The success of the European Green Deal depends on the financial support it receives.
More and more finance is already flowing from banks and investors, eager to turn their portfolios green. But what are the criteria for deciding what qualifies as sustainable finance under the Green Deal?
Today, the European Commission answered that question when it published its Taxonomy Regulation.
In many areas, the criteria the Commission outlined are excellent.
But - as critics from across the political spectrum agree - they are marred by a glaring failure in a crucial area: forests.
Europe’s forests are in a perilous state.
In the last decade, logging has increased so much that they are absorbing less and less carbon dioxide. If this continues, in the medium-term, as the Commission itself fears, they will actually emit more carbon dioxide than they absorb.
This would be a catastrophe: the precise opposite of what scientists say is needed to limit warming to 1.5 degrees. And the criteria laid out in today’s announcement will bring this reality closer.
The specific problem rests with the criteria which allows funding to go towards bioenergy, so long as it is compatible with the Renewable Energy Directive II. But this legislation is fundamentally flawed as hundreds of scientists have said on several occasions.
It allows wood burning that makes climate change worse because it fails to discriminate against burning the worst types of wood, the stuff you take directly out of the forest.
The Commission’s own scientists have said that this type of wood warms the climate for decades to centuries.
It therfore beggars belief that the Commission has just defined it as sustainable.
Forests in Danger
This puts forests in danger across Europe, because it increases the financing prospects for cutting them.
Existing rules allow natural forests to be clear cut in France and ground down into pellets, only to be replanted with monoculture pine trees. They allow old growth forests on Indigenous Sami land in Sweden to be cleared on a gargantuan scale (just take a look at the scars on the earth left by clear cutting). They allow high nature value forests in Estonia, natural pine forests in Portugal, boreal forests in Canada all to be turned into bioenergy. And this is just to name a few of the cases. The full list is longer than you have time for.
All of this is happening in the name of renewable energy, and is considered legal. Today’s announcement won’t stop it: it is more likely to intensify it.
It puts all types of forestry on a par: whether you want to restore your forests and move towards close-to-nature forestry as recommended by the Pro Silva network, or whether you want to clear-cut and replant.
The European Green Deal’s aim is for Europe’s forests to be bigger and better, and the EU is working on several key pieces of legislation to achieve that – whether through closer-to-nature guidelines, strict protection of old growth forests, or legally binding targets to restore forests.
But the Taxonomy Regulation acts could fatally undermine these plans, by treating clear cutting and conservation the same.
The Commission says this is a “living document that will continue to evolve over time, in light of developments and technological progress.”
The evidence is here today that forests are under pressure, and by encouraging a flow of finance towards logging and burning, these criteria make that worse.
But the European Parliament still has to approve them.
So the future of Europe’s forests is in their hands. They must reject the criteria and fundamentally reform the Renewable Energy Directive.