by Amerissa Giannouli,
Project Manager,
inspirer of STEP Forward
The European Green Deal (EGD) is the new plan to make the European Union (EU)’s economy sustainable. It is the new growth strategy that aims to turn climate and environmental challenges into opportunities.
How?
It promises climate neutrality by 2050, with the help of promising investments and resource efficiency. This will be achieved through technological innovations with the aim to decouple the profound problems caused by the typical production and consumption patterns of our time. And such transition is going to be just and inclusive for all.
What does this include?
EGD is a reference to the New Deal and a series of programs, public work projects, financial reforms, and regulations implemented by President Franklin D. Roosevelt in the United States (US) between 1933 and 1939. The New Deal responded to the needs for recovery from the Great Depression. Although, many people might say that it was also World War II that helped the US economy recover. The EGD includes a road-map of more than 50 actions that need to be taken in order to meet the goal of climate neutrality.
It is focused on “green” strategies for the energy sector, the industrial sector, the mobility sector and the agricultural sector. These represent the main economic industries responsible for climate and environmental problems. Achieving climate neutrality requires their full mobilization. Resource-intensive sectors such as textiles, construction, electronics and plastics will have to reduce waste and succeed resource efficiency through new technologies.
Strategies on zero pollution and toxic free plans for air, water and soil will be adopted to address pollution from large industrial installations and other harmful sources of pollution. It includes smart mobility transitions and transportation infrastructures to reduce road transport towards less polluting and more energy efficient modes of transport. Furthermore, there will be legislation related to energy performance of buildings and digital technologies, as well as plans for renewable energy systems.
Strategies on biodiversity conservation and protection include setting of targets and commitments to address the main causes of biodiversity losses in the EU. Forest and maritime spaces management will be included in these strategies. With regards to agriculture, EGD proposes the “Farm to Fork” strategy that aims to reduce the use of chemical and hazardous pesticides, the use of fertilizer, the use of antimicrobials for farmed animals and in aquaculture, as well as supports organic farming.
The EU policies will need to be in line with these “green” strategies. Hence, the European Commission (EC) will work with the Member States to ensure that current legislation and policies are relevant to the EGD, in particular reforms to ensure efficient pricing of carbon across the economy. Finally, the EGD envisions the EU becoming a major player on sustainability in the world supporting the implementation of Sustainable Development Goals.
How are these going to be financed?
According to the EC, the EGD requires around €1trillion which will be drawn from the EU Budget and private investments. The EC proposes the Just Transition Mechanism (JTM), a public loan facility to support green investments together with the European Investment Bank (EIB) which has agreed to phase out its financing for fossil fuels within the next two years to become the world’s first ‘“climate bank”. JTM will secure “investments for helping territories and regions most affected by the transition to a climate-neutral economy, prioritizing those that have less capacity to deal with the costs of the transition”. Historically, there are countries that due to quick industrialization have experienced fast growth using oil, coil and extracting other important minerals from different parts of the earth. These countries can afford making such proposed transitions, since they have the technology, the money and access to elements required to build such technologies. However, countries that have recently, if at all, entered the path of industrialization will not be able to financially and economically support such transition. EGD promises to support them financially to make this transition.
Critics
The objective of economic sustainability implies that economics, instead of politics, shapes our lives and interventions towards the planet we are living in (economism). This puts the center of the EGD policies the economic activities and not the environment. Indeed, choosing to consider economic sustainability and specifically, economic growth as the main driver for climate neutrality, is a political decision that demonstrates the priorities of this “deal”.
EGD assigns primary importance to the economy and the economic achievements, as long as these are measurable, usually through the Gross Domestic Product Indicator (GDP). To do so, the climate challenges and the environment are being turned into commodities (commodification). They can be traded in the market and used to develop profitable projects to attract investors. Economic valuation methods, such as the Ecosystem Services Approach, are applied to assign economic values to… anything in order to attract the attention of politicians and business leaders towards environmental protection. On the one hand, such methods could solve for the fact that GDP is a bad and not accurate measurement of economic welfare and send the “right” market signals towards “green” investments. But on the other hand, aiming for more economic growth to solve problems caused by the same process that generates growth (linear materialistic system) will inevitably lead to a vicious circle. Besides, we know already that markets fail. One good example of market failure in the fight against climate change is the EU Emission System (ETS) which has been criticized for over-allocation of permits, huge profits for energy generator companies and price volatility. Usually, small and weak business actors cannot compete with the large powerful ones who are in fact the main polluters and tend to dominate the ETS.
