A Better Deal for Climate and European Competitiveness: Policy Proposals for the European Centre–Right

Environmental degradation is a fact. The prevailing scientific consensus is that humankind is directly responsible for most of the rising carbon dioxide emissions in the atmosphere and their related negative effects. Within the EU political mainstream, these findings have positively resonated in policy and resulted in the most ambitious climate agenda globally. Most European citizens also recognise the threats of climate change and the need for our society to adapt and move in a more sustainable direction.

Decarbonisation is one of the most important political challenges of this century. The goals that have been set for European carbon neutrality by 2050 are laudable but presuppose the mobilisation of huge financial and material resources, as well as fundamental changes in the economic, industrial, transport, agricultural and energy sectors of European states. Climate spending already dominates the EU’s Multiannual Financial Framework and the post-Covid recovery fund, with hundreds of billions of euros earmarked for the transition. The European Green Deal has a direct bearing on the economic performance of member states and private enterprises, while also becoming ever more present in the lives and pockets of European citizens.

Importantly, the clean energy transition has a direct impact on the EU’s competitiveness and geopolitical clout. Consider the complexity of implementing such a transformative effort in concert with the rest of the international actors, which have all the incentives to free-ride on the efforts of others or delay the transition away from fossil fuels as long as possible.

The decarbonisation destination is set, but the policy routes are many and uncertain. Regrettably, the EU is in a completely different financial and geopolitical position compared to 2019, when the European Green Deal was announced. We already see clear signals that the current framework is neither generating ‘green growth’ nor putting the continent on a fast track towards carbon neutrality. If the EU is serious about its decarbonisation pledges, it needs to rethink its approach.

This paper has two main objectives. First, it briefly addresses the main shortcomings of the Green Deal—the economic costs of the transition and the effect on European energy security and resource scarcity. It also looks into the overly optimistic projections for the renewable energy rollout and the huge investment gap in decarbonisation. More importantly, it puts forward a number of policy recommendations for European policymakers in the new legislative period. Achieving carbon neutrality should remain the long-term goal, but the policy arsenal has to be improved. The European centre–right needs to be actively involved in leading this strategy by crafting a blueprint that is both realistic and achievable and that is shaped by its own vision and political values.