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View from Brussels: Enough climate cash to avoid a climate crash?

Coal miners, peat farmers and steel workers all stand to benefit from a new tranche of funding unveiled by the EU on Tuesday (14 January), aimed at helping Europe go green. Yet the amount of money on the table has already been criticised.

The EU institutions are on an environmental kick, unveiling new plans and policies to curb emissions and clean up the air. Good intentions are one thing; hard cash to back them up is another.

Before Christmas, the European Commission - the executive branch of the EU - debuted its so-called Green Deal, which aims to slash pollution, electrify transport networks and create thousands of jobs in the process.

The list of ideas in the Green Deal box is a mile long, as is the bill to pay for them. In-house estimates put the costs at around a quarter of a billion pounds every year up until 2050. On Tuesday (14 January), Commission heads presented a first stab at covering some of those costs.

Under its so-called ‘Just Transition Mechanism’, EU countries will split a pot of €100 billion over the next decade, drawing on a mixture of actual cash, grants and assistance from the bloc’s bank, the EIB.

The man tasked with overseeing climate policy for the next five years, Frans Timmermans, said the plan is a message “to the coal miners, the peat farmers and the oil shale workers” to show that the powers-that-be know that going green will have negative effects on many workers.

A grandson of a coal miner himself, Timmermans was clear that “there is no future in coal” and told MEPs that anyone who wants to keep subsidising the production of the fossil fuel will be making a mistake.

However, the Commission’s ambition does not match its financial clout, according to many of the initial reviews of the fledgling policy, which still has to run the gauntlet of the national budget hawks. It may therefore be diluted further.

Environmental groups largely welcomed the gesture, but the likes of Friends of the Earth and Greenpeace warned that eligibility for funding should be linked to how seriously countries are taking their climate pledges.

“MEPs and EU countries must improve the proposal so that regions show how and by when they will get free from gas, oil and coal,” said WWF Europe.

Some of the countries most affected by the costs of the energy transition, like Hungary and Poland, have their own gripes with the plan, as in its current form all EU members will be able to apply for a slice of the pie.

Meanwhile, Czech Prime Minister Andrej Babis told Brussels-based reporters that the fund should only be accessible to a select few. National diplomats have in the past suggested that only the poorest 10 countries should be eligible.

Germany, Italy and Spain have their own designs on the fund, though. The Bundesrepublik will be keen to boost its large coal regions with extra cash, while Italy has suggested submitting projects based on areas where steel and plastics production is starting to flag.

Spain meanwhile wants to push the envelope further still by securing funding for mining areas that have already started to see deindustrialisation, in order to recoup investments already made.

Of course, that is a bone of contention which the UK will likely not have to deal with, given the imminent Brexit date of 31 January. Regions such as west Wales, among the poorest in Northern Europe, would have been a shoe-in for funding, budget experts told E&T.

That is because the Commission will decide who gets the lion’s share of the money pot based on how carbon-intensive regions are, giving priority to areas that fall below the EU’s average income level.

Trade unions are worried that if the executive branch does not keep applications in check, the miners, farmers and workers mentioned by Timmermans will be left on the sidelines.

“There is a risk that most of the funds being made available will go to research and innovation rather than directly benefiting affected workers,” warned the ETUC group after the fund was revealed.

There are hopes that countries will nevertheless draw up plans that prioritise reskilling workers, particularly to do jobs in the clean energy sector. Industry group WindEurope pointed out that it is already doing just that in Romania and, soon, Poland.

Now we have to wait and see what tinkering and tweaks will be done to the initial idea over the course of the next few months. The ‘just transition’ will have to wait a little longer.

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