How to Get a Green Deal Done: Europe’s Lessons for U.S. Democrats

Nikos Chrysoloras and Leslie Kaufman

(Bloomberg) -- When it comes to Green Deals, Europe has a lesson or two for liberal politicians in the U.S. trying to engineer far-reaching policies to address climate change.

An American lawmaker, Alexandria Ocasio-Cortez, may have done more than anyone else to popularize the concept of a sweeping “green deal” to shift away from fossil fuels. But now the European Union is much closer to translating the goal into concrete policies that have a decent chance of actually being implemented.

Both the U.S. Green New Deal resolution and the European Green Deal, which was unveiled this week by the EU’s executive arm, share the same targets: limiting global temperature increase to 1.5 degrees Celsius compared to pre-industrial levels, in line with the landmark Paris climate accord. To meet this objective, backers of the plans in the EU and the U.S. aim to eliminate emissions by 2050 at the latest. Both plans trace their lineage explicitly to the New Deal of the 1930s, a series of social programs, public work projects and financial reforms championed by U.S. President Franklin D. Roosevelt as a way to counteract the Great Depression. 

The Green Deals may have identical goals and nearly matching branding, but the policies are oceans apart when it comes to the means of delivery.

The European version is strictly focused on climate, and those policy areas which can affect it, such an industry, energy and public procurement. The U.S. Green New Deal — as it is laid out in the Ocasio-Cortez-sponsored resolution and the policy programs of Democratic presidential hopefuls such as Bernie Sanders and Elizabeth Warren — is tied to a series of contentious issues unrelated to climate, from health care coverage to employment.

Europe’s narrow focus helped the plan gain the backing of conservative, centrist and center-left governments across the 28 nation-bloc, while the sweeping U.S. manifestos have little chance of garnering across-the-aisle support from legislators. Even ultra-conservative European governments, such as Poland’s, which resisted committing themselves to Green Deal goals, didn’t object to the bloc striving to meet the objective. 

Across the Atlantic, even modest efforts to curb climate change have been met with hostility by conservatives in the U.S. Congress, so reaction to the resolution was bound to split along political fault lines from the start. However, the Green New Deal’s very broad ambition has made it a favorite target of Republicans, who have tried to cast it as an illustration of how their liberal opponents are both dangerous and laughably unrealistic.

Larry Kudlow, Trump’s chief economic advisor, stated that it would “literally destroy the economy.” Republican Senator John Barrasso suggested that the Green New Deal would result in the banning of cows, who burp methane, a greenhouse gas, and therefore the end of ice cream. The House Republican Conference and U.S. Chamber of Commerce dismissed it as a “Trojan horse for socialism.”

The European Green Deal is also more concrete. The EU Commission unveiled on Wednesday a roadmap of specific legislative proposals divided by sector, measurable policy goals with due to be agreed interim benchmarks, and fixed dates. On the other hand, there are few numbers and details to be seen in any version of the Green New Deal advocated by U.S. Democratic hopefuls, other than public spending pledges.

Europe’s step-by-step and sector by sector approach has already delivered real wins. The world’s biggest multilateral financial institution, owned by EU governments, has announced it will end funding for fossil fuel energy projects and its intention to mobilize a trillion euros ($1.1 trillion) over the next decade to finance the bloc’s transition to a low-carbon economy.

To minimize risks for a pushback from skeptics, the EU’s Green Deal is also more flexible. While its U.S. counterpart aims 100% electricity production from renewables by 2030 — a target criticized by many as unrealistic — the EU lets its member states choose their energy mix, including zero-emitting nuclear power.

The benefits of flexibility may end up outweighing any costs in terms of ambition and speed. Through a series of incentives and deterrents, such as the world’s biggest cap-and-trade program for polluters and progressively stricter limits on emissions from transport, the EU is effectively pushing its industries and companies toward ever cleaner technologies.

Another way the European climate push differs is by successfully engaging the private sector. The continent’s biggest business leaders threw their weight behind a plan to make the bloc climate neutral, on the condition that appropriate safeguards “to avoid carbon and investment leakage and guarantee a global level playing field for competition,” are adopted. The EU is already considering such measures, including adjusting restrictions on state aid for companies, changing public procurement rules and penalizing imports from countries with looser emissions controls.

In a sign of such private-sector support, earlier this month Spain’s Repsol SA became the first oil major to align itself with the Paris climate goals, saying it will eliminate all greenhouse gas emissions from its own operations and its customers by 2050.  Luxembourg-based ArcelorMittal — the world’s largest steel-maker — announced on Friday that it set a target to reduce emissions by 30% by 2030 to contribute to the Green Deal.

To be sure, the European Green Deal is facing its own headwinds. Leading airlines attacked plans to impose a region-wide kerosene tax as part of a sweeping new environmental strategy, saying investment in sustainable fuels and electric planes would be more effective in reducing carbon emissions. 

More is still to come. While the European Commission will draft all the rules to bring the bloc’s Green Deal to life, they will require the support of EU governments and the bloc’s assembly. Expect every word and comma to be analyzed by national governments, parliamentarians, companies, industry lobbies and environmental activists. 

But rallying more than two dozen governments behind a shared goal to eliminate emissions and initiating the process of legislative proposals is something to start with. That’s the way the EU does things — one small, tedious, win at a time. 

--With assistance from Jonathan Stearns and Ewa Krukowska.

To contact the authors of this story: Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.netLeslie Kaufman in New York at lkaufman27@bloomberg.net

To contact the editor responsible for this story: Aaron Rutkoff at arutkoff@bloomberg.net, Ben Sills

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