Described as “Europe’s man on the moon moment” by European Commission (EC) President Ursula von der Leyen, the EGD is the EU’s primary growth strategy to transition the EU economy to a more sustainable economic model. The overarching aim of the deal is simple: to transform the 27-country bloc from a high-carbon to a low-carbon economy, without compromising the economic prosperity and quality of life of its stakeholders, and to ultimately achieve carbon neutrality by 2050. Simple, right?
While not a product or a service in its own right, it is nonetheless a framework within which many future products and services will be made or developed, so I believe it is worth reviewing. Of course, evaluating the entirety of the deal within the scope of a single review is extraordinarily difficult; after all, the deal sets out a legislative and policy vision spanning several decades. Having said that, I feel it important that people within and outside the EU have a general understanding of the deal.
Pros: The deal is significant partly due to its breadth and depth; it provides a commitment to develop and implement a range of sustainable initiatives related to food systems, transport, biodiversity and developing clean energy alternatives, among many others. Also, the deal is quite symbolic, and I don’t mean in the cynical sense. It represents a paradigm shift in tone, attitude and approach to climate issues. And the significance of this should not be ignored, however uninspiring or unambitious the deal might be, according to some.
Cons: Obvious cons include a lack of ambition, particularly as it pertains to the EU’s short-term emission reduction aims. The allocation of funds under the Just Transition Mechanism is, dare I say, unjust. A number of powerful, high-income countries are set to receive a large slice of what many believe to be an already small pie. The deal hangs on a knife's edge, bound by the geopolitics of resources and the motives of potentially nefarious actors.
European Green Deal, EGD; Greenhouse gas, GHG; European Commission, EC; European Union, EU.
The EGD is a set of policy initiatives intended to bring about the shift towards a more sustainable economic model, the main elements of which fall into one of nine general policy areas: these include delivering climate neutrality, eliminating pollution, promoting sustainable transport, developing a sustainable construction sector, fostering sustainable production cycles based on the circular economy, delivering on clean energy goals, modernising EU agricultural practices, developing sustainable food systems, and preserving biodiversity.
On delivering climate justice, the EGD’s aim of a 55% reduction in GHG emissions by 2030 compared to 1990 levels is insufficient to meet even the 2°C temperature target. According to the UN’s Emissions Gap Report for 2019, to stay in line with the agreements of the Paris Climate Accord, emissions would need to drop by 7.6% annually between the years 2020-2030. For the EU, this would translate to a 65% reduction in its emissions compared with 1990 levels. Only here can Europe stay below the 1.5°C temperature target described by the Intergovernmental Panel for Climate Change in a 2018 publication entitled “Special Report on Global Warming of 1.5°C”. Under the proposed policy framework, the EU will fail to deliver on its commitments under the Paris Climate Agreement. What’s more worrying, however, is the EU’s frank acknowledgement of this failure. In an 2020 impact assessment conducted by the Commission entitled “Stepping up Europe’s 2030 Climate Ambition”, and communicated to the European Parliament, Council and associated Committees, the EU states in very clear terms that the deal’s emissions reduction aim was decided based upon what was “realistic” and “economically feasible”, not by science. Insufficient improvements that do not meet the moment will just not cut it. True leadership is delivering on an overwhelming scientific consensus. Greenpeace, as well as members of the Greens/European Free Alliance, a collection of progressive and environmentally-focused MEPs from across Europe, have called on the EC to propose a reduction aim of at least 65% by 2030.
A key piece of legislation on climate action is the proposed European Climate Law, which will enshrine in law the EU’s objective of achieving carbon-neutrality by 2050. To deliver on this aim, the EU has begun reviewing a plethora of legislation to ensure its alignment with these goals. The Law describes a number of necessary steps relevant to reaching its 2050 neutrality target, not least of which is the 2030 target of a 55% reduction in GHG emissions compared with 1990 levels, something the EU has proposed to include in the Law. By enshrining in law a standard of inadequacy, the EU is saying loud and clear that the goals of the Paris Climate Agreement are incompatible with its own aims, at least in the short-term. There are some positives, however. The Law acknowledges the need to improve the EU’s carbon sink capacity through improved Land Use, Land Use Change and Forestry (LULUCF) regulation, and provides a commitment for negative emissions post 2050.
