Green transition as a complex European growth strategy

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The EU-wide directions towards green transition represent novice politico-economic trends which include a set of nine vital sub-strategies, with each having an important as well as complicated implementation structure on the EU member states’ national level. 

     The “green transition’s” idea has quite a short history: first communication was evident in 2019, followed by the European Green Deal plan approved in 2020; the latter represents a set of political-economy’s “instruments” and legal initiatives by the EU institutions with the main goal of making the EU member states climate neutral by 2050. It has to be added that there is a specific sphere of EU legislation called “climate law”.
The “green transition” includes, among other things, a review of existing EU-wide legislation on “climate neutrality” in national development patterns and introduction of new legislation on sustainability, circular economy, construction and renovation, biodiversity, farming, education, science and innovation, etc. The “green” legislative package also includes proposals to revise climate- energy- and transport-related legislation, and put in place new legal instruments to align the EU-wide laws with the European climate ambitions.
On “green legislation” in: https://www.consilium.europa.eu/en/policies/green-deal/

     Note: main greenhouse gases are carbon dioxide and methane. The vast majority of anthropogenic carbon dioxide emissions come from combustion of fossil fuels, principally coal, petroleum (including oil) and natural gas. Additional contributions come from cement manufacturing, fertilizer production, and changes in land use like deforestation. Methane emissions originate from agriculture, fossil fuel production, waste, and other sources.
Source: https://en.wikipedia.org/wiki/Greenhouse_gas; and Fox A. Atmospheric Carbon Dioxide Reaches New High Despite Pandemic Emissions Reduction. – Smithsonian Magazine, June 2021. In: https://www.smithsonianmag.com/smart-news/atmospheric-carbon-dioxide-reaches-new-high-despite-pandemic-emissions-reduction-180977945/

     According to the UN climatic change report of 2023, burning fossil fuels and using unsustainable energy sources have increased global temperatures to unprecedented levels threatening global sustainability. The UN report proposes a hasty and collaborative approach to deploy effective and equitable climate action plans to reduce damage to nature and people and transform the unpredictable climatic patterns to secure a sustainable future for all.

     Green transition, GT supports a long-term member states’ transformation into fair and prosperous societies with sustainable and competitive economies. It also underlines the need for a holistic and cross-sectoral approach in which all relevant policy areas contribute to the ultimate climate-related goal. The GT’s package includes initiatives covering the climate, the environment, energy, transport, industry, agriculture and sustainable finance: all these socio-economic sectors are strongly interlinked.
With the European Green Deal Communication in 2019, the Commission reinforced its climate ambitions, setting an objective of net zero emissions of greenhouse gases in 2050. The European Climate Law in force since July 2021, which enshrines the 2050 climate neutrality objective and introduces the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, sets the ground for the “Fit for 55” legislative proposals presented by the Commission on 14 July 2021. Among these proposals, the Commission has presented amendments of the Renewable Energy Directive and the Energy Efficiency Directive with more ambitious binding annual targets to increase the production of energy from renewable sources and reduce energy use at EU level.

