The European Green Deal: When Brussels Bet on the Climate

The deal is the announcement, and the announcement is the week: the European Commission that presented the Green Deal on the eleventh of December, the von der Leyen team that had been in office for ten days, the plan that touches every sector of the economy, the climate that became the first priority of the mandate. The deal is the December 2019 story: the Commission that promised the first 100 days and delivered in the first two weeks, the mandate that had begun on the first of December, the strategy that will shape the decade, the regulation that will move the markets, the businesses that will have to change. The Green Deal is the news, and the news is the beginning.

The deal is the subject of this article: what was announced, what it will cost, and what it means for the companies that must plan for the new rules.

1. The Announcement

The announcement is the moment, and the moment is the eleventh of December: the Commission that presented the communication in Brussels, the president who staked her mandate on the climate, the executive vice president who will carry the file, the strategy that was promised in the first 100 days and delivered in the first two weeks, the plan that was ready to go. The announcement is the scale: the plan that covers energy and transport, industry and buildings, agriculture and biodiversity, the policy that reaches into every corner of the economy, the ambition that is without precedent in the Union's history.

The announcement is also the signal: the Commission that made the climate the test of its mandate, the political capital that was committed on day ten, the targets that were set in public, the credibility that is now on the line. The announcement is the December lesson: the timing that matters, the early move that sets the agenda, the leadership that must show the direction before the critics find theirs, the member states that were listening, the markets that were watching. The announcement that came this week was the start, and the start was the signal.

2. The 2050 Target

The target is the horizon, and the horizon is 2050: the climate neutrality that was promised, the emissions that must fall to net zero, the carbon that must be removed from the air, the economy that must be transformed in a generation. The target is the Paris alignment: the agreement that the Union signed in 2015, the pledges that were made in the French capital, the goal that keeps the warming well below two degrees, the science that says the carbon budget is nearly spent, the credibility that depends on the follow-through.

The target is also the question: the leaders who gathered in Brussels that week, the consensus that was close but not complete, the member states that hesitated at the coal, the eastern capitals that count the cost, the unanimity that was still being negotiated. The target is the December lesson: the long horizon that is easy to set, the short steps that are hard to take, the 2030 numbers that will prove whether the promise is real. The 2050 target was the promise, and the promise was the anchor.

3. The 2030 Ambition

The ambition is the math, and the math is the gap: the 40 percent cut that is the current law, the 50 to 55 percent that was proposed, the difference that is the work, the year 2030 that is only a decade away. The ambition is the interim: the ten years that will decide the century, the policies that must be passed, the Climate Law that will make the targets binding, the legislation that was promised for the coming spring, the pledge that must be filed with the United Nations in the new year.

The ambition is also the debate: the member states that will negotiate the numbers, the industries that will lobby the capitals, the costs that will be argued in the meetings, the benefits that will be counted in the studies, the estimates that differ by the hundreds of billions. The ambition is the December lesson: the headline that is set first, the details that are fought over later, the direction that is fixed by the opening bid. The 2030 ambition was the ask, and the ask was the pressure.

4. The Sectors

The sectors are the sweep, and the sweep is the coverage: the energy that must be decarbonized, the power that must come from the wind and the sun, the share of renewables that must rise from 32 percent, the offshore wind that is getting cheaper, the solar that is now the cheapest power in the south, the buildings that must be renovated, the wave of renovation that was promised for the coming decade. The sectors are the reach: the transport that must shift from the pump to the plug, the cars that must go electric, the charging points that must be built, the industry that must find the clean ways to make the steel and the cement.

The sectors are also the order: the agriculture that must change its methods, the biodiversity that must be restored, the circular economy that must be built, the chemicals that must be made safer, the food that must be produced with less, the forests that must absorb more, the soil that must store the carbon. The sectors are the December lesson: the economy that is one system, the policy that must touch every part, the businesses that will all face the new rules, the ones that start early and the ones that wait. The sectors were the scope, and the scope was the message.

5. The Money

The money is the commitment, and the commitment is the trillion: the Sustainable Europe Investment Plan that was announced, the 1 trillion euros that will be mobilised over the decade, the public funds and the private capital, the leverage that the Commission promised. The money is the mechanics: the quarter of the Union budget that will go to the climate, the European Investment Bank that became the climate bank, the projects that will be financed, the flows that will be redirected, the budget that must be agreed with the capitals, the negotiation that will take the year.

The money is also the condition: the estimates that run higher, the gap that will remain, the private investors who must follow the public signal, the certainty that the policy must provide, the returns that the funds must deliver, the pensions that will be invested in the transition. The money is the December lesson: the regulation that creates the market, the capital that follows the clear direction, the spending that is the proof of the seriousness. The money was the proof, and the proof was the commitment.

6. The Just Transition

The transition is the justice, and the justice is the coal: the regions that depend on the mines, the workers who will lose the jobs, the communities that will be left behind without the help, the Just Transition Mechanism that was proposed, the mines that will close in the coming years, the plants that will shut. The transition is the solidarity: the 100 billion euros that will be mobilised for the affected regions, the retraining that will be offered, the new industries that must replace the old, the support that must arrive before the pain.

The transition is also the politics: Poland that depends on the coal, the eastern member states that fear the cost, the consensus that must include them, the deal that must be fair to be durable, the solidarity that the Union was built on, the money that must reach the regions before the closures. The transition is the December lesson: the climate policy that fails without the social support, the change that must be managed, the losers who must be compensated, the fairness that is not optional. The just transition was the condition, and the condition was the politics.

7. The Carbon Border

The border is the idea, and the idea is the signal: the carbon border adjustment that was floated in the communication, the imports that would pay the price of the carbon, the level playing field that was promised, the leakage that was feared. The border is the logic: the European factories that pay for their emissions, the imports that pay nothing, the production that could move abroad, the adjustment that would fix the distortion, the steel and the aluminium and the cement that face the imports.

The border is also the fight: the trading partners that will object, the World Trade Organization rules that must be respected, the design that is not settled, the years of negotiation that lie ahead, the allies that will be consulted, the exemptions that will be argued, the details that will take the years. The border is the December lesson: the emissions trading scheme that will be strengthened, the carbon price that will rise, the imports that will eventually pay, the trade that will change shape. The carbon border was the signal, and the signal was the direction.

8. The Lesson

The lesson is the regulation, and the regulation is the driver: the policy that sets the direction, the targets that create the certainty, the businesses that must plan for the rules, the investment that follows the signal. The lesson is the industrial policy: the Commission that is shaping the market, the state that is choosing the direction, the companies that will compete under the new rules, the advantage that goes to the early movers, the carmakers that must build the electric, the utilities that must build the wind, the builders that must renovate.

The lesson is also the decade: the 2020s that will be the transformation, the companies that will change or pay, the energy that will be the new economics, the carbon that will be priced in the end, the boards that will discuss the carbon in the January meetings. The European Green Deal is the December story, and the story is the lesson: the regulation that moves the markets, the climate that became the business, the year that ended with the plan, the decade that will begin with the work.

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