TWO SIDES OF THE SAME COIN
Jyrki Katainen is a former European Commission Vice-President for Jobs, Growth, Investment and Competitiveness
The paths for delivering the European Green Deal and ensuring Europe’s post-COVID-19 recovery are one and the same, argue former European Commissioners Jyrki Katainen and Janez Potočnik
“Today, it’s obvious that a more joined-up response to the virus, at a global and EU level, could have produced better answers and saved lives”
Now more than ever, as EU policymakers grapple with the post-COVID-19 recovery, our e orts must focus on building an economy that reduces our economic dependence on materials, increases resilience, delivers better and fairer services to society and minimises adverse impacts on citizens such as planetary instability or pollution. In short, EU leaders should see that the European Green Deal and the post-COVID-19 recovery as two sides of the same coin.
Decoupling economic health from natural resource use is the most compelling economic strategy at the EU’s disposal. Using resources more e ciently promises to reduce our dependence on imported materials, improve competitiveness and lower our environmental and climate impacts, as well as creating jobs. By tackling these structural weaknesses, and by building a clean and circular economy, we can boost innovation and employment, creating local jobs in reclamation, recycling and refurbishment, as well as in new businesses, mobility and transport and high-quality housing.
We know now that taxpayers cannot finance all the investment needed to address climate change; we need private capital to take the largest share of responsibility. We know now that establishing new nature reserves is not enough to address biodiversity loss; we need systemic changes to how markets function. In other words, the Green Deal o ers new opportunities to create favourable investment and business environments by creating new market regulations and predictability for private investors. By combining public policy objectives and market forces, we can expect real impact and results.
This is a strategy that makes economic as well as political sense. Lower material costs can increase competitiveness and also free up budget for a fairly paid, skilled, healthy labour force and society, in line with core European values.
The greater self-su ciency and resilience this approach delivers can also address some of the issues with
globalisation that have been exposed by COVID-19, such as the fragility of global supply chains.
Delivering the Green Deal through the recovery can reduce Europe’s intergenerational debt, a problem that has been exacerbated by the pandemic. Data shows that, over past decades, GDP has grown at the expense of depleting natural capital, e ectively passing on the costs of replenishment to future generations. The billions in financial debt being mobilised by countries and institutions to combat COVID-19 are adding to the environmental debt that young people already face. We cannot leave future generations to face these huge debts without doing everything possible to give them a safer, more sustainable and resilient world than the current one.
The pandemic has also demonstrated that urgent global action is possible - at least if the crisis is perceived as imminent. Until now, the fight against climate change, biodiversity loss and pollution has never been seen as su ciently pressing to attract enough funding. Now, with the COVID-19 response, we have the right scale of funding, and countries that are prepared to move immediately. The key will be to direct those funds in the best way to simultaneously address the recovery and the actions identified by the Green Deal.
We may have a better chance of implementing the Green Deal now than before the pandemic, but success still depends on better global governance. For the first time in human history, we face the emergence of a single, tightly coupled, human social-ecological system of a global scale. We are more interconnected and interdependent than ever. Our individual and collective responsibility has increased enormously. Today, it’s obvious that a more joined-up response to the virus, at a
“We need to rethink the way we are managing the risks, as individuals and collectively, as private companies and public policy makers, locally and globally. We need to collaborate more to build resilient societies and be better prepared”
global and EU level, could have produced better answers and saved lives. Similarly, managing climate change and the environment across borders requires us to join forces, share greater sovereignty and cooperate.
Europe can benefit as a leader in new approaches to deep global cooperation. Both the COVID-19 response and the Green Deal need a new level of international coordination and joint action to be successful. New governance structures created through crisis interaction can be built on for new types of value chain, innovation and trade cooperation that support a clean and circular economy. All recovery investments particularly those in the hardest hit countries and in those economies that urgently need to build greater resilience - should be provided with Green Deal system thinking in mind.
When a state considers, for example, how to provide any necessary aid to the car industry, this should be targeted at creating a sustainable mobility system - in the form of support for developing intermodal shared mobility services.
Many are saying that the post-COVID-19 world will never be the same again. But it will, and will hopefully just understand it better. It is likely that the frequency and severity of health-related outbreaks and climaterelated extreme weather events will increase in the future. We need to rethink the way we manage the risks, as individuals and collectively, as private companies and public policy makers, locally and globally. We need to collaborate more to build resilient societies and be better prepared.
The Green Deal can, and should, remain the compass guiding Europe’s post-COVID-19 recovery. When implemented with a truly systemic approach, no flipping of the coin is required.