On January 13 the opinion paper was sent to the Council of Ministries, the Prime-Minister, the Deputy Prime-Minister in charge of the NRRP, the Presidency, the National Assembly as well as other relevant institutions.
Almost two months have passed since the closing of the public consultation of the government-proposed draft for the National Recovery and Resilience Plan. The consultation attracted great interest, as more than 60 organizations from different sectors sent opinion papers with a lot of good recommendations. Unfortunately, as in the whole process of drafting the plan - now in the situation of reflecting the stakeholders' proposals - the actions of the government remain non-transparent, without public information and accountability.
Despite our repeated demand for the implementation of a clear and transparent evaluation process by an expert commission - we still missing such a methodology. The promises of transparency and involvement of all stakeholders have not yet been realized in practice, and the final version of the plan is unclear at the moment.
Bulgaria has the opportunity to benefit from about 12 billion euros in additional funds under the European Union's recovery mechanism “Next Generation EU”. This is a historic chance for implementing much-needed reforms in our country.
We have two choices:
- we can use this opportunity to realize the long-delayed and neglected green and digital transformation in our country, so as to create a modern and competitive economy with care for human health and nature;
or
- we can continue to be the country with the highest carbon-intensive economy in the EU, with the highest levels of energy poverty, on the brink of demographic crisis, and at the end of the rankings for digital development. Statistics are more than abstract numbers - those unresolved challenges affect the competitiveness of Bulgarian enterprises, our personal finances, but also our health. Air pollution and its health consequences are just one of the problems we can start solving with the “Next Generation EU”.
Unfortunately, the National Recovery and Resilience Plan still lacks an integrated vision, a holistic approach, and a long-term view for clear reforms. The Green Restart Coalition sounded the alarm about those flaws immediately after the announcement of the draft plan by Deputy Prime Minister Mr. Tomislav Donchev. But our work in support of the green restart has roots long before the presentation of the Plan - in July, the Coalition gathered more than 50 of the leading Bulgarian experts, who gave more than 130 measures for a green restart of the Bulgarian economy. In November, we gathered 10 leading specialists who gave over 30 specific recommendations for improving the Plan.
The deadline for approval of the National Recovery and Resilience Plans is approaching, and the ambiguity of the Bulgarian government is another alarming signal that many of the good proposals given before and during the public consultation could remain only statistics in strategy.bg
The Green Restart Coalition urges the government to make a clear commitment for revision of the National Recovery and Resilience Plan, based on an analysis of all proposals received during the public consultation. The real, not formal process of taking into account the views of all stakeholders is the only road to success. The government must recognize the need to significantly improve the Plan and find the necessary balance after expert analysis and stakeholders' consultation.
The task is not complicated but requires political will, a long-term view, and a clear commitment. The Green Restart Coalition is ready to help and provide assistance.
Moreover, as Bulgaria is running out of time regarding the Plan, the Coalition analyzed all of our more than 160 proposals and selected five pillars in the fields of our work and expertise: innovation and startup development, climate, energy, the circular economy as well as biodiversity and agriculture. In the annex to this letter, you can find the five priorities, developed with a special methodology that can be freely used by anyone.
The National Recovery and Sustainability Plan is not a project of one government, one sector, or one organization. It is an important first step towards change for a better future. Now is the time for Bulgaria to “get on the train” of the green restart, where many of our European counterparts are already. Staying at the “current stop” is not the right direction and the path forward.
Annex
Innovation and Startup Development
Creation of a Green Investment Fund for SMEs with a focus on startups and scaleups.
Two of the “Next Generation EU” priorities are to support the green and digital transformation of the economy as a path for overcoming the crisis and reaching long-term prosperity. In both directions, Bulgaria is experiencing serious challenges, and especially alarming is the SMEs digitization as those enterprises are the backbone of our economy and the biggest employer in the country. The EU data is clear - according to the Digital Economy and Society Index (DESI), Bulgaria ranks 27th in the Union while our country is labeled as a modest innovator by the EU Innovation Scoreboard. Those tendencies are a serious risk for Bulgaria, because, as the pandemic has shown, businesses unprepared for the digital world can fall off the economic map in days. But there is positive news as well - a small segment of SMEs not only does not lag behind technological development but also creates world-class innovations: digital-based products and services, as well as projects that fight carbon intensity and its causes and consequences. Those small and medium enterprises are the high-growth SMEs, popular as startups and scaleups.
