This summer, the thermometer displayed temperatures going as high as 50°C in India and over 45°C in Europe, while in Greenland the ice melted at a speed never seen before. The rising water levels, the droughts, the heat waves, the forest fires are occurring in both hemispheres, with a considerably increased frequency and amplitude. However, these are only the first effects of greenhouse gas emissions. Their consequences are systematically aggravated by economic or social difficulties, as evidenced by the more than 1,000 deaths in Mozambique and neighbouring countries from Hurricane Idai in March… The World Bank is announcing more than 140 million climate migrants by 2050 if we fail to make the drastic shift needed to combat climate change.
On the day of your election, you made ambitious commitments: you announced a “Green Deal for Europe including the first European Climate Law” for the first 100 days of your mandate, hence before March 2020. And you have proposed to raise the target to reduce our emissions by 2030 to -55%. Whichever our political sensitivities, in the face of the climate emergency, we must all strive for the success of this Green Deal.
But, in all our countries, the obstacle is the same. Of course, we want to insulate all buildings, boost public transport and renewable energies, transform our agricultural model, protect biodiversity, protect and clean forests and the ocean, develop adaptation and even reparation policies… But all these projects are facing the same obstacle. : who will pay? Will this “Green Deal” have the means to deliver on its promises? Today we have no guarantee that financial resources commensurate with the challenge will indeed be included in this Climate Law.
When working on a scenario of a 40 percent emission reduction target for 2030, the European Commission estimated a gap in funding “of around 175 to 290 billion euros per year” (Communication of 28 November 2018). With an increased 55% target, the investment need must be increased accordingly.
Already in 2017, the European Court of Auditors stated that we would need 1 115 billion Euros in investments per year starting in 2021 (public and private).
Meanwhile, the commitments from the new Commission to finance the Green Deal are very far from such amounts: there is a commitment for a « Climate Bank » but with an increased lending capacity of only approximately … 16 billion € per year by 2025 (corresponding to an increase from 25% to 50% of climate financing by the EIB). And a commitment for a « Sustainable Europe Investment plan » which would provide around 100 billion € per year, with little clarity on where this money will come from and where it will go. And no promise for a proper climate budget!
Compared to the needs assessed by European institutions and experts, the Green Deal has so far been promised far too few financial resources, between 2 and 10 times too few, and in a manner too vague to ever see it succeed.
Madam President, in order to win the climate battle, we solemnly call on you to guarantee that the Green Deal and the Climate Law you are now preparing should recognise the state of climate emergency and include in the proposal in March 2020 the target for reducing emissions to -55% by 2030. In order to create an international momentum, it is essential that the European Union agrees on a revised target well in advance of COP 26. Bearing in mind that, to limit temperature increase to 1.5°C, a more ambitious target, towards -65%, is necessary.
To be credible and to have a real catalytic effect, this Climate Law must complement the quantified emission reduction targets with proportional quantified targets setting the level of funding needed.
To achieve this, for a “Real Green Deal” commensurate to the emergency, the Climate Law must specify concretely how to finance this colossal project. Here are three solutions that seem capable of reaching a broad consensus:
- In order to drastically reduce our consumption of fossil fuels, stop all fossil fuels subsidies and investments. The Climate Law in March 2020 must prohibit all Member States from continuing to subsidise fossil fuels. It must also guarantee that all banks (private and public) and insurance companies operating in Europe are transparent about all their activities and organise the progressive end of fossil investments.
In 2010, to fight tax evasion, Barack Obama passed the FATCA law. It closed the US market to banks that did not provide the US tax authorities with full transparency. Similarly, to fight climate change, we need a “FATCA-Climate law” that reserves the EU market to banks and insurance firms that have redirected their investments to be consistent with the Green Deal.
- In order to reduce the emissions linked to air transport for both people and goods, to stimulate alternative and clean modes of transport, and to muster new resources for the climate-biodiversity budget, end the tax exemption on kerosene in the coming year.
- In order to finance a global transformation of our society, Europe must adopt the Climate-Employment Pact. This Pact is supported by hundreds of elected representatives from all backgrounds, but also trade unionists and entrepreneurs, climate experts and economists from various horizons.
This Pact is based on two findings and includes the creation of two instruments: (A) The European Central Bank created 2600 billion € since 2015. Only 11% of these colossal amounts of money so far went to the real economy, while most of the rest went to speculation. The ECB will create another 240 billion in one year, starting in November 2019. Rather than feeding speculation, it is essential to invest the entirety of these billions in climate and jobs. These billions must feed a real Climate and Biodiversity Bank, which will provide interest-free loans to each Member State (up to 2% of its GDP each year for 30 years, as suggested by Nicholas Stern in 2008, which would mean €300 billion for the whole EU).
(B) At the same time, there has never been as much dividends going to shareholders as today, but the average corporate tax rate in Europe has fallen by half since 1980. A 5% European profit tax on large transnational companies (adjusted according to their carbon footprint) would bring in €100 billion per year to feed a real EU Climate-Biodiversity Budget. This additional 100 billion would allow us to pass the threshold of 50% of the European budget devoted to climate.
With these 3 solutions to finance it, the EU Green Deal could create more than 5 million jobs in Europe and improve the livelihoods of millions of households, thanks to the savings they will make on their energy bills.
Mrs von der Leyen, you said in July that you were inspired by “the passion, conviction and energy of those millions of young people who have made their voices heard in our streets and found the way to our hearts“. You added, “It is the duty of our generation not to disappoint them“.
Indeed, we cannot afford to lose any more time. The IPCC scientists are very clear: we cannot lose 5 years. The citizens of Europe are 84% in favour of increasing funding for the ecological transition. They are waiting for elected officials to unlock these new funding opportunities.
That is why, respectfully but with great resolve, the resolve that millions of citizens expect, we are addressing you: We fully support the need for a Green Deal, but nothing would be worse than a false Green Deal that would not be given the means to deliver on its promises and to be fully implemented in all our territories. This would only be greenwashing. Nothing would be worse than a fake Green Deal with unfair financing, which would provoke the anger of thousands of yellow jackets in all our countries. We would then stand no chance of winning the climate battle.
Can you assure us that these three solutions will be integrated into your Climate Law for a “Real Green Deal”?
If not, if these solutions do not suit you, what financing do you propose to reach equivalent amounts, while meeting the demand for tax and social justice of our fellow citizens?