Opinion

Europe’s Green Deal must reach beyond its borders

A European Climate and Sustainable Development Bank could become the external investment arm of the European Green Deal.

By: and Date: February 4, 2020 Topic: Energy & Climate

Ursula von der Leyen has made climate change a top priority for the European Commission, proposing a European Green Deal that would make Europe climate neutral by 2050.

This is good for Europe and for the world.

It is good for Europe because deep decarbonisation represents a historic occasion to revitalise Europe’s economy and provide purpose and meaning to the common project.

It is good for the world because it shows that pursuing climate neutrality by 2050 is not only technically and economically possible, but also politically rewarding. This is of paramount importance, as early deployment of low carbon technologies is key to making them globally competitive with high carbon technologies.

Even so, a European Green Deal focused only on Europe itself would not do much to mitigate climate change, as the continent produces less than 10 per cent of global greenhouse-gas emissions. The only way for Europe to exercise global leadership on decarbonisation is to move beyond its own borders. The European Green Deal should go global. To make that possible there is a pressing need to consolidate and streamline the EU’s development finance and climate activities outside Europe, which are today divided between the European Commission, the European Investment Bank, the European Bank for Reconstruction and Development and individual European member states.

Take the example of Africa. The EU and its member states have created a myriad of initiatives to promote electrification and decarbonisation on the African continent. But this fragmentation limits Europe’s leverage regarding credible energy sector reforms and, therefore, does little to promote the much-needed private investment in African countries. In the labyrinth of initiatives, understanding who is doing what is challenging even from an EU perspective, let alone from an African one, especially when China offers to finance coal plants in a far more coherent way.

Europe’s fragmented system creates overlaps, inefficiencies and greater transaction costs. European taxpayers’ money would be far better spent if channelled through a single facility, aimed at co-ordinating the initiatives of European institutions and member states.

The EU should combine the current instruments into a single sustainable development finance entity, such as a European Climate and Sustainable Development Bank — as proposed last year by the High-Level Group of Wise Persons on the European Financial Architecture for Development.

A European Climate and Sustainable Development Bank could become the external investment arm of the European Green Deal, pushing it beyond the continent’s borders. Such an approach would represent a triple win for the EU.

First, it would help to meet Europe’s climate-finance obligations and unlock the conditional emission-reduction commitments provided by most developing countries under the Paris Agreement. Second, it would enable European industry — which is competitive in many low carbon technologies — to find new markets. And third, it would help economic development in partner countries, providing an invaluable foreign policy dividend for Europe.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read about event More on this topic
 

Past Event

Past Event

The Polish view on extending the EU-ETS: Red lines, room to manoeuvre, game changers

What are the red lines, what room is there to manoeuvre, and which elements of the new carbon pricing architecture can be real game changers?

Speakers: Wanda Buk, Maciej Bukowski, Adam Guibourgé-Czetwertyński, Michael Pahle, Aleksander Śniegocki, Urszula Stefanowicz and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 21, 2021
Read about event
 

Upcoming Event

Apr
29
14:00

The External Dimension of the EU's Green Deal: What Role for EU Development Cooperation?

The EU Green Deal's political scope extends far beyond climate neutrality and the European Union. What geopolitical and human repercussions does it have for its partners?

Speakers: Francisco André, Mikaela Gavas, Carla Montesi, Njuguna Ndung'u and Simone Tagliapietra Topic: Energy & Climate, Global Economics & Governance
Read article More on this topic
 

Blog Post

China has a grand carbon neutrality target but where is the plan?

China’s new long-term targets, to reach peak emissions before 2030 and achieve carbon neutrality by 2060, are yet to be matched with a consistent short-term action plan.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Energy & Climate Date: April 14, 2021
Read article More on this topic More by this author
 

Opinion

It’s time for a green social contract

The green transformation will have far-reaching socio-economic implications. Action is needed to ensure domestic and international social equity and fairness.

By: Simone Tagliapietra Topic: Energy & Climate Date: April 12, 2021
Read article More on this topic More by this author
 

Blog Post

How to extend carbon pricing beyond the comfort zone

Rapid emission cuts need a carbon price for the whole economy. This must be introduced in careful stages. 

By: Georg Zachmann Topic: Energy & Climate Date: April 1, 2021
Read article Download PDF More on this topic
 

Policy Contribution

Navigating through hydrogen

Policymakers must address the need to displace carbon-intensive hydrogen with low-carbon hydrogen, and incentivise the uptake of hydrogen as a means to decarbonise sectors with hard-to-reduce emissions.

By: Ben McWilliams and Georg Zachmann Topic: Energy & Climate Date: April 1, 2021
Read article More on this topic
 

External Publication

Form a climate club: United States, European Union and China

If the three biggest economies agree a carbon tax on imports, it will catalyse climate action globally.

By: Guntram B. Wolff and Simone Tagliapietra Topic: Energy & Climate Date: March 23, 2021
Read article More on this topic More by this author
 

Opinion

Central banks don’t have to pick winners and losers to fight climate change

Disclosures and financial regulation don’t get enough respect as tools to reduce emissions.

By: Rebecca Christie Topic: Finance & Financial Regulation Date: March 11, 2021
Read about event More on this topic
 

Past Event

Past Event

A new carbon pricing paradigm for the path to net zero

Which role carbon pricing could and should play in the future policy mix?

Speakers: Ottmar Edenhofer, Peter Liese, Sam Van den Plas, Beatriz Yordi Aguirre and Georg Zachmann Topic: Energy & Climate Date: March 9, 2021
Read article Download PDF More on this topic
 

Policy Contribution

A whole-economy carbon price for Europe and how to get there

Putting carbon pricing at the centre of the EU climate policy architecture would provide major benefits. Obtaining these benefits requires a uniform, credible and durable carbon price – the economic first-best solution, however, several preconditions required to attain this solution are not yet met. This paper proposes a sequenced approach to ensure convergence of the policy mix on the first-best in the long run.

By: Ottmar Edenhofer, Mirjam Kosch, Michael Pahle and Georg Zachmann Topic: Energy & Climate Date: March 9, 2021
Read article
 

Opinion

The EU can’t separate climate policy from foreign policy

How to make the European Green Deal succeed.

By: Mark Leonard, Jean Pisani-Ferry, Jeremy Shapiro, Simone Tagliapietra and Guntram B. Wolff Topic: Energy & Climate, Global Economics & Governance Date: March 5, 2021
Read article More on this topic
 

Opinion

欧洲如何实现碳中和?一种建议

“欧洲绿色协议”目前缺少的一个工具是碳底价,它可以为ETS和非ETS部门设定最低碳定价。经过多年的讨论,现在可能已经到了引入这一制度的时候了。

By: Maria Demertzis and Simone Tagliapietra Topic: Energy & Climate Date: March 5, 2021
Load more posts