The EGD promises to invest approximately €800 billion as part of its offshore renewable energy strategy, in the process increasing the EU’s offshore wind energy capacity from 12 GW to 60 GW by 2030, with a view to further increase these capacities to 300 GW by 2050 (in addition to establishing 40 GW in offshore ocean energy). In line with its clean energy strategy for hydrogen fuels, it aims to support further development in this area by funding the installation of 40 HW hydrogen electrolysers capable of producing up to 10 million tonnes of renewable hydrogen by 2030. Investments in hydrogen are expected to fall anywhere in the range of €180-470 billion. The EU’s recent commissioning and support of the EastMed pipeline, a multibillion-euro offshore/onshore natural gas pipeline between Israel and the EU, is in direct contradiction with these clean energy aims. While the Commission called the deal a “welcome development”, Yanis Yarfoukis, a progressive and elected member of the Greek Parliament, criticised the deal as being a theatrical performance in greenwashing.
The EU has been accused of outsourcing environmental damage to countries in the Global South, while at the same time pursuing green policies at home. The EU relies heavily on agricultural imports, the majority of which come from countries with highly unsustainable practices. Between 1990-2014, eleven million hectares were deforested elsewhere to produce food that was consumed within the EU. During that same time, European forests grew by 9%, an area equivalent to the size of Greece. Can the EU seriously call itself a leader in environmental issues if its practices have such disastrous implications elsewhere?
Under the Paris Climate Agreement, carbon accounting covers emissions produced only within a nation, not those embedded in goods produced elsewhere. In the EGD, I would like to see the inclusion of a roadmap for the EU to reduce its global carbon footprint, not simply that footprint considered under the carbon accounting framework of the Paris Climate Agreement. EU trade agreements are patchy at best, and most agreements stipulate an aim to “strive for” improvements in certain areas. This is evident in the EU-Mercosur free trade agreement between the EU and Mercosur, a South American trading bloc. While the EU cannot enforce standards elsewhere, it can require that goods entering the bloc meet its own standards. Shockingly, a recent study has linked EU agricultural imports to more than one-third of all deforestation embodied in the global crop trade since 1990. It is time for the EU to drop its double standard on imports and exports.
Some have labelled the deal as the latest iteration of European colonialism, this time climate colonialism. For the EU’s green tech revolution to be realised, it must cast a blind eye to the extractive models of production that contribute to untold human and environmental suffering. From the cobalt mines in the Democratic Republic of Congo, where child labour is a chief element of the sector’s workforce, to lithium mining in Bolivia, Europe needs it all for its aims to be realised. But at what cost?
Projects the size of the EGD require very significant investment. The European Green Deal Investment Plan, the deal’s investment pillar, plans to mobilise over €1 trillion in investments over the next decade, the majority of which (€503 billion) will come directly from the EU’s budget. Additional sources of investment will come from national co-financing schemes (€114 billion) and the the InvestEU programme (€279 billion), the latter of which is an investment strategy that brings together the multitude of EU financial instruments, including guarantees covering SMEs (InnovFin), sustainable employment and social protection (EaSi), and financial intermediaries such as banks and leasing companies (COSME), among others. By providing an EU budget guarantee to the European Investment Bank (EIB), InvestEU will facilitate investment in higher-risk projects, in the process raising additional funds through private investment.
Central to the EU’s Green transition is the Just Transition Mechanism, a key tool to ensure the transition towards a more sustainable economic model is fair and equitable, and leaves no one behind. Speaking about the deal, Frans Timmermans, the grandson of two coal miners, said:“[there needs to be a] just transition, or there will be no transition”. This notion of a “just transition” is not new; it’s as old as the EU itself, or perhaps the European Community and Steel Community, as it was known then. In 1951, a fund existed for the retraining and redeployment of workers affected by the industrial modernisation of the time. The transition now, however, is far greater, and affects almost every sector of the economy. To deliver on its promises of leaving nobody behind, the EU proposes an investment fund to ensure the professional transition of those affected, to revitalise and diversify local economies, and to enable land restoration. This fund, called the Just Transition Fund, is a €17.5 billion fund composed of €7.5 billion derived from the 2020-2027 Multinational Financial and an additional €10 billion from the EU Recovery Plan. This fund is expected to mobilise closer to €30 billion in investments.
