How the EU’s ambitious bid to lead the world on climate action will work and whether it will really make a difference

What is Europe’s green deal?

The European Green Deal aims to transform the 27-country bloc from a high- to a low-carbon economy, without reducing prosperity and while improving people’s quality of life, through cleaner air and water, better health and a thriving natural world.

If that sounds ambitious, it is. The European commission president, Ursula von der Leyen, called it “Europe’s man on the moon moment”. Nothing similar has been attempted before, as the pattern of human progress since the industrial revolution has been one of relentless exploitation and despoilment of the natural world, filling the atmosphere with carbon and the seas with plastic.

Nearly every major aspect of the European economy will have to be overhauled, from energy generation to food consumption, from transport to manufacturing and construction. In part, this will build on two decades of work in a few of these sectors, such as directives mandating renewable energy and cutting air pollution.

Previous attempts were piecemeal, limited in scope and sometimes flaccid in execution. Energy-intensive industries, for instance, have been covered by an emissions trading scheme since 2005, but political pressure kept the price of carbon low, rendering it largely ineffectual.

How will it work?

The green deal will work through a framework of regulation and legislation setting clear overarching targets – a bloc-wide goal of net zero carbon emissions by 2050, and a 50%-55% cut in emissions by 2030 (compared with 1990 levels) are supposed to be at the core – alongside incentives to encourage private sector investment, with action plans for key sectors and goals such as halting species loss, cutting waste and better use of natural resources.

All of the EU’s budget will be subject to checks to ensure it is spent in ways that benefit the environment. That includes the common agricultural policy, scorned by green campaigners for promoting intensive farming, which will retain farm subsidies but direct more to green measures. Science, research and development budgets will take on more of a low-carbon slant, and there will be a detailed roadmap of “50 actions for 2050” for other sectors.

Jobs will be created, the commission believes, in new high-tech industries from renewable energy to electric vehicle manufacturing and sustainable building, and efficiencies in resource use will repay the cost of the changes. “The European green deal is our new growth strategy – a strategy for growth that gives back more than it takes away,” von der Leyen said.

What is the legal basis?

All of this will require myriad changes and detailed measures, which will have to pass through tortuous EU processes, requiring the approval of all member states and parliament, so the details will inevitably be subject to horse-trading and backroom deals.

East European states have been promised financial incentives, as their economies are more fossil fuel dependent. The backing of the UK – which despite covertly watering down some measures in the past has broadly pushed for the low-carbon agenda – will be missed, predicts Jean Lambert, the former Green party MEP.

The new European parliament also has more rightwing MEPs, so it may be harder to pass some measures, she says. The hole that Brexit has created in the EU budget will also be hard to fill.

But what is clear is that the incoming presidency under von der Leyen and her vice-president, Frans Timmermans – charged with delivering the green deal – will throw all of its might behind the effort. “It’s not going to be straightforward to get all this through,” says Tom Burke, co-founder of the environmental group E3G. “It will be a typical EU process. But it has become the touchstone issue for this commission.”

Will the green deal make a difference?

It needs to. Europe has cut emissions by roughly one quarter since 1990 – good but nowhere near enough to put the bloc on track to net zero by mid-century. Current measures will not suffice for that – disruptive change is required, which is why the green deal targets are key.

On other environmental scores, the EU’s record is mixed. There have been vast improvements in areas such as air and water quality across EU states, western and eastern, in the past five decades, spurred by EU regulations since the 1980s. Dozens of harmful chemicals have been phased out, farm animal welfare standards raised and recycling rates beat most of the world.

But alongside those successes, the natural world has suffered a calamity across the continent: birds, insects, mammals, fish … few creatures (other than humans) have had a good time of it since the EU was created in 1992.

How much will it cost and where will the money come from?

At least €1 tn (£852bn) needs to be found over the next decade, according to the European commission. The biggest share, €503bn, should come from the EU budget, unleashing a further €114bn from national governments (because EU programmes often require a contribution from member states).

The next €279bn would come mostly from the private sector: the idea is that companies would be encouraged to make risky green investments by loan guarantees from the European Investment Bank, the EU lender, which recently pledged to phase out loans to fossil fuel projects.

On top of this Brussels has promised a €100bn “just transition” mechanism to help retrain workers who lose jobs in shuttered coal mines or steel factories.

But is it really €1 tn?

Even friendly experts detect wishful accounting in Brussels’ figures. Economists at the Bruegel thinktank say it is a stretch to consider the €503bn from the EU budget as “green investment”, as much of the money would be spent on traditional EU policies such as farm subsidies. Previous attempts to “green” the common agricultural policy have failed dismally. In a damning report in 2017, the EU’s auditors highlighted how farmers were being paid to undertake environmentally friendly measures they would have done anyway, such as crop rotation, while governments handed out “green” cash with little oversight.

Others fear that carbon financiers will game the system, meaning EU cash fails to trigger truly green investment from the private sector. And don’t forget, EU governments last month failed to agree a new seven-year budget, with four “frugal” net payers leading the charge to cut EU spending. The €503bn is not even in the bank.

Even if the EU realised its €1tn plan, it wouldn’t be enough. Bruegel argues the €1tn is only one third of what is needed, if the EU follows through with the commission’s plan to reduce European greenhouse gas emissions by up to 55% by 2030. Meanwhile, critics in eastern countries complain there is not enough money to help coal regions. In 2015 there were 128 coal mines alone in the EU employing more than 238,000 people from Aragón to Silesia.

Why does the green deal matter internationally?

