Ukraine can be a leader in the green transition in Europe

The author is Senior Advisor to the President of Open Society Foundations and Europe’s Future Fellow of the Institute for Human Sciences-IWM and the ERSTE Foundation

By rethinking its membership offer to Ukraine, the EU could rally the funding and reform motivation to create Europe’s first seriously low-carbon economy.

Green membership of the EU would mean two major changes in the practices of the bloc: first, advance financial assistance to implement the vision of the European Green Deal immediately rather than after membership; and second, sectoral integration as soon as Ukraine is ready to join parts of the single market, in parallel with accession negotiations. This new sequence of the accession process should start with EU standards and legislation in the sectors most important for the population, such as mobile roaming in telecommunications, as well as the objectives of the Green Deal to make sustainable energy, industry and agriculture.

Gradual sectoral integration would turn Ukraine into pan-European supply chains even if Russian aggression continues. Ukraine has the chance to upgrade to cutting-edge technologies and the latest European environmental standards, becoming a key supplier of raw materials and components for Europe’s decarbonisation. A good example is steel. Ukraine’s largest source of emissions, the Mariupol steel plant, is in ruins. Given Ukraine’s iron ore reserves and skill base, it makes sense to build new steel mills. But they should pilot new technology such as a direct reduction iron and an electric arc furnace to supply green steel to EU industry and construction.

Such investments require an ambitious reconstruction plan, as recognized by the Ukrainian government in its recovery plan presented at the Lugano conference in Switzerland last month. Ukraine now needs help to prioritize green technologies and projects that have higher initial investment costs but offer greater efficiency throughout their lifetime. To reduce the risks associated with private investments, frozen Russian assets should be used as collateral for political risk insurance. The EU will provide the bulk of reconstruction funding, so it should begin to expand lines of funding that are normally only available to members under the Green Deal and regional policies.

However, Ukraine should not join the common agricultural policy of the EU in its current form. Pollution from war and Russian mines have put a quarter of Ukraine’s arable land out of use. Ukraine should not adopt the old CAP model of industrialized monoculture agriculture that poisons its soil with agrochemicals. Either way, current CAP beneficiaries would lobby against Ukraine for fear of having to share their subsidies.

Instead, the EU should support the small and medium farms which employ 80 percent of agricultural workers and provide half of the labor-intensive crops. In order to ensure longer-term food security — both grains and vegetable oils for international markets and for domestic needs — Ukraine should be fully integrated into the objectives of the “farm to fork for organic agriculture, conservation and precision agriculture, and nature-based solutions for water and soil management. Thanks to the biodiversity of its forests, steppes and wetlands, Ukraine has valuable ecosystem services. These must be restored and protected by EU programs.

Building a regenerative economy is also a security strategy for Ukraine and Europe as a whole. A circular economy with widely distributed electricity generation and many small farms is not only greener but more resilient. It is more difficult for military aggressors to deprive people of heat, electricity and food if these are generated by decentralized local production. A circular economy requires fewer imports, making it less vulnerable to supply chain disruptions. It brings the political reward of not producing rents from centralized extractive industries that feed networks of oligarchs and corrupt officials.

Ukrainian civil society is highly motivated to build back better. Soviet-era state failures and the incompetence of later governments mean that Ukrainians are accustomed to organizing locally and informally, creating strong civic pride and effective local government that could quickly implement circular economy practices.

A green Ukraine could present a sustainable and regenerative economy to the world, supporting EU climate leadership. When the Berlin Wall came down in 1989, people could see what a non-Communist society would look like because there was already one in Western Europe. But today, no climate-neutral economy exists to give everyone the courage to take the plunge. With a creative approach to EU membership, Ukraine could become that vision of the future.

Video: Will the war in Ukraine help or hinder attempts to reach net zero? | FT rethink
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