Briefing

The EU puts €1 trillion behind its climate-change strategy

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The European Union will dedicate a quarter of its budget over the next 10 years to help industries reduce their carbon footprints and support regions that will be hit hardest by phasing out fossil fuels. Half the financing for the new Europe Investment Plan, announced Tuesday, will come from the EU budget, with national governments and the private sector contributing the rest. (Associated Press)

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Talking point: The fund will finance the European Green Deal announced in December 2019, which outlines 50 policy initiatives for industries spanning air travel to building construction to food production, with the aim of reaching net-zero carbon emissions by 2050. The plan comes as central banks and institutional investors raise concerns about the negative impacts of climate change on financial institutions and economies—the response to which has been to get companies to disclose what those risks are. Few policymakers, however, have legislated steps requiring sectors to actually reduce their carbon emissions. The proposed Green New Deal in the U.S. would come closest to the EU’s plan, but even if the government were to support the congressional resolution, it isn’t legally binding, nor does it come with substantial financial backing to help see the strategy through.