The Executive wants private initiative to deploy an investment of 188,800 million euros until 2030.
The government is clear: the future is green Spain. To this end, it intends to give priority to its commitment to ecological transition, the carbon-free economy and the development of a sustainable economy, although without specifying the path it will take or specifying how this transformation will be financed. The only thing they have specified is how much this process will cost: 236,000 million euros, of which 47,200 million will have to come out of the public coffers.
The Stability Plan 2019-2022 presented in Brussels last week confirms the Executive’s intention to develop the Agenda for Change, which is nothing other than the active management of the ecological transition to meet Spain’s objectives in the fight against climate change, acquired in the commitments of Paris and the Agenda 2030 for Sustainable Development of the United Nations.
The draft National Integrated Energy and Climate Plan 2021-2030, included in the 2019 Reforms Plan, establishes the framework for meeting these objectives with a deadline of 2030. As a result, the Government presents optimistic spending figures, but without confirming allocations and leaving the largest amount, 80%, to private investment, 188,800 of the 236,000 million euros to be spent between 2021-2030. Electricity companies and operators of the energy and gas system – among which are Iberdrola, Enagás, Naturgy, Red Eléctrica, Cepsa and Repsol – will have to focus their greatest commitment over the next decade on investment in renewables and clean energy.
According to government forecasts, savings and changes in the energy mix will have a positive effect on GDP, which would increase between 19,300 and 25,100 million euros between 2021 and 2030, and would create between 250,000 and 364,000 net jobs. In this way, it aims to take advantage of “the opportunities offered by the circular economy, energy efficiency, the transformation of agriculture and the blue economy, as vectors for the modernisation of advanced economies”, the plan states textually.
To deal with this transition from the public sphere, the government could, in a first phase, use the European Structural and Investment Funds (EIE Funds) for the period 2014-2020 and allocations from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (MEFF). Of these, a large part would be earmarked for environmental policies. Specifically, the 5,823 million earmarked for the development of the low-carbon economy and the 4,706 million included in the specific environmental headings, totalling 10,529 million. At the Council of Ministers prior to the last general elections, a first set of aid measures to improve energy efficiency and sustainable mobility was approved for a total of 987 million from the above-mentioned European funds. To this amount were added 507 million for decarbonization programs for municipalities and local entities and 480 million that had already been mobilized for other environmental plans.
However, the Government will have to reinforce this aid with its own financing, which will come mainly from a higher tax burden and from increases in indirect taxes on hydrocarbons, environmental taxes, electricity or coal, among others. And to begin with, in the item of total non-financial income consigned in the Stability Plan, the Government aspires to collect 1,000 million euros for environmental taxation this year. Taxes on gas oils will also increase, with a rise of 38 euros per 1,000 liters.
The Executive will also initiate the development of the Draft Law on Climate Change and Energy Transition, which configures the regulatory framework to facilitate the progressive adaptation of our economy to climate demands. Its objective: to achieve a 20% reduction in greenhouse gas emissions by 2030 and 90% by 2050 compared to 1990; the consumption of renewable energy by 35% by 2030; an electricity system with at least 70% clean generation, to reach 100% by 2050 and the improvement of energy efficiency by 35% compared to baseline. Objectives that need a billion-dollar financing that, for now, is in the air and dependent on private investment.