This year – coronavirus permitting – will see the most important international climate meeting since the landmark Paris agreement was signed in 2015. Then, all of the world’s functioning states signed up to hold global temperature rises to no more than 2C, and preferably to below 1.5C, beyond which the ravages of climate breakdown become catastrophic and irreversible.

But the national pledges made at Paris on curbing greenhouse gases fell short of what is required to stay below 2C, and since 2015 the world’s carbon output has risen by 4%. At the Cop26 climate talks, to be held in Glasgow this November, nations are supposed to come up with tougher targets for 2030, and preferably also with goals for reaching net zero emissions by mid-century, or soon after.

But enthusiasm has ebbed since Paris, from Donald Trump’s US, to Brazil, India and big oil producers such as Russia and Saudi Arabia.

The key player will be China, the world’s biggest emitter of greenhouse gases and second biggest economy. At Paris, a pact between the US and China was the core of the deal. This time, the EU must bring China to the table alone.

“EU climate leadership [in the form of] the green deal is crucial to putting pressure on China and other major emitters to make more ambitious climate commitments,” says Paul Bledsoe, a climate adviser in Bill Clinton’s White House, who has attended more than a dozen climate negotiations since the 1990s. “In the face of Trump’s climate nihilism, only the EU can show that the world’s largest economy can decarbonise while continuing to provide a high standard of living for its 500 million people.”

What do critics say?

The EU will face a backlash from its citizens, fuelled by populist politicians, for persisting with green policies, predicts Charles Grant, director of the Centre for European Reform thinktank.

He points to the gilets jaunes protests in France, which took off after rises in fuel taxes intended to reduce carbon dioxide emissions, and the rise of the AFD in Germany. “The AFD is fuelled partly by climate scepticism. Populists are keen to promote anti-greenery, as they listen to voters,” he says.

“The green agenda will meet more and more opposition as voters start to realise it will make them poorer and affect their lifestyles, and they will worry about Europe becoming less competitive than, say, India and China, which won’t be going carbon-neutral,” says Grant. “This will increase the electoral strength of populists.”

Some leftwing campaigners have also attacked the plans. Taking issue with the “just transition” mechanism, Yanis Varoufakis and David Adler of the Democracy in Europe Movement 2025, wrote in the Guardian: “Will there be justice for the communities across Germany and France that have been asked to shoulder the costs of the climate transition? Does it speak to the swathes of Greek or Portuguese people who cannot afford to care about carbon emissions in 2050, preoccupied as they are with making ends meet this week? The stark answer is no.”

Will the UK be affected?

Boris Johnson’s government has made it clear that the UK wants to depart from EU environmental standards after Brexit. The post-Brexit environment bill, agriculture bill and fisheries bill now going through the British parliament contain various loopholes that green campaigners say would reduce in the UK the environmental protections that current EU law guarantees.

The UK does officially have a 25-year environment plan, with the government pledging to leave the UK’s natural realm in a better state than this generation inherited, but how that will hold up after Brexit is moot.

On the climate crisis, the UK is aligned with the EU. Last summer, a target of reaching net zero by 2050 was enshrined in law, and all major parties are pledged to uphold it. What’s missing, though, is a clear plan of action to meet the net zero aim. That is what Europe’s green deal is meant to provide, and unless the UK forms its own parallel plans soon, its 2050 target will look increasingly adrift.

Who are the green agitators in Europe?

The idea of a Green New Deal has been kicking around US politics since at least 2006. The European Green Deal (minus the word “new’ with its radical overtones) is not yet one year old. The EU plan resulted when an unexpected political leader collided with newly-elected MEPs, energised by the global climate movement.

Von der Leyen, a German defence minister, was a surprise choice to become European commission president, leapfrogging candidates who had run in the European elections in May. Those elections resulted in a record number of seats for European Greens, as climate change topped the agenda in Germany and the Nordic countries. Von der Leyen’s last-minute elevation angered the European parliament, pressuring her to lean to the left, liberals and Greens to gain support. To win MEPs over, she promised a European Green Deal within 100 days of taking office.

Beyond the Brussels power play, politicians were responding to the streets, as school children walked out of their classrooms, demanding action. The school strike was personal. Chief executives, heads of government and senior UN officials told EU officials their children were asking what they were doing to save the planet. As one official recounts: “You can imagine a conversation with your own children is much more confrontational than a conversation with a shareholder, or a bad headline in a newspaper.”

Who’s in favour, who’s against?

It’s a bit like world peace: everyone backs the European Green Deal, in theory. But there is a big hole in the ambition to be net-zero by 2050: Poland, which says it will reach climate neutrality at “its own pace”.

And beneath the surface, tensions over Europe’s green ambitions are not hard to find. At least eight countries, including Spain, Sweden and Latvia, want the EU to increase its 2030 emissions reduction target. Poland and Hungary think that is too much. Divisions will also come when hard choices have to be made: from closing coal mines, demanding more from farmers, to tougher emissions standards for the car industry.

What role will the European parliament play in the green deal?

EU governments agree environmental laws with the European parliament. That gives MEPs a weighty role across a swathe of new laws expected to flow from the European Green Deal: a revision of the EU’s heavily criticised carbon trading scheme, new performance standards for cars and vans, an overhaul of farm policy, changes to EU rules on state subsidies that will phase out support for fossil fuels.

Typically, the parliament tends to raise the bar on green action – it last year declared a climate emergency. But MEPs often lose the battle against EU ministers, who usually get the upper hand in EU negotiations.

Reading list

The European Green Deal, the European commission

A trillion reasons to scrutinise the Green Deal Investment Plan, Bruegel

How good is the European commission’s Just Transition Fund proposal?, Bruegel

Europe’s Green Deal, Jeffrey Sachs, Project Syndicate