Over a decade ago, the world slid into the worst economic and financial crisis since the Great Depression. Governments cobbled together multi-billion dollar economic stimulus packages as a response. This crisis gave birth to the concept of the Green New Deal. The idea of using economic stimulus packages to simultaneously boost the economy and prevent climate change was gaining traction. Unfortunately, few national governments pursued it.

A decade later, the opportunity has re-emerged. The world economy is again standing on the brink of an economic downturn amid climate catastrophe. In this situation, a Green New Deal would be a win-win.

The new European Commission led by President Ursula von der Leyen has come to accept these realities and has unveiled its “European Green Deal”. This European flagship policy is a new economic growth strategy that aims to turn the EU into the world’s first climate-neutral continent by 2050. It is about time the Commission advanced such an agenda, something similar to what Greens across Europe have been backing for years.

The Green New Deal was always about connecting economic and climate issues and addressing them simultaneously. It allowed the Greens to formulate a coherent economic and financial policy and break out of their eco-niche as they grew up politically. Following the Great Recession, the Green New Deal made headlines and was in line with the political zeitgeist as the Greens became increasingly recognised for their political programme.

Geopolitics is back

It would be foolish to believe that a concept developed in the first decade of the 21st century could be transposed into the 2020s without an update. The world has changed. The issues of the day are no longer just economic, social, and environmental. Geopolitics has returned with a vengeance. In the words of the historian Robert Kagan: “The jungle grows back.” Amid a fundamental geopolitical realignment, the international order is breaking down. The United States and China are locked in a hegemonic conflict. The Middle East is a powder keg. Liberal democracy is on the retreat. The World Trade Organization is facing an existential crisis. Protectionism is on the rise. NATO and the transatlantic relationship are under strain. World orders do not last forever.

A silo mentality appears omnipresent – geopolitics and the European Green Deal are pursued in isolation. In a geopolitical world, the European Green Deal needs to be geopoliticised.

Under those circumstances, geopolitics comes front and centre. It needs to be considered transversally, integrated into every policy and political issue. The new EU Commission appears to have understood this Ursula von der Leyen has vowed that this will be a “geopolitical” Commission. Josep Borrell, the EU foreign policy chief, has stated soberingly that the EU must “learn to use the language of power.” So far, however, this is not happening. A silo mentality appears omnipresent – geopolitics and the European Green Deal are pursued in isolation. In a geopolitical world, the European Green Deal needs to be geopoliticised.

The spheres of security and economy are increasingly linked. It is no longer about economics but geoeconomics. The neoliberal credo of open markets, unfettered free trade, and laissez-faire is over. The state has returned, mixing politics, security interests, and economics. Huawei’s role in 5G, China’s One Belt One Road Initiative, US extra-territorial sanctions against the Nord Stream 2 pipeline, and US export controls against high-tech goods to China are economic issues that all pursue clearly geostrategic interests.

A deal that thinks strategically

Geopoliticising the European Green Deal is a task that Greens must come to grips with. Green parties that have strengthened their economic profile over the years must now work on their geopolitical profile. That includes developing a broader conceptual framework and strategy – not an easy task given the Greens’ traditional pacifist roots and scepticism towards power politics. The Economist recently noted that, while “most Greens shed their instinctive pacifism long ago”, their foreign policy impulses, be it on China or Russia, “do not make up a broader strategy.”¹

Geopolitical considerations must take three diverging perspectives into account. First, the European Green Deal should consider its contribution to Europe’s existing geopolitical challenges. Second, it should reflect upon the impacts that the European energy transition might have on the rest of the world. Third, it must factor in potential impacts within the EU and their potential spill-over effects.

On the first, Europe is in an increasingly difficult position. The United States and China are undermining the multilateral order, fighting over spheres of influence. Europe is to some extent caught in the middle with both parties pressuring the EU and its member states to choose a side. Europe’s vast exports, while economically beneficial, make it politically vulnerable. The export dependency both actors and urge for foreign direct investment into Europe is becoming something of an Achilles heel.

A move to a completely renewable and efficient energy system would wean Europe’s economy off oil and natural gas from autocratic states, reducing the influence of gas-exporting Russia.

The US and China have effectively extorted Germany with regards to its automotive sector. While Beijing warned Germany that it might import fewer cars should Germany block Huawei from its 5G network, Washington threatened to put tariffs on European cars should Germany not activate the arbitration mechanism of the Iran nuclear deal (which it then did). Writing in the Financial Times, Wolfgang Münchau hit the nail on the head: “If Europe had its modern-day Metternichs or Talleyrands, they would start by addressing that specific vulnerability first: stop the dependence on export surpluses to end the blackmail.” ²

The European Green Deal could address that vulnerability. Diversifying the economy and boosting domestic-led consumption would decrease foreign economic dependencies. It would also put the EU in a good position to benefit from the global trend towards decarbonisation. The race for clean tech is on. Europe is in pole position to set the standards, financing, and regulatory regime in this new strategic industry. In this context, the European Green Deal could be a pillar of Europe’s connectivity strategy, promoting sustainable infrastructure in the countries on Europe’s borders and beyond. Integrating neighbouring countries in the EU’s energy network would deepen economic ties and ward off China’s push to set industrial standards and build economic dominance, seen in China’s Belt and Road Initiative.

