Europe to Raise €1 Trillion to Finance the Green Deal

Offshore wind farm - Wind turbine. MEPs want a shift from unsustainable to sustainable economic activities that boost competitiveness and result in high-quality jobs. Photo: EP2012
Offshore wind farm – Wind turbine. MEPs want a shift from unsustainable to sustainable economic activities that boost competitiveness and result in high-quality jobs. Photo: EP2012

MEPs question whether the plan will enable €1 trillion to be mobilized by 2030, given the negative economic outlook following the Covid-19 crisis.

European Parliament sets out its proposals on how to best finance the Green Transition to sustainable, carbon-neutral economic activities in the vote on Friday (November 13).

In a non-binding resolution on the Sustainable Europe Investment Plan (SEIP) and financing the Green Deal, which passed with 471 votes in favour, 134 against, and 83 abstentions, MEPs stressed that one of the objectives of the SEIP should be to ensure a shift from unsustainable to sustainable economic activities.

They insist that the green transition should focus on reducing existing and potentially exacerbated disparities between member states, boost competitiveness and result in sustainable, high-quality jobs.

MEPs agreed that public investments should respect the ‘do no significant harm’ principle that applies to both environmental and social objectives, such as reducing the gender pay gap.

Only national and regional programmes with the highest potential to achieve these objectives should receive public investment. To that end, they insist on harmonized sustainability indicators and a methodology to measure impact.

The criteria established by the Taxonomy Regulation should also be taken into account if an investment is to meet green transition criteria. In addition, national recovery plans should be aligned with the National Energy and Climate Plans (NECPs).

MEPs welcome that the Covid-19 Recovery Plan for Europe and the subsequent national recovery and resilience plans have been designed to put the EU on the path to climate neutrality by 2050, as enshrined in EU climate law, including the 2030 intermediate targets and ensuring transition towards a circular and climate neutral economy.

They call for public and private investments in economic activities that are harmful and pollute the environment to be phased out, when economically feasible alternatives are available.

At the same time, MEPs respect member states’ right to choose their own energy mix and stress that the transition to climate neutrality should preserve a level playing field for EU companies and ensure they remain competitive, particularly in the case of unfair competition from third countries.

MEPs question whether the SEIP will enable €1 trillion to be mobilized by 2030, given the negative economic outlook following the Covid-19 crisis, and want to know how the new EU long-term budget (MFF) can contribute to meeting the SEIP targets.

They are concerned that a green investment gap might arise at the end of the next MFF period and call for plans to bridge this gap through both private and public investments. At the same time, MEPs call on the Commission to ensure that the new MFF will not support or invest in activities that would be harmful to the environment in the long-term.

They stress that public and private investments must complement each other and that the private sector should not be crowded out. MEPs welcome the European Investment Bank’s (EIB) decision to devote 50% of its operations to climate action and environmental sustainability from 2025 onward.

They suggest using a bottom-up approach and that the EIB should promote dialogue between the public and private sectors, and coordinate with various stakeholders.

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