Opinion

Von der Leyen’s Green Deal isn’t just a plan for the environment

Ursula von der Leyen's proposal of a European Green Deal is ambitious and urgent. Not only does it aim to reduce the continent's emissions, but it also has the potential to grow the EU's economy and transform the bloc's politics.

By: Date: July 18, 2019 Topic: Energy & Climate

This week, as part of her impassioned pitch to MEPs, Ursula von der Leyen established climate change as the priority for her prospective European Commission, promising to deliver a European Green Deal –in her first 100 days–able to make Europe the first climate-neutral continent by 2050. But can a deal be agreed? And what’s stopped Europe acting until now?

The deal is good for Europe, and for the world.

It is good for Europe because deep decarbonisation represents a historical occasion to modernise its economy, revitalise its industry and ensure long-term growth and jobs.

It is good for the world, because it shows that pursuing climate neutrality by 2050 is not only technically and economically possible, but also politically rewarding. And this is of paramount importance, as scientists have shown that achieving climate neutrality within that time frame is the only sensible way to limit global warming to 1.5 degrees Celsius, and therefore to protect the world from the more dramatic impacts of climate change.

Von der Leyen’s plan does not lack ambition. It already contains about 20 different policy proposals, spanning from the creation of a Sustainable Europe Investment Plan, to the introduction of a carbon border tax as well as the partial transformation of the European Investment Bank into a climate bank and the adoption of a new industrial policy for Europe.

The Green Deal represents an unprecedented opportunity for Europe to move away from fragmented policymaking

If structured and implemented with pragmatism, a Green Deal has – due to its comprehensive nature – the potential to unleash Europe’s deep decarbonisation, and therefore to profoundly reshape the continent’s economy. Just look at the European industrial sector. In a climate neutral scenario, all industries built on burning fossil fuels will have to transform or vanish within three decades; this will affect the regions that generate a large share of wealth from these industries; and ultimately the people that work in these industries, live in these regions and consume these products. It is clear that only a comprehensive policy – encompassing climate, energy, environmental, industrial, economic and social aspects – could face such a challenge.

As the EU cannot act without the approval of national governments, the key challenge facing Brussels’ decarbonisation initiatives has traditionally been surviving the same member states’ crossed vetoes. Different countries have different interests in different areas and different blocking/weakening minorities have often emerged in different decarbonisation initiatives, further exacerbating the challenge. The comprehensive nature of a Green Deal can help overcoming this challenge, as it opens multiple fronts at the same time, providing wider scope for negotiation, and thus allowing member states to compensate eventual losses in certain fields with gains in others.

For example, the recent EU failure in adopting a 2050 climate neutrality target was due to the opposition of the Czech Republic, Estonia, Hungary and Poland, which seek accompanying compensation packages to modernise their industrial sectors that were not even subject of discussion in that context. Had the discussion had been broader, the result might have been different.

The European Green Deal thus represents an unprecedented opportunity for Europe to move away from fragmented policymaking in the field, made up of stand-alone decarbonisation initiatives exposed to member states’ blocking/weakening minority. What follows could be a truly comprehensive and consistent policy framework capable of intelligently promoting deep decarbonisation by seizing the economic and industrial opportunities it offers, and by ensuring its social inclusiveness.

The EU has both the institutional and financial potential to make a European Green Deal work. What it needs is a strong sense of direction and an industrious pragmatism to pursue it, which is precisely what Von der Leyen promised in the European Parliament. Now she has to deliver, with audacity and determination. Should her project work, the Europe she leaves behind will be cleaner, richer and more functional than the one she inherited.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read about event More on this topic
 

Past Event

Past Event

CANCELLED: India-EU Partnership: New Vistas for the Next Decade

Policymakers, academics and private sector actors from the EU and India come together to work on common issues and explore further areas of cooperation.

Speakers: Yamini Aiyar, Suman Bery, Navroz K Dubash, Alicia García-Herrero, Rajat Kathuria, Partha Mukhopadhyay, Ananth Padmanabhan, Georgios Petropoulos, André Sapir, Shyam Saran, Simone Tagliapietra and Marc Vanheukelen Topic: Global Economics & Governance Location: India International Centre, Lodhi Gardens, Lodhi Estate, New Delhi, Delhi, India Date: March 12, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

The European Green Deal rules

When it comes to global carbon emission is a tax the best form of defence? To make the European Green Deal work, the EU is considering a levy on carbon-intensive goods manufactured beyond its borders. But will a carbon border tax spawn a massive bureaucracy and lead to accusations of protectionism? To find out, Nicholas Barrett talked to Georg Zachmann and Ben McWilliams from Bruegel and Gabriel Felbermayr, President of the Kiel Institute for the World Economy.

