The New Green Deal
On December 11, 2019, the president of the European Commission, Ursula von der Leyen, revealed her new European Green Deal. The first and foremost goal of this deal is to have Europe “become the world’s first climate-neutral continent by 2050” and lays out a roadmap on how to achieve this goal. This is a lofty and expensive goal.
The first major benchmark of the deal is to reduce carbon emissions to 50% of 1990 levels by 2030. The European Commission has unveiled a plan to mobilize €1 trillion of public and private investments over the next 10 years for the Green Deal, which averages out to €100 billion per year. The European Commission estimates that the actual cost of achieving the 2030 goal is approximately €260 billion per year. This is over double the amount the investment plan will generate. Where the other €160 billion per year will come from is unclear, but likely the new Green Deal will implement new forms of taxation that will contribute to the missing €160 billion. Much of this taxation will be generated from goods and services that are considered unsustainable. The Green Deal states that “at national level, the European Green Deal will create the context for broad-based tax reforms, removing subsidies for fossil fuels, shifting the tax burden from labour to pollution”.
The Green Deal is a monumental decision by the European Commission. If it is to meet its goals, the EU can expect drastic changes across the board. The transition to carbon-neutrality will be especially difficult for several EU member states, including the Czech Republic.
This paper will first go over the reasons for the Green Deal and pollution in the EU. Next, it will discuss possible taxes that could be implemented to help the Green Deal meet its goals. The next two topics are particularly important for the Czech Republic, those being nuclear power and the impact on the Czech Republic specifically the country’s number one export: cars. The last topic is dedicated to the Green Deal and COVID-19 recovery.
Policy Brief – Ryan Jacobsen, May 2020
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