Green Transformation in Times of Austerity
AbstractThe Paris Agreement and the 1.5 °C report of the Intergovernmental Panel on Climate Change demands a cut of 50% of greenhouse gas emissions by 2030 in order to avoid a temperature rise above 1.5 ° C by 2100. Although a general opinion among experts tends to suggest that these aims are insufficient to prevent climate degradation, the available and ongoing adjustment programs seem to be unable even to achieve this moderate level of change. As the US, under the Trump administration, decided to renege on its previous commitment to the treaty, one of the major players in pollution and greenhouse effect is now out of the Paris compromise.
In Europe, despite the situation of climatic emergency, both national governments and European institutions have been incapable to provide a convincing program of energetic and economic transition towards what has been labeled a ‘green economy’. While the European Union continues to support investments in fossil-based projects, namely through the Projects of Common Interest, austerity policies transfer the costs of the transformation to workers and poor people, alienating the necessary social support to such endeavor, as we have seen in France with the Green Tax. The surge of inequality suggests new obstacles to the necessary consensus for an ambitious climate change transition.
Furthermore, the current EU’s and EMU’s institutional framework, especially its competition and fiscal rules, constitute serious constraints to the much-needed transition program. This paper discusses the full scope of such obstacles, and explores possible institutional solutions to address what is now one of the greatest challenges of our generation. In particular, the paper discusses how the combination of restrictive fiscal policies and the absence of a credible, involving and well-financed program is preventing the European Union to solve the climate change challenge.