
Green Horizons: Environmental Stewardship and Decarbonisation
A Memo based on the roundtable organised by the Institute of European Right titled “Green Horizons: Environmental Stewardship and Decarbonisation.” The event convened policymakers, sustainability experts, and industry leaders to explore strategies for achieving the EU’s decarbonisation goals while fostering economic growth and social well-being.
This memo is based on the key insights and recommendations presented during the event, with Chatham House rules in place.
Executive Summary:
- The EU’s green transition presents significant challenges in maintaining competitiveness while adhering to stringent decarbonisation goals. Financial constraints, regulatory burdens, and a skills gap complicate efforts to meet sustainability targets.
- Recommendations for the EU policymakers and the member states:
- Increased Funding for Green Initiatives: There is a need for greater financial support, particularly for smaller municipalities and businesses, to implement sustainable policies. EU and national governments must provide the necessary resources for a feasible transition.
- Streamlined Regulations: Simplifying regulatory requirements and compliance processes will ease the burden on local governments and businesses. This will accelerate the decarbonisation process and remove bureaucratic obstacles.
- Public-Private Partnerships and Skills Development: Collaborative efforts between the public and private sectors should be encouraged to fund innovative decarbonisation projects. In parallel, investments in education and training programs are essential to close the green industry skills gap.
- A coordinated, EU-wide approach to decarbonisation, supported by sustained investments, regulatory reform, and public-private cooperation, is vital to ensuring the long-term success of Europe’s green transition.
1. Introduction
The European Union (EU) has placed environmental sustainability at the centre of its long-term strategy, most notably through the European Green Deal, which aims to make Europe climate-neutral by 2050. This decarbonisation effort is critical for addressing global climate challenges, reducing greenhouse gas emissions, and fostering economic growth through green innovation. The urgency of the transition cannot be overstated, as Europe faces ecological and financial pressures to lead the world in sustainable practices.
Balancing environmental stewardship with economic competitiveness and social well-being is essential to achieving these ambitious goals. Decarbonisation must address emissions and improve citizens’ quality of life, create new jobs, and promote sustainable economic growth at both local and regional levels. This necessitates a multi-layered approach that includes innovative policy frameworks, technological advancements, and active collaboration between governments, businesses, and communities.
The core objectives are clear: the EU must develop comprehensive decarbonisation strategies, identify and overcome barriers to implementation, and offer robust policy solutions that ensure long-term sustainability and resilience. By doing so, Europe can secure its position as a global leader in the green transition, providing a model for other regions to follow.
2. Challenges in the EU’s Green Transition
The transition to green energy presents significant economic challenges, particularly in industries that rely heavily on energy consumption. High energy costs associated with renewable technologies create a substantial burden for manufacturing, transportation, and heavy industry sectors. This burden risks reducing competitiveness unless targeted policies are introduced to alleviate the immediate costs of transitioning while ensuring long-term environmental benefits. Subsidies, tax incentives, and innovative financing models must ease the strain on high-energy sectors and facilitate a smoother shift toward sustainability.
Europe’s dependence on external raw materials, particularly renewable energy technologies, complicates the green transition. Silicon, essential for solar panel production, is predominantly sourced from outside the EU, raising concerns about supply chain security and the environmental costs of importing these materials. Sourcing sustainable alternatives within Europe is critical, but this requires investment in domestic extraction and production capacities. The EU must accelerate efforts to secure strategic materials and develop internal supply chains to reduce dependency on external sources and ensure the stability of its green energy transition.
The challenge of balancing economic growth with sustainability commitments remains central to the EU’s green transition. Ensuring that decarbonisation efforts do not disproportionately impact economically weaker regions is vital. Regional inequalities risk undermining the broader European project if wealthier countries accelerate their transition while leaving others behind. Policies must be crafted to support all member states equally, particularly those with less advanced industrial bases. Ensuring equitable access to green technologies, funding, and resources is essential for maintaining competitiveness across the continent and preventing fragmentation of the EU’s economic and environmental goals.
3. Local-Level Approaches to Decarbonisation
Local governments play a crucial role in the success of decarbonisation efforts, as they are at the forefront of implementing strategies that directly impact citizens’ lives. The Vilnius Municipality presents a case study on how cities can achieve climate neutrality while enhancing the well-being of their residents. Vilnius has integrated green strategies into its urban planning, prioritising sustainable transportation, energy efficiency, and waste reduction. By focusing on innovative city technologies and infrastructure development, Vilnius is working to reduce carbon emissions while improving air quality, reducing noise pollution, and fostering economic growth through green investments.
