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The EU is a “beacon of stability” when it comes to climate policy on the world stage, said MEP Lídia Pereira on Thursday.
Speaking at the Brussels’ Economic Forum, the member of the European People’s Party (EPP) said that the bloc must not resort to “dangerous” solutions when tackling the climate crisis.
“If we want to find solutions, we have to find solutions with the moderates,” she said.
Pereira was responding to an argument for degrowth, proposed at the forum by Timothée Parrique, an economist and researcher at HEC Lausanne.
“This [degrowth] is not a political statement… this is a scientific reality that we have to grapple with,” Parrique said.
“There is no point being first when you’re going in the wrong direction…economic growth has lost all correlation with quality of life.”
He continued: “I can tell you with confidence wealth is not trickling down and pollution is not trickling out.”
The theory of degrowth, which has been around since the 1970s, warns against continual economic growth and instead advocates for economic shrinking. Proponents argue that the world doesn’t have enough resources to make endless growth a realistic goal, meaning we need to scale back our consumption.
Although supported by some eminent academics, critics argue that degrowth would massively destabilise the interconnected global economy, resulting in unemployment and deepening inequality. They also argue that it’s a tough political sell.
Even so, “the costs of action are much lower than the cost of inaction,” stressed Parrique on Thursday, noting that growth-focused policies will have a “huge drawback” in the long term. He suggested that public figures should do more to promote public awareness around this.
Lídia Pereira argued that the green transition can go hand in hand with the EU’s push to become more competitive.
She pointed to subsidies in China and the US, notably former President Biden’s Inflation Reduction Act (IRA), and said that Europe must do more to foster “strategic autonomy in clean technologies”.
This is currently held back by a lack of progress on a fully-integrated capital market in the EU, she said. As a result, companies can’t get their hands on the capital they need to compete on a global scale. Country-specific laws are still a hindrance to cross-border funding, forcing companies to be more reliant on banks, rather than private investors, for loans.
The EU is aiming to be climate neutral by 2050 and member states have specific strategies on how they plan to achieve this.
Pereira suggested that Europe could act as a pioneer for other economies when it comes to fulfilling climate commitments, which are becoming ever-more urgent.
This comes as, across the Atlantic, the US administration is pulling economic resources from initiatives designed to support the green transition.
Donald Trump in January signed an order to withdraw the US from the Paris climate agreement for the second time. The president is also pushing for a renewed focus on fossil fuels, as opposed to renewable technologies, and is rolling back elements of the IRA.