EGD proposes the Circular Economy (CE) to deal with the linearity problem. Production and consumption wastes can be minimized and resources will be used more efficiently by keeping the products, equipment and infrastructure in longer use. Thus, it promises improving productivity and resilience of these resources through technological innovations and recycling mechanisms leading to resource efficiency. EGD praises the making of large scale corporate investments on “green” and “smart” projects, as a plausible solution to the ecological and climate crises. Such investments will generate profits, profits will send the signal to the businesses to create more (green) jobs and everything will be fine as long as we keep the machine going generating (green) economic growth.
EGD, similarly to many mainstream greenwashing approaches, fails to consider the environmental limits to growth imposed by the laws of physics and the planetary boundaries. According to the Club of Rome and their report on Limits to Growth (1970), “earth’s resources probably cannot support present rates of economic and population growth much beyond the year 2100, if that long, even with advanced technology”. This is due to the use of non-renewable natural resources such as oil and minerals that put a limit to how much economies could grow.
Even if renewable energy resources are used instead of the exhaustible ones, as suggested on the EGD, this will not be enough to cover the needs of contemporary production and consumption patterns since the Energy Return on Energy Investment (EROI) for renewable energy is lower than the EROI of fossil fuels for example. Furthermore, in order to produce a particular amount of energy through renewable energy technologies, you will have to use extra energy to produce the parts required to build the technology that harvests the wind, the waves or the sun. In addition, such projects have been blamed for biodiversity loss in the land and sea that are located. At the same time, there are environmental conflicts, local pollution and social struggles for the control of the resources (ie. rare earth minerals, land use conflicts) that need to be extracted to cover the immerse demand for renewable technologies. Hence, the idea to become entirely powered by renewables without harming the environment contradicts with the EGD promises for efficient resource use. The materials required, the wastes produced and social sacrifices needed to undertake such projects that secure our western ways of producing and consuming surpass the environmental benefits promised.
Additionally, according to the Jevons paradox, even if we can reduce the necessary amount of resources used to meet our economic needs through CE, technological progress and smart policy interventions (increasing resource efficiency through productivity), the rate of consumption of that resource will rise due to increasing demand. To put it simply, if a business needs to spend less energy to produce product A, the same business is going to produce more product A in order to have higher profits (aka economic growth) leading to more resource extraction and wastes (rebound effect). Of course, the same business could invest in creating more jobs but it does not seem to be the case if the business aims to maximize its profits.
This “new” growth strategy suggests that technological change and substitution will allow us to absolutely decouple economic growth from resource use and carbon emissions. There will be no additional ecological damage through malevolent production and consumption practices. However, according to J. Hickel and G. Kallis (2019), there is no empirical evidence on resource use and carbon emissions that support such theory. Furthermore, absolute decoupling from carbon emissions is highly unlikely to be achieved at such a fast rate to prevent global warming over 1.5°C or 2°C.
In the same line of thought, if we buy a more efficient car that needs less energy, we are going to spend more time driving and travelling longer distances. We will keep polluting the environment, unless we use another kind of car. But still, this new car requires materials and resource extraction to be produced in the first place. The key idea here is to use the car less, not more, not the same…
To reach a point where we can talk about climate neutrality, we need a more ambitious political vision. A vision that is directed away from the growth-based economy. Do we need greener infrastructures and investments on more environmental and social just industry practices? Yes, we do!
BUT it should not be a struggle where the public sector tries to give incentives to businesses to be more sustainable and ethical. Being more sustainable and ethical should be the prerequisite to operate in general. Such investments should not be another opportunity to make profits with the “hope” of providing new jobs.
Conceptually, EGD follows the development theory and more explicitly, the modernization theory and the beneficial effects of capital, science and technology. The concept of development is connected to the history of colonialism and industrialization. The “developed” nations are considered to be ‘better” than the “underdeveloped” ones. The “underdeveloped” nations will have to follow the models of development of the “developed” ones in order to prosper. This whole idea creates a hierarchy of developed and underdeveloped nations, while at the same time, the different cultural and historical characteristics between the nations and the communities are disregarded. EDG keeps embracing the growth-oriented economic models that generate social inequalities, injustice and environmental problems.