“Green deal” package: composition
The package of initiatives includes the following goals:
= “Fit for 55” legislation (i.e. at least 55% of net emissions shall be cut by 2050, compared to 1990 levels) represent a set of proposals to revise climate-, energy- and transport-related legislation and put in place new legislative initiatives to align EU laws with the EU’s climate goals.
= European climate law regulation aimed at reaching climate neutrality by 2050.
= adaptation to climate change: i.e. transforming the member states’ growth into climate-resilient societies which are fully adapted to the unavoidable impacts of climate change by 2050.
= EU biodiversity strategy to help recover member states’ biodiversity by 2030 in order to bring benefits for people, the climate and the planet.
= “Farm to fork” strategy, which aims to help the EU states to achieve climate neutrality by 2050 by shifting the current EU food system towards a sustainable model. In addition to food security and safety, the strategy’s main goals are to: a) ensure sufficient, affordable and nutritious food within planetary limits; b) support sustainable food production, and c) promote more sustainable food consumption and healthy diets.
On diets in: https://integrin.dk/2023/03/06/global-and-European-food market.
= European industrial strategy is aimed at supporting the industry’s role in the member states’ economies as an accelerator and enabler of change, innovation and sustainable growth. It strives to enable EU-wide industry to lead the green and digital transformation and become the global driving force in the shift towards climate neutrality and digitalisation.
= New circular economy action plan, with over 30 action points on designing sustainable products, on circularity in production processes and empowering consumers. It targets such sectors such as electronics and ICT, batteries, packaging, plastics, textiles, construction and food (production and processing).
= New mandatory requirements for batteries: the proposal aims to address the whole life cycle of batteries from the production process to design requirements as well as ‘second life’, recycling and incorporating recycled content into new batteries (industrial, automotive, electric vehicle and portable) placed on the EU market.
= Just transition mechanism, JTM to provide financial and technical support to the EU-regions most affected by transition towards a low-carbon economy; with an initial budget of €17.5 billion, the just transition fund provides tailored support to alleviate the social and economic costs resulting from the green transition for regions dependent on fossil fuels and high-emission industries. It is expected that the JTM will help mobilise at least €65-75 billion over the period 2021-2027.
= Clean, affordable and secure energy. As soon as 75% of European greenhouse gas emissions come from energy use and production, the decarbonisation of the energy sector is a crucial step towards a climate-neutral EU. There are several aspects in this direction: a) supporting development and uptake of cleaner energy sources (e.g. renewable offshore energy and hydrogen), b) fostering integration of the EU-wide energy systems, c) developing interconnected energy infrastructure via EU-wide energy corridors, and d) revising present legislation on energy efficiency and renewable energy, in view of the 2030 targets.
= Sustainable chemistry’s strategy: chemicals are essential to modern living standards and the economy; however, chemical substances can be harmful to people and the environment. Thus, the EU chemicals strategy for sustainability sets out a long-term vision for the EU chemicals policy, wherein the EU member states want to: a) better protect human health, b) strengthen the industry’s competitiveness, and c) support a toxic-free environment.
= EU forest strategy: as one of the flagship elements of the European GT, the forest strategy for 2030 (presented by the Commission in July 2021), builds on the EU’s biodiversity strategy and forms a key part of efforts to reduce greenhouse gas emissions by at least 55% by 2030. The proposed measures include: a) promoting sustainable forest management, b) providing financial incentives for forest owners and managers to adopt environmentally friendly practices, and c) improving the size and biodiversity of forests, including by planting 3 billion new trees by 2030.
All references to: https://www.consilium.europa.eu/en/policies/green-deal/

Creating global markets for net zero: some vital issues
Carbon emissions are a major contributor to global warming and premature deaths due to air pollution and cost the global economy the equivalent of the combined GDP of India, Canada, and Mexico. But how much do investors care? A new study shows how stock markets respond to companies’ efforts to limit their carbon emissions and suggests ways to further enlist investors in the fight against climate change.
Achieving net zero emissions is necessary to avert a climate catastrophe. And getting there in time to meet the goals of the Paris Agreement on climate change will require both massive and transformative actions in global and European economy. Practices, production, and supply chains will all need to move away from fossil fuels, while land degradation and other sources of emissions must be curbed as we move towards clean energy, clean manufacturing, and sustainable land use. This global net zero transition will require major investment; it presents many opportunities for businesses. Ultimately, it also calls for collaboration at all levels of society – including national governments, local authorities, people and businesses.
Some 11 industrial clusters are part of the so-called initiative on “transitioning industrial clusters towards net zero”; these clusters, despite facing unique geographical, infrastructure, policy and sectoral challenges, have all developed comprehensive strategies to rapidly and equitably decarbonize their operations.
At the World Economic Forum Annual Meeting 2023, the energy crisis was a big theme with its links to the challenges of climate change, geopolitics and the cost of living; the theme has come to be known lately as the “polycrisis”. Hence, presently, the global conversation on energy in Davos has slightly changed and even turned into climate mitigation efforts and the energy transition has become a firmly centre-stage aspect in national governance.
For example, altogether, aviation is currently responsible for 2.5% of global emissions: without reducing emissions, demand could soar three times by 2050. Thus, about 65% of the way to net zero will come from switching to sustainable aviation fuels, SAF; its production uses a fraction of the carbon footprint generated by petroleum fuel.
Shared mobility is another example: e.g. ride-sharing services and e-scooters; that could be key tools in the pursuit of net-zero emissions in modern growing cities. But outdated or regressive attitudes and approaches towards the urban mobility sector too often restrict its growth; the process can even endanger the peoples’ safety and hold back decarbonisation.
Quite interesting is Czech example: the European Commission has approved under the EU State aid rules at the end of April a €401 million scheme to promote green district heating based on renewable energy and waste heat in the Czech Republic. The measure will contribute to the implementation of national energy and climate plan; it will coincide with the EU’s strategic objectives relating to the European Green Deal.

