On Thursday 23 April, the European Council will discuss the recovery from the pandemic crisis. Much attention will be on how to finance the necessary investments to restart the economy. In parallell, a more detailed Recovery Action Plan is being developed. Commission President Ursula von der Leyen and a number of national governments have made clear that the Green Deal should be a key part of the European response to the crisis.
Earlier, I have outlined some elements to consider in this context. Many parts of the Green Deal Communication and other policy documents are still valid. Here, I would like to highlight five points that could complement or strengthen earlier proposals in light of the current situation.
- Contribute to synergies between better health and environmental sustainability. Ursula von der Leyen has mentioned the need to have both a Green Deal and a White Deal (for health). There is a link between ecosystem degradation and the risk for pandemics, and some evidence that air pollution increases the sensitivity for Covid-19. While it is important to keep the Green Deal as a key initiative in its own right, earlier work on a health and environment strategy could be revived. Some possible elements are: reducing air pollution, proposing an ambitious chemicals strategy, and putting more value on the role of nature for mental and physical well-being.
- Increase the focus on green jobs and skills. Unemployment is rising rapidly across Europe. In the draft revised Commission work program for 2020, the importance of the proposed Renovation Wave is rightly highlighted. In addition, rapid adoption of the proposals in the Circular Economy Action Plan can contribute to more jobs. Other measures against unemployment include higher ambitions for biodiversity (including agro-environmental measures and management plans for Natura 2000-areas), better implementation of already decided EU environmental legislation, and tougher measures against noise from roads. Green skills should be emphasised in labour market programs. Investment in decarbonisation of the European economy will contribute to competitiveness and jobs. This is urgent, given the difficult situation in for example the car industry and the metal sector. The EIB should have stronger muscles to support this, perhaps through more green bonds issued by the EIB and then bought by the ECB.
- Promote sustainable mobility. This is a defining moment for the future of transport. Innovative digital solutions now show the potential for reducing the environmental footprint of mobility. This should be reflected in the upcoming strategy on sustainable and smart mobility, which could be brought forward to early autumn. Investments in railways and urban transport ought to be an important part of the envisaged Recovery Fund (there are already worrying signs that some investments in railways are being put on the shelf because of the crisis, and that the EIB might not get enough green national projects to fund without more direct EU support). Green conditionality should be part of rescue programs for airlines. Smart and sustainable cities is already a priority in Horizon 2020, but Europe is lacking behind countries such as South Korea when it comes to intelligent transport systems. Now public transport companies are facing financial problems because of the lockdowns, making a green leap even more urgent. There is a need for a wider alliance between the EU, Member States and cities to make Europe a leader in green and smart mobility.
- Encourage green tax reform as part of financing of the recovery. Oil prices are low. This is a moment to reduce subsidies, and to promote environmental taxes when the time comes for financial consolidation. Carbon taxes and other measures are politically easier to implement as part of broader policy packages, including for example investments in health. This could be promoted as part of the Green Deal and in the reformed European Semester. In the medium term, Member States that consider tax reductions to stimulate consumption could be encouraged to prioritise areas contributing to sustainability, for example lower VAT on fruits and vegetables compared to red meat. In addition, new proposals could be made for environmental own resources to the EU budget, for example related to the carbon content of heating fuel.
- Cooperate on resilient and sustainable supply chains. There are now voices for reshoring of production back to Europe from other parts of the world. Some such measures will be necessary to increase preparedness for the next crisis. However, this should not come at the expense of the Global South or increase political tensions with strategic partners for the EU. In contrast, this is the time for Green Diplomacy to included cooperation on sustainable supply chains, for example on better information systems and enhanced producer responsibility
There are many other valuable contributions to this debate. It is comforting that support for environmental protection is still strong in Europe. But there are also economic and administrative hurdles to overcome. The European Commission is showing leadership in sticking to the Green Deal during the crisis. Now it is up to the European Council to demonstrate its commitment to sustainability.