For climate neutrality and sustainability, the EU is focusing on green and digital transitions but investments and skills are needed, finds the Strategic Foresight Report 2023
The green and digital transitions are fundamental prerequisites for achieving climate neutrality and sustainability. The European Commission highlights this in the Strategic Foresight Report 2023, making it clear that the dual transition “requires decisive changes” and compromises “that will impact our economies and societies”. For this transformation to be achieved, “it is essential to recognize the links between the environmental, social and economic dimensions of sustainability”.
Achieving the goal in the green and digital field requires enormous efforts, in the form of investments, but capable of guaranteeing the necessary conditions for them to be characterized by equity.
Investments, first and foremost: on the ecological transition (which also includes the energy transition) to achieve the objectives of the Green Deal and the RepowerEU plan more than 620 billion euros per year will be needed. For the digital transformation, at least 125 billion euros per year will be needed for “fill the EU investment gap”.
Further resources need to be added for other priorities, from defense to climate. In this latter regard, the EU Commission reports:
“The European Union already plans to allocate 578 billion euros (at least 30% of its budget) to climate action in the period 2021-2027. Yet the costs and consequences of the climate and biodiversity crisis are not fully known.”
Takeaway
Climate neutrality and sustainability are central goals in the present and future EU strategy. In the Strategic Foresight Report 2023 the EU Commission highlights this, noting the decisive role of the green and digital transition in achieving them. Significant investments are needed for the green and digital transitions, and this requires a decisive role of private individuals, alongside public support, and a favorable framework to facilitate allocations. Equally crucial is filling knowledge gaps. The green and digital transitions will require strong European education and training systems to generate the right skills to fill the jobs that will be created between now and 2030 in many sectors.
The crucial importance of environmental protection
A fundamental aspect that is made clear right from the start Strategic Foresight Report 2023 it is environmental sustainability, first and foremost. The green and digital transitions cannot do without the consideration of environmental protection. In addition to the essential role it plays for the very survival of living beings (including humans), nature is a source of economic wealth of considerable importance. The European Commission itself writes it:
“Environmental resources, which are not infinite, constitute the very foundations of economic activity: for example, 72% of the 4.2 million businesses in the euro area are heavily dependent on at least one service connected to nature.”
It thus becomes crucial to dissociate economic growth from the use of resources for a new economic model that must take into account sustainability and the well-being of citizens, crucial themes of the report.
Given this, the document highlights other issues ranging from geopolitics to demographic aspects which must be taken into account in an overall picture where there are multiple challenges.
Green and digital transitions: investments are needed, but not only that
Support for the green and digital transitions requires public capital, but also a significant contribution from the private sector. For this reason, the European Union has developed a global framework of sustainable finance capable of stimulating businesses and the financial sector to increase the investments necessary for the transition towards sustainability. This framework “includes the taxonomy, sustainability disclosures, climate benchmarks and green bonds”, reads the report.
However, there are critical elements to consider and address. One of these concerns the gap between the EU and the United States in terms of productive investment, which has further widened over the years. Above all, thoughts turn to the Inflation Reduction Act, a US measure to encourage investments and interventions in renewable energy and climate action.
Then there is the problem of a lack of a single capital market, which hinders private investment, and of a complete banking union.
Skills are lacking: the future requires knowledge and training
The green and digital transitions require competent figures who can manage this change and operate at their best. The Strategic Foresight Report 2023 does not fail to recognize a lack of adequately trained figures, complained in particular in the public sector. 69% of EU municipalities reported a lack of skills in environmental and climate assessment as a factor slowing down climate-related investments.
This deficiency can also be seen in the digital sector. Digital technologies, including Generative AI, create new possibilities for teaching and learning. However, they also pose challenges for current education and training systems. But there’s more:
“The skills challenge goes beyond mere economic considerations. Digital literacy and digital skills will be crucial not only for finding quality work but also for actively participating in civic life or distinguishing facts from disinformation or misinformation, including in relation to sustainability. Currently only 54% of EU citizens have at least basic digital skills.”
Hence the need for solid education and training, essential prerequisites for transitions, such as to develop adequate skills. Long-standing problems must also be overcome, including the gender gap. Reducing the gender gap in STEM disciplines, which are essential for both the green and digital transitions, could lead to an improvement in EU GDP of up to €820 billion in 2050.
The demand for employment is already strong today and will increase over time. For example: there will be a need for 180 thousand skilled workers in the hydrogen and fuel cell sector by 2030 and up to 66 thousand in the photovoltaic sector.
The present and, even more so, the green and digital, sustainable and inclusive future, require skills and knowledge to face and compete in an increasingly complex world, where variables (climatic and otherwise) will be a constant.
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