Gennaio 27, 2021

What constitutes a European green recovery?


While the COVID-19 crisis has created colossal socio-economic challenges, it provides a window of opportunity to invest in a greener and healthier future, thus “building back better” and future-proofing Europe. Lessons must be learnt from the 2008 financial crisis, in which monetary policy and cuts lead to weak productivity, a lack of employment opportunities and rising social inequalities. Moreover, recovery packages failed to implement sustainable challenges, therefore locking in the fossil fuel economy (1).


While the resilience-oriented stimulus plan is highly welcomed, further policies following the sustainability test must be envisioned and enacted. In this article, building upon a policy brief released by IEEP last July, we aim to compile different proposals put forward by think tanks and civil organizations on the topic of what policies should be implemented in order to attain a more resilient society in this recovery. Moreover, such policies would allow to keep the momentum going, thus avoiding a loss in much-needed environmental ambition.


  1. Fiscal measures with a long-term vision.

Given fiscal measures’ long-term implications, the EU must step up environmental efforts in this field in order to keep clear of unsustainable lock-ins.


According to a tracker created by Transport & Environment, many EU airlines are still receiving financial support without any binding climate conditions, while the green recovery should be focused, instead, on industries with a high potential of job creation and ecological transformation. Transparency International argues that bailouts given to companies must incentivize responsible tax conduct commitments: in order to achieve this, companies that receive bailouts must not make use of tax havens. Therefore, following Vivid Economics’ recommendation, any government bailout must bring about sustainability-oriented reforms in companies, thus reporting on key targets and indicators.


Furthermore, by eliminating EU fossil fuel subsidies, valued at around €39 billion, the costs of the transition to clean energy would be decreased, saving taxpayers’ money and by-passing carbon lock-ins. Subsidies for air travel like the free EU emission trading system should be eliminated. All these financial flows could be channeled towards investments in clean energy or redistributed to offset the costs of the transition. Green investment has been proved to be labor-intensive, therefore allowing skills maintenance and reskilling of workers, reducing inequality, and providing economic multipliers (1).


Finally, Bruegel shows that increasing the price of future carbon emissions is necessary to encourage broad cooperation in the recovery, since it would adjust market expectations to a future context of higher carbon prices, thus triggering a market adaptation. In order to do so, the ETS and the energy taxation directive must be revised.


  1. Recognition of the value of ecosystem services

The virus SARS-CoV-2 has proved the threat posed by animal-to-human transmission, which is associated to land-use changes and biodiversity loss (2). Investment on natural capital is needed to foster ecosystem resilience – and it would provide a high economic multiplier with a positive climate impact, so it should be seen as an opportunity. One of the initiatives that could catalyze such investment is the Blue Manifesto call, which outlines a plan for achieving healthy oceans by 2030. While the interconnectedness of economic, social and environmental spheres has been recognized by European institutions, nature protection is not mentioned in the EU recovery package.


  1. Resilient health systems for universal care.

In order to face the COVID-19 pandemic and any possible future pandemics, health system resilience is key – especially for marginalized groups, which face much higher mortality rates. CONCORD argues that a well-prepared health system must first and foremost address unequal access to medication and treatment. Equal access for developing countries should also be attained, given its lower access to healthcare services. However, according to CONCORD, structural reforms must be driven publicly, since private reforms are prone to be efficiency-oriented and driven by donor agendas.



  1. Research and innovation on the green recovery.

Several groups have expressed concerns over the decline of R&I’s share compared to previous proposals of the EU budget. This is showcased by the proposals to cut funding to Horizon Europe, EU’s largest research funding programme. The Jacques Delors Institute highlights several benefits R&I can bring to Europe’s economic recovery. For instance, green public procurement and the renovation of energy-inefficient dwellings could boost the sustainable construction industry, while providing more efficient housing to low-income citizens. Finally, E3G proposes to narrow down the European innovation gap, by which Member States have different research outputs, by setting up a certification scheme for “second-best” projects that do not win Horizon Europe funding but are still deemed viable and of added value.


  1. Harnessing the circular economy to achieve a prosperous future.

The economic stimulus package could pave the way to the circular economy, which brings about many opportunities. For instance, re-using building materials such as steel could save 25% of material costs while reducing GHG emissions – and food waste valorization is deemed to be a 155-405 USD billion economic opportunity globally. The fashion industry must also transition to a circular paradigm: to do so, circular business models should be promoted, and collection, sorting and recycling infrastructure must be upgraded.


In addition to environmental benefits, available data demonstrates the high job creation potential of the circular economy: up to 700,000 jobs in Europe by 2030, as reported by Cambridge Econometrics, Trinomics and ICF. While landfilling provides 6 jobs per 10,000 tons of used goods, recycling and re-using can generate around 36 and 296 jobs by the same metrics, according to RREUSE. Hence, the Waste Hierarchy must be implemented in order to unlock its environmental and social benefits.



  1. Conclusions: The need to think ahead.

This overview of sustainability-proofed ideas from European think tanks and other organizations aimed to provide food for thought to future discussions. Opting for conservative solutions for the economic recovery will, as it happened in 2008, aggravate social inequalities and hamper the transition to zero net emissions. Hence, there is an urgent need to examine real solutions for a sustainable transition, such as the ones presented in this briefing. Indeed, the complex crisis that we are undergoing, which encompasses social, environmental, health, and economic factors, showcases the need to implement future-proof policies to achieve a fair, sustainable, and resilient society.



  • Molho, N. (2021). Delivering a sustainable, durable, and inclusive recovery for Europe. Think 2030 paper. Aldersgate Group (oncoming paper).
  • Keesing F et al. (2010). Impacts of biodiversity on the emergence and transmission of infec- tious diseases. Nature, No 468, pp 647–652




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About IEEP


Authors: Eloïse Bodin (IEEP), Oscar Planells (IEEP) Contributors: Gauthier Schefer (IEEP), Cara Maetzu (IEEP)

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