By: The Sound of Economics Topic: Global Economics & Governance Date: March 9, 2020
Read about event More on this topic
 

Past Event

Past Event

On gains, losses, and trade-offs: the case of Border Carbon Adjustment

How will the border carbon adjustment be implemented and what will be the implications?

Speakers: Gabriel Felbermayr, André Sapir and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 5, 2020
Read article Download PDF
 

Policy Contribution

A European carbon border tax: much pain, little gain

The European Commission should not make the implementation of a carbon border adjustment mechanism into a must-have element of its climate policy. There is little in the way of strong empirical evidence that would justify a carbon-adjustment measure. Moreover, significant logistical, legal and political challenges will arise during the design. The EU should instead focus upon the implementation of measures to trigger the development of a competitive low-carbon industry in Europe.

By: Ben McWilliams and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: March 5, 2020
Read article More on this topic More by this author
 

Blog Post

The European Green Deal must cut hidden fossil fuel subsidies

Brussels should ensure that fossil fuels do not get direct or indirect support from governments

By: Simone Tagliapietra Topic: Energy & Climate Date: March 4, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

Can the European Green Deal kill the single market?

The European Green Deal is one of the landmarks of Ursula von der Leyen's Commission. But, without an ambitious investment behind it, what could be its potential implications for the EU? Could it go as far as to threaten the EU's single market? This week, Renew Europe's vice-president, MEP Luis Garicano, joins Guntram Wolff and Maria Demertzis to discuss not only the European Green Deal but also the EU Budget and the Banking Union. Disclaimer: this episode was recorded on the 20th of February, before Bruegel hosted the event "The Ressurection of the European Banking Union".

By: The Sound of Economics Topic: Energy & Climate Date: February 25, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

The EU's plan to catch up on artificial intelligence

While the US and China have been setting the pace when it comes to Artificial Intelligence, the European Union seems to be lagging behind. What are the Commission's plans to finally catch up? Will AI increase the gap between big and small companies? This week, Nicholas Barrett is joined by Julia Anderson and Guntram Wolff to discuss the EU's plan for AI.

By: The Sound of Economics Topic: Innovation & Competition Policy Date: February 14, 2020
Read article More on this topic
 

Opinion

Europe’s Green Deal must reach beyond its borders

A European Climate and Sustainable Development Bank could become the external investment arm of the European Green Deal.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: February 4, 2020
Read article More on this topic
 

Opinion

Berlin will make or break the European Green Deal

€1 trillion isn't enough for the European Green Deal and the EU's fiscal framework is constraining public investment. "Mrs Merkel, tear down this rule".

By: Grégory Claeys and Simone Tagliapietra Topic: Energy & Climate Date: February 3, 2020
Read article More on this topic More by this author
 

Opinion

European capital markets union, by rule and by choice

While the euro is now a leading global currency and the European Central Bank has become a comprehensive banking supervisor, Europe’s markets have been treading water.

By: Rebecca Christie Topic: Finance & Financial Regulation Date: January 23, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

Paying for the European Green Deal

The European Commission has presented its Just Transition Fund to help regions still dependent on fossil fuel as they move towards green energy. But where does the money come from and is it enough to make Europe carbon neutral by 2050? Should the EU re-write its fiscal rules to encourage sustainable investment? And should environmentalists be optimistic? Nicholas Barrett asked Simone Tagliapietra and Grégory Claeys.

By: The Sound of Economics Topic: Energy & Climate Date: January 16, 2020
Read article More on this topic More by this author
 

Blog Post

European green finance is expanding, a discount on bank capital would discredit it

If EU banks are to mobilise a greater share of loans for sustainable projects they will need a reliable policy framework, clear internal performance targets and the relevant skills. A discount on bank capital underlying such assets is neither justified nor likely effective. A comprehensive review of how climate risks are reflected in prudential regulation is nevertheless in order

By: Alexander Lehmann Topic: Energy & Climate Date: January 15, 2020
Load more posts