Just a day after declaring it a “mission impossible”, leaders of 27 European countries finalized a COVID-19 recovery plan and seven-year budget worth €1.8 trillion, with nearly one-third of the total set aside for climate measures but reduced funding to key climate initiatives and only limited “green strings” to prevent investments in polluting industries.
Some European climate campaigners called the end result a “mixed bag”, Al Jazeera reports. There are too many things that still need improvements,” said Bas Eickhout, a Greens Member of European Parliament from the Netherlands. “The deal is not over yet.”
Other prominent advocates weren’t nearly as sanguine. “As expected, the #EUCO resulted in some nice words, some vague, distant, incomplete climate targets nearly impossible to track, and a complete denial of the climate emergency,” tweeted #FridaysforFuture founder Greta Thunberg. “As long as we keep playing their game on their terms this is all we’ll get—the leftover breadcrumbs.”
The continent’s primary fund for shifting countries off fossil fuels “received €17.5 billion euros—less than half of what was previously proposed,” and “the conditions for accessing it were also watered down,” Al Jazeera explains. “Countries that have not signed up to an EU-wide target to become ‘climate neutral’ by 2050 will only get half of their share of the Just Transition Fund.” By contrast, though, “previous proposals would have forced countries to commit to climate neutrality at a national level—but EU officials said this was a ‘red line’ for Poland, the coal-heavy country expected to receive the biggest chunk of the money.”
The final deal also cut funding to two sustainable investment funds, InvestEU and Horizon Europe, at the behest of the “frugals”, a group of four or five wealthier northern European countries that entered negotiations determined to scale back the deal.
“New green taxes will help fill EU coffers, with an EU-wide tax on non-recycled plastic waste scheduled for next year,” Al Jazeera says. “A plan to slap levies on polluting imports should be ready by 2023, and a scheme to use carbon market revenues to shore up EU funds will be considered later.”
The package still offers the EU “a chance to develop clean energy resources, stimulate the market for emissions-free cars, invest in budding technologies, and promote energy efficiency,” Bloomberg Green reports. It requires both the rescue fund and the 2021-27 budget to comply with the EU’s climate neutrality goal and 2030 emissions target, calls for the European Investment Bank to become the continent’s climate bank, devotes 40% of the continent’s agriculture budget to climate, and commits to a monitoring methodology with annual reporting, to prevent climate spending from being greenwashed.
With more than €500 billion in the plan, “never before has so much of an EU budget been allocated to combating climate change,” said German Environment Minister Svenja Schulze. “The commitments to climate action and environmental protection are important and necessary, but the distribution of funds must reflect that.”
“This was a summit meeting where I believe the consequences will be historic,” said French President Emmanuel Macron. “It created the possibility of setting up loans together, of setting up a recovery fund in the spirit of solidarity.”
Italian Prime Minister Giuseppe Conte called the recovery plan “an historic moment for Europe”.
“The plan is part of Europe’s bid to become the world’s first climate-neutral continent by 2050, putting it ahead of other major emitters such as the U.S., China, and India in the global fight against unstoppable temperature rise,” Bloomberg writes. “The proportion of the European package earmarked for climate projects illustrates that contrast dramatically.” World-wide, “only US$54 billion of the trillions of dollars of recovery funds pledged globally will be channeled into green policies, while $697 billion has been allocated for carbon-intensive sectors such as air travel and fossil fuel extraction, according to a Bloomberg NEF report released prior to the EU’s stimulus deal.”
Last week’s release by the global Energy Policy Tracker reached a similar conclusion.
“There is no doubt this is the world’s greenest stimulus plan,” Simone Tagliapietra, a researcher at Brussels-based economic think tank Bruegel, told Bloomberg. “Member states should now put forward sensible green national recovery plans, prioritizing those policies that have a triple dividend: economic growth, greening, equity.”
“There’s no getting around the fact that climate now has an essential role in EU politics,” agreed E3G policy adviser Johanna Lehne. “There are caveats on how it will be put to practice, but that’s still a massive investment in a better recovery.”
The final deal came at the end of a bitter policy fight that produced one of the longest EU summits ever. The net result was a pandemic rescue package that contains fewer grants and more low-interest loans, as well as the deep cut to the Just Transition Fund, from €40 to €17.5 billion. Lehne said it was striking to see climate reduced to “a pawn in the bigger negotiation” after initially being cited as a top priority by EU leaders.
“It bears raising the question of where the leadership is on climate and whether leaders are living up to their own calls for a green recovery,” she said.
In the lead-up to the summit, Reuters reported that more than 1,000 climate-friendly projects were lining up for funding under the continent’s post-COVID recovery package. “The projects would support over two million jobs and require investment of around €200 billion,” the news agency wrote, citing research commissioned by the European Climate Foundation.
“These so-called ‘shovel-ready’ projects—which could be ready for launch within two years if they receive financing—cover renewable energy, energy storage, building renovation, low-carbon transport, manufacturing of low-carbon technologies, and more efficient industrial processes.”