08.01.2020 | A climate-neutral Europe by the year 2050

Green Deal: What the EU wants

A feat of strength. The Green Deal that EU Commission President Ursula von der Leyen wants to implement together with the Member States by the year 2050. The plan also affects power supply.

By 2050, Europe is to become the first climate-neutral continent on earth. Of course, this Green Deal arouses associations with Franklin D. Roosevelt's New Deal proposed nearly 90 years ago. At that time, rigorous economic interventions were supposed to bring the USA out of a deep depression: With considerable success, as the majority of economic historians attest to today.

Everyone must follow suit

That sounds like a good omen. However, the road to this goal is certain to be a rocky one. The first stumbling block: The 28 EU Member States must all follow suit. Poland, Hungary and the Czech Republic are already putting on the brakes. Their governments demand financial guarantees to help them achieve the tramsition from fossil to renewable energy sources.

Various states also want to rethink the contribution of climate-friendly nuclear energy production. They doubt that the goal of climate neutrality can be realised by the year 2050 without nuclear power.

The Commission hopes to have the climate neutrality objectives laid down in a law by next March. Were this to succeed, the next milestone: The reduction of greenhouse gas emissions by 50 to 55 per cent over the next ten years, below the levels of 1990. A look into the past reveals how ambitious this goal is. Since 1990, the EU States have only been able to reduce 23 per cent of their greenhouse gas emissions.

Continued expansion of renewables

In order for the Green Deal to succeed, the Commission will apply various levers. Targets for the expansion of renewables will be raised. Up to now, it was agreed that their share in energy consumption in the EU would be 32 per cent by 2030. Energy efficiency must also increase by 32.5 per cent by that time.

The power grids must be upgraded in order to efficiently transport power from renewable sources. The Commission also wants to develop a strategy as to how artificial intelligence can help to optimally control energy.

Climate protection and trade policy hand in hand

In order to avoid harming the competitiveness of European industry, the introduction of a CO2 compensation mechanism is foreseen. The Commission is considering the introduction of a CO2 tax for the import of goods from countries with low climate protection levels.

Climate protection and trade policy must go hand in hand. For example, when free trade agreements are concluded, the climate protection framework in the potential partner country must also be considered.

The Emission Trade System (ETS) that will be coupled with the Swiss system as of January 2020 will be expanded to cover shipping and air transport will be taxed more heavily. In addition, the Commission wants to advance e-mobility and build at least one million charging stations for e-vehicles by the year 2025.

Industry, for example the steel sector, must produce with the lowest possible CO2 emissions. For example, only clean steel using hydrogen as the energy source will be manufactured.

The Green Deal also foresees improved protection for biodiversity, the reforestation of European woodlands and green agriculture. 

The crux: Costs

According to experts, the road to a climate-neutral world will cost between 250 and 500 million Euros per year.

Where this money will come from is yet unclear. The European Investment Bank (EIB) intends to investment one billion Euros in climate projects by the year 2030, but this will not be sufficient. In addition, the Commission is planning a "Just Transition Fund", which according to Ursula von Leyen is intended to offset "unequal starting points". The fund will mainly benefit Eastern European countries with coal industries and comprise funds from the EU budget, additional payments by the Member States, and monies from the EIB as well as private industry. Von der Leyen wants to mobilise a sum of 100 billion Euros to this end.

Is the calculation right?

Critics complain that the EU Commission is not providing enough new money for climate protection. They talk about one trillion euros, but in reality they can only provide 7.5 billion euros in fresh money. In order to really make the Green Deal happen, the member states would have to increase their contributions to the European budget significantly. However, it is questionable whether they will succeed. Germany, for example, has already publicly announced its opposition to higher contributions. The comments in the media are correspondingly critical: They talk about "uncovered checks" and "air bookings to finance the Green Deal". 

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