The 1.85 trillion € EU budget and its alignment with the climate targets
July 17, 2020
Climate & Company has been mandated by Agora Energiewende for a critical review of the potential contribution of the European Commission (COM) proposal (27 May 2020) for an EU Recovery and Resilience Programme and a new Multiannual Financial Framework (MFF) to achieving the objectives of the Green Deal and the 2030 and 2050 climate targets. In this analysis we want to develop a deep understanding about the role of the EU recovery package and the MFF in boosting a green recovery after the 2020 Covid-19 crisis.
Whereas Agora Energiewende’s report “Recovering Better! Climate-safeguards for the proposed EU’s 1.85 trillion Euro Budget” is published separately and contains key findings and policy suggestions, this report presents the analytical backbone of the key findings including sectoral discussions.
Against the backdrop of the EU climate and energy targets (in particular the envisaged 50-55%-GHG-emission reduction target for 2030) and the objectives laid down in the Green Deal, our assessment focuses on four sectors central to the climate and energy transition, namely the building, industry, electricity and transport sector. These sectors have a high-carbon intensity (representing 82% of total EU GHG emissions in 20161), are of particular economic importance (33% of EU GDP2) and are furthermore key to decarbonise other sectors (e.g. by providing low-carbon electricity). The sector choice has been made with particular emphasis on key transition technologies identified in a previous publication by Agora Energiewende and Agora Verkehrswende3. Further discussion on the significance of the sectors for both the low-carbon transition as well as their relevance for green stimulus package can be found in the Agora report.