Introduction

In December 2015, 195 countries signed the Paris Agreement, a new climate treaty, aiming to limit rising temperatures at +2 °C above pre-industrial levels. This “monumental triumph for the people and our planet,” as exclaimed by UN Secretary-General at the time Ban Ki-Moon, states that greenhouse gas (GHG) emissions must come down to ‘net-zero’ levels between 2050 and 2100. As a decentralized and bottom-up system relying on signatories’ nationally determined contributions, the success of the Paris Agreement can only be achieved if countries ratchet up their ambitions. 

Naysayers have been quick to argue that the Paris Agreement is doomed to failure due to political inertia and carbon lock-in of our energy system. However, over the last year, a waterfall of governmental announcements seems to have broken what Thomas Hale named the “global warming gridlock”. For instance, in 2019, the new president of the European Commission, Ursula Von Der Leyen, forcefully claimed that the European Union (EU) would become “the world’s first climate-neutral continent by 2050”. In 2020, new heads of state joined the EU’s call to arms. Indeed, after the withdrawal of Shinzo Abe, Japan’s Prime Minister, his successor Yoshihide Suga pledged in late October to make the Land of the Rising Sun carbon neutral by 2050. Similarly, Xi Jinping  announced China’s intentions to reach carbon neutrality by 2060 and assured that its GHG emissions would peak during the next decade. Likewise, Joe Biden, publicly committed to rejoining the Paris Agreement “in exactly 77 days” and reaffirmed the US ambitions of achieving net-zero emissions by 2050. In doing so the newly elected president reversed four years of continuous disengagement of Trump’s administration from global climate mitigation efforts. 

After the failures of the Kyoto Protocol, the Copenhagen Conference, and the limited political responses to the school strikes in the West last year, one might very well wonder why countries are now waking up. One sentence will suffice to explain this. We are in the midst of a new climatic momentum. 

Where does this new climatic momentum come from? 

In 2010, already, Newell & Paterson were arguing for the existence of a new form of  capitalism − climate capitalism. The latter is a model in which continued economic growth is compatible with a shift “away from carbon-based industrial development”. While the concept has a tangible reality, one might still wonder why countries have been ramping up their ambitions almost simultaneously only over the last few months. 

The answer might lie in the concept of complementarity used by my former professor at Johns Hopkins, Bentley Allan, and a fellow scholar, Jonas Meckling, in their article “The evolution of ideas in global climate policy”. Complementarity refers to “the view that growth and climate protection are compatible with one another”. Allan & Meckling argue that since the 1990s, a neo-classical paradigm has dominated policymakers’ agendas. This paradigm has a weak climate-growth complementarity. In other words, nature is understood as capital and must be preserved to avoid future declines in economic growth. For example, the United Nation Development Program stated, in 1992, that the main concern was not to limit growth but “achieving it without overburdening future generations”. Correspondingly, neo-liberalism frames climate change solely as a market failure that must be fixed by using market-based mechanisms. A notable example is the creation of the European Union Emissions Trading Scheme in 2005. 

However, Allan & Meckling also show that the dominance of this neo-liberal paradigm began to fade away with the 2008 crisis, further arguing that the international system has now entered a post-neo-classical paradigmatic period. As such, new forms of strong climate-growth complementarities have emerged, including Keynesian and Schumpeterian ones. While the former focuses on climate policies to increase aggregate demand, the latter identifies climate policy as a driver for technological innovation. These new paradigms are central because they frame climate change as an economic opportunity. While early-movers will likely have a competitive advantage in green industries, laggards might find themselves dependent on foreign imports. This environment-growth complementarity has created a new great technological leap forward, catalytically driving the international system towards decarbonization. 

One can argue with confidence that the 2008 crisis was clearly a first window of opportunity which started to re-orient climate policies away from neo-liberal solutions. It is the opinion of the author of this article that the Covid-19 crisis is a second window of opportunity. It is the new climatic momentum the world has been looking for to fully embark on the decarbonisation of the world’s economy. 

What does this new climatic momentum look like? 

The Covid-19 pandemic has led to an explosion of unemployment, poverty, and distress. Against such a backdrop, governments have been quick to respond with Keynesian-Schumpeterian based climate policies that emphasise a strong complementarity between economic growth and environmental objectives. 

Firstly, this is observable rhetorically. Xu Bijiu, the Director-General of the general office of China’s Ministry of Ecology and Environment, has explained how his country’s climatic ambitions will not impede its economic growth, promoting a “harmonious, win-win relationship” between climate change mitigation and economic development. The European Green Deal takes a similar stance when it states that its growth strategy “aims to transform the EU into a fair and prosperous society […] where there are no emissions of greenhouse gases in 2050”. Similarly, the Biden administration is already coming up with its trillion dollar proposal to tackle climate change. 

Secondly, this win-win rhetoric seems to translate into tangible decarbonisation plans. While Esther Duflo, the 2019 Nobel Prize winner, argued that “this is really the Keynesian moment by excellence,” I do believe that it is also a Schumpeterian one. Clearly, the current climatic momentum is triggering an infrastructural and technological revolution. For example, Joe Biden proposed to invest around $2 trillion into green infrastructure and energy over the next four years. In Asia, Xi Jinping also advocated for a “green recovery from the coronavirus pandemic”. In another example, the European Commission has advanced with a European Green Deal aiming to create a new infrastructure to sustain an economy based on renewable energies and green hydrogen. The European Investment Bank is also massively investing in essential industrial infrastructures for the energy transition. In addition to this, Germany and France have teamed-up to drive innovation in the green hydrogen industry, meanwhile the European Battery Alliance has gained increasing traction since its creation in 2017. As a matter of fact, we are witnessing a process of Schumpeterian “creative destruction” which will likely leave, in its wake, an entire class of fossil fuels assets stranded over the next decades. Without a doubt, a post-pandemic decarbonised world driven by Keynesian and Schumpeterian economic policies is materializing under our eyes. 

Conclusion

Amid the first industrial revolution, Victor Hugo visited Liège, a Belgian industrial city based on coal and steel industries. He could not help but refer to it as a “spectacle of war”, a living “hell” due to the outrageous smoke, pollution, and environmental degradation occasioned by the use of fossil fuels. 

A couple of decades later, in 1875, Jules Verne imagined in The Mysterious Island a future in which coal was to be supplanted by a new form of clean energy that would be both endless and much more efficient than fossil ones. Jules Verne was head of his time. 

As we are entering into a new climatic momentum, Hugo and Verne would be glad to see that humanity is sailing towards a new cape. A cape of no return for fossil capitalism. A cape opening new doors for a decarbonised future.  

By Maxime Sommerfeld Antoniou          

Maxime Sommerfeld Antoniou is a Masters student in Geopolitics, Territory, and Security in the Geography Department of King’s College London. For the second year, he is part of the working group of King’s Think Tank’s Energy and Environment Policy Center. His interests range from energy transitions and green industrial policies to the geopolitics of rare earths.  

The featured image (top) is from Pixabay.

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