After Covid-19 – The Green Deal at the heart of the EU’s Recovery Plan?

Barbara Macedo
green deal

For the last few weeks businesses have been shut down throughout the world in an attempt to control the spread of COVID-19. Although the immediate impact of this measure was the reduction in energy use and greenhouse gas emissions, it is resulting in an unprecedented burden on economies, increasing unemployment rates and temporary closures of companies. While dealing with the health emergency and saving as many lives as possible remains the immediate priority, governments have put in place stimulus and recovery packages in an endeavour to address the economic fallout. In Europe, countries are beginning to look to a ‘green’ recovery and the setting up of bodies to place the EU Green Deal at the centre of the EU Recovery Plan.

At the EU Summit held on March 26, European leaders called for a far-reaching recovery plan that would include the digital and green ambitions and goals. In line with this, the environmental ministers from Austria, Denmark, Finland, Italy, Latvia, Luxembourg, the Netherlands, Portugal, Spain and Sweden signed an appeal for a green recovery, with France, Germany and Greece joining a few days later. In the manifesto, the ministers urge the European Commission to exploit essential features of the Green Deal, including the European Green Deal Investment Plan, to boost green recovery and an appropriate transition, notably by scaling up investments in sustainable mobility, renewable energy, building renovation, the circular economy, research and innovation and recovery of biodiversity and, therefore, avoiding EU being locked into a fossil fuel economy for the decades to come.

The need to increase the 2030 targets despite the postponement of Cop26, and to maintain and strengthen EU’s effective regulatory tools, such as the Emissions Trading Scheme (ETS), were also mentioned. Based on a cap and trade system that limits the  greenhouse gas emission allowances, the Emissions Trading System is a cornstone in EU climate policies. However, even with a market stability reserve mechanism, in 2020, carbon prices in the ETS fell by 40 % between February 19 (€25.66) and March 18 (€15.24), due to the  coronavirus emergency shutdowns and the consequent drop in industrial activity and, consequently, electricity demand.

Following the call from the 12 EU environmental ministers, an informal alliance was launched in the European Parliament as an initiative of Mr. Pascal Canfin, Chair of the European Parliament’s Environment and Public Health Committee. The “Green Recovery Alliance” brings together Members of the European Parliament, CEOs, business associations, NGOs, and also aims to ensure that the investments to recuperate the European Economy are compatible with the Climate Neutrality ambitions. “COVID-19 has not made the climate crisis go away. European public money that member states and Europe will spend to reinvest in the econonomy must be consistent with the Green Deal”, Mr. Canfin declared.

On April 23, the EU leaders will gather in a video conference to discuss the recovery plan. However, even though the European Council has clearly advocated for a green recovery, some member states, such as the Czech Republic and Poland, are sceptical of the possibility to meet the climate targets towards climate neutrality, pushing for  the commitments to  be revoked or delayed. The Executive Vice-president of the European Commission, Frans Timmermans, has stated that saying the Green Deal is a luxury Europe cannot afford is a false contradiction since replacing old and polluting infrastructures across all sectors with modern, clean and efficient ones may create more jobs and increase GDP.

The challenge will be to combine economic growth and job creation with the transition towards climate neutrality. These stimulus packages offer an excellent opportunity to decouple economic growth from resource use – a priority of the Green Deal – by boosting investments in clean technologies and aligning public policies and investment with the goal of a sustainable future. The decisions and investments made now will be those that shape our societies and economies for years to come.


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