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The European Green Deal, promoted by the European Commission, aims to achieve climate neutrality by 2050. The plan encompasses a wide range of policies involving sectors such as energy, transport, industry, agriculture, and finance. Among the most important initiatives are the Net-Zero Industry Act and the Critical Raw Materials Act, which seek to position the EU as a global leader in green technology. However, the report highlights significant economic and regional challenges associated with these ambitious goals, amid growing climate concerns.
The Fit for 55 package, adopted in 2021, is central to the EU’s efforts to reduce emissions. At the same time, it includes controversial measures, such as the proposed ban on internal combustion engine (ICE) vehicles by 2035. However, these policies have generated considerable political opposition, particularly in economically vulnerable regions of the EU, which may struggle to bear the costs of rapid decarbonization.
Economic Realities and Disparities
A “two-speed” Green Deal is evident. Like two trains running on parallel tracks, one is a high-speed train, while the other is an old locomotive. The disparities between richer and poorer EU member states in their ability to implement the Green Deal are clear. The transition to green technologies, such as electric vehicles (EVs), requires significant infrastructure investments, which less prosperous regions struggle to support. For example, Eastern European countries, whose economies heavily depend on coal and other traditional industries, face economic devastation if forced to adopt greener but more expensive technologies. The study suggests that the EU’s Just Transition Fund, created to alleviate these burdens, is insufficient to address regional disparities. Solutions need to be tailored to individual countries, aiming for an equal final outcome.
Another concern raised is the substantial gap in necessary investments. The study conducted by the ECR highlights an annual funding shortfall to achieve the EU’s green goals, estimating a need for around €1 trillion over the next decade. Despite the EU’s efforts, there is a heavy reliance on external private investment, which has been scarce. Investors are becoming increasingly hesitant, particularly due to the poor performance of many green energy stocks and scandals related to greenwashing. In 2024 alone, ESG (Environmental, Social, and Governance) funds saw a net outflow of $40 billion, indicating growing mistrust in green investments. Was it all just a big bluff?
Public Perception and Resistance to Climate Policies
The report highlights growing public resistance to some of the more invasive climate policies of the Green Deal. While polls show broad support for climate action, there is a significant difference between recognizing climate issues and being willing to make personal sacrifices. For example, in more industrialized countries like France and Germany, public support for reducing driving and home heating is significantly lower than in less industrialized countries like India and Indonesia. This lack of enthusiasm for personal change poses a substantial obstacle to achieving climate goals, especially given rising energy and transportation costs.
Green Deal proposals, such as the ban on internal combustion engine vehicles, face significant public opposition. A survey cited in the report reveals that policies directly impacting consumers, such as higher carbon taxes and the ban on gasoline and diesel cars, are among the least popular. The study argues that these measures are seen as punitive and economically burdensome, especially for low-income individuals who cannot easily afford the transition to electric vehicles.
Automotive Industry Case Study: Challenges and Realities
One of the most significant aspects of the study is the case study on the automotive industry. The EU’s proposed 2035 ban on internal combustion engine vehicles aims to drastically reduce emissions. However, the study questions the feasibility of this goal, especially given current market realities.
Electric vehicles remain prohibitively expensive for most European consumers, and rising interest rates are making car loans more costly. This is reflected in the decline of EV sales and the increase in the average age of vehicles on European roads. While newer cars—both electric and combustion—are cleaner, many Europeans are choosing to hold onto their older, more polluting cars due to financial difficulties. The study highlights that the average vehicle age in the EU is now over 12 years, with some less prosperous member states like Estonia and Greece having even older fleets. This not only delays the environmental benefits of newer technologies but also keeps carbon emissions higher than expected.
Moreover, the affordability of EVs is further challenged by the dominance of low-cost Chinese electric cars in the European market. Chinese manufacturers, including Tesla’s Shanghai gigafactory, are flooding Europe with cheap electric cars, putting European manufacturers under pressure and pushing the EU to impose tariffs. However, the study argues that these tariffs will likely increase EV prices, further slowing adoption rates and exacerbating existing economic disparities.
Funding Challenges and Political Resistance
The report also discusses the EU’s investment strategies, highlighting the significant gap between the funds needed to implement the Green Deal and those currently available. There is a heavy reliance on public-private partnerships and national subsidies, which disproportionately benefit richer countries like Germany and France. This approach risks creating a “two-speed” Europe, where wealthier member states advance their green transitions more easily, while poorer regions fall behind.
Political resistance to the Green Deal is growing. The shift to the right in the European Parliament, exemplified by the rising electoral strength of the European Conservatives and Reformists (ECR) group, is likely to make it harder to adopt stringent climate policies. The European right, however, is not opposed to environmental protection, which is actually a cornerstone of conservative ideology regarding the relationship between man and nature. Many conservative thinkers have placed it at the heart of their thought. Most recently, Italian Prime Minister and Fratelli d’Italia and ECR President Giorgia Meloni emphasized this at a programmatic conference for her party, stating: “There is no more convinced environmentalist than a conservative—because ecology comes from the Greek word ‘oikos’, home. For conservatives of all latitudes, home means homeland, the place that safeguards the family, the pillar on which the common destiny that binds us rests.” The study, however, notes that although some existing policies may remain due to their legal entrenchment, new measures such as increased carbon taxes or further industrial regulations will face substantial resistance.
The Need for a Balanced Approach
In conclusion, the study presents a compelling case for a more balanced approach to the EU’s green transition, one that takes into account both environmental goals and economic realities. The ambition of the Green Deal to achieve climate neutrality by 2050 is commendable, but without sufficient funding, public support, and a realistic implementation timeline, it risks failure.
A focus on technological innovation, economic pragmatism, and energy security would be advisable. This includes investing in nuclear energy, which has been a reliable and low-carbon energy source for countries like France, and expanding carbon capture technologies rather than relying solely on intermittent renewable sources such as wind and solar power. The study also advocates for a more gradual transition, allowing industries and regions time to adapt without compromising economic growth or energy security.
Ultimately, the study argues that while the EU’s green ambitions are admirable, they must be tempered by realism. A one-size-fits-all approach will not work for a diverse bloc like the EU, and a more targeted strategy is needed to ensure that all member states can equitably navigate the transition to a greener future.