The battle over how to spend recovery funds — to quickly restore the old economy or invest in a greener one — will define the post-pandemic world.
BRUSSELS — With the global paralysis induced by the coronavirus, levels of pollution and carbon emission are dropping everywhere — leaving bluer skies, visible mountains, splendid wildflowers. Even Venice’s famously murky canals are running clear.
After decades of industry and government slow-walking the climate issue, for some it is proof that effective action can be achieved.
But nature’s revival has come at enormous cost, with Europe’s economy projected to decline 7.4 percent this year. So for many, like the suddenly unemployed, concerns about climate — which seemed urgent just a few months ago — can seem less so now.
Those competing camps are now locked in debate over how and what to rebuild — between those who want to get the economy moving again, no matter how, and those who argue that the crisis is a chance to accelerate the transition to a cleaner economy.
Jean Pisani-Ferry, an economist and former aide to President Emmanuel Macron of France, described this as the struggle that “will define the post-pandemic world.”
For green militants, the virus “only strengthens the urgent need for climate action,’’ he wrote recently. “But die-hard industrialists are equally convinced: There should be no higher priority than to repair a ravaged economy, postponing stricter environmental regulations if necessary. The battle has started.’’
As European governments squabble bitterly over a virus-recovery fund and the next seven-year budget, the issue is front and center.
The European Union began the year promoting a plan for a rapid transformation of the economy toward a carbon-neutral future — “the Green Deal” — as its flagship theme and engine for renewed growth.
European leaders insist that some form of it will remain paramount, but the new coronavirus has complicated matters.
Ursula von der Leyen, the president of the European Commission — the European Union’s important bureaucracy — said late last month that the bloc’s green goals should be “the motor for the recovery.” She has important support from Mr. Macron and Chancellor Angela Merkel of Germany.
The question is how far anyone is willing to go now, as political leaders across the continent come under pressure from citizens for economic relief, as well as from industries desperate to get their old factories running again.
The bloc is debating a law to enforce carbon neutrality by 2050, but many want to toughen targets for 2030 — by moving from a proposed 40 percent reduction from 1990 levels in the next decade, to as much as 55 percent. They argued that the pandemic is an opportunity to use new money to accelerate the transition away from carbon.
European climate and environmental ministers from 17 nations signed a statement urging governments to “make the E.U.’s recovery a Green Deal,’’ and “to build the bridge between fighting Covid-19, biodiversity loss and climate change.’’
But even the commission’s first vice president and the man in charge of the Green Deal, Frans Timmermans, is worried.“The climate crisis that was upon us before the corona crisis is still there and has lost nothing of its urgency,’’ he said. “But in the foreseeable future it will no longer rank first on people’s priority list. It will tumble down.’’
The “big question,’’ Mr. Timmermans said in an interview, is “will politicians stay the course and keep their eyes on the long-term crisis or short-term electoral considerations?’’
If the recovery is slow, “then people are in the streets and politicians will start throwing money at businesses to keep them afloat, whether the businesses are solvent or not, green or not,’’ he said. “That’s why I push for a bigger societal involvement’’ from young people focused on the future.
But with global climate negotiations known as COP-26 already postponed, there is significant skepticism.
“I suspect the next value clash in politics will be between environmentalism and those who favor economic growth, and I fear the economy will be the winner in this,’’ said Anand Menon, professor of European politics at King’s College London. “We will see enormous debt, and I have the feeling that everything will be drowned out by the economic argument.’’
“The harsh realist in me says that we’ll emerge more divided, less capable and poorer than before, and that will make governments less inclined to invest in problems that will emerge years and decades down the line,’’ he said. “I would say that government will pay less attention to climate.’’
At the same time, “this is in our hands,” Mr. Sawers said. “The pandemic shows us that global problems have immediate national and local impact, and climate change affects us all.”
The argument made by Mr. Timmermans and national leaders like Ms. Merkel and Mr. Macron is fairly simple: Use the new money not to restore the old world but to help create the new one.
“Make sure that the investment we make takes us into the new economy,’’ Mr. Timmermans told the European Parliament.
To European officials, some answers are obvious: Help the auto industry recover, but tie support to the production of electric cars and better batteries. Help the energy industry move toward renewables and hydrogen. Put people to work installing electric charging stations, rooftop solar panels, better home insulation, smart meters and more efficient windows and boilers. Regulate to ensure energy-efficient new buildings.
Some issues, though, are less clear, like the future of mass transportation and large apartment complexes, especially in big cities — let alone the future of airlines. Mr. Macron has tied new funding for Air France-KLM to carbon reduction.
As a former bloc official, Stefan Lehne, points out, “every day, letters from powerful industrial organizations, from cement to plastic to the car industry, arrive in the Commission, saying that we need relief on standards for emissions, on regulations.”
There is “a huge conflict,’’ he said, between “saving the jobs of companies on edge of bankruptcy and investing in new jobs.’’ He added, “There will be a lot of pressure to go back to the status quo ante as much as possible.’’
The countries of Central and Eastern Europe are already worried about the pain of a green transition. And poorer countries of the south, with higher debts to begin with and less room for more, fear a new inequality as bigger, richer countries like Germany and France can subsidize their industries far more lavishly.
Wealthier countries reject collective debt to help the more indebted ones. But promoting more spending as green will be more acceptable politically, said Jacob Funk Kierkegaard of the Peterson Institute for International Economics.
Mujtaba Rahman, chief European analyst for the Eurasia Group, is also more optimistic.
“The Green Deal is essentially about money and it’s a great lubricant, even in Central and Eastern Europe,’’ he said. “If a substantial chunk of the budget is for climate spending, that will incentivize them to engage,’’ despite their doubts about energy transition and questions around burden sharing.
Diederik Samsom, Mr. Timmermans’ head of cabinet, is working to revise the Green Deal to cope with the new crisis.
“Yes, there is a demand for a green recovery, but also a demand for jobs and growth,’’ he said. “If we can combine that, we can do what we want. If we cannot, forget about it.’’
Written by: Steven Erlanger
Image credit: Alessandro Grassani for The New York Times/ Fabio Muzzi/EPA, via Shutterstock/ Pool photo by Olivier Hoslet/ Laetitia Vancon for The New York Times/ Remko De Waal/ANP, via Agence France-Presse — Getty Images/