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Is the Post-Pandemic Economic Revitalization Plan from the EU “Green” Enough?

published: 2020-08-13 10:00

As the leader in aggressive implementation of carbon reduction economy, the EU adheres to the philosophy of greening, even amidst the global COVID-19 pandemic, by drafting a post-pandemic economic revitalization program, and claims to conform to a “green recovery”, which signals that greening will be executed alongside the revitalization program. After 5 days of intense discussion at the summit, the EU has decided to launch a post-pandemic recovery fund worth EU€750 billion, where EU€390 billion will be used for gratuitous relief, and the EU€360 billion will be used for low interest loan, as well as part of the 7-year budget of EU€1.074 trillion. In addition, 30% of the recovery fund will be invested in the measures against climate changes.  

As the impact of the pandemic aggravates the deterioration on the economy, major global countries have stipulated extensive economic rejuvenation plans, which is a rare opportunity in the eyes of radical carbon reduction activists, since it is usually an impossible mission for the government of various countries to offer vast budgets to intervene in the economy. Thus, the economic stimulation advocated by these carbon reduction activists might as well be used for revitalizing the “economic greening”, which can also achieve the target of carbon reduction at the same time.

On the contrary, most governments from countries around the world have disregarded the advocacy of these carbon reduction activists, and the latter have attacked on the lack of consideration regarding carbon reduction for the economic stimulation measures proposed by the US, Japan, and China, who have been calling these measures programs of “brown recovery”, in addition to wailing on how US$151 billion from the revitalization budget proposed by G20 countries is used to recover industry of high carbon emission, including the industry of aviation, coal, oil and gas, as well as road construction. As high as $US3.5 trillion from the revitalization plans of 17 major countries will derive substantial environmental impact, and budgets used for eco-friendly purposes are less than insignificant.

Governments around the world believe that economic recovery should be implemented with one focus only, and do not seem to be willing to kill two birds with one stone, since that will only disrupt the initial plan. Hence, these carbon reduction activists can only return to their citadel Europe to seek sympathy. Europe has always been the area where governments spend the most on “green” measures, where the green expenditure of the EU occupies 0.31% of the GDP, which is a significant difference compared to the 0.1% from Asia and North America. Thus, the carbon reduction activists are even more rigorous on Europe.

Under this pressure, the 25% budget of EU’s revitalization program that is used to combat climate changes has been increased to 30% under the instruction of the president of the European Commission, which means that there will be a budget of EU€550 billion for battling climate changes. In addition, the EU also regulates that the remaining funds must not “cause harm” to carbon reduction, even if they are not used on “greening”. However, the agreed revitalization program is yet to satisfy the carbon reduction activists, as they claim that the budget is a far cry from the EU€2.4 trillion required to achieve the climate target of the EU.

The “Just Transition Fund” used by the EU in implementing the reduction of fossil fuel usage for various countries will receive EU€17.5 billion, though it is not even half of the initially planned figure, despite its enormous amount. Furthermore, the conditions for obtaining fund assistance have also been alleviated, where the original rule pertaining to how EU countries can only use this specific fund by signing the overall zero carbon emission target of “no climate impact” until 2050, has now been mitigated to countries who do not sign on the target are allowed to use half of the fund, which is primarily done to provide a backdoor for Poland, a major country of coal burning.

Is Green Economy Development a Distant Dream?

On the other hand, the revitalization program has removed numerous items under the backlash from the “frugal five”, where the two major investment plans of sustainable economy, including InvestEU and Horizon Europe, became the target of elimination. However, the “green tax” will infuse revitalization funds, including imposing tax on non-recyclable plastic, tax on polluted imports beginning from 2023, and the use of carbon tax revenue on subsidizing the EU fund.

However, what the carbon reduction activists fear most is that the EU has yet to stipulate thorough inspection measures for the so-called carbon reduction funds, and that the revitalization program discussed by the EU requires the approval of the congress of each country, which means that the possibility in the stipulation of an inspection measure is even lower now, otherwise it may not be approved by the Parliament of Poland. The possible outcome may be a stipulation of recovery that “causes no harm”, and 30% of funds used for battling climate changes on the surface, though the actual implementation may end up like that of the US, Japan, and China, which is still a “brown recovery” at the end.

The resolution of “only a green recovery is acceptable” from the EU that is regarded as the green motherland by the carbon reduction activists is actually not as powerful as it seems on the surface, since each EU country needs to be respected in order to avoid a fall out from the program. As Poland and Hungary highly oppose the values of Western Europe, it is only harder for carbon reduction activists to force their ideas and willingness on other countries, let alone the complaints from the “frugal five” regarding “green” expenditure. Kidnapping substantial funds of the revitalization plans from various countries to develop green economies in order to profit from a disaster has been an impractical approach since the beginning.

 (Cover photo source: shutterstock)

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