The European Green Deal should be conceived as a reallocation mechanism, fostering investment shifts and labour substitution in key economic sectors, while supporting the most vulnerable segments of society throughout the decarbonisation process.
European Commission president-designate Ursula von der Leyen has made climate change a top priority, promising to propose a European Green Deal that would make Europe climate neutral by 2050.
The deal’s four pillars would be carbon pricing, sustainable investment, industrial policy and a just transition.
A meaningful carbon price should be established for all sectors, by strengthening the EU emissions trading system (ETS) and by pushing EU countries to increase the price for emissions not covered by the ETS.
The carbon price should be complemented by a sustainable investment strategy that pushes companies to switch technologies and promotes behavioural change among citizens, offsetting any rising costs they face because of higher carbon prices.
European industry should be strengthened through support for disruptive green innovation.
The adverse social consequences of climate policies should be taken into account and minimised in each European climate policy proposal.
Should the strategy succeed, the European Green Deal might become a blueprint for other countries and a tangible example that pursuing climate neutrality is technically feasible and economically and politically viable.
To be clear, this will not be a smooth ride. As in any revolution, there will be winners and losers. What a European Green Deal should do is provide a clear sense of direction to citizens and companies, and put in place mechanisms to ensure that the most vulnerable segments of society are supported and not left behind.
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