The green transition at the economic-activity level among the EU27 countries

The structural adjustment to a green economy demands that the individualeconomic activities become well-suited to the rising climate challenge. Provided that theEU countries are unable or slow to adapt, negative consequences can ensue in terms ofenvironmental degradation and declining health status of the population. That is why theinitiative for green transformation should focus initially on the activities within NACE Rev. 2that are polluting the most – these are economic activities C. Manufacturing, D. Electricity,gas, steam and air conditioning supply and H. Transportation and storage. Some evidencefor CO2 abatement in these activities is presented, though a concern for a green fatigue israised. FE model is estimated over 2008-2022 to show that the price of carbon emissionshas not contributed sufficiently to curbing the CO2 pollution. In fact, it is needed to accountfor the fact that the higher price induces a direct positive effect on the progress to the 2030target, but also an indirect negative effect engendered from the replacement of closedproduction units with similar non-ecological ones. As a fundamental pillar of the GreenDeal the technological growth is propagated through the import of new capital eased bypositive cyclical conditions. It is of paramount importance that the countries which arethe biggest polluters do more, while the countries with insufficient institutional quality areadvised to make steps for its enhancement. The degree of decoupling between growth andCO2 emissions is evaluated.