In February, TIPC launched a new blog series entitled Making the Green Deal Happen. We opened the blog in a mood of optimism. Six months on, how are things going?
By the end of May, all 27 Member states had ratified the legislation required for the go-ahead of the €750 billion recovery programme, Next Generation EU, despite the obstacles placed in its way in several national parliaments. This programme formally allows the EU to issue debt worth several hundred billion euros to finance common expenditure with a specific focus on a green-led, digital recovery. Next Generation EU – dubbed the European Green Deal (EGD) – represents a historic breakthrough for EU economic policy shedding decades of monetarist orthodoxy.
We welcomed three crucial novel features in this programme. Firstly, it focused on the need for the transformation of our unsustainable sociotechnical systems of energy, mobility, buildings and food through an innovative policy mix drawing on a wide range of innovation actors. Secondly, it recognised that these transformations have social costs and that workers and communities most directly affected need to be protected by a Just Transition policy. Thirdly, and most importantly, the EGD is part of a wider turn to active government after an era of neo-liberalism, a trend which has been reinforced by the exigencies of the COVID 19 pandemic and the turn to Keynesian economics by the new US administration. Indeed, the Green Deal label itself celebrates public investment for shared purpose.
This changed policy landscape has not just materialised out of thin air. It’s the culmination of decades of detailed policy and campaigning work by specialist agencies, environmental NGOs, political parties, trade unions and civil society organisations, activity in which the sustainable transitions community and its networks such as STRN and TIPC have played no small part. As a result, the Green Deal offers potential new spaces for the pursuit of transformative climate innovations which are socially inclusive, job intensive, locally devolved, and internationally collaborative.
What are the potential dangers?
The welcome marginalisation of climate denialism in Europe – unlike with the Republicans in the United States –means that large corporations increasingly to see the move to low carbon as crucial to their future business prospects. Unsurprisingly, with the EGD and national recovery plans they scent a big opportunity. The Commission has set ambitious targets. The temptation is to rely on the ‘mega project‘ shortcut of multinational companies eager to show their new-found commitment to green technologies and electric vehicles with promised speedy impact. The risks of a greenwash rip-off are not unfounded. However, suggestions from some critics to exclude big, incumbent companies from EGD and national recovery funds are politically unrealistic and over-simplistic as to the real, messy dynamics of transition. Old guard business may well not lead the net zero transition but sections are certain to remain part of its architecture. Some sort of public/private balance needs to be struck here. Speedy roll-out of EV charging points; investment in battery giga-factories; green hydrogen and tidal power can all play a role. However if the European Green Deal can only leverage a transition of convenience for the current corporate incumbents, that will be a sadly diminished outcome of its potential for transformation.
The second related danger is that EGD and national recovery plans become overwhelmingly top-down, big capital projects, technocratic in character. Plans should not simply endorse submissions from powerful corporate players or ignore the key role of broader innovation initiatives. A revival of the naivety towards the corporate sector reminiscent of the Blairite ‘Third Way’ era is not what Europe needs.
Developing the Pluralist Innovation Model
We have argued that the European Green Deal offers the potential for a new innovation model, one that welcomes a diverse innovation portfolio that genuinely embraces bottom-up, socio-technical system innovation. To be successful this has to involve the participation of a wide diversity of innovation players. This model rejects the idea that small-scale community initiatives are the only alternative to the corporate model. Not only is this naivety in reverse but it also cedes too much ground in terms of size. We need climate innovation at scale but this can be achieved by a diffuse range of similar actions, rather than just a single, over-concentrated mega project.
Our series shows the degree to which this thinking is already spreading across Europe. We have highlighted the broad-based initiative in the Valencia region to accelerate the spread of renewable energy networks; the efforts to develop new mobility patterns in cities; the development of new financial mechanisms to quicken the take-up of housing renovation; the emergence of new types of farming practice based on agro-ecology. Alongside these, we’ve run pieces on the role of digital innovation to help transform the pace of Green Deal learning and the potential for firm regulation to act as the demand shock that can speed up change in business practice. Such initiatives need to be multiplied and generalised in the months to come.
The EGD opens up a huge space for political engagement by regional and city authorities, small and medium sized businesses, trade unions and civil society organisations to present a wider variety of innovations for transformation in towns and neighbourhoods across Europe. This opportunity needs to be taken up across the political spectrum, together with those in the business community. On housing, energy, industry, food and mobility the EGD and national recovery plans will require alliances bringing together joint expertise to drive change and build innovation capacity for the longer term. The catastrophic floods and loss of life in Germany and Belgium in mid-July have served as a dramatic reminder of the dangers posed by the climate emergency. The European Green Deal is the main instrument that Europe has created to deal with it. Its successful implementation -along with the related ‘Fit for 55’ regulatory package – drawing on these pluralist innovation models will help Europe meets its IPCC carbon emission targets and build the case for this type of investment to become a permanent feature of the policy landscape. Frugal monetarists may try to resist the case for substantial additional expenditure, but the reality of the climate emergency and events such as those in Germany and Belgium are generating a powerful momentum. Making a success of the EGD can make it unstoppable.