The Green Deal (Green Transition) is changing our society, economy and international relations. It is not just about moving away from the extraction of fossil resources and growth; it looks like a different version of the path that is causing problems for the planet. Can abandoning economic growth help ensure a more stable future? Olivia Lazard (Olivia Lazard) is a fellow at Carnegie Europe; she researches the geopolitics associated with climate change and future ecological problems.
Jamie Kendrick: The European Green Deal is the European Union's plan to reach net-zero carbon emissions by 2050. What is the practical side of Europe's “green” transition?
Olivia Lazard: If we start a new industrial revolution of energy digitalisation, it means we are increasing our material impact on nature. The circular economy can limit this impact if we follow the logic of growth.
Over the last 10 years, there has been a lot of talk about decoupling economic activity from greenhouse gas emissions. As a great deal of scientific research has been conducted on this, as far as we can tell, there are times when economic activity and greenhouse gas emissions can be decoupled, but this cannot be done in the long term; furthermore, there are two more serious problems.
The first is that the European Union claims that it is successfully decoupling some economic activities from greenhouse gas emissions. How? Partly because many sectors on which the EU depends are outsourced to service providers in countries outside the EU. If, within the framework of carbon accounting, the EU announces, “we only emit 6-7% of global greenhouse gas emissions per year”, this is only possible because the European Union uses supply chains in Asia, Africa, Latin America and eastern neighbouring countries.
The second problem is that there is an ““absolute fantasy” about the dematerialisation of the economy through digitalisation”. Digitalisation requires very large infrastructure containing a lot of metal, as well as carbon-intensive infrastructure associated with the use of steel and concrete. Parts of this infrastructure, such as undersea cables for the internet, interfere with ecosystems yet again. Civilisation continues to erode the remaining integrity of ecosystems. We are approaching boundaries without knowing what lies beyond them when it comes to the stability, health and evolution of human systems.
You are working on the link between the Green Deal, conflict and peace. For the EU, what is the meaning of the connection between growth, resource extraction and conflict?
Like any energy-intensive economy, the European Union is dependent on resource extraction. Given the nature of the EU single market and the fact that the EU economy is largely service-oriented, it shifts the costs of resource extraction onto other economies, which use trade and commercial exchange to climb the ladder of economic growth. In some cases, resource extraction is closely linked to violence, the predation of local “elites”, corruption and illicit financial flows.
The European Union is not “blind” to the problems of resource extraction. It has developed various control instruments, such as supply chain monitoring mechanisms. Work is currently underway to create a specific control mechanism for critical minerals. However... rules can be easily bypassed if there is high demand. Energy-intensive countries tend to ignore the control of their extractive industries, such as mining, thus creating a political economy that either pretends not to notice the violence or attempts to mitigate its consequences to avoid higher costs.
Regulatory instruments can only superficially mitigate violent political economies. Instead, one must either address the problems upstream, for example, before supply chains are established, or make systemic investments to resolve the problems of economic, ecological, governance, social and financial instability that would truly transform the violent political economies associated with resource extraction.
Our economic and social systems are based on economic growth and resource extraction. The Green Deal has so far been based on a similar logic. Are there alternative possibilities in our relationship with nature?
If we remember human history, we can see that there are other ways of functioning. Indigenous communities have been pointing this out to “modern” peoples and societies for centuries. For example, the Amazon basin is not just a result of natural processes and ecological succession, but a result of human management and positive interaction between people and nature. The relationship between humans and natural, living ecosystems in some parts of the world is still understood as reciprocal. We must restore this knowledge in the long term. However, it is very difficult to take indigenous people as a reference point compared to how we live today in Europe or the US. This is a fact that we cannot and must not ignore. What is at stake for European societies is the creation and placement of an extremely complex and delicate socio-economic balance within a space that is connected to complex living ecosystems.
Social welfare systems form the main part of the socio-political DNA of European nations; they rely on employment to create a tax base. In Europe, employment depends on macroeconomic structures that rely on resource extraction from other countries and on trade exchanges that maintain a precise balance with other lands. This is the principle of globalisation: no country is an island, we are all dependent on one another, and our lives are bound together in interdependent relationships that define the balance and redistribution models of nations.
As we try to reshape our relationship with complex living systems by integrating so-called externalities into our economic behaviour, if we change economic interdependencies, for example through demand reduction or degrowth policies, we must understand what trade-offs we are creating and what instability we might trigger. For Europeans, the main question is: how to re-engage with complex living ecosystems and work towards global climate and economic justice while implementing an economic system that does not destroy social safety nets in Europe.
