Policy brief

How to make the European Green Deal work

Ursula von der Leyen has proposed a European Green Deal that would make Europe climate neutral by 2050. With this Policy Contribution, the authors pro

Publishing date
05 November 2019

European Commission president-designate Ursula von der Leyen has made climate change a top priority, promising to propose a European Green Deal that would make Europe climate neutral by 2050. The European Green Deal should be conceived as a reallocation mechanism, fostering investment shifts and labour substitution in key economic sectors, while supporting the most vulnerable segments of society throughout the decarbonisation process. The deal’s four pillars would be carbon pricing, sustainable investment, industrial policy and a just transition.

First: a meaningful carbon price should be established for all sectors, by strengthening the EU emissions trading system (ETS) and by pushing EU countries to increase the price for emissions not covered by the ETS. To ensure a robust mechanism against carbon leakage, a carbon border tax should be prepared. However, such a measure will be extremely politically challenging, and the EU’s future climate policy should not rely on its successful implementation. Other instruments should therefore be put in place first, including subsidies for low-carbon exports and stricter environmental standards importers would have to comply with to access the EU market.

Second: the carbon price should be complemented by a sustainable investment strategy that pushes companies to switch technologies and promotes behavioural change among citizens, offsetting any rising costs they face because of higher carbon prices. Green investment should be promoted by shifting current EU funds towards this purpose while enabling EU countries to support green investment, and by incentivising private investment through regulatory measures and through support for European promotional banks.

Third: European industry should be strengthened through support for disruptive green innovation; by creating the conditions for innovative, green, European companies to flourish (for example through new product standards and via carbon-based contracts for difference to ensure competition between companies for the most efficient technologies); and through measures to export the European Green Deal on the back of a reform of EU neighbourhood and development policy.

Fourth: the adverse social consequences of climate policies should be taken into account and minimised in each European climate policy proposal. Unavoidable impacts should be addressed by targeted compensation measures. The scope of the European Globalisation Adjustment Fund can be broadened and the mechanism adjusted to aid the transition in coal-mining regions.

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About the authors

  • Georg Zachmann

    Georg Zachmann is a Senior Fellow at Bruegel, where he has worked since 2009 on energy and climate policy. His work focuses on regional and distributional impacts of decarbonisation, the analysis and design of carbon, gas and electricity markets, and EU energy and climate policies. Previously, he worked at the German Ministry of Finance, the German Institute for Economic Research in Berlin, the energy think tank LARSEN in Paris, and the policy consultancy Berlin Economics.

  • Grégory Claeys

    Grégory Claeys, a French and Spanish citizen, joined Bruegel as a research fellow in February 2014, before being appointed senior fellow in April 2020.

    Grégory’s research interests include international macroeconomics and finance, central banking and European governance. From 2006 to 2009 Grégory worked as a macroeconomist in the Economic Research Department of the French bank Crédit Agricole. Prior to joining Bruegel he also conducted research in several capacities, including as a visiting researcher in the Financial Research Department of the Central Bank of Chile in Santiago, and in the Economic Department of the French Embassy in Chicago. Grégory is also an Associate Professor at the Conservatoire National des Arts et Métiers in Paris where he is teaching macroeconomics in the Master of Finance. He previously taught undergraduate macroeconomics at Sciences Po in Paris.

    He holds a PhD in Economics from the European University Institute (Florence), an MSc in economics from Paris X University and an MSc in management from HEC (Paris).

    Grégory is fluent in English, French and Spanish.

     

  • Simone Tagliapietra

    Simone Tagliapietra is a Senior fellow at Bruegel. He is also Adjunct professor of Energy, Climate and Environmental Policy at the Università Cattolica del Sacro Cuore and at The Johns Hopkins University - School of Advanced International Studies (SAIS) Europe.

    His research focuses on the European Union climate and energy policy and on the political economy of global decarbonisation. With a record of numerous policy and scientific publications, he is the author of Global Energy Fundamentals (Cambridge University Press, 2020), L’Energia del Mondo (Il Mulino, 2020) and Energy Relations in the Euro-Mediterranean (Palgrave, 2017).

    His columns and policy work are published and cited in leading international media such as the Financial Times, The New York Times, The Guardian, The Wall Street Journal, Le Monde, Die Zeit, Corriere della Sera, Il Sole 24 Ore and others.

    Simone holds a PhD in Institutions and Policies from Università Cattolica del Sacro Cuore. Born in the Dolomites in 1988, he speaks Italian, English and French.

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