During the coronavirus pandemic economic activity slowed, causing a reduction in carbon emissions but leaving the EU facing recession. In a resolution adopted on 15 May 2020, Parliament called for an ambitious recovery plan with the Green Deal at its core.
In response, the European Commission came up with Next Generation EU, a €750 billion recovery plan. The plan, along with the next EU long-term budget which still needs to be approved by member states and Parliament, aims to build a greener, more inclusive, digital and sustainable Europe and increase resilience to future crises such as the climate crisis.
In November 2019, the Parliament declared a climate emergency asking the Commission to adapt all its proposals in line with a 1.5 °C target for limiting global warming and ensure that greenhouse gases emissions are significantly reduced.
In response, the new Commission unveiled the European Green Deal, a roadmap for Europe becoming a climate-neutral continent by 2050.
Financing the green transition
In January 2020, the Commission presented the Sustainable Europe Investment Plan, the strategy to finance the Green Deal by attracting at least €1 trillion worth of public and private investment over the next decade.
Half will come from the EU budget and €25 billion is expected to come from the EU Emissions Trading Scheme.
The Just Transition Mechanism, which should mobilise at least €100 billion over 2021-2027, will help alleviate the socio-economic impact of the transition on workers and communities most affected by the shift. In May 2020, the Commission proposed a public sector loan facility to support green investmentsin regions dependent on fossil fuels. It still has to be approved by the Parliament.
To encourage investment in environmentally sustainable activities and prevent companies falsely claiming their products are environmentally friendly – practice known as green-washing -Parliament adopted new legislation on sustainable investments on 18 June.