Fundamentally, this is precisely where difficulties arise in discussions about degrowth. If one looks at things from a national perspective, one might consider how to phase out certain industries, move labour to another sector, or potentially retrain. If we look at a national economy in the context of its international links, the conversation becomes much more complicated.
A very good example is palm oil. Malaysia and Indonesia reacted sharply to the European Union's ban on the use of palm oil because it threatens the social balance of these countries linked to its use; the reaction of both countries was not triggered by opposition to climate measures. When the EU passed the law on deforestation, it did not take into account its impact on countries that supply timber, creating instability in partner countries and undermining trust in international relations. By not paying due attention to our partners, we will jeopardise at least some of the basic elements that need to be restored and strengthened (which is the goal of the degrowth movement), especially in the face of the disturbances caused by climate change.
If degrowth is too sharp a turn, what is the future path of our economy? After all, we know that the “logic” of economic growth is destroying vital natural systems?
If we think about how to reorient the economy from extraction to regeneration, i.e., not extracting more than nature can replenish, two questions arise.
Firstly, do we still have time for regeneration, knowing that the climate crisis has progressed far? Natural resources and ecosystems are already on the move; we see changes in bird migration patterns. The formation of the state and the nation is based on certain borders, a certain distribution of natural resources and an imagined identity linked to borders. If these begin to shift, many problems will arise. Can we seize the last opportunity to preserve certain distribution patterns of natural resources as they are today by using regeneration? Or are we heading towards something completely different and therefore do not really know how to act?
Secondly, the question is not whether degrowth itself is desirable, but whether degrowth is effective and impactful at the local, national, regional and international level. Does degrowth serve the purpose of limiting unnecessary material use and reorienting the economy towards a more localised, circular and bioregional economy? Can degrowth restore the social structure and prevent other social problems, such as loneliness, depression, mental health disorders and their prevalence?
All political and social systems must be oriented towards renewal. The question is: will degrowth be a part of it.
Has the war in Ukraine revealed the link between Europe's geopolitical stance and degrowth policy?
The problems and consequences caused by the war have prompted even more thought about the efficient use of resources. I wouldn't call it degrowth; it is rather a political proposal on how to achieve a balance between ethical, economic and social benefits in the most important sectors. Reflection should result in more than just tackling unemployment and its consequences, or merely abandoning environmentally harmful consumer behaviour.
True, but the policy demanded by proponents of degrowth has become politically unacceptable.
That is also true. I am a French citizen and it was interesting for me to observe last year's presidential election campaign. I expected degrowth to become a significant topic in the 2027 presidential election campaign, but it already happened in 2022. So it is happening! The future, which will be affected by climate change, requires political thinking.
The war in Ukraine can be considered a reality check and a shock to existing systems, especially in Europe. The war in Ukraine has created opportunities to talk about the reality of degeneration, for example, the link between fossil resources as a commodity that creates a chronic crisis, war, and European strategic autonomy.
There is an argument – the more strategic autonomy Europe gains by investing in open and decentralised energy systems, the better off we will be. This is only true if decarbonisation is considered the end goal. To achieve this, there are many obstacles that will likely make the conversation about degrowth very difficult in the next decade.
How so?
I remember a Green Party poster I saw last year, with the Ukrainian flag in the background and some workers installing a wind turbine. The content of the poster stated: we will have peace if we invest more in renewable energy. From a communication point of view, the message is questionable if we consider that we are talking about a transition from fossil resource dependency (fossil energy) to another dependency. It is yet another age of extracting other resources (raw materials). There are not enough mineral resources in EU territory to meet Europe's needs for clean technologies, despite the recent discovery in Sweden. The need for minerals will create a new dependency; their extraction can promote economic relationships that will form competition between different systems. This is not a fabrication, but a real threat. We can progress if we consistently take care of security, which is currently at the centre of our international attention.
The EU needs to consider what “dependencies” we want to develop in 20 years' time. China and Russia are ahead of us in terms of supply chain autonomy and sovereignty and are using their economic advantages to change governance systems in the Global South. The rise of authoritarian or, at least, opaque, unaccountable regimes in the world is clearly in line with the energy transition. In my opinion, this must be discussed if and when we talk about degrowth. Growth has a strong politico-ecological orientation. It must also be a strong geopolitical and geoeconomic offer.
