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Europe's Green Deal won't work if China, US play truant

The deal is a powerful beacon of hope in a world of confusion and instability.

Europe has done it. The European Green Deal announced by the European Commission is the first comprehensive plan to achieve sustainable development in any major world region. As such, it becomes a global benchmark - a 'how-to' guide for planning the transformation to a prosperous, socially inclusive, and environmentally sustainable economy.
To be sure, the tasks confronting the European Union are daunting. Even reading the new document is daunting: a seeming welter of plans, consultations, frameworks, laws, budgets, and diplomacy, and many interconnected themes, ranging from energy to transport to food to industry.
Critics will scoff at the European bureaucracy. But this is bureaucracy in the finest Weberian sense: it is rational. The goals of sustainable development are spelled out clearly; targets are based on the time-bound goals; and processes and procedures are established in line with the targets. The overarching objectives are to reach 'climate neutrality' (net-zero greenhouse-gas emissions) by 2050; a circular economy that ends the destructive pollution caused by plastics and other petrochemicals, pesticides, and other waste and toxic substances; and a 'farm-to-fork' food system that neither kills people with an overly processed diet nor kills the land with unsustainable agricultural practices.
And the European Commission understands that this must be a citizen-based approach. Again, the critics will regard the talk of public consultations as naive fluff. But tell that to French President Emmanuel Macron, who has faced street riots for more than a year; or Chilean President Sebastián Piñera, whose country suddenly erupted in riots this fall after the introduction of a small increase in metro fares. Both Macron and Piñera are exemplary environmentalists. Both have committed their countries to climate neutrality by 2050. Both are urgently searching for a path of public consultations.
American neoliberals will scoff, too, arguing that the 'market' will sort out climate change. Yet look at the US today. If neoliberalism does for the planet what it's done for America's infrastructure, we're all in big trouble. Arriving at a US airport means facing elevators, escalators, and people movers that don't work, taxis that don't arrive, rail links that don't exist, and highways with broken lanes and overpasses.
The reason for this dysfunction is obvious: corruption. Each US election cycle now costs $8 billion or more, financed by billionaires, Big Oil, the military-industrial complex, the private health-care lobby, and vested interests intent on tax breaks and protecting the status quo. Market-based solutions are a sham when politics is subordinated to lobbying, as it is in the US. The European Green Deal shows government as it should be, not government subordinated to corporate interests.
Europe's Green Deal is in fact a demonstration of successful European social democracy. A mixed economy, combining markets, government regulation, the public sector, and civil society, will pursue a mixed strategy: public goals, public investments in infrastructure, private investments in industrial transformation, public-private research and development missions, and an informed population. In fact, it is industrial policy at its most sophisticated.
There are reasons for optimism. Most important, the advanced technologies exist, commercially or pre-commercially, to create a zero-carbon, resource-saving, environmentally sustainable advanced economy. Yet three big challenges must be addressed. The first is to overcome status quo interests. Big Oil will have to absorb the losses, but workers and coal regions should be compensated, with income support, retraining, and other public services. Europe's plans rightly call for a 'just transition'.
The second challenge is financing. Europe, and indeed every region of the world, will have to direct an incremental 1-2 per cent of annual output toward the green economy, including new infrastructure, public procurement, R&D, industrial retooling, and other needs. Much of this will be financed by the private sector, but much must go through government budgets. The last big challenge is diplomatic. Europe accounts for around 9.1 per cent of global carbon dioxide emissions, compared with 30 per cent for China and 14 per cent for the US. Even if Europe fully implements the Green Deal, it will be for naught if China, the US, and others fail to match its efforts. European leaders therefore rightly treat diplomacy as crucial to the deal's success.
European diplomacy can make the difference if it refuses to go along with America's insidious efforts to contain China, and instead offers China a clear and positive partnership: working together on sustainable Eurasian infrastructure, development, and technology, in the context of a Chinese Green Deal alongside Europe's. Such a partnership would hugely benefit Europe, China, and the dozens of Eurasian countries in between, and indeed the entire world. Europe has made a historic breakthrough with its ambitious, challenging, and feasible plan. The deal is a powerful beacon of hope in a world of confusion and instability.
-Project Syndicate
- Jeffrey D. Sachs is Professor at Columbia University