Impact community Climate126

The Green Deal at a crossroads: lessons from the first 100 days

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In 2019, the European Commission announced a “man-on-the-moon moment” with the launch of the flagship initiative of the new President Von der Leyen: the Green Deal. Five years later, after setbacks and adjustments, is the course still the same? Under the growing pressure of the European industrial competitiveness decline, energy security issues, and unprecedented geopolitical challenges, the Green Deal finds itself at a critical turning point. Officially, the transition remains a priority for the new Commission, but its implementation is marked by strategic adjustments and compromises that tend to redefine its initial ambition.

For local and regional governments, the stakes are high. Since the launch of the Green Deal, they have been on the front lines of the green transition, with the adoption of a long series of European legislations regulating the costly implementation of sustainable mobility plans, the deployment of renewable energy, and the modernisation of infrastructure to achieve climate goals. However, the growing trend towards the nationalisation of European policies and funding threatens to marginalise them and lead to concentrating investments in already well-positioned territories, precisely at a time when action must be strengthened on the ground.

An increasingly centralised governance model for the green transition

Since President Von der Leyen is in office, the EU has adopted an increasingly centralised approach to implementing its policies, making national governments the preferred interlocutors. National Energy and Climate Plans, Social Climate Plans, the Recovery and Resilience Facility, and National Nature Restoration Plans have reinforced this model. Officially justified by efficiency and simplification imperatives,this choice has, in reality, widened the governance gap: while local governments are responsible for more than 70% of climate change mitigation measures, they are often left out of the formulation of national strategies that directly concern them.

Today, local governments are largely excluded from decision-making processes. According to the CEMR report Local Green Transition Prospects for an Inclusive and Competitive Deal, more than two-thirds of the local governments surveyed report not having had the opportunity to participate in consultations on the transposition of green legislation, and only 4% of regions and municipalities believe they were truly taken into account.

The next revision of the EU budget (MFF) could exacerbate this trend. The idea of consolidating all climate and green transition funding into a single national plan is gaining ground. On paper, this seems simpler. But this could further weaken the role of local governments, reducing them to mere implementers of top-down strategies, rather than considering them as essential actors in the transition. You can learn more about this at the CEMR position paper on MFF here.  

The OECD underscores the importance of a territorial approach to climate action, recommending that national governments facilitate the development of subnational climate targets tailored to local realities and ensure adequate funding for their implementation. Without direct involvement in shaping national strategies, local and regional governments are left with limited resources and influence, despite their critical role in building long-term investment strategies on the ground.

A green transition that cannot be disconnected from territories

The Draghi report highlighted the urgency for Europe to accelerate its transition to a carbon-neutral economy and to deploy substantial investments in green technologies to strengthen European competitiveness. Decarbonisation of industry, deployment of renewable energy, and development of sustainable transport infrastructure: The success of these political priorities depends highly on a territorial approach. Where will the new hydrogen valleys be located? How will rural areas adapt to new land uses and energy production? What role will medium-sized cities play in green industrial policy? How can competitiveness clusters be strengthened to structure these local dynamics and enhance synergies between businesses, research centres, and local governments? These are questions that cannot be answered solely at the national level (read also our reaction to the Competitiveness Compass).

Ignoring this dimension carries significant risks. Without a territorialised approach, the implementation of the Green Deal could lead to the concentration of green investments and jobs in a few already competitive regions, leaving others struggling to attract funding. The cohesion policy, which has historically been the EU’s main tool for ensuring balanced development, should be at the heart of the implementation of the new European Commission’s Clean Industrial Deal policy.

Embedding multi-level governance in the Green Transition

At the dawn of a new phase of its climate action, the EU must resolve a fundamental contradiction: the Green Deal can only succeed if it is implemented locally, but its governance model is becoming increasingly centralised. If the European Commission truly wants to achieve climate neutrality while preserving social and territorial cohesion, it must develop a robust and inclusive multi-level governance framework.

Considering this, three priorities must guide the EU’s approach:

1. Grant local and regional governments a formal role in the development of national plans for implementing European legislation. These plans should not be limited to technocratic exercises but become true co-construction processes.
2. Preserve and strengthen access to European funding for local and regional governments. The Commission’s emerging ideas for the next budget, namely a shift toward a national plan and a potential single European fund for competitiveness, risk sidelining local players and concentrating resources in already competitive regions, leaving others without the necessary financial means to support their transition. Ensuring direct access to funding for local and regional governments is essential to prevent growing investment disparities.
3. Recognise local and regional governments as major investors. They account for more than half of public investments in climate-related infrastructure. Their investment capacity must be strengthened, not hindered.

Driving the Green Deal forward in a collaborative and territorially tailored way will not only enhance the EU’s competitiveness but also position it as a leader in the global transition towards a more sustainable economy. In light of the rapidly shifting geopolitical, economic and ecological landscape, a more inclusive governance model with a formal role to local and regional governments is more crucial than ever.

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