The EU is intending to use its post-pandemic recovery plan to reinforce its fight against climate change. About 30% of the “Next Generation EU” €750 billion fiscal plan to aid the post-COVID-19 recovery would target climate-friendly projects, according to European Council President, Charles Michel’s latest proposal. This translates to a potential of €225 billion of additional green financial instruments, reinforcing the EU Green Deal’s pledges.
Even if, according to the European Commission, this is still too little to bridge the required investment gap of 1.5% of GDP per year to meet 2030 carbon-reduction goals, it is a huge improvement from the €7.5 billion of “fresh money” announced in the Green Deal (see “Related Research” below). The proposed EU budget also contains a pledge to “do no harm”, for which the recently approved EU Green Taxonomy would presumably be leveraged, helping reinforce the EU’s environment-friendly strategy.