The European Commission is increasingly turning its eyes to the significant role that startups can play as a source of innovation and economic growth. A number of European countries have created special programs to support innovative entrepreneurs because startup projects can help to expand the state’s economic boundaries, influence, and prosperity. Just one example: France is working systematically to become Europe's startup hub, including by creating a special program to support startups during the pandemic.
What are the reasons to prioritize the startups?
High-growth enterprises are a source of business innovation - of products and services that prepare and support the economy of the future. In this way, startups support economic transformation, increase competitiveness, and create new jobs. Last but not least, innovations created by startups have the potential to transform the whole economy - such examples are some of the major economic players today which were launched as startups during the Global Economic Crisis of 2008-2009: Instagram, Amazon, Zoom, Airbnb, WhatsApp, Square, Uber. In the past year alone, 18 unicorns - startups with a market capitalization of over 1 billion dollars - were created in Europe. Thus, Europe is almost catching up with the United States on this indicator. However, Bulgaria lags behind those trends and there is still no unicorn in our country. The reason: the lack of venture capital. This creates a danger that innovative Bulgarian entrepreneurs will leave Bulgaria and move their projects to countries with a more developed startup environment. And, unfortunately, we have been witnesses of such examples. In addition, in recent months, unlike other European countries, the Bulgarian government has not taken targeted measures to support the innovation ecosystem to overcome the effects of the crisis. The “Next Generation EU” mechanism can be our first important step in support of brave Bulgarian entrepreneurs.
The proposal
After analyzing more than 40 of our proposals in support of the innovative ecosystem, the Green Restart Coalition selected one major pillar: the establishment of a Green Investment Fund with a focus on startups and scaleups. The program must support the growth of innovative Bulgarian SMEs, working on a green, digital-based transformation of the economy and society.
The following steps are necessary for ensuring the functioning of the Green Investment Fund:
- Structuring it under the umbrella of an institution with a mandate - for example, the Fund of Funds;
- Allocating sufficient financial and expert resources - based on an analysis of investments in the ecosystem in recent years, its needs as well as the Bulgarian part of the “Next Generation EU”, we insist that the Fund has a budget of EUR 50 million per year or EUR 150 million for the period of the recovery plan;
- Establishing mandatory expert support for each approved project - a team of proven experts in business and science to provide mentoring support for business development and implementation of successful go-to-market strategies;
- Providing the management of the Fund to a professional fund manager after a public procedure until the end of the second quarter of 2021;
- Setting mandatory requirements for experience, in line with the leading world practices, on the team of the fund manager;
- Setting mandatory investment rules - the fund must support projects via equity or blended investments;
- Setting a rule for reinvestment - after the successful sale of the shares (exits), the income must be reinvested in the Fund, so as to guarantee the long-term life of the initiative after the “Next Generation EU”;
- Opening of the first call for support by the end of the second quarter of this year;
- Signing the first contracts with SMEs in the third quarter;
- Introduction of permanent mechanisms for oversight and control of the Fund by both the state and an expert council formed by scientists and business.
The creation of the Green Investment Fund via "Next Generation EU" will increase confidence in the Bulgarian economy at national, European, and global levels and will bring long-term economic benefits.
The economy of the future is already here and, as the pandemic has shown us, the unprepared can fall off the board in days. It is time to begin the long-delayed transition from a resource-based and carbon-intensive economy to one with value and care for human health and nature. Only in this way, Bulgaria will not lag behind the global green transformation and the digital revolution. Support for innovative startups is only a first but an important step in that direction.
Circular Еconomy
Raise awareness among the Bulgarian society about the challenges associated with the green development of the EU and ensure a detailed understanding of the means for their overcoming at a national and regional level. Develop and implement a comprehensive policy for educating and informing the public about the concept of sustainable economic development, its importance, and the opportunities for its implementation in Bulgaria.
What are the reasons to prioritize the need for informing and educating the Bulgarian society on the topics of green economic development?
The convergence of several strong trends such as climate change, scarcity of raw materials, biodiversity loss, and unsustainable waste management have put the focus on the emergency for a radical change of the global economic model and practices. In this context, the transition towards circular economy appears as one of the most viable solutions to break off with the traditional linear economic model which follows the “take-make-dispose” logic and simultaneously addresses the overarching environmental, social, and economic challenges that our societies are facing. School education and curricula are the means to provide the citizens, especially the young generation, with knowledge, competencies, and autonomy of thought in order to empower them to be actors in the transition process.
