A European Green Restart

Photo by Jasmin Sessler CC by https://unsplash.com/photos/wkwPycxOBCY

The “European Green Deal” (EGD) was introduced as Europe’s ambitious “new growth strategy” to meet the challenge of climate change. Focusing on “green growth”, the proposal aims to create economic incentives for international cooperation on a green transition. While this strategy has received much critique from environmental advocates for not being sufficiently ambitious to reach emission-neutrality, it has become a tool of the ‘green economic recovery’ to revitalize the economy after the Covid-19 pandemic.

After declaring a “climate emergency” in 2019, the European Commission (EC) presented the European Green Deal (EGD) in December 2019, making environmental policy a key pillar of the European Union. At a time, at which public support for environmental policies was unprecedented, it attracted a lot of attention, being hailed as the “biggest overhaul of policy” since the establishment of the EU (Harvey, Rankin & Boffey 2019). In the Covid-19 pandemic however, environmental issues have come out of focus, while the biggest financial crisis of the 21st century is expected (Kübler 2020). Nevertheless, the EU has made policies of the EGD part of its economic recovery plan. In the new Multiannual Financial Framework (MFF) it is planning a budget of more than 500 billion euros to support Europe’s recovery and a green transition towards carbon-neutrality. What made the EGD survive the financial pressures of Covid-19?

The European Green Deal – A double crisis recovery plan?

The EGD was introduced as “Europe’s man on the moon moment”, promising unprecedented ambition for a common goal (Reuters 2019). The Green Deal terminology leads back to US President Theodore Roosevelt’s “American New Deal” introducing unprecedented social and economic policies in the United States to recover from the economic crisis in 1933. The European Greens used the terminology of the “Green New Deal” in 2009, and in 2019 the term reappeared in the “Green New Deal for Europe” proposal by the Democracy in Europe Movement (Graw 2019; DiEM 25 2019), pushing for a transformation of the economy and the treatment of natural resources. Ursula von der Leyen used the “Green Deal” as her key policy project as President of the Commission (von der Leyen 2019). She did, however, drop the “New” out of the “Green New Deal” terminology. While it seems like a coincidence to develop a “bold” and unprecedented recovery plan for both the climate crisis and the economic crisis, politics has latently embedded old strategies prioritizing the economy to combat climate change.

More environmentally ambitious or focused on economic benefits?

EU environmental policy has been internationally lauded for setting environmental standards, while also receiving critique for a “neoliberalization” of climate policy (Bailey 2007; Lauber & Schenner 2011). To see if the EGD is another example of this neoliberalization, it is important to assess its underlying ideology, even though concrete policies are not yet implemented. The EGD aims to convince the readers of the necessity of tackling climate change and embarking on a transition that will be costly but creating economic growth at the same time. The most pressing issues in the EGD are framed as:

  • Fighting climate change and protecting the health of European citizen’s and its natural capital,
  • Creating economic growth through ecological modernization,
  • Fighting economic and social consequences of phasing out essential European industries (EC 2019).

Alluding to the problem of climate change, the EGD’s solution is sustainable economic growth focused on an efficiency increase of production, as well as guaranteeing redistributive justice. By promising “benefits for all stakeholders”, “competitiveness”, economic gains from a “Carbon Border Adjustment Mechanism”, and relying on “private funds” the EGD’s future strategies build on the neoliberal institutionalist ideology, using primarily economic incentives to induce international cooperation (Keohane 1984).

Implicit green growth strategy

Employing these political goals, the EGD follows the “inclusive green growth strategy” of the World Bank (2012, 35). The term “green growth” is, however, not mentioned in the proposal. An EU funded research group has argued in 2016 that growth incentives for an ecological transition are dangerous and hardly feasible, as a focus on economic benefits often distorts fundamental change, subordinating to the pressures of the international market (Antal & van den Bergh 2016). Accordingly, environmental agencies quickly argued that the reduction targets as proposed in the EGD do not suffice (Greenpeace 2019). “Continued economic growth as a key objective” was believed to hinder the realization of the environmental protection goals (World Wildlife Fund 2019). Accordingly, it seems to be a conscious effort to refrain from a “green growth” framing in the EGD, which is a criticized concept, for not wholeheartedly protecting the climate, and using ‘new growth’ instead.

A deal for the recovery

The EGD strives to interlink economic and environmental policy fundamentally. While the pressures of the international economic markets often hinder wholehearted environmental protection, the neoliberal aspects of the EGD could be what generates cooperation on environmental policies despite the financial pressures of the Covid-19 pandemic. In particular in a situation of high unemployment, green economic incentives could “set the stage for cleaner post-recession growth patterns” (World Bank 2012, 14). Even though this is somewhat unsatisfactory given the significance of immediate climate protection measures, it might be a necessary compromise to secure jobs.

Status quo

  • By being framed as a neoliberal institutionalist environmental policy, the EGD has become the recovery instrument for both the climate and the financial crisis of the 21st The economic incentives in the EGD are valuable tools to ‘restart’ the economy in an ecologically modernized and efficient way, address unemployment and allow cleaner growth opportunities, which will incentivize stakeholders to not continue business as usual after the crisis (Erbach 2020; World Bank 2012).
  • A green growth strategy generates the support of industry and stakeholders for a green transition. While some member states of the EU have remained skeptical about restrictions on their autonomy and individual interests in big industries, such as coal or atomic energy, a focus on economic incentives remains fruitful to incentivize cooperation (Keohane 1984).
  • From an environmental standpoint, however, a constant priority of economic growth will impair the 2050 targets (Antal & van den Bergh 2016, 171f.). As immediate action is needed to combat climate change and become emission neutral, the EGD is a right direction, but is possibly not tackling the targets quickly enough (Thema et al. 2020; Greenpeace 2019). Therefore, the public needs to uphold the pressure for environmental policies that effectively protect the climate.

 

About the author

Maya Rollberg is a B.A. student from the liberal arts in the University College Freiburg, where she is currently writing her thesis about the European Green Deal from an international relations perspective. After studying in Pennsylvania and Freiburg, she plans to continue her master in Environmental Governance in Freiburg.