Poland is not alleviated even by the fact that 7,5 billion euros from the Just Transition Fund will be divided mostly between these two countries[12].  They believe that the proposed amount is not nearly enough to cover the costs of the upcoming transition. To some, even the proposed distribution is not adequate. So even though Poland will receive as much as 27% of the total funds, many consider it insufficient, as this country alone employs more people in the coal sector than the remaining 26 Member States combined[13]. On the other hand, the Member States that have already made significant progress in their energy transition do not look favourably on this generosity of Brussels and maintain that they should not finance such programs additionally. France, Netherlands and Sweden believe that the existing funds, which are already allocated to these countries, should be redirected towards their needs for energy transition[14].

Numerous European trade unions also stand in opposition against the European Green Deal. They believe that the proposed measures could endanger the competitiveness of European industry internationally. Industry accounts for approximately 20% of the total EU economy and employs approximately 35 million people[15]. Out of the total number, almost 11 million people work in the extractive industries, automotive industry and other energy intensive industries and their future will depend on the direction of the upcoming reforms[16]. The new Industrial Strategy of the European Union, which was announced by the European Commission in March, is primarily focused on digitalization measures and does not sufficiently address the traditional sectors of industry, which it will mostly affect. Representatives of the federation of trade unions "IndustriAll" believe that the proposed strategy does not provide an answer to the questions of what the future of the mentioned sectors is, nor how the European Union will achieve the ambitious climate goals for 2030 and 2050[17].

And then, the COVID-19 happened...

Despite the mentioned opposition, the most significant obstacle to the implementation of the European Green Deal is the on-going pandemic of virus COVID-19. Faced with the consequences of the virus, the European Commission officials were forced to postpone numerous initiatives, which were planned for 2020. The Commission stated that there was a need for prioritization and that the adoption of new legislation could not bring any substantial change at the moment, as the institutions were not able to implement it adequately[18]. There is still no official confirmation, but the media indicates that the adoption of most of the planned public policies within the European Green Deal could be postponed, according to their sources[19]. The postponed initiatives will include the European Climate Pact, the ‘Farm to Fork’ Strategy, the New EU Strategy on Adaptation to Climate Change and other initiatives which are not considered a priority.

Although it has slowed down the legislative process of European institutions, the pandemic has, on the other hand, opened the door to a major investment program that could become a significant step in the realization of the vision of a European Green Deal. With the outbreak of the pandemic, all the Members of the European Union have, without exception, recorded a significant slowdown of economic activity. It is estimated that in the first quarter of 2020, the gross domestic product of the European Union has decreased by 3.3%, compared to the last quarter of the previous year[20]. It is estimated that the European economy will sink by more than 7% this year[21]. With the outbreak of the pandemic, the first reaction of the EU Member States was to provide financial assistance to the domestic economy. Companies were saved, as well as the jobs in them. However, the price in terms of fiscal expenditures was colossal for governments. It became clear that in order to ease the impact of the upcoming recession, a common response is required. Therefore, the European Council and the European Commission agreed on the need to create a joint investment program, which would have a similar effect on Europe, as did the Marshall Plan[22]. This program could go to up to two trillion euros, as this is the amount demanded currently by the Members of the European Parliament[23]. As much as five hundred billion euros could in that case be distributed to the Member States in the form of grants through the Recovery Fund[24]. Currently, there are strong indications that a significant part of the resources could be used for projects that are in line with the vision set out in the European Green Deal. This idea was supported by numerous European officials, including Ursula von der Leyen, president of the European Commission. She believes that the European Green Deal should serve as a compass when allocating the resources of the Recovery Fund and that this is a unique opportunity to build a different, resilient European economy[25]. Unofficially, the projects which the European Commission could support in this regard would be related to building renovations, the circular economy, the use of renewable energy sources and hydrogen, and "cleaner" traffic[26].

In the upcoming weeks, we will see how the Recovery Fund for the EZ is going to look like. In front of the current EU officials, there is a great political decision to be made and it requires a great deal of bravery. However, it is certainly not the last one. In the coming years and decades, the success of the European Green Deal will depend on the continuous bravery of the decision-makers to maintain the EU’s position of a global leader in the fight against climate change.

 

Ilija Jovančević, Belgrade Open School



[1] A European Green Deal. European Commission. https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en. Accessed on 25. May 2020.

[2] The European Green Deal Investment Plan and Just Transition Mechanism explained. European Commission - Press corner. https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_24. Accessed on 25. May 2020.

[3] Proposal For A Regulation Of The European Parliament And Of The Council Establishing The Framework For Achieving Climate Neutrality And Amending Regulation (EU) 2018/1999 (European Climate Law). European Commission. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020PC0080&from=EN Accessed on 25. May 2020.

[4] Gesley J. European Union: Commission Proposes European Climate Law to Achieve Climate Neutrality by 2050. Global Legal Monitor.Loc.gov. https://www.loc.gov/law/foreign-news/article/european-union-commission-proposes-european-climate-law-to-achieve-climate-neutrality-by-2050/. Accessed on 25. May 2020.

