The EU’s Green Deal: Bismarck’s ‘What is Possible’ Versus Thunberg’s ’What is Imperative'

31 Pages Posted: 15 May 2020

See all articles by Servaas Storm

Servaas Storm

Delft University of Technology - Department of Economics

Date Written: March 11, 2020

Abstract

The European Union’s Green Deal, a €1 trillion, 10-year investment plan to reduce greenhouse gas emissions by 55% in 2030 (relative to 1990 levels), has been hailed as the first comprehensive plan to achieve climate neutrality at a continental scale. The Deal also constitutes the Union’s new signature mission, providing it with a new raison d’etre and a shared vision of green growth and prosperity for all. Because the stakes are high, a dispassionate, realistic look at the Green Deal is necessary to assess to what extent it reflects ‘what is politically attainable’ and to what degree it does ‘what is required’ in the face of continuous global warming. This paper considers the ambition, scale, substance and strategy of the Deal. It finds that the Green Deal falls short of ‘what is imperative’ but also of ‘what is politically possible’. By choosing to make the Green Deal dependent on global finance, the European Commission itself closes down all policy space for systemic change as well as for ambitious green macroeconomics and green industrial policies, which would enable achieving climate neutrality in a socially and economically inclusive manner. Hence, Otto von Bismarck would have been as unpersuaded by the Green Deal proposal as Greta Thunberg, who dismisses it as mere “empty words”.

Keywords: European Green Deal; green finance; climate transition; green macroeconomics

JEL Classification: E60; H50; O52; Q54

Suggested Citation

Storm, Servaas, The EU’s Green Deal: Bismarck’s ‘What is Possible’ Versus Thunberg’s ’What is Imperative' (March 11, 2020). Institute for New Economic Thinking Working Paper Series No. 117, Available at SSRN: https://ssrn.com/abstract=3550259

Servaas Storm (Contact Author)

Delft University of Technology - Department of Economics ( email )

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