EU €750 billion Recovery Plan announced to mixed reaction

In a speech before the European Parliament on May 27, European Commission President Ursula von der Leyen announced an updated seven-year €1 trillion budget proposal and a €750 billion recovery plan for the European Union, focused on a green and digital economy.  Europe’s moment: Repair and Prepare for the next generation describes the major structure of the plan,  accompanied by  a 5-page Fact Sheet  which highlights “Next Generation EU”, the new recovery instrument.

The EU recovery strategy affirms a commitment to a European Green Deal and promises:

  • “A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
  • Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
  • Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
  • Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
  • Also, recovery goals include a short-term European Unemployment Reinsurance Scheme (SURE) will provide €100 billion to support workers and businesses;
  • A Skills Agenda for Europe and a Digital Education Action Plan will ensure digital skills for all EU citizens;
  • Fair minimum wages and binding pay transparency measures will help vulnerable workers, particularly women”;

Some European reactions to the proposals are compiled in the summary article “‘Do no harm’: EU recovery fund has green strings attached ” in Euractiv . More negative views come from  Climate Action Network Europe, which  calls the proposals “greenwashing” and in a more detailed press release  states:  “Despite repeated commitments by the European Commission to make the European Green Deal the blueprint of the recovery, the proposal still allows for money to be spent on supporting fossil fuels and is lifting climate spending targets in regional development funding, while the climate emergency would need a rapid phase-out of these polluting fuels and strong climate earmarking.”  

Friends of the Earth Europe had earlier released their own proposals for a European recovery plan, here ,  and reacted to the EU announcement on May 27 with  EU Recovery Package falls short of Building Back Better – which states:

“today’s package would not prevent investments in new fossil fuel infrastructure nor put conditions on bailing out polluting industries like airlines – leaving a gaping hole in achieving the aims of the European Green Deal. Nor are there conditions related to compliance with human rights, not paying out dividends, or buy-back of shares for companies that receive funding. …… The plan gives significant political support to the development of hydrogen, without stipulating that this comes from renewable electricity alone. This could open the door to more climate-damaging fossil fuels in our energy system. The Commission will direct welcome financial support to renovating buildings, creating jobs and cutting carbon; this will need to be backed by legislation to reduce energy poverty and ensure every home in Europe meets minimum efficiency standards. Friends of the Earth welcomes an increase in funds for the Just Transition Fund, and the focus on jobs and skills.”

In  “’Defining moment’ as EU executive pushes for €500bn in grants (May 27) The Guardian summarizes the proposals and focuses on the political fight ahead amongst EU members: For example, Austria, Denmark, the Netherlands and Sweden, (a group called the “frugal four”), who want recovery funding to take the form of loans, not grants.  The potential financial and political wrangling is also the focus of the New York Times article, ” A €750 Billion Virus Recovery Plan Thrusts Europe Into a New Frontier” .  The Energy Mix  reported on North American reaction to a version of the EU proposals leaked by Bloomberg, in “EU’S massive green recovery plan includes 15-GW renewables tender, support for green hydrogen” (May 24).

Proposals for Canada’s Covid-19 recovery promised from a Task Force for a Resilient Recovery

A press release on May 19 announced the launch of a Task Force for a Resilient Recovery,  funded by private foundations and led by two research organizations: the Smart Prosperity Institute and the International Institute for Sustainable Development .  The Task Force promises to develop “actionable recommendations on how governments can help get Canadians back to work while also building a low-carbon and resilient economy” and will release their final report at the end of July 2020.

The Resilient Recovery website is available in English and French.  The websites already include the proposals of the two research organizations:  from the Smart Prosperity Institute – a 25-page “manual”   which provides a Framework  based on nine criteria, clustered in three categories: 1.  does the measure stimulate timely, lasting economic benefits and jobs? 2.  does the measure help the environment and support clean competitiveness? 3. is the measure equitable, implementable and feasible?

From the International Institute for Sustainable Development , a discussion which endorses the May 4  report from the Smith School of Enterprise and the Environment at Oxford University,  Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?. 

