Climate Policy Environment 26 March, 2020 10:00 am   

Paulus: In times of recession, we need the European Green Deal even more

After the coronavirus pandemic, it is almost certain that Europe will struggle with an economic recession. What role will the European Green Deal play in such conditions, and what will the European Emissions Trading System (EU ETS) play? We asked the German MEP Jutta Paulus from the Greens / EFA faction for a comment.

– The Covid-19 pandemic has dramatically reduced greenhouse gas emissions in Europe. This will probably bring us closer to achieving the Paris climate goals, but in view of this health, economic and social disaster, there really is nothing to celebrate. Nor will our climate policy problems simply disappear after the crisis: If we set the fossil sector back on track after the pandemic, we will be back on the same old, disastrous path in 2021, despite the currently saved greenhouse gas emissions – writes Jutta Paulus.

– In Germany, even without Covid-19, the trend of significantly decreasing coal-fired power generation and thus of emissions, has continued since 2019. The share of renewable energies rose to 52% between New Year and 16 March 2020. This is seven percentage points more than a year ago. We must follow this trajectory and accelerate the Clean Energy Transition – writes the MEP.

– Here and there voices are being raised which question the European Green Deal in view of the looming recession. This is a fallacy because it is precisely because of the recession that we need the Green Deal. We need to make our economy fit for the future, and the Green Deal is the only way to do this. We need to invest more in climate protection, especially in renewable energy, in building renovation, in modernising industry and in circular economy. This is where our opportunities for economic recovery and for employment lie – believes Jutta Paulus.

– Some call for the suspension of the EU emissions trading scheme ETS. This also would be the absolutely wrong choice. The market stability reserve will absorb some of the superfluous certificates, but not all. Industry in Europe has already bought certificates for several years. Already the prices for CO2 certificates are falling, as a consequence of the recession. In fact, we need adjustments more quickly to have a greater impact – says the politician.

– The International Energy Agency emphasises that the pandemic must not hinder the energy transition and that the interest rate cuts by the national banks support the development of large investments in green energy. I share this view and I share their call to place renewable energy at the heart of corona-driven growth programmes. Low prices for oil will force fracking out of the market and if investors cannot make secure profits, they will withdraw from fossil fuels. Renewable energies have large capital costs but almost no operating costs, which makes energy prices highly predictable. Additionally, there is great potential here for regional value creation when employees install renewable capacities and engage in building renovation – Paulus concludes.