Green New Deal: the investment plan for a sustainable Europe

Becoming the world’s first carbon neutral continent by 2050. This is perhaps the main and most ambitious goal pursued by Europe with the Green New Deal, the investment plan that, in the European Commission’s intention, will allow to balance both climate and economic needs, demonstrating how jobs and prosperity go hand in hand with environmental priorities. Moreover, the EU intends to become not only an example to the rest of the world, but also, as the world’s largest aid donor, a ferryman for developing countries towards sustainable growth. Europe produces just 10 percent of global CO₂ emissions (4.11 billion metric tonnes in 2019), a small percentage compared to Asia, which ranks first with 17.27 billion tonnes. In this context, Europe can play a crucial role in pushing other global economies towards carbon neutrality by offering access to technology and, above all, financial instruments.

In light of this, the €1.8 trillion agreement signed on the 10^th of December by the 27 member states on the 2021-2027 budget and the Recovery Fund agreement – the €750 billion package to re-launch the continent’s economy with a view to sustainability following the Covid-19 crisis – are more essential than ever. Moreover, the 27 countries also reached an agreement on the fight against climate change, which aims to cut carbon dioxide emissions by 55 percent by 2030. This is undoubtedly an ambitious target, particularly as only a year ago, the Green New Deal ratified in Brussels envisaged a 40 percent reduction in pollution. Not only will the funds help the EU overcome the economic damage that the coronavirus has caused, but they will also pave the way for much deeper integration between Member States, ease the continent’s transition to a low-carbon economy, and propel it into an increasingly important role as a hub for technology and financial models in the sector. The EU is set to become the world’s largest issuer of green bonds, with a third of issued bonds classified as environmentally friendly. Next year, the EU will publish a green taxonomy and green bond standard and is expected to become a model for this fast-growing market.

Regarding technology, Europe has taken steps to create equal standards at least in the European internal market, and the European Commission’s recently published White Paper on foreign subsidies is a step in this direction. The EU’s Innovation Fund will also help provide some of the resources Europe needs to support research and development. Europe is also working towards becoming a global standard setter on green technology to strengthen its competitive edge with China, the country with the highest emission rates in the world (28 percent of global emissions): indeed, the EU has the fastest growing investments in green technology and is a leader in solar and wind power, hydropower and battery storage. Furthermore, Europe is re-evaluating its public support criteria for green technological discoveries or those that lead to breaking the “energy curve” of increasing consumption for data processing. An example can be found in the subsidies for the implementation of 5G technology, which are crucial for a successful green transition, but which Europe has not necessarily addressed on a climate level.

The commitment from individual states and the European Commission in the fight against climate change has led to concrete results: the 2020 Environmental Performance Index, for example, ranks 10 European countries among the 15 greenest, cleanest and most climate-friendly countries. Topping the eco-chart is Denmark, followed by Luxembourg, Switzerland, the United Kingdom, France, Austria, Finland, Sweden, Norway and Germany. The index is published every two years by researchers at Yale and Columbia universities and evaluates 180 countries on 32 sustainability indicators, taking into account the latest data on critical issues such as air and water quality, waste management, CO₂ emissions and other public health factors.