A new story about growth in crisis for the EU and China
Against the backdrop of the global recession precipitated by the COVID-19 pandemic, and in preparation of the upcoming EU-China Summit and the postponed UN Climate Change Conference (COP26), Agora Energiewende and the Energy Foundation China (EFC) co-hosted a high-level closed-door meeting to discuss green stimulus programmes from European and Chinese perspectives. The key results of this event have now been published in a policy paper, which emphasises the importance of low-carbon development and climate neutrality principles in guiding decision-making, as the effects of today’s stimulus measures will have long-lasting global impacts. Comparing the policy efforts of the EU and China, the paper identifies five common priorities: the transition from coal to clean energy, green financing, a fair and just transition to clean energy, decarbonizing “hard-to-abate” sectors, and interest driven EU-China collaboration on climate issues.
For all governments, the most immediate and pressing policy priority in 2020 is to determine an appropriate economic recovery package. In order to ensure Paris-compatible economic stimulus, common areas of direct action were identified:
1. Seizing the silver lining of the depression
In Chinese culture, a crisis as significant as the COVID-19 pandemic is often perceived not only as a threat (wei) but also as an opportunity (ji)—or wei ji. In this sense, the EU and China are seizing the opportunities posed by the pandemic.
2. Green stimulus packages are in urgent need
The financial planning of the EU and China is central to the scope for green investments. For example, the European Green Deal is expected to guide the EU’s long-term budget planning -the multiannual financial framework (MFF) for 2021 to 2027, amounted 1.85 trillion Euros in total. China has earmarked roughly 9 trillion Renminbi (equivalent to 1.1 trillion Euros) of incentives by adjusting the deficit, issuing bonds, creating tax relief and newly prioritizing investment budgets. However, concrete commitments are still needed in order to close the existing gaps in green developments to raise climate ambitions to be consistent with the Paris Agreement.
3. Maximize common ground while respecting differences
It is also noted that despite some disagreements during the 22nd EU-China virtual summit on June 22, leaders from both the EU and China acknowledged the urgent need to work together to alleviate the dramatic economic consequences of the COVID-19 pandemic while moving towards a green recovery.
The online event assembled leading experts from think tanks, research institutions, and decision-makers in both the EU and China, and aimed to move the stimulus-related policy agenda forward. The now-released policy paper presents a summary of this dialogue and highlights areas of common ground and joint direction.
For details of the EU-China Dialogue on Green Stimulus Packages, the six-page policy paper with take-home messages of the event is available for download below.
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