European Green Deal at 100 days – high in ambition, but not (yet) a game changer

As the new EU Commission hits its 100 day benchmark, it is time to analyze how its flagship programme to make Europe the first climate-neutral continent has performed so far. The European Green Deal has already brought forth various ambitious measures, ranging from funding to governance. However, it has not yet triggered the necessary paradigm shift needed to deliver the transition.

The Green Deal is undeniably a sign that the EU executive has finally grasped the sense of climate and social urgency. In recent months, it has notably shifted some of its rhetoric away from being merely focused on competition and growth, in order to integrate other key objectives such as fairness, inclusion and collaboration. The first measures issued under the Green Deal umbrella are also moving in the right direction, but don’t constitute yet a game changer, as our analysis shows.  

The Just Transition Mechanism: A promising new instrument?

The Just Transition Mechanism was proposed in January this year, with the aim to specifically support carbon-intensive regions most affected by the phase out of fossil fuels to design territorial just transition plans. The EU Commission boasted that it would mobilize EUR 100 billion under this measure. However, only a fraction of this amount, EUR 7,5 billion, would be fresh money allocated to selected regions across the EU. For the remainder of the amount, the EU executive is counting mostly on Member States, the European Investment Bank (EIB) and the private sector to foot the bill, by tapping into Cohesion funds, other EU funding mechanisms (InvestEU Fund) and a so-called “public sector loan facility” managed by the EIB.

At the end of February, a list of eligible regions and cities was issued by the Commission, which encouragingly opens the door for many of our members to gain access to the Just Transition funding pot. However, going forward, it will be key that the Just Transition governance closely includes cities and regions as part of a structured dialogue, as required in the framework of the National Energy and Climate Plans. Otherwise, the Just Transition mechanism will end up being another top-down exercise where Member States and the Commission call the shots, with local actors on the sidelines. Furthermore, it will be also critical that the new EIB public sector loan facility provides zero interest loans to local governments, in order to become a credible alternative to other lending institutions.  

The Sustainable Europe Investment Plan: Business as usual

The Sustainable Europe Investment Plan aims to support the EU Green Deal climate neutrality objective, by mobilizing EUR 1 trillion of investment over the next decade. For this purpose, a quarter of the coming EU budget is to be dedicated to funding climate action, with the private sector and national co-financing also bringing in hundreds of billions of Euros. The Plan is presented by the Commission as the “Green Deal Investment Plan”, but actually reshuffles existing funding instead of providing substantial additional funding. 

Climate law: The legal framework for a climate-neutral EU

Presented on the 4th of March, the climate law is the legal framework that embeds the EU 2050 climate neutrality objective into binding law. The Commission’s proposal also empowers the EU executive to more easily increase climate and energy targets after 2030, making it more difficult for EU Member States and the EU Parliament to oppose such moves. Moreover, the climate law empowers the Commission to issue (non-binding) recommendations to Member States whose actions are inconsistent with the EU’s overall climate neutrality objective. But perhaps the most striking novelty introduced by this law, is that the Commission has to check from now on whether new draft measures or legislative proposals at EU level are compliant with the climate neutrality objective. Thereby, the EU executive seeks to remove any inconsistencies or contradictions of EU rules with the overall EU Green Deal objective.

Despite its good intentions, the climate law proposal has still several shortcomings. It does not oblige Member States to individually become climate-neutral by 2050, offering laggards a way to freeride and postpone necessary action. In addition to this, the EU Commission remains hesitant to speed up emission cuts until 2030, as it will only issue in September a plan to increase the EU’s current 2030 target of 40% GHG emission cuts to 50-55%. Thirdly, the climate law does not include the climate-proofing of investments on all governance levels as a prerequisite to make budgets fit for a long-term pathway towards climate neutrality.

Climate pact: Will it get the governance right?

Presented in conjunction with the climate law, the climate pact is a new governance framework which should bring together regions, local communities, civil society, schools, industry and individuals. Together, they would be encouraged to commit to a series of pledges and identify common solutions to climate challenges. According to the Commission’s plans, the climate pact would also “give citizens and all parts of society a voice and role in designing new actions, launching grassroots activities, sharing information and showcasing solutions”. The Commission, in particular the responsible Executive Vice-President Frans Timmermans, hope to use this mechanism to reconnect with disillusioned citizens who are demanding more climate action through ambitious political commitment, dialogue and concertation. 

A public consultation was launched on the climate pact on the 4th of March, which is open until the 27th of May. The climate pact would then be officially launched at COP26 in Glasgow at the end of this year. In order for this new instrument to succeed in getting the governance pillar of the Green Deal right, it needs to establish a real societal pact. This pact should be anchored in a deep-seated reform of the Covenant of Mayors initiative, with the aim to engage local energy alliances, guarantee effective multi-level governance, going beyond energy and climate, revolutionizing education and supporting local and regional authorities with the right resources to act as coordinators of this governance engineering around climate action. The climate pact needs to reinvent our way of life, based on a reformed set of values and standards that redefine our relationship to our local ecosystem and our respective responsibilities and commitments in addressing the climate crisis. Whether at territorial, social or economic level, this would also help to give new meaning to the word “cohesion”, one of the most important aims of the European project.

What’s next?

In April, the EU will seek to launch the reform of its economic governance, by revising EU spending and deficit rules in the context of the review of Europe’s stability and growth pact. The European Commission also aims to introduce exemptions from EU budget deficit rules for green investments, but several Member States have already voice their opposition to this process. Lifting these barriers to public investments will be key in order to free up the necessary resources to transform the Green Deal into a real game changer. Alongside this reform of economic governance, we can also expect a reform of EU Cohesion Policy. The EU executive, under its new department for “Structural Reform Support”, aims to look beyond traditional administrative borders and more towards what it calls “functional areas”. By doing so, the objective is to ensure that prosperity and territorial development benefit the surrounding areas beyond urban centers.

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