Green Deal: chapter 2
Emmanuel Macron certainly made a mistake in calling for a European “regulatory pause” on the environment. In the same speech, he however expressed a truth that is essential to the debate: “Europe and France risk being the best-in-class in terms of regulation, and the worst-in-class in terms of financing”. It went unnoticed but, as highlighted in this I4CE newsletter, the time has come for a debate on how the EU can better finance the climate transition. And there is no time like the present! In precisely one year, on June 9th 2024, hundreds of millions of Europeans will vote for a new European Parliament, that will in term elect a new European Commission that will negotiate the future EU budget.
The debate on the next chapter of the Green Deal has already started. The first chapter focused on making EU regulation and carbon pricing fit for climate neutrality. The second chapter should complement and implement those measures, and focus its new proposals on building a long-term financing and investment plan. With the end of NextGenerationEU in sight, an EU long-term investment plan should support Member States, businesses and families in investing in their own transitions.
Such debate on climate investments is already taking place in France and made the headlines last week, thanks to a report by the economists Jean Pisani-Ferry (also non-executive Chairperson of I4CE) and Selma Mahfouz, commissioned by the Government. The report assesses how much new investment and public funding are needed for the climate transition, and proposes making use of all available options, including debt and tax increases. It has triggered many reactions, and you will find in this newsletter our latest analysis on the matter. Although the French Government has tended so far to rely solely on cuts on other budgetary lines, to finance the transition, it is important to consider all options on the table. They all deserve to be debated, in France and at the EU level.
