The European Green Deal: The Proof Will Be in the Pudding

January 16, 2020

 

 

On December 13th, the leaders of the European Union agreed to adopt the European Commission’s strategy to combat climate change, called the “Green Deal”. This €100 billion action plan lays the ground for a proactive cooperation between Member States, aiming at carbon neutrality by 2050. Such a vast programme encapsulates all sectors of the EU’s activity, so as to amend and improve industry, agriculture, transportation… in a way that fosters ecological transition. Although another implicit goal of this policy is to strengthen European unity through common environmental objectives, it has already suffered important setbacks in that matter, questioning the set of shared values it is trying to put forward. This article will explore the goals and limits of this policy.

 

The origins of the Green Deal

 

The Green Deal stems from simultaneous demands in Europe and the United States for a major governmental investment in renewable energy sources. It is best epitomized by the English Green New Deal Group, which released a report entitled “A Green New Deal”  in 2008, calling for the re-regulation of finance and increased taxation in order to tackle climate change[1]. The expression itself derives from Franklin D. Roosevelt’s policy in the 1930s that was meant to deal with the violent effects of the 1929 economic crisis upon the American society. This series of policies combined conjunctural reforms (such as pumping in federal funds to pare down the unemployment rate through public benefit construction works for instance) and structural reforms (e.g. the separation of commercial and investment banking) in order to reflate the American economy.

It is that legacy of state interventionism that the Green New Deal takes up and advocates. The shift from a productivist capitalism to a greener society requires such structural reforms, which can only prove to be efficient if they have force of law. The main idea is that if states can be held responsible for the deregulations that occurred during the 1980s, they can (and should) help re-regulating global economy so as to reach a “green growth”.

 

The main objectives of the European Green Deal

 

Such concerns motivated the European Commission’s decision to put forward a strategic plan spanning the next thirty years. Its main goal is to implement a “new growth strategy”[2], in order to reach carbon neutrality by 2050 (namely, the phasing out of all greenhouse gases emissions in all European activities). This ambitious ecological transition relies on various proposals. An effective carbon pricing throughout the entire economy aims at paring down emissions to the bone, while enhancing technological cooperation would enable Member States to progressively become carbon-neutral, through proactive, common scientific research. Such a policy aims at implementing a circular economy at all levels, whether it be governmental cooperation for energy supplies or improving the European recycling rate (only 12% of the materials used in the EU’s industry come from recycling[3]). For this transition plan to be fully enacted, the Commission wants to bring to a vote the first European “Climate Law” in March 2020, in order to set the EU “onto an irreversible path to climate neutrality”[4] by 2050.

Besides these internal reforms, the Green Deal also aims at reshaping the EU’s diplomacy. Lacking such hard power as the American military, the EU focuses on strengthening its worldwide soft power through environmental diplomacy. It is at the heart of its alliance system with the like-minded (such as Japan, for instance, with the 2019 Economic Partnership Agreement[5]) so as to set a credible example. The Green Deal is regarded as an opportunity for the EU to exhibit the quality of its life standards, based on the Paris Agreement, concerning food, health, infrastructures… In other words, the Green Deal is also an attempt at showing that the world’s largest single market can serve as an example of sustainability. 

 

Internal limits and contradictions

 

However pivotal the Green Deal was introduced as, it has already suffered some major setbacks. Firstly, Poland refused to adopt this long-term plan and was exempted (for the time being) by European Council President Charles Michel. Indeed, Poland still heavily relies on coal for 80% of its electricity[6] and thus asks the EU for more generous funds in this ecological transition. Warsaw’s refusal to take up the Green Deal undermines the sense of political unity this reform was supposed to embody. It sheds disturbing light upon the discrepancy between Member States in the conception of a collective, European action, as well as a major gap in the various energy supplies.

The energy issue has become, as it were, the main bone of contention in this reform, even amongst its leaders. The Green Deal has to come with a new taxonomy for sustainable finance, in order to “determine which economic activities can benefit from a sustainable finance label at European level.”[7] While France advocated that nuclear energy should be green-labelled, as a means for ecological transition, Germany refused to include it in the new taxonomy because of the scientific uncertainty of waste treatment. This disagreement widens existing divisions, and woefully evinces the absence of consensus related to the very definition of a green energy, based on Member States’ own interests.

