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Sunday, May 28, 2023

EU unveils financial plan to shift to green economy

The European Commission proposed on Tuesday, January 14, 2020 how the EU can pay for shifting the region’s economy to zero CO2 emissions in 2050 while protecting areas and industries most dependent on coal from taking the brunt of changes aimed at preventing climate change.

Ursula von der Leyen
Ursula von der Leyen, President of the European Commission

The commission, the European Union (EU’s) Executive Arm, unveiled details of its Sustainable Europe Investment Plan to mobilise investment of €1 trillion over 10 years using public and private money to help finance its flagship project – the European Green Deal.

All EU countries except Poland agreed last month they should transform their economies over the next 30 years to not emit more carbon dioxide than they absorb, so as to limit global warming and resulting climate changes.

The deal came amid overwhelming support from Europeans who see irreversible climate change as one of their biggest threats, more so than terrorism or unemployment.

In the only dissent among the 28 European Union countries to the 2050 emissions-neutrality goal, Poland argued that its energy systems and economy were too dependent on coal and lignite to make the transition over that time.

To secure Warsaw’s support, the commission unveiled on Tuesday the details of how it can help it financially through a Just Transition Fund that would generate €100 billion over seven years to ease the transition of coal-dependent regions to a “green” economy.

The Just Transition Fund is to be a mix of money from the EU’s long-term budget, loans from the European Investment Bank and the InvestEU programme, using the principle of leveraging limited public funds to attract private cash by covering the riskiest parts of an investment.

The commission announcement on Tuesday will spell out eligibility criteria for the funds, which are widely expected to be tilted in favour of Europe’s most coal- or lignite-dependent regions like Silesia in Poland.

As well as being a huge challenge, the commission sees a switch to an economic model not based on burning fossil fuels for energy as a great opportunity for European industry to shift to making environmentally clean, re-usable and repairable products based on renewable energy sources.

“The drivers of climate change and biodiversity loss are global and are not limited by national borders.

The EU can use its influence, expertise and financial resources to mobilise its neighbors and partners to join it on a sustainable path,” the commission said last month.

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