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The Green Deal and a disordered world

Guido Montani 16th January 2020

The European Green Deal is a ray of hope but it faces two huge challenges: it must go global and the finances must be found.

Green Deal

From the point of view of international politics, the COP 25 climate summit in December was a predictable failure. No progress was made towards the targets set by the 2015 Paris agreement, secured  thanks to a consensus between the US and China—the Madrid talks were basically scuppered by America’s withdrawal. The ‘global governance’ needed to bring the other United Nations members on board was lacking.

Yet from a cosmopolitan standpoint on world politics, COP 25 was not a total disaster. The European Green Deal is the first step in the right direction. Jeffrey Sachs has described it as ‘the first comprehensive plan to achieve sustainable development in any major world region’ and ‘a powerful beacon of hope in a world of confusion and instability’.

The future of humankind is a global public good. The despoliation of the biosphere is a ticking time-bomb which, sooner or later, is going to explode. The younger generations protesting worldwide know it. The EU has now come up with an initial response.

Progressive majority

The EU is an anomalous political construction, suffering a period of acute crisis. It is criticised from the inside by nationalist parties and the imminent departure of the United Kingdom has fuelled forecasts of a general breakup, which would enable the major world powers to divide up the spoils—but these are superficial.

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The June elections resulted in a progressive majority in the European Parliament, which in turn has led to a European Commission capable of proposing a bold plan for sustainable development which addresses not only Europe but also the rest of the world. The incoming commission president, Ursula von der Leyen, told MEPs:  ‘We can be the shapers of a better global order.’ But there are formidable obstacles. The commission will need to ensure greater social cohesion, with the policies to deliver a ‘just transition’.

The international challenges are even greater. Sachs observes: ‘Europe accounts for around 9.1 per cent of global carbon dioxide emissions, compared with 30 per cent for China and 14 per cent for the US. Even if Europe fully implements the Green Deal, it will be for naught if China, the US, and other regions fail to match its efforts.’ The European Green Deal has to become a world Green Deal.

The formation of a global governance arrangement and the financing of the Green Deal are just two of the issues at stake.

Multilateralism abandoned

Under the presidency of Donald Trump, the US has abandoned the principles of multilateralism. But this is not the preserve of the conservatives: the Democrats are not proposing any alternatives. Elizabeth Warren, one of their presidential candidates, is in favour of a government that ‘would actively manage the value of the dollar’. This would add monetary protectionism to Trump’s trade protectionism.

The European Green Deal cannot be successful in an international system dominated by world powers engaged in a struggle for military, economic and political supremacy. If this trend is not halted, with the introduction of commercial and monetary rules based on multilateralism, the Green Deal will fail.


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The European Union therefore has to follow up its plan with serious proposals for a new global order. The World Trade Organization must be reformed to ensure that the Dispute Settlement Mechanism, which Trump is attempting to cripple, is once more in a position to enforce the rules and to sanction those in breach of them.

The International Monetary Fund needs also to be reformed to enable multilateral management of the ‘international currency’. It must push for the use of Special Drawing Rights, a basket of currencies based on the dollar, euro, renminbi, yen and sterling. It is mind-boggling that it is not the IMF but a private company—Facebook—which is planning to launch a global currency. A European initiative to start a debate on new multilateral economic rules would be welcomed by other major powers, such as China, Russia, Brazil, India, Japan and Canada.

There are a few encouraging signs. Ahead of  COP 25, 59 countries formed a Climate Ambition Alliance to support the Paris agreement. Most are developing countries, with the major powers currently absent. It is however a starting point for a coalition of countries willing to commit to ‘zero carbon dioxide emissions by 2050’.

Finance mechanism

The COP ship, with its 194 countries, foundered on article 6 of the Paris agreement and paragraph 6.4 in particular, which foresees ‘A mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development under the authority and guidance of the COP’. This was opposed by the US, Brazil, Australia, Saudi Arabia and, in part, China and India. The mechanism entails aid to emerging economies from the industrialised states which are the biggest polluters.

Raghuram Rajan has proposed an intelligent formula: a fund would transfer resources from countries with a per capita level of pollution higher than the global average to those that pollute less. It is hoped that a reasonable compromise will be found at the COP 26 talks in Glasgow in November.

Yet public funding for the Green Deal is the most complex question. This is needed to discourage polluting production in the private sector and to fund public investments for new energy networks, for research into alternative energy sources (including hydrogen), for carbon capture and storage, and for measures to support workers in industrial sectors that are failing or being converted (automotive, cement, chemical, plastics and so on.)

The financial aspect of the transition calls for a tax on polluting industries but public backlash represents a serious obstacle. Everyone is in favour of a cleaner planet but no one wants to pay the price. The gilets jaunes movement in France is a case in point: a small rise in the tax on diesel unleashed a wave of angry protests.

Some economists reckon that a plan for green energy would command 1-1.5 per cent of world gross domestic product and so a corresponding percentage for every country or region. The EU budget is currently insufficient to fund the ambitious European Green Deal and many other countries are in the same situation. National governments have ignored the agonising appeals of scientists for decades and the public has yet fully to comprehend the scale of the problem.

Military spending

There is an alternative, as long as we do not regard the Green Deal as a sector-specific policy uncoupled from the global point of view of international politics.

If economic nationalism obstructs co-operation between countries, pursuit of military security, nationally conceived, represents an even greater obstacle. The recent speech by the Russian president, Vladimir Putin, on nuclear-missile policies to guarantee Russia’s global supremacy will undoubtedly have repercussions for military spending in the US, China and other ambitious states.

In 2018 global military spending amounted to 2.1 per cent of world GDP. This is destined to rise, for both nuclear and conventional weapons. It is sheer madness. While part of humanity is working to defuse the environmental time bomb, another part—in the self-same countries—is engaged in diverting financial resources to stockpile lethal weapons.

National governments have not understood the profound meaning of the youth protests. Young people are not taking to the streets for abstract ideals: they are seriously worried about their future. They risk not having a future at all, if the time-bomb is not defused. This is the kind of security that matters to them and they are asking governments to guarantee. It is not a question of not defending their countries, but rather reducing global military spending.

A policy of peaceful international co-operation would enable military expenditure to be halved, freeing up funding for the world Green Deal. This is no easy task, but it can be done if progressive forces in Europe and the rest of the world seriously commit to it.

Humanity has to choose whether life on this planet is going to continue or whether the enormous technological resources at our disposal will be used to finish it off. We are at a crossroads. It is time to decide.

global governance,planetary justice,United Nations,UN,COP26
Guido Montani

Guido Montani is professor of international political economy at the University of Pavia. He is a former president of the European Federalist Movement in Italy. In 1987 he founded in Ventotene the Altiero Spinelli Institute for Federalist Studies.

Home ・ Politics ・ The Green Deal and a disordered world

About Guido Montani

Guido Montani is professor of international political economy at the University of Pavia. He is a former president of the European Federalist Movement in Italy. In 1987 he founded in Ventotene the Altiero Spinelli Institute for Federalist Studies.

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