A recent report by the European Commission’s Joint Research Centre (JRC) highlights a lack of progress towards the European Green New Deal, the EU’s framework for achieving climate neutrality by 2050. The European Green New Deal contains 154 targets spanning across the energy and transportation sectors, the circular economy, and biodiversity with a 55% emissions reduction target for greenhouse gasses (GHG) by 2030. Currently, only 32 of 152 targets are on track to be met, indicating a substantial need for regional focus and renewed investments.
Why It Matters
Modest Achievement: While progress is ongoing, achievement has stalled in recent years as 41% of targets require accelerated investment to meet initial goals.
Gaps in Contribution: Among EU member states, some nations are contributing to progress faster than others, leading to gaps in measurable outcomes.
Investment Gaps: Europe has made substantial strides in climate-impact policy; however, these advances have been unmatched by banks as the EU must invest €1.2 trillion annually until 2030 in order to reach the 55% GHG reduction target.
Details
The European Green New Deal, approved in 2020, is a collection of 152 policies aimed at achieving neutrality in the EU by 2050. The policy-plan, if successful, would make the EU the globe’s first “climate-neutral bloc.”
Progress has been unexpectedly slow; the European Commission’s JRC reports that only 21% of targets are on track to be met. Of the 122 targets not on track, 64 need accelerated progress to successful meet goals, 15 targets have stalled or are regressing, and 43 targets have insufficient data.
Substantial achievement has been made within renewable energy, but energy efficiency at large requires further investment. Simultaneously, sustainable transportation initiatives have faltered as emissions are actually increasing in some areas. Circular economy measures are making slow progress, particularly in recycling and resource efficiency; however, this progress is uneven across the EU bloc. Tragically, biodiversity targets are in urgent need of investment as pollution continues to rise and protections are not sufficient.
Despite policy announcements and clear steps towards achieving these targets, there have been several challenges surrounding implementation that have led to this lack of progress. There have been gaps across member states, particularly in funding. Industries have been slow to adapt to new regulatory policies, leading to continued pollution.
Green investment is critical for Europe to achieve the goals of the Green New Deal. A report from the European Central Bank highlights that the EU is well behind on reaching many of its targets due to a lack of financing to achieve the ambitious goals. Most notably, the 2030 emissions reduction target will require €1.2 trillion annually until 2030. Throughout the 2010s, an average of €764 billion was invested annually to reduce GHG emissions
To reach these targets, Europe must invest up to 3.7% of its GDP annually within sustainability projects, underscoring the key role of financial institutions and banks in achieving the Green New Deal. Unfortunately, high loan costs and a lengthy regulatory approval process have limited private sector financing. Green lending is slowly growing, but the risk of sustainability projects deters many institutions.
In a time where US sustainability commitments are being rolled back en masse, European inaction is becoming all the more costly. Policy changes are necessary to supercharge green lending and reduce the strangling bureaucratic red tape. The next five years will be key in determining the success of the Green New Deal and potentially, the future of our planet. European governments must work alongside private sector financial institutions to make up the financing gap.
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