Who is involved in this Task Force? 

Members are listed at the website . In addition to Stewart Elgie of the Smart Prosperity Institute and Richard Florizone of the IISD,  there are fourteen, including Elizabeth Beale, former President and CEO of the Atlantic Provinces Economic Council; Barbara Zvan, former Chief Risk & Strategy Officer for the Ontario Teachers’ Pension Plan; Don Forgeron, President and CEO of the Insurance Board of Canada;  Bruce Lourie, President, Ivey Foundation; James Meadowcroft, Professor, Carleton University; and Merran Smith, Executive Director, Clean Energy Canada.  The initiative is funded by the Jarislowsky Foundation, Ivey Foundation,  McConnell Foundation, Schad Foundation, and the Echo Foundation.

Notably, this Task Force is unrelated to the May 11 statement  which appeared in The Hill (May 11) from Canadian Labour Congress President Hassan Yussuff and Chamber of Commerce president Perrin Beatty. Describing their co-operative efforts in the Covid-19 crisis, they continue:  “we are calling on the federal government to strike a task force to develop recommendations on how to reboot the economy. The sheer scale of these decisions requires a variety of perspectives, not least of which will be accommodating the varied needs of the vastly diverse sectors. When it comes time for recovery, we will need broad engagement with governments, labour, businesses both large and small across sectors, public health experts, Indigenous groups, non-profits and academics.”

Canadian academics, experts describe plans for a Green Recovery after Covid-19

An April 28 Opinion piece in the New York Times makes an eloquent statement which summarizes global calls for a green recovery from the pandemic.   In “A Time to Save the Sick and Rescue the Planet”  António Guterres,  Secretary General of the United Nations, writes: “ Addressing climate change and Covid-19 simultaneously and at enough scale requires a response stronger than any seen before to safeguard lives and livelihoods. A recovery from the coronavirus crisis must not take us just back to where we were last summer. It is an opportunity to build more sustainable and inclusive economies and societies — a more resilient and prosperous world.” He proposes a 6-point plan, stating:  “As we spend trillions to recover from Covid-19, we must deliver new jobs and businesses through a clean, green transition. Investments must accelerate the decarbonization of all aspects of our economy….Where taxpayers’ money rescues businesses, it must be creating green jobs and sustainable and inclusive growth. It must not be bailing out outdated polluting, carbon-intensive industries….Fiscal firepower must shift economies from gray to green, making societies and people more resilient through a transition that is fair to all and leaves no one behind……Looking forward, public funds should invest in the future, by flowing to sustainable sectors and projects that help the environment and climate. Fossil fuel subsidies must end and polluters must pay for their pollution.”

Calls for a Green Recovery in Canada

The state of the federal government’s Green Recovery planning is described in an article in La PresseTrudeau misera sur une «relance verte» après la crise” (April 22, French only), summarized in English by the Energy Mix as “Guilbeault, McKenna and Wilkinson assigned to chart post-Covid green recovery” (April 26). It states that “planning for the “green reboot” is still in its earliest stages” – giving experts time to weigh in on strategies.

One of the latest Green Recovery visions came on May 7, when a group of 50 academics sent an Open Letter to Prime Minister Justin Trudeau and three ministers, called “Springing Canada Forward”. It sets out key principles “to guide investments that can future-proof our economies against climate catastrophe. Investments should link job creation and green infrastructure. They should include funding for both initial capital and long-term operations. COVID-19 has acutely highlighted that social inequalities threaten Canada’s resilience. Thus, investments should include principles of equity, diversity and inclusion and be consistent with Indigenous rights. Finally, to support an evidence-based approach, pilot projects, experimentation, rigorous testing and evaluation should be built into all major post-COVID investments.”   Specifically, the Open Letter calls for leveraging the existing programs of the Infrastructure Canada (with its formal “climate lens”) and the national Housing Strategy,  thus calling for  a transition to low-carbon energy, green infrastructure investment, and a national program of whole house energy retrofits.