A key tool for achieving green transformation in the EU is reaching the widest possible audience with regards to the socio-economic and environmental problems that our society is facing, as well as the means to address them. Education in the areas of sustainable and regenerative development and circular economy is also among the key priorities of the Circular Economy Action Plan, one of the main blocks of the European Green Deal.
Yet, there is an insufficient understanding among the Bulgarian society on these topics. In the media, the materials related to green economic development are very limited. The educational programs in schools and universities do not adequately reflect these fundamental topics and there is no systematic integrated approach focused on training/retraining the current and future staff for more sustainable, green jobs.
While the progress in Bulgaria is slow and erratic, a number of EU member states have made significant steps towards informing and educating their citizens on the topics of sustainable development and circular economy. For example, Finland is in the process of gradually incorporating the principles of regenerative development and circular economy into the curriculum at all educational levels. The need for adequate training of staff in order to meet the future needs of business, administration, and the non-governmental sector is also a key priority for a number of other countries such as Ireland, Denmark, and Austria.
The introduction of educational programs and financing information campaigns on the topics of circular economy and green development can lead to multidimensional benefits and contribute to a positive trend within the society (from a socio-economic, environmental, and innovation capacity perspective). This could result in increasing the competitiveness of the Bulgarian economy and achieving a number of UN Sustainable Development Goals (UN SDGs), such as Goal 3: Ensure a healthy lifestyle and promote well-being for all at all ages; Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all; Goal 7: Ensure access to affordable, reliable, sustainable and modern energy for all; Goal 9: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation, etc.
What is needed to achieve this goal?
The National Recovery and Resilience Plan "Next Generation EU" needs to include the following mechanisms for raising awareness and ensuring the topic of sustainable development and circular economy are integrated into the curricula:
- Education from early childhood (kindergartens, schools)
Introduce children to the environmental impact of human activity and the culture of consumption in particular. In kindergarten and during the initial educational stage, such training is best perceived in the form of practical exercises and game models. At junior high school and high school levels, there is a progressive development in students' abstract thinking and they are able to perceive a combination of theoretical and practical knowledge. At these educational levels, specific good examples of circular models could be considered, as well as interactive exercises to improve existing business models.
- University courses and programs
Develop tailored pedagogical contents, tools, and materials adapted to different audiences in accordance with the needs of the programs offered by the higher educational institutions in our country, in order to update the existing curricula and integrate the concepts of green development. Create specialized curricula for sustainable development and circular economy, focused not only on the economic but also on the social, cultural, and environmental benefits.
- Vocational training, retraining, lifelong learning
Develop and fund a wide range of vocational training, targeting both executives and operational staff, with the aim to acquire the skills needed for the transition to a green and carbon-neutral economy. Retrain citizens for green jobs with the main focus on the regions that are strongly dependent on the coal industry. Create an educational platform with courses on the topics of sustainable development and circular economy that address the needs of the various economic sectors. Integrate the educational platform with the existing tools of the labor offices for professional development. Create career opportunities for the unemployed through regional pilot programs - collaborate with municipalities, labor offices, local businesses.
- Information campaigns through media programs, publications, events, and seminars
Fund PR and media campaigns aimed at informing and engaging the general public and increasing trust between consumers and producers (local production, organic farming, etc.). Campaigns to raise awareness of the benefits of the circular economy among small and medium businesses.
- Institutional commitment at the national and regional level
Train executive and operational municipal staff. Finance local and regional green initiatives, pilot projects in the field of the circular economy.
For the effective implementation of the outlined priorities, we recommend the following actions and timelines:
- Define clear objectives and criteria for evaluation of the projects for development and integration of new educational content on the topics of circular economy and sustainable development, which should be periodically reviewed and updated in accordance with the Bulgarian and European directives, as well as the latest developments in this field: 2021
- Develop and integrate educational content and tools with mainly practical and game-oriented content on the topics of green development for kindergartens and primary school: 2021 - 2022
- Develop and integrate educational content and tools including both theoretical and practical material on the topics of circular economy and sustainable development for the stages of junior high school and high school (according to the profile of the respective high school): 2021 - 2023
- Develop and integrate educational content and tools, including theoretical and practical material on the topics of circular economy and green development for higher education institutions (tailored to the profile of the respective program): 2021 - 2023
- Develop a comprehensive program for managerial and operational municipal staff aimed at introducing and elaborating on the topics of green development and circular economy: 2021 - 2022
- Develop mechanisms for financing PR and media campaigns directed to the general public, as well as campaigns targeting the business and raising awareness of the benefits of green development and the circular economy: 2021.
