If the European Green Deal made economic sense before the COVID-19 crisis, “it makes even more sense now” because it will help reboot the economy, said Frans Timmermans, the EU Commission vice-president in charge of climate action.
In a speech on Tuesday (1 September), Timmermans confirmed that Brussels will forge ahead with proposals for new climate targets this month, saying the objective will be to align the EU’s 2030 objectives with the bloc’s long-term goal of becoming climate neutral by 2050.
“Very soon we will propose new emissions targets for 2030,” Timmermans said, announcing a raft of new policy proposals to come out in the autumn, including a building renovation wave and an offshore energy strategy to boost the uptake of renewables such as offshore wind.
The proposal, due in September, will be accompanied by a detailed economic analysis to evaluate the costs and benefits of reducing the EU’s greenhouse gas emissions by 50 or 55% below 1990 levels by 2030, up from 40% currently.
This cost-benefit analysis – or “impact assessment” in EU jargon – is eagerly awaited by EU countries, some of which have grown wary about the cost of climate action at a time when the economy is entering a recession caused by the COVID-19 health crisis.
In July, a group of six eastern EU countries sent a letter to the Commission warning about the extra costs this will entail for regions that are heavily dependent on polluting industries such as coal.
“Above all, the impact assessment should be realistic,” said the environment ministers of Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia.
“We are experiencing a global pandemic that will not end soon and there might be others to come. This is no longer business as usual, so neither the IA should be,” the six ministers wrote in a letter dated 13 July.
But Timmermans seemed to push back on those claims. “The cost of climate action may be high but it is dwarfed by the cost of inaction,” the Dutchman said in reference to storms, floods and heatwaves which are becoming more frequent and taking a heavy toll on the economy.
“The Green Deal is Europe’s new growth strategy,” the Commission vice-president underlined, repeating the EU executive’s new mantra that economic growth and environmental policies “go hand in hand”.
With the long-term EU budget and recovery plan that was agreed by EU leaders in July, Europe will have €1.8 trillion to spend on rebooting the economy in the coming seven years, Timmermans reminded, saying 30% of that sum will be dedicated to climate action.
That money must be spent “responsibly”, he insisted, saying the sums will be “borrowed from the next generations” who will have to pay back this debt.
“Spending it on their future instead of on our past is a moral imperative and a matter of economic good sense,” said the Commission vice-president.
“It’s just bad economics: why spend money to keep things as they are when you know you will require money again to change them in the near future?” he asked, warning this would be “wasteful and even irresponsible” as new money might no longer be available in a world burdened with post-COVID debt.
Of course, money will be spent on the immediate priorities of the crisis as well, the Dutchman continued. “But we must avoid the trap we fell into after the financial crisis” where money was splashed on protecting the status quo rather than investing in future industries.
He then lifted a corner of the veil on the upcoming impact assessment on the EU’s new 2030 goal. “One thing stands out from the underlying assessment: it is that an increased target in the range of 50 to 55% is doable and it can underpin sustainable economic growth.”
“Increasing our ambition, especially now, makes sense,” he stressed, saying “holding off now because we cannot afford it for the moment is the surest way to not being able to afford it in the future either.”
“We must stand firm and get this right from the start. As pressure grows, we must continue to resist the temptation to throw money in a carbon economy that will soon peter out.”