This study assesses the progress of EU Member States in embedding participatory governance processes to foster transformative climate governance. Through comprehensive criteria-based analysis and in-depth interviews across several nations, this publication unveils the current state of MLCED implementation, challenges in stakeholder engagement, and the adequacy of mechanisms designed to steer us towards a climate-neutral future.

In this 4th episode, together with investment and finance experts Julie Evain (I4CE) and Thomas Pellerin-Carlin (I4CE), we unpack the regulatory framework for mobilizing green investments that are needed for a climate-neutral future. Can current EU financial policies provide predictability to economic actors? Which policies do we need to ensure long-term vision toward climate neutrality? We also explore the role of the banking sector and the use of banks' transition plans to ensure banks consider climate-related risks and direct investments properly.

The 4i-TRACTION research has identified additional instruments with untapped potential and possible game changer qualities, that can help tackle challenges of transformative change other policies struggle to address. In this side event, the 4i-TRACTION project presented three policy instruments that can support transformative change: transition plans for banks, public procurement for climate neutrality and integrated infrastructure planning.

This paper addresses a gap by providing a conceptual basis to further the understanding of security implications of the EU’s transformation to a net-zero economy. It first defines the aspects of security under consideration (Section 2) and proposes a typology to classify fossil fuel exporting countries based on their exposure to world market prices, their capacity to adjust and their importance to the EU in terms of security issues (Section 3). It then takes stock of policy options that can be adopted in other countries to reduce adjustment costs to a changed economic environment (Section 4) and discusses how the EU can support these policies (Section 5). Finally, it highlights key implications for EU policy makers (Section 6).