Towardsa Clean and Green Future
By Marianna Nicolaou
When she unveiled the European Green Deal, European Commission President Ursula von der Leyen described it as “Europe’s ‘man on the moon’ moment.” How feasible are its goals, especially given the need to change policies and mentalities to achieve them?
The European Green Deal is the strategy for sustainable growth, a modernised circular economy and a climate-neutral Europe. It sets out the road to recovery from the COVID-19 pandemic and aims to boost the efficient use of resources across all sectors of the economy and all layers of society with the flagship goal of achieving climate neutrality in the EU by 2050. The Commission has completed a detailed analysis of how to achieve this ambitious goal, which shows that all sectors need to participate in climate action and contribute to the green transition. We have agreed on Europe’s first-ever Climate Law to make Europe climate-neutral by 2050 and to reduce greenhouse gas emissions by at least 55% by 2030.This impact assessment also shows that all EU actions and policies should be aligned as we strive to achieve a successful and just transition towards a sustainable future. This applies to all policies – for example the transition to a circular economy will undoubtedly also help address the biodiversity crisis. Achieving these targets is most definitely feasible but it will not be easy. Now is the moment for all actors to rethink the systems that underpin the economy and to play their role so as to ensure that our growth is in line with planetary boundaries.
In our complex economy, public investment is necessary but not sufficient to drive a green recovery. What are some of the incentives that could be provided to facilitate private investment in green sectors?
While public investment is important to help us rebound from the current economic crisis, it is absolutely essential to increase private sustainable investments. We have recently launched our flagship programme – InvestEU – to support new investments and mobilise private finance. We will provide an EU guarantee of €26 billion to de-risk projects of high EU added value and attract private investors. We expect to be able to mobilise around €370 billion of public-private investments to finance economically viable projects in key EU policy areas, including green and digital transition, research and innovation, new action areas in the European health sector and strategic technologies. InvestEU has a strong focus on investments with a positive climate and environmental impact. Co-legislators have agreed on ambitious climate and environment targets for the programme – 30% climate at the level of the programme and 60% climate and environment for sustainable infrastructures. That allows us to design financial products in line with the climate ambition of the programme. We will work with like-minded institutions – the European Investment Bank, the European Investment Fund, the European bank for Reconstruction and Development and National banks – to promote investment in sustainable sectors. Our investment partners will finance green projects either directly or through financial intermediaries and funds. InvestEU will also provide technical assistance, capacity building and other advisory support to stimulate the development and preparation of sustainable projects.
Countries that pursue green projects have seen considerable benefits. China led the world in solar panel manufacturing and has now become the largest producer of lithium ion batteries; Europe leads the offshore wind industry, which could be worth $1 trillion by 2040; hydrogen projects are being deployed in Australia, Morocco, Saudi Arabia and the EU, etc. What are some of the long-term benefits that the EU could enjoy by pursuing green projects?
The Green Deal is our opportunity to transform Europe’s economic model by moving to a clean, circular economy, restoring biodiversity and cutting emissions and pollution. This modern growth strategy will create exciting new economic opportunities for Europe and European companies. It will create growth, jobs, and attract investments – and is an important driver of innovation. More circularity also responds to business needs of price stability, securing access to raw materials, and diversifying and localising supply chains.
The business case for increased protection of nature is also clear to see – more than half of global GDP is dependent on high-functioning biodiversity and ecosystems. If we were to continue down the current path of ecosystem destruction, the continued degradation of natural capital would considerably limit business opportunities and socio-economic development potential. The economic and social costs of inaction on environmental and climate issues would be huge, and would reduce the average EU GDP by up to 2% and by even more in some parts of the EU. So companies that get ahead of the curve now will have a big advantage. We have seen that the destruction of nature can have the same impact on a company as major oil spills while, for example, fashion companies that use recycled material already have an additional selling point for their environmentally conscious customers. On the EU level, we will propose to strengthen due diligence for companies to ensure that the EU market does not drive deforestation on the other side of the world. We know how important this is for investors, who are looking for truly sustainable projects. Our European Union green bond standard, for example, and the newly proposed taxonomy will lead the way. It will bring clarity on what accounts for sustainable, eco-friendly activities.
