Making the Euro­pean Green Deal happen. Ukraine’s impact on a climate-neutral continent

How can Ukraine develop a com­pre­hen­sive climate policy and reach a poli­ti­cal con­sen­sus on Green Deal? This we dis­cus­sed with Lesia Vasy­l­enko, Georg Zach­mann, and Olek­sandr Diachuk on May 11th.

The Green Deal is a holistic trans­for­ma­tive agenda set by the Euro­pean Union to achieve climate neu­tra­lity by 2050. It will have a signi­fi­cant impact not only on the EU’s climate, eco­no­mic and envi­ron­men­tal policy but also on trade and poli­ti­cal rela­ti­ons with its part­ners. To become effec­tive and suc­cess­ful, the Euro­pean Green Deal (EGD) must become a part of the domestic poli­ti­cal and eco­no­mic agenda of the EU‘s Eastern neigh­bours, espe­cially Ukraine.

The Ukrai­nian government has already decla­red its wil­ling­ness to join the EGD. However, the war-torn country will face several chal­len­ges in catching up with the EU’s climate ambi­ti­ons. Ukraine must address the low energy effi­ci­ency and high carbon inten­sity of its economy, phase out fossil fuels and invest in the green tran­si­tion. How can Ukraine develop a com­pre­hen­sive climate policy and reach a poli­ti­cal con­sen­sus on Green Deal? What are the green coope­ra­tion prio­ri­ties between the EU and Ukraine? What should be the role and instru­ments of the Euro­pean Union in sup­por­ting Ukraine on its path towards decar­bo­niz­a­tion and sustainability?

These ques­ti­ons will be dis­cus­sed with
▪️ Lesia Vasy­l­enko, MP, Holos Faction
▪️ Georg Zach­mann, Advisor, Berlin Economics
▪️ Olek­sandr Diachuk, Leading Rese­arch Officer, Insti­tute for Eco­no­mics and Fore­cas­ting of the Natio­nal Academy of Sci­en­ces of Ukraine

Chair: Ralf Fücks, Center for Liberal Modernity.

Selec­ted quotes

Ralf Fücks

The Euro­pean Green Deal will have a signi­fi­cant impact on our rela­ti­ons with other coun­tries. This is an oppor­tu­nity for enhan­ced coope­ra­tion, but also for poten­tial con­flict with our trading part­ners. To become effec­tive and suc­cess­ful, the Euro­pean Green Deal should actively engage the Eastern neigh­bor­hood coun­tries, espe­cially Ukraine as the biggest Eastern Part­ners­hip country.

For Ukraine, it’s even more clear than for Western Euro­pean coun­tries: the tran­si­tion towards an eco-friendly economy must go along with rising living stan­dards, eco­no­mic growth, and social pro­gress. We think that Ukraine should look at the Euro­pean Green Deal as an oppor­tu­nity for eco­no­mic moder­niz­a­tion. Vice versa, the EU should look at Ukraine as a partner in gree­ning the Euro­pean economy and an asset in terms of rene­wa­ble energy sources.

If you look at Ukraine’s CO2 emis­si­ons, you get a puz­zling picture: On the one hand, CO2 emis­si­ons per capita are only half the emis­si­ons in Germany: roughly 4,5 t per person com­pa­red to 9 t in Germany. And if you look to the history of CO2 emis­si­ons in Ukraine, it seems an impres­sive success story: From more than 16 tons per capita in 1989 to 4.5 tons today.

Lesia Vasy­l­enko

Ukrai­nian budget is mostly direc­ted at the support of tra­di­tio­nal indus­tries, rather than at envi­ron­men­tal issues since big indus­trial groups high­light an acute need to streng­t­hen the economy in view of the ongoing war and pan­de­mic crises. The budget of the country reflects the policy and the approach to climate change.

Nord Stream 2 poses a great danger not only to Ukraine but also to Euro­pean energy inde­pen­dence and to various envi­ron­men­tal aspects, which the EU has been advo­ca­ting for – it des­troys bio­di­ver­sity throughout Europe. Pro­mo­ting envi­ron­men­tal issues, we need to be sus­tainable in words and actions, and we need a plan, which balan­ces eco­no­mic, inter­na­tio­nal, and envi­ron­men­tal inte­rests. An important exter­nal aspect of the Green Deal is pro­mo­ting the notion in Ukraine that the Green Deal is a secu­rity matter.

Ukraine can become a success story, where rene­wa­bles and nuclear sector balance each another. The nuclear poten­tial of Ukraine is already there, however, the exis­ting faci­li­ties need to be moder­ni­zed in accordance with inter­nal laws, inter­na­tio­nal obli­ga­ti­ons and in line with envi­ron­men­tal policy.

For Ukraine, as a tra­di­tio­nally agrarian country, it is a key to remain this way, however, agri­cul­tu­ral prac­ti­ces should be sus­tainable. The land reform (pri­va­tiz­a­tion of agri­cul­tu­ral lands) in Ukraine must be environmentalized.

Olek­sandr Diachuk

Ukraine’s agri­cul­tu­ral indus­try has very high green­house emis­si­ons and is a huge sector to be modernized.

The capital expen­dit­ures for nuclear energy in Ukraine are rising, while the costs of rene­wa­bles are decli­ning. So, in the long-term per­spec­tive, rene­wa­ble energy should play a bigger role.

The demand for high-quality agri­cul­tu­ral pro­ducts will be incre­a­sing. Ukraine should seize the oppor­tu­nity and export less raw, but more pro­ces­sed agri­cul­tu­ral products.

Georg Zach­mann

EU part­ners must be ambi­tious in helping Ukraine to set regu­la­tory anchors to incre­ase the pre­dic­ta­bi­lity of its envi­ron­men­tal and eco­no­mic policies.

The big problem in Ukraine is that there is no long-term time horizon neither for the government nor for busi­nes­ses. Incumbents very often defend old busi­ness models, which is pro­ble­ma­tic, keeps us in the past, and does not bring us to the future. Also, citi­zens do not often demand long-term struc­tu­ral impro­ve­ments – in the elec­tions, we can see that they demand short-term bene­fits, which is an issue for civil society.
There is a lot of energy effi­ci­ency poten­tial in Ukraine. Many western coun­tries have made some mista­kes in the trans­port sector, and we have to make sure that Ukraine does not lose its bene­fits by repea­ting similar mistakes.
Given the poten­tial bene­fits, Euro­pean part­ners are in my view too unam­bi­tious. Much more can be done and should be done in Ukraine. The problem is the lack of com­mit­ment devices – tolls that ensure that inves­tors do not fear that future government decisi­ons devalue their low-carbon investments.

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