There will be no just and inclusive transition for all if these policies are drafted and implemented under the growth imperative. For years the Western growth economy has exploited humans and nature, producing wastes and socio-economic problems to many different parts of the world, while reaping the benefits and economic profits in the expense of others. It is a bit ironic to require less industrialised countries that have historically polluted less the environment to follow technologies and practices that are phenomenally green, coming from the same countries that are responsible for the climate and societal catastrophes. Countries and communities should be supported to make socio-ecological transitions focusing on the things that make their lives better, healthier and more ecologically sustainable. This means that the countries and communities should be autonomous to decide what is best for them and not dependent on financial mechanisms, big private energy plans and top down interventions.
EDG proposed transitions are neither fair nor just. Countries that depend on heavy industries and historically have polluted more are able to afford less polluted practices and technologies. The same practices and technologies are presented as ideal solutions to the rest of the countries. This universalisation which is also promoted through the SDGs will inevitably require from the most technologically “developed” countries to provide the tools and means for the same transition to the “least developed” countries. Of course, this will not be for free. Those who profit are the private companies behind these big technological projects. While the EU funds will pay for the transition, the EU taxpayers will pay twice for clean air, water, soil, things that should have been common goods for all…
Although transitions to more sustainable practices are welcoming and essential for the future, there should be community transitions under the terms of the communities and the people living in them. Unless, there is a distinctive direction towards embracing the regional differences, this “transition” will be another excuse of dominance over the people and nature, an excuse to profit, and not a transition for the people and nature. These differences can bring real benefits and prospects for a sustainable future for all. They are related to ecological, cultural and historical aspects that affect prosperity and livelihoods of the citizens in each country and each community within them. These differences will direct effective policies for dealing with climate change, as well as generate new, creative, ethical, social and sustainable jobs.
Don’t we need international collaboration to combat climate change? Yes, we do! But over the years, globalisation has been taking over politics, governments, businesses, our social and mental systems. Power has been concentrated in the hands of a few, leaving the majority of the society as a passive and depoliticized player. THIS has to change.
Policy Proposals
- Understand that the economy does not need to grow more to address the ecological crisis. The economy needs to deal with the real needs of the people, using less materials, exploiting less resources (natural and human). For communities and businesses dependent on resources extraction and heavy industries, this will be difficult but inevitable. For communities that tend to buy from or “follow’ the aforementioned communities to satisfy the falsely created needs and consumption patterns, it is going to be a paradigm shift.
- Focus on local, community solutions. Of course, big infrastructure projects and international coordination will be needed at some extent. However, local interventions that provide sustainable jobs, income, prospects and environmentally friendly solutions with low environmental impact should be showcased. From permaculture and eco-communities, community repair centers to more public transportation, alternative means of transport such as bikes or carpooling, small scale renewable energy solutions for each home and local recycling, composting and wastes management systems. These local solutions should be easily accessible to all.
- More democratic processes with public consultations and citizens involvement in the process of decision making. The role of the municipalities should be reinforced. This does not mean that local communities will be independent from the EU policies. This means that communities will be more autonomous to decide how they wish to comply with the EU policies in line with climate objectives and their inherited socio-cultural and environmental differences. Additionally, financial schemes and investment tools should be simple and accessible for all. The more complicated they are the less understandable are for the people, hence, the less legitimate are.
- Education for all. This is not just for addressing the climate crisis or knowing how to recycle and become a conscious consumer. This is about becoming an active citizen, knowing your rights and processes to participate in the community. Sustainable education in schools seems to be very short sighted. It touches only the basic layers of the problems, it tries to address their symptoms instead of tackling their causes. It does not provide tools and knowledge on how to change the system.
Will this be enough to combat the climate crisis?
Family, schools, universities, working sectors, businesses, government, EC, EU, all these are systems influenced and constructed based on certain social values and ideas about life that are rooted deep into our consciousness. In schools we accumulate knowledge, in economics we accumulate money, we just take it, with no questions asked. If we really want to talk about transitions, we need to question things, explore, experiment and deconstruct the illusions of our time.
We have been taught to become always better, bigger, stronger but we have not been taught that it is good to be who we are as long as we are together. This EGD is full of financial schemes and big technology projects but it lacks solidarity and prospects for a true good life for all.