In a surprisingly detailed statement regarding workers’ issues, the Open Letter states:

 “Facilitating the development of a climate-literate construction workforce should be a key part of Canada’s recovery investments en route to a low-carbon economy. High-quality, low-carbon construction requires a workplace culture that emphasizes reducing energy consumption. Major investments in developing new and upgraded climate-related construction skills is a key opportunity to expand equity, diversity and inclusion in the workforce while promoting greener practices and technologies. If climate literacy is an integral part of workers’ training, the industry can establish new skill requirements to ensure that newly trained workers can find the good quality jobs they expect and have the capacity to effectively contribute to Canada’s climate objectives. Upskilling workforces must address violence against women and open the road to take advantage of the important contributions that Indigenous workers and women can make to the green new economy.”

The Open Letter is summarized by  the National Observer in “Use pandemic to ‘future-proof’ against climate crisis, academic group urges”  (May 8).

Other Expert statements on Canada’s Green Recovery

The Institute for Climate Choices is publishing articles in  an ongoing COVID-19 Recovery series, beginning with “Climate policy in the long shadow of Covid-19”  by Dave Sawyer . Other articles include:  “Well and good” ( a reaction to the federal relief funding for orphan well clean-up in the oil sands);  “When Disasters collide”  (Apr. 8) and “When Disasters Collide: the Sequel” (Apr. 14) .

The journal Policy Options is publishing articles under the category,  The Coronavirus pandemic: Canada’s Response  . A few examples from the dozens of articles:  “Economy and climate need more than stimulus” written by Brendan Haley,  published in Policy Options (April 27) , which states: “…  the clean economy sector requires patient, long-term capital focused on earning returns from productivity improvements and environmental benefits. For a real recovery, capital needs to be funnelled towards building things instead of short-term speculation.” Haley reiterates Jim Stanford’s April call in “We’re Going to need a Marshall Plan to rebuild after Covid-19(April 2)  and continues: “… The Canada Infrastructure Bank could lead a national clean energy investment strategy. But it would need to take a more transformative view of green infrastructure, which includes zero-carbon buildings and other decentralized energy technologies. If the Infrastructure Bank is not the right vehicle, policy-makers should create new institutions, …. Expending the policy effort to create a Canadian climate investment bank makes good sense if the objective is to lay the foundation for the next decades of economic prosperity rather than solely providing short-term stimulus.” Most recently, “A Deep Retrofit of Homes and Buildings is the megaproject Canada needs”  by Tom-Pierre Frappé-Sénéclauze  (May 8).

The Canada we want: How a green recovery can help us bounce back stronger” in Corporate Knights (April 15) introduces their “Build Back Stronger” series of articles which will be published from April 22 to June 3, here . Among them,  “Building Back Better with a green renovation wave” – a roadmap for retrofitting policy, by Ralph Torrie and Celine Bak ; “To invest in a green power infrastructure, we’ll need to re-boot Canada’s electricity markets” by Pierre-Olivier Pineau.

Dan Woynillowicz  lays out a framework for  “How Canada can build back better” (April 17) at the Clean Energy Canada website, envisioning three stages: 1. our current relief stage, 2. a stimulus stage (with the goal is to kickstart the economy), and 3.  a recovery stage (characterized by “continued government efforts to rebuild the economy, building on and expanding stimulus efforts to ensure sustained and sustainable economic activity.”) He concludes:

“The COVID-19 pandemic, like climate change, isn’t a “black swan” event but a “gray rhino”  (“highly obvious, highly probable, but still neglected dangers”). Risk expert Michele Wucker, who came up with the “gray rhino” metaphor, notes that “it matters immensely that decision-makers view risks as gray rhinos instead of obsess in vain about black swans, because we can see gray rhinos in front of us, but black swans by definition only appear in the rearview window. That means we have a chance to do something about gray rhinos. And, in fact, most so-called black swans happen because people ignored the gray rhinos.

The gray rhino of climate change clearly stands before us.”