8. The Public Spending Needs of Reaching the EU’s Climate Targets

In Chapter 8, C. Baccianti argues that the 2020s are a crucial decade for steering the European Union towards climate neutrality and decreasing dependence on imported fossil fuels. In the period from 2021–2030, public expenditure on climate investment across the EU should increase by 1.8% of GDP (1.1% excluding investment in public transport) compared to the previous decade. The bottom-up analysis of the chapter reveals that almost three quarters of that spending will go to the construction and transport sectors. Filling such a significant public green investment gap will be challenging for EU countries with little fiscal space, especially once the Recovery and Resilience Facility comes to an end.