Green opportunities in a post-Covid world: What CEE countries should do next?

Poland, the Czech Republic, Hungary and Romania are being asked by the European Commission to present green-friendly national recovery plans – a pre-requisite for securing disbursements from the EU recovery fund. In this report, we look at the role of the green agenda, especially for the CEE’s European Union members.

Five key takeaways

1. CEE fiscal stimulus in response to the Covid-19 crisis has been large and comparable to that seen in Western Europe. Yet climate action has been relatively low on the CEE policy priority list. Indeed, in some countries, like Russia, the pandemic has forced the postponement of key climate goals.
2. The CEE region, excluding Turkey, has been cutting greenhouse gas emissions over the last thirty years and progress can be demonstrated on sectoral sustainability measures. There are green shoots across the region, e.g. in transport in Hungary, energy in Romania, or agriculture in Turkey, Poland is just about to make a turnaround in its energy transition. Progress in the areas of agriculture, manufacturing and the circular economy is lagging.
3. The good news is that the region, especially the CEE’s EU members, have a holistic framework for progressing towards climate targets. The Czech Republic, Hungary, Poland and Romania (CE4) - are subject to the EU’s ambitious carbon reduction targets, while Russia and Turkey have signed the 2015 Paris climate agreement, though their intended climate pledges need to be made more ambitious.
4. Access to sizeable EU funds to support the green transition in the early 2020s is a game-changer for the CE4. Total EU grant funding available for the CE4 may be as much as 17 to 31% of GDP combined in 2021-27. Russia and Turkey may also consider strengthening their green agenda, given that the EU plans to introduce a carbon border tax too. More tangible reduction targets may emerge in late 2021 ahead of the next round of UN climate talks, dubbed COP26.
5. Rebuilding CEE economies after the Covid-19 crisis presents an exceptional opportunity for the region’s policymakers to transition towards more climate-friendly policies. For example, Poland and the Czech Republic are being presented with a supportive path to a less coal-dependent future. Make no mistake, this is a huge opportunity, but will policymakers have the courage to take it.

This Report was originally published on 3 November 2020.