Deal or No Deal? - EU’s Green New Deal
Updated: Jun 25, 2020
What is the EU Green New Deal ? Who is going to finance it? What would the Green New Deal mean for India?
The coronavirus pandemic has provided us with a sneak peek into clean, breathable air and clearer views. In a matter of only a few weeks, pollution levels have dropped across major cities of the world. Having said that, an Atma nirbhar and sustainable India is a long way to go.
The EU Green New Deal aims for robust action and ambitions for a climate-neutral Europe by 2050. The European Commission has devised a road map enlisting key actions under the ten heads covering various policy areas from clean and affordable energy to circular economy
The 2030 agenda of the Sustainable Development Goals (SDGs) will have to be taken forward, and the European Union has come up with an even longer-term ambitious Green New Deal with Agenda 2050. This has taken its aspirations up a notch and has established a leading example for other countries.
Climate Change is not a new fact around the corner, it has been consistently in works for decades, and anthropological activities have been its driver. In furtherance of specific targets for nations, the Paris Agreement was adopted in 2015, has 189 member countries. One of the provisions of the Agreement sets Nationally Determined Contributions (NDCs), based on “common but differentiated responsibilities”, owing to the historical usage of resources by the signatories. Moreover, climate change would have a profound impact on vulnerable countries such as Bangladesh and the Philippines, who are already feeling the pressure of climate change. The Agreement is voluntary, thereby not attracting any sanctions or disincentives for inactions, which encourages the members to proceed with “business as usual” by putting the climate ambitions on the back burner.
All nations have disparate laws and policies for the environment and climate. The economic divide exhibits that the global south has relatively weaker policies when it comes to the environment. Understandably their focus is on tackling poverty and guaranteeing education (which also happens to be covered under the SDGs). In the 24th Conference of Parties (COP24) held in Katowice, Poland, “Realpolitik” for climate change was largely emphasised, iterating that political interest and will be diverted towards the present most pressing issue of climate change.
EU Green New Deal
So, what is the Green New Deal? The European Green New Deal was presented on December 11th, 2019 at the 25th Conference of Parties (COP25) on Climate Change in Madrid, Spain. The Deal aims for robust action and ambitions for a climate-neutral Europe by 2050. The European Commission has devised a roadmap enlisting key actions under the ten heads covering various policy areas from clean and affordable energy to circular economy. It also proposes a European Climate Law conflating the neutrality objectives by the middle of the Century. The insistence is on energy taxation, climate change adaptation, circular economy action plan, sustainable and smart mobility, preserving biodiversity and zero pollution strategy.
As ambitious as it sounds, financing the deal is the foundation of its future. According to a Bloomberg report[1], the European Investment Bank, the bloc’s lending arm will play a key role on the financial front, aiming to mobilise 1 trillion euros in the next decade. The European Commission estimates that the shift would attract 290 billion euros in extra investment annually for energy systems and infrastructure from 2030. However, not all nations of the EU are on equal footing. Poland, the Czech Republic and Hungary are pushing for financial aid as the transition cost would be a blow to their respective economies.
The program rests on investing at least 5% of Europe’s GDP in emissions-free transportation infrastructure, renewable energies and innovative technologies while creating jobs and transitioning Europe to zero-emissions - all without raising taxes[2]. The deal builds on the Juncker Plan of 2015 in two ways: Green Investment Bonds and Public Works Agency. The Green Bonds would be issued by the European Investment Bank and their value would be backed by the European Central Bank and secondary markets. The Public Works Agency would be inclusive of citizen assemblies across regions to determine where investments are most needed.
The Green New Deal in Europe has a predecessor. The term was highlighted during the US presidential election campaigns and COP25 in 2019. The idea behind this emerged in the 2007-2008 financial crisis in the United States and the United Kingdom. Senator Alexandria Ocasio-Cortez pursued this in 2018, and it caught on when she, along with Senator Edward Markey, published a bill for the Green New Deal in February 2019. Kamala Harris and Bernie Sanders also vouched for it during their Presidential Campaign.
South Korea also became the first Asian economy to announce its Green New Deal in April 2020. The Republic of Korea was the 7th largest carbon emitter and the 5th largest per capita emitter in 2017[3]. A recent study by Climate Analytics[4] concluded that the country is lagging on its Paris Agreement targets. Despite having an emissions trading scheme (3rd largest in the world) and green policies, the nation was not much successful in controlling their emissions. In April, they proposed a Green New Deal with similar objectives as the European Green New Deal. It is the first country in East Asia to pledge net zero emissions by 2050.
India has an abundance of fossil fuels, and most of our energy needs are fulfilled from that. The fact that climate change wasn’t even on the agenda for the last election campaigns is disturbing, considering that India is and will be on the list of worst-hit nations in respect of climate-related disasters. Sunita Narain, Director General of Center for Science and Environment said, “The question for a country like India is where and what is our way ahead. Can we take the beaten path or should we reinvent? As yet, there is little appetite for this reinvention. But I believe that it has to be the agenda for the years to come.”
India is the third-largest producer of greenhouse gases, and therefore a significant contributor to the problem. It is also expected to be one of the major victims of global warming. Our view is that India doesn’t need to follow EU or South Korea and come up with a half baked Green New Deal, but the fact that it needs to be high on the political agenda is the first step forward and the need of the hour. India’s growth in the past three decades has been at the cost of environmental degradation and social inequality. Perhaps, it is time for India to think of her version of a Green Party?
The EU Green New Deal is not to simply replace fossil fuels with renewable energy in such a way that yokes our air, wind, or sun to the compulsions of capitalist growth. Would the European Green Deal stimulate India to think in the direction of better environment policies or would the Green deal be another master plan that offers no compensation or hope to the countries that are experiencing the worst immediate and long-term effects of climate change?
The point both for the EU and India is to reimagine social labour and human purpose, where care across scales — individual, social, and planetary — can finally be made whole. Should the global south walk on the familiar path as the developed economies and reach the destination that they have, which is evidently not sustainable? Or should they reroute to a sustainable journey right now to have a different outcome? We cannot put the same inputs and expect different results. To have alternate outcomes, efforts will have to change, and now is the time.
Footnotes