Is this the beginning of the end of the European Green Deal?
The first notes of the funeral march of the Green Deal are starting to sound: the European ecological transition seems to force a choice between economic growth or sustainability. Sergio Giraldo's analysis
The ecological transition is rapidly collapsing in on itself. After Brussels' fanfare about zero-emission Europe, today the first notes of a funeral march can be clearly heard in the distance. The upheaval brought about by the zero-emission economy is not just technological: the social engineering that seeks to apply to such a massive change risks causing earthquakes. The so-called sustainable economy is actually a dead end that involves a do ut des : either economic growth or sustainability.
THE PROMISES OF THE GREEN DEAL AND THE REALITY
Many scholars now say this. The European Green Deal has the declared aim of combining economic growth and environmental sustainability. As its preamble emphatically states, the Green Deal “intends to guarantee: 1) no net emissions of greenhouse gases by 2050; 2) economic growth dissociated from the use of resources; 3) no person and no place left behind.”
But is it really like that? Will the green economy be able to decouple GDP growth from resource exploitation?
Apparently, there is great skepticism about the concrete possibility of achieving this result, even among experts and scientists. For Ursula von der Leyen's dream to be realized, decoupling must be real: that is, the economy should grow while emissions decrease. Those who support the green economy say that this is possible in the long term, the famous long term in which we will all be dead.
On the other hand, there are those among the experts who think that decoupling will not bring growth ( agrowth ) and those who instead think that it will lead to explicit economic decline ( degrowth ), rather than that the decline in global GDP is a necessary condition for reducing emissions .
WHAT THE STUDIES SAY
Remedy worse than the disease. A very recent study by Jefim Vogel of the University of Leeds and Jason Hickel of the London School of Economics shows that current rates of decoupling in high-income countries are well below what would be necessary to limit global warming to well below 2°C, as established by the Paris Agreement.
In a survey carried out among experts for the journal Nature Sustainability ( King, LC, Savin, I. & Drews, S. Shades of green growth skepticism among climate policy researchers, 7 August 2023 ) 73% of respondents say that sustainability does not it will bring economic growth. Only 27% of scholars think that it is possible to combine economic growth and sustainability.
Therefore, with decarbonisation at any cost (where the cost is borne by citizens) we are committing economic suicide. The doctrine of the World Economic Forum applied.
The prospect of a poorer life, which 73% of scientists interviewed by Nature indicated as probable, is not the only problem.
OBSTACLES TO THE TRANSITION
There are many real factors that hinder the transition, and there are many consequences that this brings with it. For example, the extreme need for raw materials linked to the technological leap required by the production of zero-emission energy (assuming that it really is) entails technical and geopolitical implications which up to now have been overlooked, if not downright neglected, by the enthusiastic promoters of new frontier. The Truth has spoken about it many times, for years.
The most obvious consequence of the new energy supply chains is the dramatic dependence on China for most of the necessary materials and components. If depending on Russia for gas wasn't a good idea, we don't see why depending on China for materials related to the green economy should be. The mineral intensity of the ecological transition brings the European Union into the arms of Beijing.
Just to mention the latest information, China in recent days has set the production quota of rare earths (a fundamental element for the ecological transition, of which China is almost a monopolist) at 240,000 tonnes for 2023. This is an increase of 14% compared to 2022, but it is much lower than the increase that occurred in 2022 compared to the previous year (+25%). China measures its production effort according to its needs and maneuvers the world market as it sees fit, if it is able to do so. Western ecological transitions hang on Beijing's appetites.
Furthermore, the world production of primary aluminum (another metal indispensable to the West) last August reached an annualized all-time high of 71.2 million tonnes. This is because China significantly increased production to supply domestic needs, while the data seemed to suggest a decline. The simultaneous increase in production in the rest of the world has depressed prices. In any case, the Beijing government has placed a maximum ceiling on monthly production (45 million tons per year). It is not yet known whether the roof will be raised. This however has an impact on prices, introducing a disturbance linked to political decisions. Once again, Europe is double-linked to Chinese political decisions.
THE WORDS OF JAMIE DIMON (JPMORGAN)
In all of this, the global economic situation certainly offers no cause for optimism. In recent days, Jamie Dimon, the powerful American banker at the head of JP Morgan, has made himself heard, who in an interview with the Times of India said: ""I'm not sure that the world is prepared for interest rates at 7%. Going from zero to 5% caught some people off guard but I ask people in business: are you ready for something like 7%? The worst case is 7% with stagflation. If there are lower volumes and higher rates, this will lead to stress in the system. We urge our clients to be prepared for that type of stress. Warren Buffet says you find out who's swimming naked when the tide goes out. That will be the tide going out.” Clear and worrying message.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/green-deal-europeo-crisi/ on Sat, 14 Oct 2023 05:06:05 +0000.