The European Commission estimates that compared to the previous decade, additional investments of 1.7% to 2% of European GDP annually will be needed to meet the objectives of the Green Deal and the RepowerEU initiative. Crucially, significant public and private resources need  to be deployed to limit global warming to 1.5°C and avoid the potentially catastrophic impacts of runaway climate change. The costs of that transition are substantially lower than the costs of inaction.

Europe stands at a crossroads, with the end of the Next Generation EU (NGEU) in 2026 implying a substantial reduction in investment. It will cut the EU’s financial firepower in half (by about €800 billion). This means about €300 billion less available for climate and nature investment, especially affecting Central and Eastern European and Southern European countries that rely significantly on these funds to help finance their transition.

In addition, the current political agreement on the revision of the EU fiscal framework (notably the debt and deficit rules) suggests that austerity is on the cards for many member states. This will constrain their fiscal capacity for investing in the green and just transition for the foreseeable future. As only 60% of all green investment needed by 2030 has a “bankable” business case, public investment is crucial. Coupled with the current environment of high interest rates, which places further constraints on both public and private investment, this risks strongly undermining the means to achieve the Green Deal’s 2030 goals.

As such, a new investment plan for the post-Next Generation EU period is urgently needed. T&E, WWF, CAN, EEB and Birdlife outline what needs to be done.