European Commission announces the Green Deal’s ‘Just Transition Mechanism’ towards a climate-neutral economy

epa08126565 European Commission President Ursula von der Leyen delivers her speech during a presentation of the programme of activities of the Croatian Presidency at the European Parliament in Strasbourg, France, 14 January 2020. EPA-EFE/PATRICK SEEGER

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Ursula Von der Leyen announced that the mobilisation of at least €1 trillion, will show the direction and unleash a great investment wave.

“People are at the core of the European Green Deal, our vision to make Europe climate-neutral by 2050. The transformation ahead of us is unprecedented. And it will only work if it is just – and if it works for all.” European Commission President Ursula Von der Leyen said this when she announced the Commission’s plans to finance the green deal transition.

“We will support our people and our regions that need to make bigger efforts in this transformation, to make sure that we leave no one behind. The Green Deal comes with important investment needs, which we will turn into investment opportunities”, she said,

The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. While all regions will require funding and the European Green Deal Investment Plan caters for that, the Mechanism provides targeted support to help mobilise at least €100 billion over the period 2021-2027 in the most affected regions, to alleviate the socio-economic impact of the transition. The Mechanism will create the necessary investment to help workers and communities which rely on the fossil fuel value chain. It will come in addition to the substantial contribution of the EU’s budget through all instruments directly relevant to the transition.

The European Union is committed to becoming the first climate-neutral bloc in the world by 2050. This requires significant investment from both the EU and the national public sector, as well as the private sector. The European Green Deal’s Investment Plan – the Sustainable Europe Investment Plan – presented today will mobilise public investment and help to unlock private funds through EU financial instruments, notably InvestEU, which would lead to at least €1 trillion of investments.

The EU budget chief said the bloc needs to invest dedicated funds to avert a “climate crash” as Brussels detailed how it planned to pay for a trillion euro push to cut net C02 emissions to zero by 2050 and protect member countries dependent on coal.

The financial challenge for Europe is huge: the European Commission executive arm estimates that halving emissions by 2030 would require 260 billion euros (£222 billion) of investment a year in the energy, transport and construction sectors.

Executive Vice-President for the European Green Deal, Frans Timmermans, said: “The necessary transition towards climate-neutrality is going to improve people’s well-being and make Europe more competitive. But it will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others. The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, added: “For Europe to transition to a climate-neutral economy, we need both political commitment and massive investments. The Green Deal shows our determination to tackle climate change, which we are now backing up with a funding plan. First, we will use the EU budget to leverage private funds for green projects across Europe and support the regions and people most affected by transition. Second, we will create the right regulatory incentives for green investments to thrive. Last but not least, we will help public authorities and market players to identify and develop such projects. The European Union was not built in a day. A Green Europe will not happen overnight. Putting sustainability at the heart of how we invest requires a change of mindset. We have taken an important step towards achieving this today.”

Via European Commission

 

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