Energy is a key geopolitical feature of the European Green Deal. Energy security is the only geopolitical aspect to Green New Deal thinking that has received adequate attention in the past. A move to a completely renewable and efficient energy system would wean Europe’s economy off oil and natural gas from autocratic states, reducing the influence of gas-exporting Russia. In answering the Paris climate goals, the European Green Deal would strengthen multilateralism. As a climate policy, it will also reduce the likelihood of droughts, floods, and water scarcity – all of which have the potential to trigger future geopolitical events, from conflict to refugee movements.

One could even imagine the European Green Deal as a policy that could strengthen the euro internationally. Mark Leonard, director of the European Council on Foreign Relations, has argued that by promoting green financial markets and issuing green bonds, “Europe can secure greater economic independence from other powers and start to establish the euro as a global currency.” ³

Calculating consequences

However, the geopolitical implications of the European Green Deal policies cannot be overlooked. What will happen to the Middle East and North Africa region when its petrostates can no longer rely on Europe to buy their oil? What future do they have in a post-fossil world order? The political-economic shift may well prove a source of regional instability, conflicts, and proxy wars in Europe’s immediate neighbourhood. The region’s national oil and gas corporations, responsible for over half of global oil production, will have severe problems when their assets become stranded. The International Energy Agency found that state energy groups are not ready for a move to clean fuels: “none of the large national oil companies have been charged by their host governments with leadership roles in renewables.” ⁴ Yet oil and gas sales comprise more than 60 per cent of fiscal revenues in countries such as Saudi Arabia, Iraq, Kuwait, and Qatar. The new world energy regime will create winners and losers. The European Green Deal should ensure a role to play for the losers of the new climate order.

One way to achieve this would be to help these states establish ambitious renewable energy infrastructure connected to Europe (such as the DESERTEC project⁵), allowing the EU to import renewable electricity or ensure, for example, that solar energy in the region can be used to produce hydrogen that could be exported for air travel or long-haul freight. The old world of energy must be left behind but Europe’s neighbours have to be able to find their place in the new world. Ideally, support for the region would be tied to reforms in the areas of corruption, transparency, democracy, and human rights.

The European Union needs to be aware of divergent interests around European Green Deal policies. The proposal for carbon-border adjustment taxes is designed to create an environmental “level playing field”. On the one hand, climate tariffs will make sure that European companies do not compete at a disadvantage. On the other, they could invite counter-tariffs and lead to broader trade wars that undermine the international trading order.

The EU will have to tread carefully between conflicting objectives. The Greens have often been vocal in their opposition to free trade agreements. In a world where multilateralism and international trade are under attack, they must consider whether some trade agreements, albeit imperfect, might be necessary as tools to re-affirm the wider order.

Last but not least, the European Green Deal should not become a transition policy that creates winners and losers within the EU. Mark Leonard has warned that it could “make or break” Europe. It could become a platform that unites Europe and strengthens it vis-à-vis China and the US, or it could divide Europe between East and West. If that happens, third parties such as China will make easy work of dividing Europe even further.

China has already gained a foothold in Central and Eastern Europe with investment promises. This region needs adequate financial backing in its transition to a sustainable economy. This could potentially take on a Marshall Plan character to help the economies of Central and Eastern Europe become fit for the 21st century. Giving the EU member states a direct interest in the European Green Deal makes foreign investment offers with anti-EU strings attached less persuasive. Germany’s austerity drive in Europe has already shown what happens when the economy tanks and the EU does not support those members in economic difficulty. Thanks to the lack of investment from the EU, China has bought influence in Greece by buying up strategic assets.

The European Green Deal must accept the reality of our geopolitical age – an ambitious task for the new Commission. All the different services and EU departments will have to talk to one another, and EU embassies and representations abroad will have to take on appropriately trained staff to streamline geopolitics and the energy transition. As Green parties grow in power, they too must start to think about geostrategy. In the next few years, the Greens should hold the EU institutions’ feet to the fire to make sure a geopolitical strategy for the European Green Deal is developed. It is better to prepare to govern geopolitically sooner rather than later.

This article is part of our latest edition, “A World Alive: Green Politics in Europe and Beyond”.