Wednesday

27th Jan 2021

Recovery plan slammed for failing to tackle climate crisis

  • The Just Transition Fund has been more than halved to €17.5bn - from the €40bn proposed just in May by the EU Commission (Photo: AdamCohn)

EU leaders agreed early on Tuesday (21 July) that around a third of the €750bn coronavirus recovery package and the €1.074 trillion seven-year budget will be invested in projects contributing to climate action.

This could mean nearly €550bn spent on climate initiatives over the next seven years - which is far below €2.4 trillion in low-carbon investment needed to meet EU climate targets.

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For Thomas Pellerin-Carlin from the think tank Jacques Delors Institute, this is a "good deal" for climate - but "the challenge will be to suit the action to the words [and] transform late-night promises into concrete projects that build a clean future: clean start-ups, housing renovation, bike lanes [or] sustainable agriculture".

However, environmental activists say the package falls short on climate safeguards.

"European governments said they would deliver a green recovery plan from the Covid-19 pandemic, but they have cut funding for health, research and climate, and failed to guarantee that public money won't go to polluting industries," said Sebastian Mang from Greenpeace.

Similarly, William Todts from NGO Transport & Environment said that it is difficult to accept "the paradox that something called 'Next Generation EU' invests 70 percent of its funds in an older generation's economy while asking young Europeans to foot the bill".

Moreover, the deal states that the funds should be driven by the Green Deal, a revised EU 2030 emissions reduction target and the EU's 2050 climate-neutrality target.

However, campaigners previously warned that increasing the 2030 emission-reduction target from 40 percent to between 50 and 55 percent is still not aligned with the Paris climate agreement and efforts to limit global heating to 1.5 degrees.

Green groups also called for an exclusion list of activities to ensure that polluting industries do not receive any public money of the €750bn recovery fund under the 'no harm' principle - whereby no spending should be for projects harmful to the environment.

Poland's price

Meanwhile, the EU's flagship fund directed to support regions whose economy is deeply-dependent on fossil fuels, the so-called Just Transition Fund, has been halved to €17.5bn - from the €40bn proposed in May by the European Commission.

And the conditions for receiving the money have been also lowered.

As a result, Poland will have easier access to a much smaller budget for its transition towards climate neutrality - a goal it has not signed up to yet, undermining the credibility of the whole EU.

Additionally, the EU also plans to introduce green taxes to help fill EU coffers, including a tax on non-recycled plastics scheduled for next year and a mechanism to ensure that imports in the EU pay their share of environmental taxes that should be ready by 2023.

The European Parliament will have to approve the overall size of the package in the coming months, although difficult negotiations are expected.

"There are too many things that still need improvements," said Dutch Green MEP Bas Eickhout, adding that "the deal is not over yet".

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