The allocation of funds is determined using a combination of social (employment in mining coal/lignite, employment in industry in carbon-intense regions) and economic (production of peat/shale, GHG emissions of industrial facilities in carbon-intense regions) indicators. Using these criteria, the EU has provisionally decided that Poland (€3.5 billion/20%), Romania (€2.24 billion/12.9%) and Romania (€1.95 billion/11.1%) will see the greatest share of this fund. This feels somewhat skewed. Germany’s economy is the largest in the EU, and the fourth largest in the world by nominal GDP. Romania, on the other hand, ranks 35th in the world. Is it truly fair that Germany, with its multitrillion-euro economy, sees the second largest slice of what many deem to be an already small pie? Is this just?
There are many credible criticisms of the Fund. These include a lack of ambition, a lack of credibility on the EU’s side to bring about its own objectives, and the underestimation of the costs associated with the transition to a more sustainable economic model. Under-funded social policies focusing on income support will not be sufficiently effective unless employment and training opportunities complement them. Due to the recent public health crisis, the Fund was proposed to be increased to €40 billion, however, this was ultimately rejected by members of the European Parliament. I hope I am proven wrong, but my intuition is that €17.5 billion is insufficient to facilitate the redeployment of many hundreds of thousands of people across the continent.
Turning the EGD into a success will require enormous structural changes on the side of all EU member states. Initially, there was fierce opposition, particularly from the EU’s coal-dependent members, namely Poland, Hungary and Czechia, however, that opposition is slowly turning in this post-Covid world. Notwithstanding this turning tide, Poland is still adamant on maintaining its hard-coal mining industry until 2049. Poland is also looking for state aid to be granted to finance the operations of unprofitable state-owned mining companies, namely PMG, Europe’s largest mining operator.
Within the remit of the EGD is the EU’s capacity to impose sanctions on non-complying members. This is a powerful tool that must be considered in all cases of non-compliance, but it must be considered with prudence. In the hopes of achieving a greener Europe, the EGD could instead orient countries along an anti-environmental path, and in the worst of cases the deal could trigger a number of Brexitesque events. Despite living under the same roof, so to speak, there is a clear divide between the more Europhillic member states (eg., Ireland, Belgium) and the less Europhillic member states (Eg., Poland, Hungary). The recent rise of right-wing political parties in Europe, most of which are running on Eurosceptic and nationalistic party platforms (United Right, Poland; National Rally, France; Alternative for Deutschland, Germany), is real and should not be ignored.
For the EGD’s vision to be fulfilled, the Commission will have to carefully navigate the geopolitics of climate policy. After all, climate policy is foreign policy. This is an important reality of climate policy that is often sidelined. For example, sweeping structural changes will severely affect European trade and investment patterns. As it stands, the EU imports over €300 billion in energy products. Around 60% of its trade with Russia, for instance, is directly related to energy. Therefore, Europe’s exit from fossil-fuel dependency, though critical for the safety of life on our planet, may adversely affect its neighbouring trading partners, and potentially destabilise them economically but also politically. As energy systems begin to change, so will energy politics. New levers of power will inevitably emerge. The stability and prosperity of nations will be threatened. The competitiveness of renewable energy and green technologies will be heavily infuenced by the geopolitical posturing of Gulf nations such as Saudia Arabia, which the ability to sustain low oil prices due to its low-cost production processes. Crucially, if the EGD is to have any impact on the global climate, it must seek to include, not exclude, its trading partners.
Despite these many concerns, I am nonetheless confident the EU can navigate these treacherous waters. I would prefer for there to be a lower reliance on Asian and Middle-Eastern countries for the goals of the deal to be realised, and I have factored this into my score. From bank bailouts and austerity to the rise of nationalism culminating in Brexit, the last decade provided few moments of celebration. I view the environmental movement as a unique opportunity to write a new and positive European chapter, one represnting unity and triumph in the face of adversity.
Impact Assessment & Communication Briefing of the Deal: https://ec.europa.eu/clima/sites/clima/files/eu-climate-action/docs/impact_en.pdf / https://ec.europa.eu/clima/sites/clima/files/eu-climate-action/docs/com_2030_ctp_en.pdf
EU deforestation report: https://ec.europa.eu/environment/forests/pdf/1.%20Report%20analysis%20of%20impact.pdf
EGD Explained: https://www.nortonrosefulbright.com/en/knowledge/publications/c50c4cd9/the-eu-green-deal-explained#3 / https://www.politico.eu/article/what-is-the-green-deal/
Climate colonialism: https://www.aljazeera.com/opinions/2021/6/23/the-eus-green-deal-could-propagate-climate-colonialism