National plans to reset the economy after the Covid-19 crisis fall short of delivering green and just transition. Despite some green elements, there is a real risk of returning to a business-as-usual scenario if the European Commission doesn’t push member states to raise ambitions.
The European Commission has already received national recovery and resilience plans from 14 countries in order to access the bloc’s €750 billion recovery fund. Having passed the submission deadline in April, the remaining plans are expected to be presented also soon.
Brussels will now have two months to scrutinise the plans. Based on the Recovery and Resilient criteria, the EU executive will have to ensure that at least 37% of spending is directed to investments and reforms that support climate objectives, while the remaining 63% respects the principle of do-no-significant-harm.
Early assessments of the plans, however, are proving worrying. The EEB is concerned about the number of green proposals that are far from being really sustainable and about the general lack of a long-term and transversal approach to truly ‘build back better’.
All that glitters is not green
The Green Recovery Tracker, a monitoring platform of national recovery plans launched by the Wuppertal Institute and E3G, show in its first assessment some green positive examples from all countries and sectors. Nevertheless, it also reveals that only 24% of the green spending share is going to activities that fully support the green transition, hence below the threshold of 37%.
At least eight national recovery plans are nowhere near to the target of 37% green spending share, with Poland (18%), Portugal (19%), and Slovenia (5%) among those performing less well.
While most plans fall short on green spending, some are directly including ‘greenwashing’ proposals that may end up in supporting fossil fuels.
Portugal’s recovery plan says too little on sustainable mobility (e.g in cycling measures) but has earmarked €660 million for investments into new roads and highways. Poland also includes €3.2 billion for efficiency measures that could support investments in gas boilers, while worth €244 million in Bulgaria and €600 million in Romania may fall into what will likely be fossil gas infrastructure.
“Building highways or dams or refurbishing gas infrastructure to produce blue hydrogen are neither climate nor environmentally friendly investments”, says Barbara Mariani, Senior Policy Officer for Climate at the European Environmental Bureau (EEB).
Back to the old normal?
Most measures in national recovery plans aim at restoring the economy to pre-Covid levels, rather than reforming it towards long-term sustainability, resilience and social justice.
Countries should engage much more in economic reforms to increase the incentives for investments. Current plans miss proposals on promoting carbon pricing, green public procurement and a systemic reform of environmentally harmful subsidies.
“Green fiscal measures are overall too few and we are still far from a systemic change of our economies which the recovery plans should drive”, point out Mariani.
Some EU governments are planning to use recovery funds to finance previously agreed programmes, rather than to unlock new transformative measures. For example, around 80% of the German plan goes to support previously agreed measures.
To reach the objectives set by the European Green Deal, policy-makers must urgently address long-term systemic reforms. “The recovery funds, which are the biggest green investment plan in EU’s history, provides a once-in-a-generation opportunity to truly transform our economies”, adds Mariani.
Leaving no one behind
The national plans not only lack a broader approach to the environmental crises of today beyond climate but also a holistic approach to sustainable development.
Most measures focus too narrowly on climate and adaptation measures while missing addressing other environmental challenges related to social justice and equity. Investments in renewable energy, for example, might have negative impacts on biodiversity or lack the aspect of a socially just transition if decided in a siloed approach.
“These plans offer at best a tunnel vision on climate-related measures. Their narrow approach does not make sure that investments contribute to sustainability beyond climate, addressing pre-existing gender and social inequalities”, says Patrizia Heidegger, Director of Global Policies and Sustainability of the EEB.
There is a risk that member states will repeat the mistakes made after the 2008 financial crisis and focus on economic recovery only while neglecting social justice, Hedidegger concludes.
EU governments have also failed to properly involve civil society in the design of the plans. The EEB and its partners have witnessed how public participation and consultation with civil society has been rather weak. If not addressed now, the problem is likely to persist throughout the implementation of the plans.
Litmus test for the EU Commission
The ball is now in the court of the EU institutions, with the European Commission in the driving seat as it will have to negotiate effective reforms and measures with EU capitals in the next two months before approving the plans.
The Commission must ensure that 37% of spending is adhered to climate, that the remaining 63% is non-harmful, and that policy reforms are put in place to help build back better and create incentives for a green deal transformation.
The Council will have to endorse the Commission’s decision while the Parliament will have a scrutiny role and can do a ‘check and balance’ on the other two institutions’ deliberations.
The EEB will monitor work around the recovery plans before their approval and will continue to demand more space for civil society to comment on how the EU will spend this money.