Sustainability at the local level must be viewed as an environmental objective and a social and governance priority. Decarbonisation initiatives should enhance the overall quality of life, focusing on inclusivity and fairness. Sustainable development policies must consider the social dimensions, ensuring that no group is disproportionately affected by the economic or infrastructural changes that come with decarbonisation. Governance structures must be adaptive, flexible, and accountable, ensuring that sustainability goals are integrated into every layer of local government decision-making.
Public engagement is critical to the success of local decarbonisation efforts. Transparent communication and active citizen involvement foster public trust and ensure the community supports and participates in these initiatives. Effective decarbonisation strategies should involve citizens from the planning stages to implementation, allowing local governments to align their initiatives with the broader environmental goals of the EU. By engaging the public, municipalities can ensure that the transition to sustainability is equitable and efficient, making citizens active participants in shaping the green future of their cities.
4. Barriers to Decarbonisation
One of the most pressing challenges for the EU’s green transition is the significant financial cost of decarbonisation. Industries heavily dependent on fossil fuels and energy-intensive processes will face substantial upfront expenses to upgrade infrastructure and adopt new technologies. Small and medium-sized enterprises (SMEs), in particular, need help with the financial burden, as they need more resources available to larger companies to invest in sustainable alternatives. While investing in green technologies is essential for meeting long-term climate goals, the mismatch between the long-term returns on these investments and the immediate financial pressures businesses face complicates the adoption of necessary technologies. Many SMEs will need targeted financial assistance to handle the transition.
In addition to financial constraints, the complexity of complying with EU environmental regulations presents a significant barrier, particularly for smaller municipalities and businesses. Compliance with reporting requirements, sustainability standards, and carbon accounting frameworks demands substantial administrative resources that many local governments and SMEs need to gain. The intricate regulatory landscape, including frameworks such as the Carbon Border Adjustment Mechanism (CBAM) and the EU taxonomy for sustainable investments, can stifle innovation by placing excessive burdens on those with limited technical capacity. These bureaucratic challenges slow the pace of the green transition and make it difficult for companies to align their operations with EU decarbonisation goals.
The transition to a green economy also faces challenges related to the skills gap in the workforce. New green technologies and sustainable management competencies are essential as industries adopt renewable energy technologies, circular economy practices, and carbon-neutral infrastructure. There is a significant gap between the skills required and those available in both the public and private sectors. The need for qualified personnel capable of designing, implementing, and maintaining sustainable solutions threatens to slow the transition. A concerted effort is required to train a workforce with the necessary expertise to support the green transition effectively.
5. Opportunities in Green Innovation and Technology
The transition to a low-carbon economy presents substantial opportunities for economic growth, primarily through innovations in renewable energy, smart grids, and electric vehicles. These sectors are critical to reducing emissions and hold immense potential for job creation, increased competitiveness, and technological leadership. Renewable energy technologies, including wind, solar, and hydroelectric power, offer a reliable and sustainable energy supply that can reduce Europe’s dependence on fossil fuels and strengthen energy security. In parallel, smart grids and energy storage systems are crucial to optimising the integration of renewable energy into existing infrastructures. They enhance energy efficiency, reduce wastage, and allow more effective use of intermittent energy sources. Additionally, electric vehicles are instrumental in decarbonising the transport sector and stimulating the growth of supporting industries such as battery production and charging infrastructure.
To maintain a competitive edge in the green economy, Europe must prioritise sustained investment in research and development (R&D) for green technologies. Advanced technologies such as hydrogen power, carbon capture and storage, and energy-efficient industrial processes are essential to achieving long-term decarbonisation goals. Public and private investment in R&D will drive the development of these innovations, positioning European industries to lead in emerging global markets while reducing greenhouse gas emissions. Increased support for innovation clusters and collaborations between academic institutions, governments, and the private sector will accelerate technological breakthroughs, enabling Europe to meet its ambitious environmental targets.
