European Union to lay out trillion-euro ‘Green Deal’

The Commission says an extra 260 billion euros in investments are needed per year to finance the switch to clean energy and reduced emissions.

By Author  |  Published: 14th Jan 2020  4:50 pm

Strasbourg: Going green can be a costly business, as the EU’s executive body will make clear on Tuesday when it launches a one-trillion-euro plan to finance its goal of making the bloc carbon neutral by 2050.

That figure represents a 10-year investment to be sourced from public funds and leverage private sector money.

It is part of Europe’s “Green Deal” — an ambitious rethinking of the economy, transport and energy sectors to turn the EU into a leading inspiration in the fight against global warming.

But behind the sweeping rhetoric of the endeavour, to be studied Tuesday at a sitting of the European Parliament in the French city of Strasbourg, are a number of knotty problems that have to be worked out.

A main one is how to set coal-dependent EU regions — think Poland, the Czech Republic, or parts of Germany — on the path of renewable energy.

European Commission President Ursula von der Leyen has proposed a transition fund meant to bankroll the sort of deep changes needed, which would make available up to 100 billion euros (110 billion dollars) a year.

She also wants state aid to seed investments that would protect the environment.

The Commission says an extra 260 billion euros in investments are needed per year to finance the switch to clean energy and reduced emissions.

A Commission document seen by AFP suggests the “just transition fund” be given 7.5 billion euros from the EU’s long-term budget between 2021 and 2027.

That is to be augmented by other EU investment programs and budgets, such as for transport and agriculture, as well as financing from the European Investment Bank and public-private ventures.

The Commission wants a quarter of its long-term budget spending to go on the Green Deal transformation, and is banking on EU member states and the European Parliament backing its plan.

At the same time it has to persuade its poorer, eastern member states to commit fully to the changes envisioned.

Poland has so far refused to sign on, worried about the economic and social costs involved.And there is also a tricky debate over nuclear energy to be navigated.

France champions the atomic power it relies on as a relatively beneficial energy source when it comes to climate emissions. The Czech Republic and Hungary too defend nuclear as part of their energy mix.

But other member states, such as Luxembourg and Austria, are opposed to nuclear energy being painted as “green”.

The Commission document excludes transition fund money to finance the construction of nuclear power plants.

But, under pressure from France and some eastern EU countries, a summit last month described nuclear energy as an option on the way to securing climate neutrality, leaving the broader question open for debate.