[5] Harvey F, Rankin J. What is the European Green Deal and will it really cost €1tn?. the Guardian. https://www.theguardian.com/world/2020/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn. Accessed on 25. May 2020.

[6] Harvey F, Rankin J. What is the European Green Deal and will it really cost €1tn?. the Guardian. https://www.theguardian.com/world/2020/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn. Accessed on 25. May 2020.

[7] Financing the green transition: The European Green Deal Investment Plan and Just Transition Mechanism. European Commission - Press corner. https://ec.europa.eu/commission/presscorner/detail/en/ip_20_17. Accessed on 25. May 2020.

[8] Harvey F, Rankin J. What is the European Green Deal and will it really cost €1tn?. the Guardian. https://www.theguardian.com/world/2020/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn. Accessed on 25. May 2020.

[9] Harper J. EU climate goals ditched as Warsaw and Budapest dig in | DW | 26.06.2019. DW.COM. https://www.dw.com/en/eu-climate-goals-ditched-as-warsaw-and-budapest-dig-in/a-49357554. Accessed on 25. May 2020.

[10] Eastern European countries threaten to wreck EU 'Green Deal'. euronews. https://www.euronews.com/2019/12/12/eastern-european-countries-threaten-to-wreck-eu-green-deal. Accessed on 25. May 2020.

[11] Schulz F. German CDU/CSU climate paper: A stab in Merkel's back?. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/german-cdu-csu-climate-paper-a-stab-in-merkels-back/. Accessed on 25. May 2020.

[12] Morgan S. Poland, Germany get largest slices of Just Transition Fund. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/poland-germany-get-largest-slices-of-just-transition-fund/. Accessed on 25. May 2020.

[13] Funding the Just Transition Fund: additional money is needed. www.euractiv.com. https://www.euractiv.com/section/energy/opinion/funding-the-just-transition-fund-additional-money-is-needed/. Accessed on 25. May 2020.

[14] Coal-reliant nations ‘wiser’ not to count on EU funds for green shift. Ft.com. https://www.ft.com/content/eeddbeb0-0cb7-11ea-bb52-34c8d9dc6d84. Accessed on 25. May 2020.

[15] Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the regions. A New Industrial Strategy for Europe. European Commission. https://ec.europa.eu/info/sites/info/files/communication-eu-industrial-strategy-march-2020_en.pdf. Accessed on 25. May 2020.

[16] Simon F. Eleven million jobs at risk from EU Green Deal, trade unions warn. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/eleven-million-jobs-at-risk-from-eu-green-deal-trade-unions-warn/. Accessed on 25. May 2020.

[17] Simon F. Eleven million jobs at risk from EU Green Deal, trade unions warn. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/eleven-million-jobs-at-risk-from-eu-green-deal-trade-unions-warn/. Accessed on 25. May 2020.

[18] Simon F. Green Deal facing delays due to coronavirus, EU admits. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/green-deal-facing-delays-due-to-coronavirus-eu-admits/. Accessed on 25. May 2020.

[19] Simon F. Leaked: Full list of delayed European Green Deal initiatives. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/leaked-full-list-of-delayed-european-green-deal-initiatives/. Accessed on 25. May 2020.

[20] GDP and employment flash estimates for the first quarter of 2020. Eurostat. https://ec.europa.eu/eurostat/documents/2995521/10294864/2-15052020-AP-EN.pdf/5a7ea909-e708-f3d3-8375-e2510298e1b8. Accessed on 25. May 2020.

[21] Spring 2020 Economic Forecast: A deep and uneven recession, an uncertain recovery. European Commission - Press corner. https://ec.europa.eu/commission/presscorner/detail/en/ip_20_799. Accessed on 25. May 2020.

[22] A Roadmap for Recovery. Towards a more resilient, sustainable and fair Europe. Consilium.europa.eu. https://www.consilium.europa.eu/media/43384/roadmap-for-recovery-final-21-04-2020.pdf. Accessed on 25. May 2020.

[23] Parliament: EU27 need €2 trillion recovery package to tackle COVID-19 fallout | News | European Parliament. European Parliament. https://www.europarl.europa.eu/news/en/press-room/20200512IPR78912/parliament-eu27-need-EU2-trillion-recovery-package-to-tackle-covid-19-fallout. Accessed on 25. May 2020.

[24] Rose M, Nienaber M. France, Germany propose 500 billion euro EU Recovery Fund. U.S. https://www.reuters.com/article/us-france-germany/france-germany-propose-500-billion-euro-eu-recovery-fund-idUSKBN22U275. Accessed on 25. May 2020.

[25] Simon F. Green Deal will be 'our motor for the recovery', von der Leyen says. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/green-deal-will-be-our-motor-for-the-recovery-von-der-leyen-says/. Accessed on 25. May 2020.

[26] Simon F. Leaked: Europe’s draft 'green recovery' plan. www.euractiv.com. https://www.euractiv.com/section/energy-environment/news/leaked-europes-draft-green-recovery-plan/. Accessed on 25. May 2020.