Importance of research to EU’s green growth ambitions stressed in annual spending plan
Europe “needs to invest record amounts in cutting-edge research and innovation” to achieve environmentally sustainable and socially fair economic growth, the European Commission has said.
Setting out its annual growth strategy on 17 December, the Commission also said a “systematic and forward-looking research and innovation strategy” and “far-reaching investment in education and skills” would be needed to raise Europe’s productivity.
“A profound transformation of our economic model is underway,” said Valdis Dombrovskis, the Commission’s vice-president for economic matters.
“Climate change, digitalisation and changing demographics require us to adapt our economic policy, so that Europe remains a competitive force on the world stage and does so in a way that’s sustainable and fair.”
Spending should focus on areas with the greatest potential, the Commission stressed. It said EU and national investments should be “directed towards clean assets that are the most productive in mitigating climate change and to disruptive innovation efforts”.
Current EU emissions reductions targets for 2030 will need €260 billion of extra investment in energy systems each year from 2021 until the target, according to the Commission.
On the same day the growth strategy was published, the European Parliament and national representatives in the Council of the EU agreed on criteria for determining which kinds of investments are environmentally sustainable.
The criteria specify that green investments must help to reduce problems including climate change, pollution and biodiversity loss, and not exacerbate any such problems. Investments in solid fossils fuels such as coal are out, while investments in gas and nuclear can be considered green.
Lead Parliament negotiator Sirpa Pietikäinen described the criteria as “probably the most important development for finance since accounting”.
But addressing the Parliament on 18 December, Commission president Ursula von der Leyen stressed the importance of the EU’s 2021-27 budget for achieving the bloc’s sustainable growth goals.
She said that if member states do not agree to stump up sufficient contributions under ongoing budgetary negotiations, the EU would need to look at generating more of its own resources, such as through its Emissions Trading System. In 2018 the ETS generated €14bn in revenue.
The Commission’s strategy said that digital technologies such as artificial intelligence and access to data will be crucial for EU growth. It called for “structural reforms” to foster the spread of innovation and improve companies’ access to public and private finance.