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Funding: The Bane of the EU's Green Deal

Chemicals are not inherently harmful. On the contrary, they are part of our everyday lives and can be virtually found in all industries crucial for modern technology's advancement. They are also important for increasing living standards and fostering overall economic growth. Most industry sectors around the world, such as infrastructure, energy, food production and healthcare, are directly or indirectly related to producing chemicals.

Still, chemical manufacturing itself imperils human health and the environment. 

Ironically enough, humans utilize chemicals to invent technologies that aim to reduce pollution and chemical waste as well as increase the efficient use of resources. Regardless of how individuals, societies and states respond to current global environmental movements such as climate change, there is a consensus about the importance of ensuring that chemicals are produced and used in a manner that does not harm human health or the environment. 

The European Union has been on the frontline of transitioning to a safe and sustainable model of producing and using chemicals. The European Green Deal has set the EU on a path to becoming a sustainable economy by 2050. 

However, the challenge for the EU is implementing this plan while keeping its industries strong. The production of chemicals is expected to double by 2030, and the EU’s strategy is to promote innovation toward sustainable chemical manufacturing. However, this plan requires tremendous resources and almost all of the EU's industrial sectors have to go through a fundamental restructuring process. The question is: how does the EU plan to implement this ambitious and costly plan?

The EU Green Deal contains over 50 actions that set a net-zero-carbon emissions goal by 2050. It also envisions a carbon border tax that prevents companies from relocating outside the EU to avoid the legislation. 

As part of the Green Deal, the EU has specifically adopted a Chemicals Strategy for Sustainability that requires industries to eventually reach a zero-carbon emission level. Moreover, the plan intends to ban the most harmful chemicals in consumer products and boost investment and innovation sustainable chemical production. 

According to the EU Commission, the plan will require at least €1 trillion to be funded by the EU budget, national governments and the private sector. However, even optimistic experts believe these figures are wishful. 

The money necessary to implement the EU's action plans is not even in the bank, which is why the EU hopes for private-sector money. But there are no signs of green investments from the private sector and the action plans will most likely fail to coerce the private sector to alter its investment trajectory. This is due to fears that “carbon financiers” will trick the system, and harm the implementation of the plans. 

Moreover, even if the EU manages to get €1 trillion in funding, many experts argue that it is only one-third of what is required to carry out the plan. In addition to financing the new innovations and technologies toward the 2050 plan, the EU also needs to support the fundamental restructuring of any industry connected to chemical production. And we haven't even discussed the problem of how the EU will manage the job market following the evolution of its economy. 

Whether the EU succeeds in funding the ambitious plans ahead or not, there is still much more that needs to be done. The EU is facing resistance from workers affected by the new plan. Citizens are fueled by politicians and populist movements, such as Gilets Jaunes in France and the rise of AFD in Germany. These movements have successfully advertised the fear that the transition towards a “green economy” will drain EU citizens through taxation and render them poorer. It's also said that the Green Deal would make European industries less competitive compared to other regions of the world that are not “green” and use cheaper resources to produce cheaper goods. If it wants a greener future, it is up to the EU and national governments to create trust and counter these populist advertisements. 

The EU’s goal to go “green” is certainly an ambitious and costly plan. Many barriers impede the path of the European Green Deal. The EU must introduce more comprehensive strategies to fund the Green Deal budget. In addition, it must expedite the process of passing the required legislation and countering the rising anti-green movements.

The opinions expressed in this article are those of the individual author.

To see all sources and learn more about the author, John SmithCLICK HERE.


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