On Tuesday the European Union announced its plan to dedicate a quarter of its budget to tackle climate change and attract investment to the tune of €1 trillion to create an environment-friendly economy for EU in the next 10 years.
The plan tries to establish a roadmap by which the EU can be the first carbon-neutral continent in the world by 2050. The new plan comes with a mechanism to help regions that’s primarily dependent on carbon-based industries.
Von der Leyen, the president of the European Commission (EU’s executive wing) has made the fight against climate change as her prime priority. The newly revealed plan aims to deliver her vision of making EU carbon neutral by 2050.
Half of the investment needed to make the transition will come from the EU budget. The private sector will be providing €300 billion and €100 billion from the side of national governments.
The mechanism would allocate cash based on specific criteria such as how many people work in coal mining or shale gas in any given region. Money could be spent on “re-skilling” workers or “investment in new productive activities”, EU officials said.
Member countries will have to put forward plans to restructure their economy to be low-carbon and then be signed off by the Commission to qualify for the money. The commission has also set aside another €7.5 billion from the 2021-2027 budget to act as seed funding to generate 100 billion euros more in investment.
EU leaders had agreed last month to make their economy carbon neutral by the middle of the century. But Poland which depends on coal for energy did not immediately agree on the timeline as such a shift will not easy for them. The new plan will be the arsenal by which Von der Leyen will have to convince countries like Poland.
“The transformation ahead of us is unprecedented. And it will only work if it is just – and if it works for all,” said Ms von der Leyen.
“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.
The final amount of financing from the plan will depend on discussions between EU countries during the next multi-annual EU budget.