Climate change
Establishment of a specialized climate fund to support the development of research and development (R&D) and the implementation of the results of technological research, development programs, and projects that lead to finding and implementing advanced and vanguard solutions to deal with the climate crisis, incl. accelerated implementation to the available climate technologies, such as electrolysis, heat pumps, energy storage, plant genetics, removal of greenhouse gases, etc.;
What are the reasons for prioritizing climate change?
The costs of emissions are expected to continue to rise in all related segments of the economy and this will further affect Bulgaria's competitiveness as global and EU-wide efforts to tackle the climate crisis are getting more intensive.
The funds from the Recovery Plan should help to overcome the current challenges and to achieve the main goals and the common European priorities: the implementation of reforms, modernization, digitalization, green transition, and decarbonization. These actions should have a strong social aspect, ie. measures, and resources to be targeted at people and jobs creation, as well as to lead to decarbonization and adaptation. Clear medium- and long-term commitments are needed to tackle the effects of climate change as a top national priority
Determining the need for investments in environmentally friendly technologies and sustainable solutions, as well as providing appropriate funding are crucial for achieving the country's climate goals and shaping a new model of economic transformation and sustainable overcoming of the consequences of the pandemic.
In order to achieve this goal, the following must be achieved:
- Real decentralization of the regions and change of the legislation for support of public-private partnerships in all spheres of the economy for the development of the decisions in the direction “climate and energy”;
- Revised the mechanism, which forms the tax burdens in the direction to relieve the business to implement climate solutions. Including specific business investments in future-oriented opportunities, implementation of electric vehicles, energy efficiency measures, investments in artificial intelligence and robotics, to create sustainable jobs. Measures that can be set as initial state support and be part of the Recovery Plan for a certain period with certain goals and indicators;
- Creating requirements for green public procurement with the main focus - reducing emissions and overcoming the climate crisis, which requirements to enter the administration and municipalities, and subsequently become mandatory for all public procurement.
Renewable Energy
Guaranteed participation of citizens in the energy system, as producers of energy (for electricity, heating, cooling, storage, and transport) for their own needs, through favorable changes in legislation, available financial instruments, information campaign, and involvement of all stakeholders in the process.
In a world facing a climate emergency, transforming fairly towards a fossil-free energy system in Europe has never been more urgent. Communities across the world are already feeling the impacts of climate breakdown. Europe, as one of the world’s richest regions and the birthplace of the industrial revolution, has the responsibility to lead the fight to fix it.
A socially fair energy transformation means putting renewable energy into the hands of communities and people – taking back power from the fossil fuel industry, which has consistently blocked action that threatens its own financial interest, at the expense of people and the planet.
In theory, Bulgaria achieves the European goals for renewable energy in the overall mix. In practice, this is due to the cost of poorly managed water resources and a high share of biomass combustion, which is proving to be an unsustainable pattern associated with deforestation and deteriorating air quality. Bulgarian citizens are still bystanders of the processes in the energy sector. However, European policies give them another role - active actors. Energy production by citizens and communities has huge potential in Europe. A study by the Dutch independent organization CE Delft shows that half of EU citizens, including local communities, schools, and hospitals, can produce renewable energy on their own by 2050, meeting 45% of their energy needs. With the new energy rights for communities and citizens, the potential can be fully realized and Europe can move on the path to the necessary energy transition.
As written in the Directive on common rules for the internal market for electricity, consumers should be able to consume, store, and sell self-generated electricity to the market and to participate in all electricity markets by providing flexibility to the system, for instance through energy storage, such as storage using electric vehicles, through demand response or through energy efficiency schemes. New technology developments will facilitate those activities in the future. However, legal and commercial barriers exist, including, for example, disproportionate fees for internally consumed electricity, obligations to feed self-generated electricity to the energy system, and administrative burdens, such as the need for consumers who self-generate electricity and sell it to the system to comply with the requirements for suppliers, etc. Such obstacles, which prevent consumers from self-generating electricity and from consuming, storing, or selling self-generated electricity to the market, should be removed while it should be ensured that such consumers contribute adequately to system costs. Member States should be able to have different provisions in their national law with respect to taxes and levies for individual and jointly-acting active customers, as well as for household and other final customers.
