The Commission’s headline numbers have transport as the main spending item by far, but
60 percent of this investment need would arise from replacement of cars that would happen
anyway (based on an average car lifespan of around 10 years; ACEA, 2023). If this is taken out,
the Commission expects additional transport investments consistent with reaching net-zero
to be limited: 0.5 percent of GDP annually from 2021 to 2030. Instead, the power sector and
buildings are expected to be the main sectors requiring additional efforts to achieve climate
targets. In these two sectors, investment needs are expected to almost double as a share of
GDP over the same period.
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A new report estimates the EU’s green transition could cost €1.3 trillion annually until 2030 and €1.54 trillion annually until 2050.
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The high cost of the transition may require higher taxes, subsidies, and potentially national green investment strategies.
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Concerns exist about public support for the transition due to rising living costs and potential harm to businesses’ competitiveness.
The impressive amount of money that needs to be spent on the transition is divided into three categories by Bruegel: energy supply, energy demand, and transport. It may also be an underestimation by the EU itself—because it does not include all the costs associated with the transition, omitting, for instance, financing costs that could be quite significant in their own right.
It does not include the manufacturing costs associated with that transition into the budget, and these could be steep as well.
There is political turmoil in Europe as evidence by recent elections parliamentary ousters of governments.
Also lets not forget the yellow vests protests that went on for a year initially motivated by rising crude oil and fuel prices, a high cost of living, and economic inequality. Has any of that been addressed?