Rouven Stubbe, Georg Zachmann: Towards a green modernisation programme for Ukraine

Ukraine recently committed to carbon neutrality in 2060 and signalled support for the European Green Deal aiming for net zero emissions by 2050. On the course of its decarbonisation and the country’s path towards the EU, it will need to adopt the stricter environmental rules and standards introduced by the Green Deal. At the same time, it will need to restructure its coal sector, which is heavily subsidised, loss-making and environmentally harmful. To deal with these issues effectively, we suggest a well-coordinated set of policy measures across three areas of action – better regulation of the energy market, taxing carbon emissions and the creation of a green modernization fund. The fund could channel a part of carbon tax revenues towards supporting green modernisation of Ukraine’s energy and industrial sectors while another part might be used for social protection of former coal miners, lower-income segments of the population and other vulnerable groups.