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The EU passed the world’s largest green stimulus package—but is it green enough?

July 23, 2020, 11:27 AM UTC

On Tuesday, leaders of the 27 European Union countries concluded a marathon 90-hour summit in which ministers hashed out the details of what is being touted as the world’s largest green stimulus package.

Over the course of four days, the EU members settled on both a seven-year budget and a special pandemic-recovery package that earmarks a collective $630 billion for spending against climate change. Despite the gruelling debate, the funding isn’t secure yet.

“Today we’ve taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted,” European Commission President Ursula von der Leyen tweeted Tuesday.

The European Parliament, comprised of 705 representatives elected by vote in their home countries, is convening Thursday to debate the funding proposal and vote on its approval. The head of European Parliament, David Sassoli, has already indicated he will push amendments on the bill—such as reinstating funds cut from education and research.

Environmental campaigners have criticized other aspects of the proposal. For starters, the amount pledged is significantly lower than initially targeted. The amount of grants to be issued was cut from $570 billion to $450 billion, and some worry even the original amount wouldn’t be enough.

Research commissioned by the European Climate Foundation and conducted by EY found 1,000 “shovel ready” green projects supporting over 2 million jobs that could be funded with $231 billion. But reports from German consultancy Climate & Company, say meeting the EU’s emission goals will require around $3 trillion in investment over the next seven years. Goldman Sachs analysts estimate it will require $7 trillion by 2050.

(This could be an opportunity for private investment, which is already chasing green energy makers in Europe.)

Meanwhile the Just Transition Fund—a flagship financing tool designed to help countries transition from fossil fuels—had its capital slashed to $20 billion from a proposed $43 billion. One of the fund’s biggest beneficiaries will be Poland—the only EU member state that rejected the EU’s 2050 target for net-zero carbon emissions. Last Friday, Poland also set aside $33 million to buy coal and prop up the domestic mining industry.

More broadly, the budget is criticized for not being specific about what industries will be prohibited from financing. Bas Eickhout, a Dutch Green member of the European Parliament, told Reuters the deal should have pledged not to fund fossil fuels and been clear on how it would wean member states off of fossils.

“The fact that they didn’t do that, that says a lot,” Eickhout said.

More below.

Eamon Barrett
eamon.barrett@fortune.com

CARBON COPY

EPA

Documents released as part of a lawsuit brought by over 15 states against the U.S Environmental Protection Agency (EPA) show how a fossil fuel lobby group quickly convinced the Trump administration to reverse requirements on methane data collection. The lawsuit asserts the EPA bowed to the lobbyists first and then created a rationale second.

China flooding

China is suffering its worst flooding in decades, affecting some 37 million people along the Yangtze River Basin and causing $12.3 billion in damage. Song Lianchun, a meteorologist at China’s National Climate Center, said global warming was a contributing factor to the severity of this year’s floods. As rains continues to lash the country, state media has refuted “rumors” that the gargantuan Three Gorges Dam is at risk of breaking.

Biden plan

Presidential candidate Joe Biden announced a $2 trillion climate plan that aims to build green initiatives into a four-year economic recovery plan. The plan—more aggressive than one Biden pushed last year—includes achieving a carbon neutral electric grid by 2035, 15 years earlier than his previous deadline.

Voting action

BlackRock says it has placed 244 of its portfolio companies “on watch” for insufficient progress on climate change. In January, CEO Larry Fink pledged to use BlackRock’s weight as a shareholder to pressure companies on climate action. Of the 244 companies, BlackRock says it took voting action against 53 of them this year—mostly opposing the re-election of directors—and warned the remaining 191 firms they “risk voting action” next year.

Facebook

Here’s a read on how Facebook’s fact-checking policies allow posts denying climate change to escape scrutiny by labeling the content “opinion.” It’s another interesting angle in the contradiction between free speech and misinformation.

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Upstart electric-truck maker Rivian raises $2.5 billion in new backing by Aaron Pressman

Why Oprah, Natalie Portman, and Howard Schultz are betting big on plant-based milk brand Oatly by Beth Kowitt

CLOSING NUMBER

2.6 and 4.1

For over four decades, scientists have said greenhouse gas emissions could raise global temperatures by as much as 1.5 to 4.5 degrees Celsius above pre-industrial levels. New research has critically narrowed that bandwidth, to between 2.6 and 4.1 degrees Celsius—eliminating the previous "best case" scenario.