“The European Green Deal is at the core of the European Commission’s political priorities,” says Dr Joanna Drake, Deputy Director-General for Mobility and Environment within the European Commission.
With an objective to tackle climate change and other environmental challenges in a systemic manner, the Green Deal is also a growth strategy, “aiming to transform the EU into a fair and prosperous society, with a modern, resource efficient, climate neutral and competitive economy where economic growth is decoupled from resource use.” It is also intended to protect, conserve and enhance the EU’s natural capital, and protect the health and well-being of citizens from environment-related risks and impacts.
“Since the 1970s, the EU has developed comprehensive and ambitious environmental legislation covering all domains: air quality, water, waste, protected areas (Natura 2000), climate change and renewable energy,” Dr Drake expounds, but the pressures on the environment are increasing in such a way so as to render these efforts insufficient. “It is therefore urgent to act even more strongly, urgently and in a more coordinated way, especially between policies,” she says.
Speaking on behalf of European business, Alexandre Affre, Deputy Director-General of BusinessEurope, affirms that European business is fully on board with the ambition of reaching netzero greenhouse gas emissions to reach the objectives of the Paris Agreement and shift Europe to a fully functioning circular economy, and is fully engaged in making the European Green Deal a success.
However, he insists that “making Europe the first climate-neutral continent calls for a massive transformation of the economy,” and laments that there are still many questions. “For instance, Europe has a big financial gap (€260-270 billion/year) to reach its existing 2030 climate and energy targets, and most of it will have to be covered by businesses. Competitors clearly do not have these same costs.
As long as they do not, we need to think about additional safeguards,” he quips, adding that apart from this, a climate-neutral Europe will be a more electrified Europe. “Energyintensive industries will use at least three to four times more electricity between now and 2050. However, the EU’s electricity prices are significantly higher on average than in other G20 countries,” he warns, stating that “we stand ready to work with EU policy-makers to address these and other issues to drive Europe to a climate-neutral economy.”
When it comes to Malta, Minister for the Environment, Climate Change and Planning, Aaron Farrugia, speaks of the change in mindset required for the country to do things in a more sustainable way, calling for a paradigm shift towards policy-making which centres around intelligent development principles.
“One way to achieve this is through more sustainable production and consumption patterns. We need to change our habits and be more conscious in the choices we make,” he says, maintaining that while Malta does not have economies of scale within its domestic market to influence the demand and supply of green products and services, it should subscribe to instruments such as green public procurement in order to foster this change within its own territory.
“At a development level, it is important to factor green and blue infrastructure in our planning system with a view to move towards offsetting the environmental impact of physical development, thereby contributing to enhanced well-being and a more resilient environment,” he continues.
“Meanwhile, Government is committed to continue supporting our industries and society in general in this transition,” Minister Farrugia says, pinpointing one key challenge as being the consumption of single-use plastic products. To combat this, he highlights Government’s ban on certain single-use plastic items starting from next year, as well as the beverage container refund system. But these alone are not enough. “More mechanisms to which a refundable deposit is attached are warranted in order to divert selected waste streams to appropriate methods of treatment which valorise the material and extend its lifetime within the economy,” he says.
Asked whether Malta is prepared to make the necessary reforms to meet the EU Green Deal measures, Minister Farrugia highlights that the most imminent targets are related to climate change. “Malta is already the lowest emitter per capita in the EU, as most of its gross value added is generated through the services industry. Indeed, we experienced a huge drop in emissions in 2015 when we switched our electricity generation from heavy fuel oil to gas,” he says.
However, this is not enough to meet our climate targets. “Our potential to curb emissions in a cost-effective manner is very low and hence our options are limited,” the Minister laments, explaining that Malta’s main emitting sectors are transport and energy consumed in buildings, and the island’s ability to reduce emissions from these is hindered by its size and external factors.
In so far as transport is concerned, he says that while Government is assessing the necessary conditions to enable a transition towards sustainable mobility, “the known option available to curb emissions from land transport in the short to medium term is a shift towards net zero-emissions vehicles. Government grants are already available for this purpose, but the price remains a challenging issue for our citizens.”
Minister Farrugia goes on to highlight solar farms and tightening of building regulations to make buildings more energy-efficient as other possible solutions.
