What does a #RealGreenDeal look like?

We want you to make sure the new Green Deal is ambitious enough and with sufficient financial resources. The next five years will be defining for a strong European climate policy, and for our future.

In one week, the most important vote of the next five years takes place in the European Parliament; the vote scheduled for 27 November on the intallation of the new European Commission. It is before this vote that the level of climate ambition for Europe for the next 5 years is determined. Currently, the level of climate ambition of the new Commission is too low.

Yes, the new Commission promised a "Green Deal" and a "Climate Law" in their first 100 days, and those are positive steps. However, they lack sufficient ambition, sufficient financial resources and sufficient guarantees that they will ensure a transition that is socially fair.

Now, more than ever, is the time to demand climate guarantees before the vote on the installation of the new European Commission.
There shall be no new European Commission until it is a real Climate Commission.

Not enough ambition, financial resources and social justice

A Real Green Deal must induce transformational change through all of society, as called for by scientists of the IPCC. Concretely, if we want all houses, schools, and factories to be insulated, all transport, farming, and energy to be clean, we can assess how much this costs. Then we can―we must―find ways to make sure this does not add burden to the most vulnerable of our society and instead is paid for by those who have the most financial means.

For a Real Green Deal, how much is 'enough financial resources'?

When working on a scenario of a 40 percent emission reduction target for 2030, the European Commission estimated a gap in funding “of around ​175 to 290 billion euros per year" (​European Commission Communication, 28 Nov 2018​). Now that the target has been raised to 55%, the bill must be increased accordingly.

Already in 2017, the European Court of Auditors quoted figures assessing a need of ​1 115 billion euros in investments per year​ starting in 2021 (public and private). (​European Court of Auditors, 2017, p. 58​)

Meanwhile, the commitments from the new Commission to finance the Green Deal are very far from such amounts: there is a commitment for a Climate Bank but with an increased lending capacity of only approximately… ​€16 billion per year​ by 2025 (corresponding to an increase from 25% to 50% of climate financing by the EIB). Also, they share a commitment for a Sustainable Europe Investment plan which would provide around ​€100 billion per year​, with little clarity on where this money will come from and where it will go. Moreover, there is no promise for a proper climate budget! (​“My Agenda For Europe”, Ursula von der Leyen, July 2019​)

This leads to the conclusion that the financial resources promised for the Green Deal are far too few, somewhere between 2 and 10 times too few, to succeed.

How to make the Green Deal ambitious enough, with enough social justice?

How to find the resources we need for a Real Green Deal, without making the most precarious pay?

As demonstrated by the “Gillets Jaunes”, a policy ran in the name of climate which increases the burden on those who are struggling to make ends meet will simply not work. So, where can we find the colossal amounts needed to invest in rails, clean sea transport, quality passive housing, and renewable energy, without taxing the most vulnerable? In fact, there are quite a number of ways to do that.

Here are ​3 solutions​ that are capable of mobilising such enormous amounts of climate investment, creating millions of jobs​ and improving the livelihoods of millions of households by reducing their energy bill. But those are, of course, not the only solutions.

Not one penny more for fossil fuels

Bank financing for fossil fuels has increased each year since the Paris Agreement. Since Paris, 33 global banks financed fossil fuels with 1.9 trillion USD. (​See 350.org for more details​). If we manage to end fossil finance in Europe, imagine how many billions would become available for a Real Green Deal.

The Climate Law, as part of the EU Green Deal, could prohibit all Member States from continuing to subsidise fossil fuels. It could also oblige all banks (private and public) and insurance companies operating in Europe to be transparent about all their activities and to stop brown investments.

In 2010, in an attempt to fight tax evasion, the former president of the U.S. Barack Obama, passed the FATCA law that closed the US market to banks that did not provide the US tax authorities with full transparency. Similarly, to fight climate change, we need a "FATCA-Climate law" that closes the European market to banks and insurance companies that refuse to redirect their investments.

"If we can save the banks, we can save the world" said Greta

In order to finance a global transformation of our society, to invest in building insulation, public transport, renewable energies, a new model of agriculture, and the protection of biodiversity, Europe could adopt the Climate-Employment Pactsuggested by the association “Act for climate”​.

This pact is supported by hundreds of elected representatives from all backgrounds, but also trade unionists and entrepreneurs, climate experts, and economists from various horizons.

This Pact is based on 2 facts and includes the creation of 2 instruments :

  1. The European Central Bank ​created €2 600 billion since 2015​. Only ​11% of those billions so far went to the real economy​, while most of the rest went to speculation. ​The ECB will create another 240 billion in the coming 12 months​, starting this November. Should these billions go to speculation or to climate?​ Rather than feeding speculation, let us invest this money for climate and jobs.
    For this, we need a ​Climate Bank​ providing interest-free loans to each Member State (up to 2% of its GDP each year for 30 years, as suggested by Nicholas Stern in 2008, which means €300 billion).

  2. At the same time, there has never been as much dividends being distributed to shareholders as today, as corporate tax rates in Europe ​dropped from 45% to 19% in 40 years​.
    A 5% European profit tax on large transnational companies (adjusted according to their carbon footprint) would bring in €100 billion per year​. This would allow a real EU Climate Budget.
    This additional 100 billion would allow us to go over the threshold of 40% of the European budget devoted to the climate.

Let’s end the unfair and harmful tax exemption on aviation fuel

In order to limit the use of air transport for both people and goods, and to muster new resources for the climate-biodiversity budget, we should end the tax exemption on kerosene in the coming year. This could mobilise ​up to €27 billion​ per year for a Real Green Deal, based on a report leaked from the European Commission.