Thursday

28th May 2020

Opinion

Why Poland couldn't sign up to Green New Deal

In her stirring speech to the European Parliament last week the president of the European Commission, Ursula von der Leyen, presented the European Green Deal. She confirmed the earlier announcements about substantial upscaling of the EU climate targets for 2030 and 2050.

In a later press conference, she justified it as the "man-on-the-moon moment".

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She underlined that we don't know yet all the answers on how to do it.

This month EU leaders have reached an agreement on achieving climate-neutrality by 2050 but with Poland opting-out of the target. For one member state, it is necessary to take more time to implement this objective.

What does this mean for Poland and the EU?

First of all, the European Green Deal is envisaged to have a transformative impact on the whole European economy as well lifestyle, including consumption habits.

Having in mind the central and eastern European legacy in terms of economic structure and especially energy mix, it is easy to understand that exceptions on the European Union's path leading to climate-neutrality must occur.

Concordantly, there is a fundamental issue which should be addressed, which is: how to conduct a reliable and inclusive plan resulting in achieving climate-neutrality in 2050 without any damage for the cohesion policy funds?

This is a fair question not only with regard to the total budget, but also to each of priorities envisaged in the commission agenda.

Von der Leyen says that there are going to be €100bn available to tackle this issue.

As much as it seems a generous plan, it does not necessarily have to be.

For instance, the current European Fund for Strategic Investment created by the European Investment Bank Group and the European Commission is to mobilise €500bn by 2020, with an own fund of €35bn (€26bn guarantee from the EU budget, complemented by a €7.5bn allocation of the EIB's own capital).

By analogy, this could mean that €100bn offered for the just transition by the EIB is to be raised by around €7bn which is only half of what was postulated earlier - and a fifth of what Jerzy Buzek, a former prime minister of Poland and current MEP proposed.

Consequently, it must be emphasised that the Just Transition Fund should be prepared meticulously – we need to know how the money is going to be spent, not only the rough amount.

Which projects?

Poland will have another couple of months to negotiate the shape of the financial tools which will enable the country not only to agree on the climate neutrality in June 2020, but also to make it real by 2050.

In this context, it is worth to be mentioned that even if the amount is higher than €7bn, a more important question is what kind of projects it is going to finance.

In the paper issued this year by the Polish Economic Institute our authors argue, that the real just transition needs to focus on those who will be hit the hardest by the coal transition costs.

However, neither the old commission, nor the new one, came up with a convincing solution to that issue.

The thermal insulation together with sustainable heating, which are claimed to be the best way to solve energy poverty, cannot be used the same way as before.

The efficiency logic of spending these funds was oriented on energy savings which are the easiest to achieve in multi-family buildings and the best way to distribute them was through preferential credits and loans.

In Poland however, energy poverty is largely a matter of detached houses and households with low credit scores.

This leads to the third question, which needs re-asking. Who will benefit the most?

The companies profiting vastly from the cohesion funds on energy efficiency are most likely large producers of technologies and materials. Economically-speaking this makes no sense as it rewards the most technologically advanced and competitive companies, which are big corporations.

However, if we take into account solidarity as the backbone of Europe, the idea of spurring growth in local communities is at its most crucial.

We need to help those regions and communities confronted with a coal phase-out. We need new jobs and new business in places like Silesia, Poland.

Central and eastern Europe member states are often labelled as ones focused primarily on money. Indeed, because we are the poor kid in the elite club of the EU.

We need to take into account the different state of economic and social development of each country, not to mention their varying energy systems.

We cannot put a climate muzzle on economic growth. The CEE businesses need to be included more in value chains of green technologies which are to answer the needs of the least wealthy among us.

If the current growth model is to be replaced by the one proposed by the European Commission the issues mentioned here need to be answered and all of these sophisticated interlinkages transferred into policy.

Climate neutrality, likened by von der Leyen herself to the moon expedition, has to be realised reliably, thinking about people and not just about the numbers.

If the European Union wants to succeed in this area, it should take into account that decarbonisation has to be a common and solidarity commitment and there will be no one left behind. Only solidarity will bring us to the right place.

Author bio

Piotr Arak is the head of the Polish Economic Institute, a public think tank in Warsaw.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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