In order for the energy transformation to 100% renewable energy with the participation of the citizens to take place in time, the following are needed:
- Specific legislation and regulations to stimulate energy generation for self-consumption, including the transposition of the Renewable Energy Directive (RED II) by June 30th, 2021;
- Facilitated administration of energy generation and consumption by citizens - the introduction of the so-called net metering;
- Strong process for stakeholder engagement - information platforms with accessible, practical information for new prosumers of renewable energy and for the involvement of energy communities; explaining the possibilities and steps for own energy generation;
- Available financial instruments, including program and public-private financing, practical schemes for bank lending, transparency, and accountability of the schemes.
Biodiversity and Agriculture
The identifying key ecosystems (forest, freshwater, marine, agricultural, and urban green areas) and providing financial support through NRRP for the development of a new socio-economic-environmental model for planning and administration of the EU public funds in Bulgaria founded on Nature-based solutions (NbS), The UN Sustainable Development Goals and the climate and human health benefits of protecting and restoring natural ecosystems
The healthy and diverse ecosystems are at the core of the NbS and are key to success in addressing social, economic, and environmental challenges. These solutions make possible provision of critical ecosystem services, increase and improve resilience to climate change and overcome local challenges making it easier to deal with natural disasters, such as floods or air pollution, and reducing human health risks and well-being.
The NbS are also essential to ensure sustainable farming systems and practices. In the field of good agricultural practices, solutions are available that provide win-win scenarios that simultaneously address climate change mitigation and adaptation, biodiversity conservation, and sustainable soil and water management. Most solutions make long-term financial sense for farmers, but there are short-term costs and risks that need to be overcome and can also be supported through the recovery and resilience mechanism.
What are the reasons for prioritizing ecosystem-based solutions?
The European Union recognizes that the loss of biodiversity, the deterioration of the environment, and the need for significant greening of agricultural practices are among the main threats to the existence of Europe and the world, and puts a new approach to biodiversity and natural resources as a key basis for health standard of living and economic development of our society. With the European Green Deal, the community sets ambitious strategic goals such as those in the new Biodiversity Strategy and the Farm to Fork Strategy for a just, healthy, and ecological food system. Bulgaria can and should be among the leaders in these priority areas of the Community.
These and many other promising initiatives have the potential to both address the biodiversity crisis and unsustainable agricultural practices in Europe and to support Covid-19 sustainable economic recovery. However, clear objectives, measures, commitment, implementation mechanisms, adequate funding, and long-term monitoring are needed to achieve the desired impacts and be effective.
The EU Biodiversity Strategy to 2030 is ambitious and fulfills the commitments of the EU and its Member States as parties to the UN Convention on Biological Diversity. The strategy aims to ensure that ecosystems are healthy and resilient to climate change, rich in biodiversity, and provide a range of services that are essential for the prosperity and well-being of citizens. Whereas one of the milestones of the European Green Deal is to improve the EU natural capital and whereas natural capital can make a significant contribution to reducing the impact of floods, for example, the NbS can play a significant role in promoting economic growth, which will put the EU back on the path to sustainable recovery.
In order to integrate the EBS into the National Sustainability Plan, it is necessary to:
- To plan ecosystem solutions aimed at natural ecosystems:
- To perform a unified national mapping of key natural ecosystems (forest, freshwater, marine, and grassland) and a unified socio-economic assessment of the ecosystem services they provide. Follow-up planning of measures for conservation, sustainable management, or restoration of natural habitats and their biodiversity, linked to the EU Biodiversity Strategy until 2030 and the requirements of EU environmental directives;
- Creating new and restoring degraded ecosystems to improve ecosystem services at the landscape level, provide habitat for species, and improve the link between urban and rural areas;
- To plan the implementation of ecosystem solutions for the agricultural areas and the implementation of environmentally friendly agricultural practices, considering the mitigation and adaptation to climate change, conservation of biological diversity, conservation of soil fertility and freshwater:
- Wide application of agri-environmental agricultural practices;
- Promotion of agroforestry, multifunctional forest landscapes with protective functions and those for food production;
- Improving agrobiodiversity for more sustainable agricultural systems adapted to climate change and aimed at protecting human health;
- To plan ecosystem solutions in the urban environment: urban green areas, pollinators, green corridors, restored wetlands, sustainable urban drainage systems or green roofs;
- The measures and interventions should have an indicator of results and an indicator of impact on the environment and climate with an effective monitoring system;
- Improving secondary legislation related to the protection and management of key ecosystems and linking them to human health.
