- National Rally defeat in France still leaves Green Deal vulnerable
- EU needs private sector to step to fill investment gaps
- Bloc facing ‘mother of all battles’ to diversity away from fossil fuels
The EU will need to spend big on renewable energy sources to make the Green Deal work
The European Green Deal could still fail despite the surprise defeat of the National Rally in the French elections, and the EU will need billions more in private sector investment to achieve net zero carbon emissions by 2050.
According to Antoine Oger, Director of Research at the Institute for European Environmental Policy, the EU is facing “the mother of all battles” as it looks to diversify investments away from fossil fuels.
To win this battle, the sustainability sector needs to be made “more attractive” for the private sector to fill the investment gaps governments can’t meet.
Speaking to The Eco Experts, Oger said even though the bloc received a boost when National Rally surprisingly lost the French parliamentary elections on 7 July, it’s far from certain that the EU will reach its goals.
Describing the results of the French elections as “very good news”, Oger said there would now be no one “actively opposing” the Green Deal, which means much of the programme will continue unhindered.
Despite this, the EU will require huge amounts of public and private money to make Europe the world’s first carbon neutral continent.
Launched in 2019, the Green Deal is a package of policy initiatives, which aims to set the EU on the path to a green transition, with the ultimate goal of reaching climate neutrality by 2050.
National Rally stated in its manifesto that it wanted to take France out of the Green Deal had it won the election.
The money the EU needs to put into renewable technologies and electrification of the energy grid will stretch into “several hundred billion pounds a year” and mean close collaboration with the private sector.
When asked what technologies should be invested in, Oger said that every EU member state will have its own priorities, such as France with nuclear and Germany with solar and it is a “question of policy mix”.
“We have to be supported by private investors,” Oger said, insisting that this is necessary because national governments cannot muster the necessary levels of spending for the energy transition.
Working closely with the private sector is a “contentious point” and “not the easiest one to regulate,” Oger accepted, but it is necessary because governments cannot achieve net zero on their own.
“It is a question of infrastructure, there needs to be public investment in the infrastructure and once this heavy lifting is done by the state then the private sector can come in and fill the investment gap.”
“Right now we’re not there, and we need several hundred billion pounds a year.”
A good example of the necessary balance between public and private sector funding are the proposals of the new Labour government, which wants to turn London into the green finance capital of the world and encourage the Bank of England to attract global investment in renewable innovations and technologies.
Oger said while the new UK government’s stance on net zero was “very positive” there are still questions regarding its ability to pay for the green transition, which is common across Europe.
“The private sector is not evil, operators are simply diverting their investment decisions based on business opportunities and risk assessments, so it is a question of the regulators making the sustainability sector more attractive or even risk free.”
Despite the monumental challenges ahead, Oger believes it is still feasible that the Green Deal can be a success, but he warned the EU is “running out of time” to do so.
“From a scientific perspective it is feasible, but from a political perspective, it will be an extraordinary challenge.”
