Introduction

In recent years, green financing has been significantly gaining popularity in the whole European Union. It is no different in the case of Poland. Green financing became a significant development driver in the private and the public sectors. The Polish governmental actors need to incorporate the United Nations (UN) Sustainability Goals and the criteria of the European Green Deal into their governance. Analysts often argue that private and public green investments need to develop simultaneously to achieve the most optimal level of prosperity. However, some areas are not as easily accessible to private funds, and that is where the government needs to work extra hard to ensure the financing is, in fact, green.

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The Public Sector’s Green Expenditures

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The expenditure on environmental protection among the European Union (EU) economies grew 40% between 2006 and 2020. It is safe to assume that this trend will continue as the European Parliament pays more attention to eco-friendly ventures. Despite that, it must be highlighted that not all EU countries decide to promote sustainable development equally.

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Figure 1 (below) incorporates all EU nations and their expenditure on environmental protection as a percentage of each country’s gross domestic product (GDP). The EU average equals 2% of GDP. While some countries have already crossed the 3% threshold, many nations are still below the 1.5% mark. In this ranking, Poland places relatively high between France and Italy. Considering the fact that Poland is the EU’s sixth-largest economy by nominal GDP, the country’s contribution is undoubtedly meaningful. Nevertheless, the Central-European nation should be encouraged to achieve the 2% total shortly, which may be a demanding task considering the impact of the war in Ukraine and the EU-wide inflation on the Polish financial state.

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Next Generation EU

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To combat the economic issues that arose with the Covid-19 pandemic, the EU proposed the “Next Generation EU” fund, often referred to as a recovery plan for Europe. The whole budget distributed among all of the EU economies is over €800 billion. Each country gets to manage the part of its funds separately, which provides an enormous opportunity to invest in green projects.

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The Polish government will receive a total of €58 billion from the recovery fund and pledged to spend almost 40% of it on issues related to environmental protection. The spokesperson for the government highlighted investments in areas like energy and reduction of energy intensity, green and intelligent mobility, as well as digital transformation. Those investments in the public sector will hopefully encourage private investors to allocate their resources to many green projects.

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Conclusion

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A balanced assessment of the above information suggests that as the private entities in the EU become more aware of green financing, the same is happening in the public sector. The government must allocate its resources to areas less accessible to the private actors. Poland has been giving almost 2% of its GDP to issues related to environmental protection, which should be further improved. The Next Generation EU fund is a significant opportunity for EU economies to facilitate development in green projects. The Polish government pledged to allocate considerable funds to climate-change-related issues.