The circular economy offers a transformative approach to managing resources by focusing on reducing waste, reusing materials, and improving resource efficiency. Implementing circular economy principles allows industries to minimise their environmental footprint while maintaining competitiveness. This model emphasises designing products for durability, reducing material consumption, and promoting recycling and reuse throughout supply chains. Although Europe has already made progress in adopting circular economy practices, further efforts are needed to scale these solutions across industries. By prioritising resource efficiency, the EU can reduce its reliance on raw material imports, lower production costs, and create sustainable business models aligned with decarbonisation objectives.
6. Global Cooperation and Trade Alliances
Global cooperation is essential for Europe’s decarbonisation efforts, particularly in building new trade alliances with emerging markets. Forging partnerships with countries like India and regions such as Africa is critical for diversifying supply chains and reducing reliance on high-emission imports. These markets offer access to vital raw materials needed for green technologies and present substantial opportunities for mutual collaboration in renewable energy projects. India’s rapidly growing renewable energy sector and Africa’s vast solar and wind resources offer strong potential for strategic partnerships. By investing in infrastructure development, technology transfer, and capacity-building initiatives in these regions, Europe can enhance its own energy security.
However, establishing these partnerships is challenging. One key difficulty lies in aligning the EU’s stringent environmental standards with the varying capabilities of developing nations. The EU has set high regulatory benchmarks for carbon emissions and sustainability, which many emerging markets may struggle to meet due to a lack of financial resources, technology, or institutional capacity. These discrepancies can hinder the formation of new trade agreements and complicate the development of shared supply chains.
To overcome these obstacles, Europe must adopt a flexible and supportive approach. While maintaining its environmental integrity, the EU should provide technical assistance and financial support to help emerging markets comply with global climate objectives. By offering gradual compliance mechanisms and tailored support, the EU can ensure that trade alliances are beneficial and contribute to global decarbonisation efforts without stifling the economic growth of its partners.
7. Policy Recommendations
Increased Funding for Green Initiatives
More significant financial support from the EU and national governments is essential to facilitate the green transition, particularly for smaller municipalities and businesses. Decarbonisation requires substantial investment in infrastructure, renewable energy, and green technologies, which often need to be put in reach for smaller entities. Targeted grants, low-interest loans, and subsidies must be available to enable local governments and small businesses to invest in sustainable projects. This financial support would also mitigate the high upfront costs of transitioning to renewable energy and other green initiatives.
Streamlined Regulations
The complexity of existing environmental regulations poses a significant barrier to effective decarbonisation. Simplifying regulatory requirements and compliance processes would ease the administrative burden on local governments and businesses, allowing them to focus more on implementation rather than navigating bureaucratic hurdles. Streamlined regulations should maintain environmental integrity while making compliance more accessible, particularly for small and medium-sized enterprises (SMEs).
Public-Private Partnerships
Collaboration between the public and private sectors is crucial to achieving decarbonisation goals. Governments should incentivise businesses to invest in green technologies and sustainable practices through tax credits, public funding for research, and infrastructure development. These partnerships can accelerate the implementation of innovative solutions, particularly in sectors like renewable energy, transportation, and waste management. Private sector involvement is critical to scaling up successful pilot projects and driving large-scale adoption of green technologies.
Education and Skills Development
Closing the skills gap in green industries is critical for Europe’s long-term sustainability efforts. Investment in education and vocational training programs must be a priority to ensure the workforce is equipped with the necessary competencies in green technologies, energy efficiency, and sustainable business practices. Schools, universities, and training centres should partner with industry leaders to create curricula that reflect the evolving needs of the green economy. Continuous professional development programs for current employees will also be essential to upskill the existing workforce for a sustainable future.
Conclusion
A coordinated, EU-wide approach to decarbonisation ensures that Europe remains competitive while achieving its environmental objectives. By aligning national and regional efforts, the EU can better leverage its collective strength to overcome the challenges of transitioning to a low-carbon economy. This requires sustained investment in critical industries, such as renewable energy and green technologies, as well as comprehensive regulatory reforms to simplify the path to sustainability for businesses and municipalities alike. Public-private cooperation will foster the innovation and infrastructure necessary for this transition. Collaborative efforts will accelerate progress and ensure that the economic benefits of decarbonisation, such as job creation and technological leadership, are shared across the EU. In conclusion, Europe’s green transition will depend on strategic investments, regulatory efficiency, and the active participation of all sectors of society.