EU’s response to coronavirus could set it up for long-term success, says GlobalData

Following the news that the EU council will not abandon the principles of the Green Deal in its fiscal response to the coronavirus (COVID-19) pandemic;

Ella Benson Easton, Thematic Analyst atGlobalData, a leading data and analytics company, offers her view:

“Integrating the green transition and digital transformation into Europe’s economic recovery could be crucial for long-term economic strength. COVID-19 stimulus packages from the block will likely insist on compliance with sustainability goals. This condition could prove critical and provide the continent with an advantage over other economic regions where the speed of recovery is of great importance than sustainability.

“The continued commitment of the EU to green principles, could prove vital for the recovery of the renewables industry worldwide. China leads global solar module manufacturing, but factory closures have resulted in supply chain disruptions worldwide. GlobalData expects the COVID-19 outbreak to contract annual solar installed capacity in China by roughly 17% of pre-pandemic estimates. Support for local renewable companies from the EU could be a lifeline for the recovery of the sector worldwide.

“Simultaneously, carbon prices have declined drastically from an 11-year high of $30.46 per tonne in the summer of 2019, to $16.32 per tonne. Renewable energies had previously overtaken fossil fuels as the most affordable energy source. However, this may be threatened if oil and gas prices remain low. Enterprises are unlikely to look to adopting renewable energy during a recession, particularly if the price is no longer competitive.

“Carbon prices will rise again. If the EU has integrated the Green Deal and a carbon emission plan into its recovery packages, it is set to be in a stronger long-term position than other regions. Rebuilding the economy around green principles will insulate the region from the volatility of fossil fuel prices and encourage sustainable growth.”

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