Certainly, the EU Green Deal is not an environmental strategy in isolation, but also an economic one. And while Malta’s impact on the climate as a result of these reforms will be negligible, they may have a huge impact on its economic competitiveness. Speaking of the benefits Malta stands to reap, Minister Farrugia outlines one key benefit: attaining sustainable development for a better quality of life. “Sustainable development can only be achieved if the three pillars – economy, social and environment – are maximised,” he says, asserting that while economic growth remains a priority, it should not come at the expense of the socio-environmental aspect.
“It is important that the European Green Deal is not seen as an environmental model of sorts but is marketed as a sustainable and resilient solution to the development of Europe – a development which greens business models not only in terms of the products and services which are offered but also how these are delivered,” he says, adding that it must also look at well-being as a key ingredient of economic success.
Moving on to the topic on everyone’s lips in recent months – what about COVID-19? Will the current crisis brought about by the pandemic impact the Green Deal’s timeline or ambition?
Dr Drake contests that the European Commission’s attention may currently be focused on addressing the COVID-19 crisis in its health, economic and social dimensions, but the environment and climate crisis cannot be neglected. “The pandemic’s impact on our health, societies and economies is profound and long-lasting. However, this difficult moment offers us an opportunity to lay the groundwork for a new normal with resilience, fairness and sustainability at its core,” she maintains. “The coronavirus is giving us a sobering taste of how future climate and environmental crises will look like,” Dr Drake adds.
Mr Affre seconds this, maintaining that COVID-19 does not change BusinessEurope’s commitment to making the Green Deal a success, but, more than ever, these ambitions need to be accompanied by a strong business plan. “There needs to be significant public support to help deploy key low-carbon technologies such as batteries, hydrogen, low-carbon liquid fuels, off-shore wind or carbon capture and storage, in order to reach the scale where they become increasingly competitive. That is why the Green Deal ambition has to be deeply anchored into the European recovery plan, making sure that it secures investments in financing energy, environment and climate programmes,” he says.
“The COVID-19 crisis is significantly reducing member states’ economic growth and is forcing companies to reduce capital expenditure by the billions. A robust analysis of the impacts of a serious socioeconomic downturn on the ability for Europe to reach the Green Deal ambitions, and what the possible remedies are, is therefore essential,” Mr Affre continues.
Minister Farrugia firmly believes that returning to the way things were pre-COVID-19 is not an option. “The new normal being contemplated should be one which prioritises green and blue economic niches in a manner that they may become attractive to industry and businesses for a logical migration thereto,” he adds. “A migration to greener technologies cannot come at the expense of a regressive economic policy but neither can economic recovery come at the expense of socio-ecological considerations. Thus, it is important to achieve that delicate balance that will nudge our economy to one which is decoupled from environmental and societal degradation, and which intrinsically increases our resilience to future shocks.”
Meanwhile, the Chairman of the Malta Chamber’s Sustainability Committee, Adrian Mallia, believes that the work of the Chamber is directly in synch with the ambitions of the European Green Deal, referencing its recent Economic Vision for Malta, which proposes an economic blueprint to Government to sustain and assure a sustainable and competitiveness-based economy for the future.
Speaking of how COVID-19 will impact matters, Mr Mallia maintains that the crisis has obviously had a significant impact on the economy of all European countries and on the viability of business in general, especially in the short-term. “As a result, there will likely need to be a rethink in the ambition or timeline for the delivery of the European Green Deal, but we do not expect the Green Deal to be shelved,” he says, adding that this would be “a huge mistake”, and that the environmental benefits resulting from the COVID-19 pandemic should be built upon and enhanced to create a new and more sustainable normal.
Turning his attention to how businesses can contribute to the transition of a green economy, Mr Mallia affirms that, within a green economy, growth in income and employment can be generated through strategic investments that reduce GHG emissions, improve resource efficiency, and reduce the loss of biodiversity.
“Climate change challenges affect society and ultimately also businesses. Businesses fail if society fails, as it is difficult to separate community well-being from company viability and economic growth. The business response to climate change forms part of the transition to a green economy.
This transition can be accelerated by businesses by aligning their investments with opportunities provided by climate change adaptation, thereby greening the economy,” he attests, arguing that the private sector has much to contribute to the development and implementation of climate change strategies, including sector-specific expertise, technological innovation, financing, resource efficiency and promotion of the circular economy, improved design to increase durability and recycling, and entrepreneurial spirit.
This features was first carried in the July edition of Business Agenda