How important is it for islands to pursue marine litter policies and solutions and how significant is ‘green shipping’ since shipping is considered to be one of the world’s major polluters?
Islands, like all other places, need to focus first and foremost on prevention if they want to tackle marine litter. This of course means proper waste and wastewater management but also adequate port facilities to receive waste from ships and to channel it to proper treatment. The EU’s new Port Reception Facilities Directive from 2019 was specifically designed to maximise deliveries of waste from ships, including fishing vessels, to ports. This is particularly important for touristic islands visited by cruise ships. Litter from the sea may also end up on island beaches and plastic marine litter is particularly a problem. This litter may have been generated elsewhere, so to address this, the Commission adopted the Plastics Strategy in 2018 to tackle plastic pollution at source. We have also introduced specific measures including a Single-Use Plastic Directive, to reduce the volume of single-use plastic products ending up on our beaches. We will very soon complement those with more actions for plastic litter reduction. Furthermore, ships are indeed a major source of pollution in Europe and the EU is concerned about ships’ negative impacts on human health, the marine environment and its biodiversity, climate change and end-of life disposal. Under the European Green Deal, the Commission is accelerating the shift to sustainable and smart mobility including ship pollution, at sea or in EU ports. The creation of ‘Emission Control Areas’ protects sea basins such as the Mediterranean Sea. In these areas, ships are obliged to reduce polluting emissions and do so by using cleaner fuels, through retrofits or new engine standards.
What are some of the most important environmental projects that are expected to have a significant impact on the EU economy?
As I mentioned earlier, the business case for increased circularity is clear – and the EU’s economy is dependent on high-functioning biodiversity and ecosystems. Climate action, in particular, is a massive opportunity for EU businesses. It creates new markets, mobilises investment in new and transforming industries, and it unleashes innovation for a healthier and more prosperous future. This is why 30% of the EU’s Recovery Plan – the Union’s long-term budget and NextGenerationEU (altogether €1.8 trillion) – is earmarked for climate-related goals. The fight against climate change will be the engine for our global recovery. We have also significantly increased our sustainable financing activities. An additional 20% of the EU Recovery Plan will be invested into digital projects, furthering the digital focus of the Green Deal to nurture innovative ecosystems, for example, where universities, companies and innovators can access data and cooperate. To boost the vibrant start-up scene, the EU has invested in cities like Sofia and Lisbon to become a global hub for Artificial Intelligence. In fact, the 2020s will be Europe’s Digital Decade.
US President Joe Biden has invited 40 world leaders, including Xi Jinping and Vladimir Putin, to meet and discuss the fight against climate change. What could be the geopolitical impact of such action for Europe, if the world’s superpowers come together over an environmental agenda?
We very much welcome the efforts and momentum from around the world to work together for a greener future – from the United States to South Korea and Japan, from South Africa to China. It is clear that we need such economic powerhouses around the world to share our ambitions. An important partner in our common fight is the US, which has now re-joined the Paris Agreement – humanity’s life insurance. The fight against climate change will be our compass for cooperation with all countries in many areas – research, innovation and breakthrough technologies, or in helping vulnerable countries become resilient to climate change. Europe wants to be the first climate-neutral continent in the world but to tackle climate change, we need all major economies to take responsibility and turn the transition into an opportunity for all. At this year’s 15th meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD COP15), we hope to increase the ambition for the environmental agenda not only within the EU but also globally. The EU is committed to protecting at least 30% of land and sea here in Europe and we will soon present a legal framework for the restoration of ecosystems. There is a great expectation for the COP15 Summit to deliver for biodiversity what the Paris summit did for climate – the equivalent of an internationally binding commitment to re-balance our unhealthy relationship with the planet. Europe has everything to gain from this new form of international and sectoral cooperation, and we will reach out to our partners from around the world – from foundations to global institutions, from CEOs to NGOs, and from our oldest partners across the Atlantic to all those who want to join.
The business case for increased protection of nature is clear to see – more than half of global GDP is dependent on high-functioning biodiversity and ecosystems