The European Green Deal

The EU's plan to become climate neutral by 2050, the policies involved, and the economic debates about its costs and benefits.

In 2019, the European Commission launched the European Green Deal, a plan to make the EU climate neutral by 2050, meaning its net greenhouse gas emissions would be zero.

The targets

The European Climate Law of 2021 made the 2050 goal legally binding and set an interim target of cutting net emissions by at least 55 percent by 2030, compared with 1990 levels. A package of laws to reach this was called Fit for 55.

Key policies

Expanding the Emissions Trading System, the EU carbon market, and creating a second one covering fuel for buildings and road transport.
Carbon Border Adjustment Mechanism, charging importers for the carbon content of goods like steel and cement.
Ending sales of new petrol and diesel cars by 2035, in principle.
Renewable energy and efficiency targets.
A Social Climate Fund to help vulnerable households and small businesses with costs.
Just Transition Fund for coal-dependent regions.

Progress

EU emissions have fallen substantially since 1990, while the economy has grown, showing that emissions and growth can be decoupled. Renewable energy’s share of electricity has risen quickly.

Debates

Costs: households and industries worry about higher energy, housing and car costs.
Farmers’ protests: in 2024, farmers across Europe protested against environmental rules and costs, leading the EU to soften some measures.
Competitiveness: some argue climate rules raise costs for European industry relative to competitors; supporters say leading in clean technology will create future advantage.
Trade partners, including India, have raised concerns about the carbon border tax.

Replacing a gas boiler

A family in Germany needs to replace an old gas heating boiler. Under EU and national climate policies, they are encouraged, with subsidies, to install a heat pump instead. The upfront cost is higher, but running costs and emissions may be lower over time. How such costs are shared between households, government and energy companies is at the heart of Green Deal politics.

Thinking climate policy only costs money

Climate policies involve costs, but also benefits: reduced damage from climate change, cleaner air, lower energy imports and new industries. Economists compare these costs and benefits rather than looking at costs alone.

Key takeaways

The European Green Deal, launched in 2019, aims for climate neutrality by 2050.
The EU legally committed to cutting net emissions by at least 55 percent by 2030.
Policies include carbon pricing, a carbon border tax and a 2035 target for new car emissions.
Costs, farmers' protests and competitiveness concerns shape the debate.