Hello folks, and welcome back the Social Life of Energy! Good to have you here. I want to do this week’s story a little differently: I’ll break it up into two smaller bits. Expect part II on Friday. I’ll experiment with this break-down in the near future as well. Let me know what you think.
A couple of months back I wrote about the importance of energy security for countries from Central and Eastern Europe, especially those heavily impacted by the 2009 gas dispute between Ukraine and Russia. The ensuing energy crisis profoundly shaped their perception of fossil, nuclear and renewable energy. Countries diversified their gas supply and doubled down (rhetorically, sometimes practically) on nuclear. Consequently, while the EU train was slowly making its turn towards Destination Renewable, these countries held off on investments in wind and solar, often citing national interests.
New gas infrastructure on Krk, Croatia, under construction citing energy security reasons.
At the end of that newsletter, I wondered whether the Green New Deal’s insistence on fundamental shifts in economic and industrial policy in order to “reinvent prosperity” might just be the frame we needed to allay the fears of policymakers from Central Europe and get them on board for decisive, concerted action for sustainability.
Three weeks later, Ursula von der Leyen, fresh at the helm of the EU Commission, announced the European Green Deal: a bold-ish plan to have the EU climate-neutral by 2050. Obviously, I was curious about how this plan had been received in Central Europe. To find out, I turned to Matúš Mišík, co-author of one of the papers I had reviewed in November. We had a very interesting conversation about it, which I’ll you tell all about on Friday. For now, before hearing about how it was received, it makes sense to quickly review what the Deal is actually proposing and compare that with the Green New Deal frameworks.
The European Green Deal in 200 words
In case you missed some of the reporting, the EGD plans to (re)direct some €500 billion of its budget towards carbon neutrality. It expects these billions to generate another €400 billion from and within member states as well as private partners. Together, investments should total 1 trillion euries (as the Dutch like to call the common currency they cherish so much they want to part with none more than necessary) over the next decade. Most of this is money from existing programmes, either repurposed or rebranded.
Then there is the Just Transition Fund. This is a new bit (€100b) of money (the source for this money remains uncertain). It is intended to help those regions in the EU that depend to a significant extent on the production of fossil energy (coal, in case you were wondering). It was important in securing initial support for the deal and it takes a prominent place in the EU’s communication of the plan. To the writers of EGD, then, a just transition primarily means one in which regions, companies and workers in the fossil fuel sector are compensated for their loss of income (and assisted in accessing new sources of income).
The Just Transition Mechanism will allow you to develop new economic activities near a nuclear power plant.
Structural change
This is somewhat different from the way justice is conceived the Green New Deal. While compensation is also important, most proponents adhere to what you’d might call an intersectional theory of (in)justice: one where “racial, regional, social, environmental, and economic injustices” (AOC and Markey’s resolution) come together. Concomitantly, the policy proposals (such as GND for Europe) span, besides decarbonization, standards of living, decent jobs, rules of the financial sector. To GND folks, then, a just transition is one in which environmental sustainability is aligned with greater equality and democratization across societal domains.
Put differently, whereas for the GND the climate emergency is the occasion to ‘reinvent prosperity’, the EGD limits its ambition by and large to becoming climate neutral: phasing out fossil fuels and making agriculture sustainable. Far-reaching and systemic changes in themselves, but not a project for a wholesale reconfiguration of the economy (Von Leyen mentions an economy in harmony with the planet, but that language doesn’t really offer any policy tools). For a statement of purpose that speaks on behalf of half a continent this diverse and conservative, perhaps you can’t expect anything more (at this moment: it should not stop you from pushing for more). It does make it quite distinctive from the various left(-leaning) and progressive Green New Deals out there.
That brings us back to the question how this the proposal was received in poorer (and somewhat climate-sceptical) regions of Europe. Will it galvanize? I’ll be back on Friday with some initial takes from Mišík! Till then, stay adamant,
Marten
Further reading
Check out these links below if you want to find out more:
On the introduction of the Just Transition Fund:
Commission vice president Frans Timmermans, who has been put in charge of the green deal, said meeting the 2050 target “will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others.”
“The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”
There’s some speculation on why The European Green Deal isn’t New, and whether that betrays certain political preferences:
https://www.forbes.com/sites/davekeating/2020/01/28/the-not-so-new-green-deal/#55511e6475df
“There is no doubt that the European Green Deal is ambitious: It aims to decarbonize the world’s second-largest economy within three decades,” [Dimitris Valatsas] wrote. “Moreover, the deal’s long but still visible horizon—slightly longer than one generation—means that this goal is technically achievable while still addressing activists’ concerns. […] The removal of the word ‘new’ in Europe may signal a more realistic approach to tackling climate change than is being shown by the center-left in the US or UK.
https://www.theguardian.com/commentisfree/2020/feb/19/european-green-deal-polish-miners
But the commission quietly dropped the word “new” from original US plans for a green new deal, which of course echo Franklin D Roosevelt’s Depression-era economic New Deal.
Losing that “new” is a signal that the commission does not seek system change through ambitious green macroeconomics and tough regulation of carbon financiers. Rather, it takes a politics as usual, third-way approach that seeks to nudge the market towards decarbonisation.
Global overview of the financing mechanism: