By Ewa Krukowska and Laura Millan Lombrana
Heads of government are due to meet by video on Thursday and are considering a proposal that would their emergency measures compatible with principles set out in the Green Deal, according to an EU document obtained by Bloomberg. The move would reassure investors who want to take stakes in climate projects and are looking to see how their work will be treated in stimulus packages now evolving worldwide.
“The urgency is presently on fighting the coronavirus pandemic and its immediate consequences,” according to a draft statement for the EU leaders’ videoconference later on Thursday. “We should however start to prepare the measures necessary to get back to a normal functioning of our societies and to sustainable growth, integrating the green transition and the digital transformation, and drawing all lessons from the crisis.”
Europe is aiming to zero out greenhouse gas emissions by the middle of the century in its far-reaching environmental clean-up. Its Green Deal, which was launched shortly before the virus outbreak, will overhaul everything from transport to energy production and agriculture, putting Europe’s ambitions on climate change ahead of most other major polluters.
EU leaders plan to use the first scheduled gathering after the pandemic to confirm the region remains committed to its climate plans. That ambition remains even as millions of citizens stay in lockdown and governments turn their focus to preventing the spread of the virus.
The strong statement at the highest level of European leadership will also be a sign for governments putting together similar recovery packages in other regions.
“We’ll be looking at the EU for the first signals of how long-term recovery is designed,” said Nick Robins, a sustainable finance professor at the London School of Economics. “The EU Green Deal provides a broader platform already in place to shift the direction of growth in the European economy.”
The European Commission, the EU’s executive arm, expects the spreading contagion to cause a deep recession this year. To stave off a full economic crisis, it is readying a 37 billion-euro ($40 billion) “Corona Investment Fund” that would use spare money from the EU budget to help businesses, health-care systems and sectors in need.
Putting Europe back on track to sustainable growth will require “a coordinated exit strategy, a comprehensive recovery plan and unprecedented investment,” the leaders may say, inviting the commission to start work on the necessary measures. The draft statement by the leaders may still change.
The document explicitly mentions the Green Deal in the context of an exit strategy from the crisis. The reference to the landmark EU policy didn’t exist in the previous draft of the communique, also seen by Bloomberg. It reflects a growing concern in the bloc that handing out aid to companies without conditions may hinder efforts to cut emissions and could result into public funding for businesses that boost pollution.
Concerns that the Green Deal may fall down the political agenda have helped depress the value of carbon allowances. Benchmark permits in the EU Emissions Trading System, the region’s flagship tool to reduce pollution, slumped by almost a third this month.
“If we come out of this with an economy into pieces, then it will be hard to put climate back on the agenda, for sure,” said Ernest Urtasun, a member of the EU parliament and the vice-president of the Greens group. “Most stimulus programs after the 2008 crisis had no environmental focus — we need to avoid that.”