What geopolitical consequences would a reduction in economic growth have for the European Union?
By starting to change international economic relations, taking away a share of value and potentially bringing production back to Europe, we may weaken existing partners outside the EU. These partners are not just economic, but also political partners. Some countries have built their economy and social structure based on Western demand, so the process of change must be shaped and evaluated together. We have not started doing that.
An important question is the link between economic growth and security. Political theory explains that a state is defined by a monopoly on violence. To obtain a monopoly on violence, one must invest in military, security and defence systems. If we look at the global situation, we see that China, Russia and the US are investing more and more in military potential. From the perspective of those responsible for security, now is not the time to rock the boat. Degrowth could also mean abandoning the socio-economic stability that allows the nation-state to invest funds in security.
In my understanding, the degrowth movement has only just begun to address these issues.
Current circumstances are very fragile, and an ideological degrowth programme focused only on the health of the planet, without understanding how human systems self-organise, is unproductive. This contradicts the importance that systemic degrowth can have for the security of the planet and people.
You have called for a global public goods regime, i.e., deepening international cooperation to preserve the stability of the planet. Are there any chances that Putin, Xi, Biden and others would sit at the same table to agree on the governance of global public goods?
Yes and no! At any critical historical moment, there are always forces operating simultaneously. The war in Ukraine has created tectonic shifts. The EU changed its view of the European Green Deal from a project created by Europeans for Europeans to a project that, with the REPowerEU directive, acknowledged that the Green Deal depends on an international dimension. With the Critical Raw Materials Act (Critical Raw Materials Act), the EU will engage in a new kind of diplomacy in the field of minerals, technology and the economy.
I am speaking about an international public goods regime because I believe the reality of climate variability will be severe enough. There will still be a “last-minute glory”, just as the fossil fuel industry has a “last-minute glory” as a result of the war, but it will be very difficult to solve complex problems without international cooperation.
The global balance of power cannot extend beyond the planet's boundaries. Even China knows this. Transforming collective security systems and changing economic exchange within the framework of global security systems will be possible, given the urgency and severity of the climate problem affecting us.
If we look at policy directions until 2030, they actualise the concept of planetary boundaries, the transformation of economic sectors in order to move towards regenerating ecosystems as a whole, including human ecosystems. I see all these words in EU documents for the first time. The new initiatives were created just a year ago. The rupture caused by the war in Ukraine opened up new opportunities, showing what international diplomacy and cooperation should look like. For example, work was completed on a treaty (High Seas Treaty), for which negotiations had been ongoing for 20 years.
New ideas are entering EU policy. The community of degrowth supporters and European Union bureaucrats and Members of the European Parliament are still like different and distant planets. Who could make them talk to each other?
In the past, they were very distant planets; now they are trying to get closer. As a sign of hope, I take the fact that the European Commission is funding a 10 million euro research project led by Giorgos Kallis, Julia Steinberger and Jason Hickel. It is one of the largest Horizon grants. This is very positive.
From private conversations, I know that people who work as chief economists in various EC directorate-generals engage in discussions behind closed doors, addressing questions such as what is degrowth and what does it mean? It is a different way of thinking when talking about the economy, and everyone needs time to adapt. It is not that people in the EU – and I insist on the word “people”, not institutions – are not concerned about this situation.
However, changing the working style of institutions is complicated and takes time. I think that as a result of various crises, this will happen faster and faster. The problem to be avoided is what I call “planned”, for example, planned panic. Let's say the reaction related to food security, which was greatly affected by the war in Ukraine. President E. Macron said that wheat cultivation in the EU and, for example, Egypt must be doubled. That is useless. Yes, such a call is logical, given the current economic justification, but it creates increasingly systemic shocks, because increasing wheat cultivation is a systemic risk.
The better the EC prepares by funding stable research – and it must be stable research that is not ideologically engaged, but asks difficult questions with an open mind and a genuine approach – the more we will see an EU that will be able to say in the next crisis: “What did we fund? How can we learn from this research when designing and creating policy? What effective institutional processes will allow us to achieve practical results?”
At the same time, we need internal institutional cooperation, coordination and communication. It is known that European Commission directorate-generals operate in isolation. We must encourage them to collaborate, not to fundamentally dispute how they work, but to call on them to work differently. What should the next European Commission look like for it to work systemically and coherently? What kind of projects will it implement if the EU wants to jointly solve problems of energy, economic, climate and ecological security? These things will be the foundation of future policies.