Another ambiguity becomes apparent within the Green Deal’s seminal measure: “a carbon border adjustment mechanism, for selected sectors, to reduce the risk of carbon leakage”[8]. Carbon leakage refers to the relocation of greenhouse gas-producing activities outside of the EU, in order to avoid carbon taxation. This policy would thus prove to be a great incentive for both EU and non-EU countries, insofar as it would be tantamount to taxing highly polluting productions. It would therefore encourage technological innovation and green transition, so as to be able to reach the EU’s single market. This specific point of the European Green Deal exemplifies its strong ambitions and could somehow be regarded as its cornerstone. Indeed, it would affect both Member States and non-Member States, and would add a coercive touch to this set of reforms.

However, it has inevitably raised some major concerns. China has already denounced what it calls “climate protectionism”, calling for less trade restrictions as a means of promoting multilateralism and a common fight against climate change. Moreover, if we bear in mind the Trump Administration’s hostile reaction to EU tax raises, another trade dispute with the United States following a carbon adjustment mechanism is not unlikely. This particular policy epitomizes the dilemma the EU is facing. Is it ready to fully implement this ambitious, game-changing programme? Or will it back down on such measures, lest it should wrestle with the United States and China? It will not only put to the test the EU’s determination to take up the environmental challenge, it will also reveal its ability to put its foot down in front of international partners and competitors, when it comes to defending at home the very principles it is promoting abroad.

 

The Green Deal is a praiseworthy watershed in European politics. It undeniably shows growing awareness of the ecological crisis at a political level, in the wake of the 2019 Parliament elections and the notable progression of the Green coalition (+ 22 seats). It represents a consistent, collective response to the challenges raised by climate change, all the more as it is willing to shape European policy in the long-term, both at the foreign and home levels.

 

However, the internal dissensions and quarrels we have mentioned undercut the impression of unity the European Commission is trying to display. They raise major questions as to the future implementation of this set of pressing reforms, even more as far as trade relations with China and the United States are concerned. Furthermore, it is yet to be enacted. Although the majority of the European Parliament has already backed the deal, we may wonder about its effectivity. Following the Madrid COP25 and the outcry caused by the international community’s inability to reach a common position (exemplified by the conclusion of negotiations two days after the stated deadline), the EU’s Green Deal arouses high expectations of cohesive, political action against climate change. Pending parliamentary vote and actual enactment, the proof of such awareness will definitely be in the pudding.

 

 

Bibliography

 

Green New Deal Group (2008, July 21), “A Green New Deal”, retrieved from https://greennewdealgroup.org/wp-content/uploads/2019/06/a-green-new-deal.pdf

 

European Commission (2019, December 11), “The European Green Deal”, retrieved from https://ec.europa.eu/info/sites/info/files/european-green-deal-communication_en.pdf

 

European Commission in the United Kingdom (2019, December 12), “The Green Deal — A Roadmap to Make Europe Climate-Neutral by 2050”, retrieved from https://ec.europa.eu/unitedkingdom/news/“green-deal”-–-roadmap-make-europe-climate-neutral-2050_en

 

European Commission (2019, January 31), “EU-Japan Agreement Enters into Force”, retrieved from https://ec.europa.eu/commission/presscorner/detail/en/IP_19_785

 

Rankin Jennifer (2019, December 13), “European Green Deal to Press Ahead Despite Polish Targets Opt-Out”, The Guardian, retrieved from https://www.theguardian.com/environment/2019/dec/13/european-green-deal-to-press-ahead-despite-polish-targets-opt-out

 

Barbière Cécile (2019, November 27), “Paris and Berlin Divided Over Nuclear’s Recognition as Green Energy”, Euractiv, retrieved from https://www.euractiv.com/section/energy-environment/news/france-and-germany-divided-over-nuclears-inclusion-in-eus-green-investment-label/

 

Cadell Cate (2019, November 27), “China says CO2  Border Tax Will Damage Global Climate Change Fight”, Reuters, retrieved from https://www.reuters.com/article/us-climate-change-accord-china/china-says-co2-border-tax-will-damage-global-climate-change-fight-idUSKBN1Y105T

 

 

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