Green Transition

From the Green Industrial Revolution to the Ecological Revolution

By the end of the seventies, many European Green parties were created to counter the negative consequences of industrialisation on the environment and on people. The Greens fought against polluting factories and many of their political opponents described them as a threat to employment and the economy, mostly in the old industrial parts of Europe. Thirty years later, the picture might be reversed: a different kind of industrialisation must help us to take on the environmental challenge and deliver a new prosperity for Europe. Even if in 2013, the resistance against this project seems to be growing, the Greens must remain at the forefront of the ecological transformation of European industry.  Why and how?

1. Why?

Without falling into the trap of catastrophism, one can never dedicate enough attention to the ecological challenges we are facing in this century: if we want to limit global warming to 2°C, humanity needs to half its total amount of greenhouse gases (GHG) emissions by 50% by 2050. And as we nearly all know, more effort is required from industrialised countries: they need to reduce their emissions by 80%. For Europe, this means a drastic reduction from an average of 10 tonnes per capita in 2008 down to two tonnes of CO2 (and we should even add 4 tonnes CO2 per person if we integrate the impact of imported goods).  According to the IEA report, in order to reach the 2° target, then the reduction of carbon emitted per unit of GDP should be 2.8 percent a year (which is double the rate of the last decade) reaching an annual rate of 5.5 percent during 2020-2035.

Broader than measures of carbon intensity, the statistics on the Total Material Requirement (TMR) of the EU take into account all material flows generated by European consumption and production patterns. The resource intensity of Europe can make us dizzy: 22 billion tons, which is the equivalent to a freight train about 9 million kilometres long!

We can and must debate the respective shares of increased energy efficiency and reduced consumption that are needed in order to reach our sustainability goals, but it is absolutely obvious that industry will play a key role. Even if in the last few decades the closing of polluting industries and the global recession contributed to the reduction of Europe’s GHG emissions, there are many good reasons to think that de-industrialisation is not the way to reach our ecological goals.

The first reason is that we have – at least currently and in the short term – no real idea of how we could finance European welfare states without the tax income coming from the European industry. Strengthening the financing of these welfare states in the long term implies a progressive switch from taxes on labour to other sources of taxation that must take place over many years.

The second reason, closely interconnected with the first, is that the transition to a more resource efficient industrial sector brings hope for the creation of new and sustainable jobs. Even if we know that some existing jobs will also disappear in this process, there are many studies that indicate that the final balance will be positive.

The third reason is that the areas of expertise and products of European industry are absolutely indispensable to the transition to a sustainable way of life. Some very big consumers of energy and resources, for example the steel industry, are key players in the global reduction of consumption.  Even the supporters of a zero growth economy must recognise this. We will always need renewable energy sources, better insulated houses and public buildings and radically more resource efficient patterns of production and consumption.

The fourth reason is that it would be ecologically counter-productive to import our industrial goods from other parts of the world where weaker standards are applied.

The fifth reason is that the industrial sector is already a key player in the improvement of resource productivity. In the two last decades CO2 emissions decreased by 25.1 % in manufacturing and construction and by 12.1 % in the residential, tertiary and agriculture sectors and grew by 23.8 % in the transport sector.

Thus there will be no transition towards sustainability in Europe without a strong and innovative industrial base that is able to lead on resource efficiency.

2. How?

With its triptych of financial regulation, social inclusiveness and industrial transformation, the Green New Deal project must be continued. Many concrete experiences and industrial successes show that this is far from unrealistic. But it is also a difficult and long term process. The resistance that the Greens are facing around Europe – for example with the energy transition – are signs that we are probably in the middle of what some economists call “innovation conflicts” between potential winners and losers from the transition to the new type of economy. And like in former transitions, the lobbies of the old sectors – this time, the carbon and nuclear industries – often have solid supporters in the political sphere.

This resistance at least partly explains why the required tools for the new economic revolution are still lacking. We need to develop a real industrial policy, not only at the national but also at the European level, which is in contradiction with the neoliberal ideas currently dominating the European institutions. The new European industrial policy must include policies regarding research, procurement, standards and labour market. It must also be supported by completely different social and fiscal policies.

Some very big consumers of energy and resources, for example the steel industry, are key players in the global reduction of consumption.  Even the supporters of a zero growth economy must recognise this.

As Roosevelt’s New Deal was about internalising the social costs of labour, the Green New Deal is about internalising the external costs to the environment in the production process. Its story will not be finished until we have decoupled the link between economic growth and our ecological footprint. But for the moment, there is absolutely no direct link between improvement of resource efficiency and the reduction of CO2 emissions, on the contrary. Luxembourg for example is the European champion of resource productivity, but it is the worst performer in terms of per capita CO2 emissions (in 2009 it was 21.7 tonnes per capita). On the other hand, Bulgaria with its average 6 tonnes of CO2 per capita, has the weakest resource productivity.

It is obvious that this situation will not change without adequate carbon pricing as it is the only truly efficient way to tackle the famous rebound effect – where resource efficiency does not lead to reduced emissions but to a growth of emissions.  However, green taxation is lower in the EU than it was ten years ago.  A possible explanation of this evolution is the depletion of non-renewable resources. But we also know that some attempts at introducing or reinforcing ecotaxation have met resistance in various European countries. The context of the rising inequalities of income is not propitious to a real shift in the fiscal policies. So long as we do not make an explicit link between ecotaxation and social justice and a reduction in inequalities, it is dubious that the internalisation of the environmental costs of all production processes will happen.  There lies the subject of an important discussion that the Greens should organise, for example, with the trade unions. The good news is that the labour movement is not locked in the industrial society as it was until the 1990s. It could thus be a potential partner for an efficient “deal” on the global taxation shift needed for the absolute decoupling.

A cultural project?

The transition towards a green economy is not only driven by technological change, for example by the development of renewable energy. It will also be conditioned by fiscal, social and cultural changes. On this level, our main difficulty is perhaps how to change the existing conception of the industrial society and its underlying dream of the domination of nature.  The social progress of the new deal society was based on the never ending growth of fossil energy and on the systematic organisation of the rebound effect – and as a consequence on the complete transformation of the natural fundamentals of human life. What we are trying to invent is a completely new kind of relationship with nature. And this brings the project of green industrialisation back to the roots of the Green parties.

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