Climate-neutral European strategy for 2050: effect for the Baltic States
The Baltic States can lead the way to climate neutrality by investing into realistic technological solutions and aligning action in such areas as industrial and agricultural policies, finance and research, etc. while ensuring socio-economic fairness during the transition.
At the end of 2018, the Commission adopted the strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy by 2050; so-called “A Clean Planet for All” program. The strategy shows how Europe can lead the way to climate neutrality by investing into realistic technological solutions, empowering citizens, and aligning action in key areas such as industrial policy, finance, or research – while ensuring social fairness for a just transition.
The strategy is built on the new energy policy framework established under the “Clean Energy for All: European package”. The package empowers European consumers to become fully active players in the energy transition and fixes two new targets for the EU for 2030: a) a binding renewable energy target of at least 32%, and b) an energy efficiency target of at least 32.5%, with a possible upward revision in 2023.
For the electricity market, it confirms the 2030 interconnection target of 15%, following on from the 10% target for 2020. These ambitious targets will stimulate Europe’s industrial competitiveness, boost growth and jobs, reduce energy bills, help tackle energy poverty and improve air quality.
When these policies are fully implemented, they will lead to steeper emission reductions for the whole EU than anticipated – some 45% by 2030 relative to 1990 (compared to the existing target of a 40% reduction).
More on the package in:https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/clean-energy-all-europeans.

   The purpose of the EU-wide and long-term strategy is not to set targets, but to create a vision and sense of direction, plan for it, and inspire as well as enable stakeholders, researchers, entrepreneurs and citizens alike to develop new and innovative industries, businesses and associated jobs. The strategy suggests some options available for the Baltic States’ governments, business community and citizens to contribute to the modernisation of national economies and improving the citizens’ quality of life. The long-term strategy also seeks to ensure that such transition’s efforts shall be socially fair and enhances the competitiveness of the Baltic States’ economy and industry on global markets, securing high quality jobs and sustainable growth, while also helping address numerous environmental challenges, e.g. the air quality, waste management and promoting biodiversity.
The road to a climate neutral economy in the Baltic States would require joint action in seven strategic areas: – energy efficiency, – deployment of renewables, – clean, safe and connected mobility, – competitive national industry and circular economy; – infrastructure and interconnections, – bio-economy and reducing natural carbon; and – carbon capture and storage to address polluting and harmful emissions.
In the perspective, the Commission’s strategic action plan provides the Baltic States’ governing institutions, the business sector and local communities with management instruments to ensure active participation in coordinated development. The EU-wide information debate would follow to allow the EU states to adopt and submit ambitious national strategies by early 2020, in time for the United Nations Framework Convention on Climate Change.

    Note. Other documents and weblinks on the matter: = EPSC study “10 Trends reshaping Climate and Energy” (December 2018); = A Clean Planet for all – A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy; = In-depth analysis accompanying the Communication (28 November 2018); = Press release; = Questions and Answers: Long-term strategy for Clean Planet for All; = Report by the High-Level Panel of the European Decarbonisation Pathways Initiative.
Other related links: = 2050 long-term strategy website; = 2030 Energy Strategy; = 2050 Energy Strategy (adopted in 2012).
General source: https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/2050-long-term-strategy%20?pk_campaign=ENER%20Newsletter%20December%202018

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