Four Scenarios for EU Net-Zero

Four Scenarios for EU Net-Zero

The EU Policy Lab has published a report “Towards a fair and sustainable Europe 2050: Social and economic choices in sustainability transitions” in which it explores possible and necessary changes in the European social and economic systems as the European Union engages in managing sustainability transitions towards 2050. The study builds on a participatory foresight exercise, which generated four foresight scenarios for a climate-neutral EU in 2050. It builds on these scenarios to identify strategic areas of intervention and sustainability transition pathways.

It adopts an interesting methodology with some innovative aspects, though there are some areas for concern – of which more later.  It has three key elements:

  • Scenario Building
  • Transitions Pathways and backcasting
  • Strategic areas of intervention

Scenario Building

The four scenarios are built on a classic scenario cross, using other pre-existing work – a 2015 JRC study on the sustainable economy and recent European Environment Agency (EEA) ‘imaginaries’ for a sustainable Europe in 2050. The axes of uncertainty were:

  • whether society would become more collaborative/collectivist or more individualistic/ competitive
  • whether broad policy mixes supportive of transformative change for sustainability would emerge or not.

In each scenario, the necessary transitions in production and consumption happen through a change in lifestyles that leads to a drastic reduction in consumption and phasing out of unsustainable practices. However, this comes about for different reasons and through the actions of different actors.

The key features of the four scenarios are:

Eco-States – Government-driven sustainability:  Member States’ governments are the key actors, responding to and shaping public concern to introduce strong Net-Zero policies.  They shape a social and economic transformation of the EU by improving the effectiveness and efficiency of their government action. As well as national reforms, they strengthen their coordination to jointly address challenges that countries cannot tackle alone.  This is clearly an optimistic scenario relying on some heroically positive assumptions – social inequalities have been reduced through redistributive policies; taxes, energy and some social policy shifted to the EU level; “persisting” world order.

Greening through crisis crisis-response-driven sustainability: at the other extreme, successive crises unfolding at the global and regional level push national governments to devolve competences and power to the EU to ensure security and protection. The European Commission is proactive in steering the process and is gradually backed by all Member States. The EU in 2050 works as a federal state. Probability – low!

Green business boom – business-driven sustainability: as resource costs surge, corporations find ways to decouple profits from resource consumption. They engage in a circular economy, renewable energies and in sustainable bio-economy. Innovation helps accelerate market opportunities for sustainable businesses models. In this way, the economy promotes sustainable behaviour while generating added-value. A more plausible scenario, if it were supported by clear government targets and investment.

Global Eco-World – people-driven sustainability: policymakers fail effectively to respond to the major havoc wrought by climate change, forcing people to find new ways to adapt to more difficult circumstances. In this new paradigm, people discover, through the pressures they endure, the value of human relationships, connections, community help and the possibility of a dignified life with much lower levels of material prosperity. This one is close the Second Coming.

Admirably the report includes much greater detail on each of the scenarios structured around the STEEP factors:

  • social: national identity and social inequality
  • technology: predominantly digital technology in various forms
  • economic: taxation, regulation, financial sector, labour markets
  • environmental: attitudes to nature, monitoring, agricultural practices, lifestyles
  • political: relationships between EU and Member States, geo-political situation, migration.

Transitions Pathways and backcasting

An innovative approach (at least in my experience) is the development of transition pathways developed by combining the X-curve and the three horizons approach.

Each comprises:

  • signs of the new, which point to current developments that are compatible with the given pathway.
  • main patterns of change, which indicate the main change processes that define each pathway
  • transformative elements – trends, trade-offs, synergies and conditions that can be identified along the transition pathways from today to 2050.

The transition pathways are developed by combining the X-curve and the three horizons approach. The pathways indicate the processes of change towards sustainability going from today to each scenario in 2050. The X-curve is a sense-making tool that enables the co-creation of collective narratives about system change.

Key insights from the four pathways, common to all, are:

  • people as a driver for urgent action
  • strong shift to a new EU model of multilevel governance
  • a systemic mix of actions requires joint efforts
  • the urgency to act can be guided by the search for resilience and strategic autonomy

Strategic areas of intervention

Areas in each pathway consistently deemed be significant to sustainability transitions, and in need of intervention, were grouped into four clusters:

  • a new social contract: covering democracy and social cohesion, inter-generational fairness and wellbeing; leading to a social contract based on sustainability
  • governance for sustainability: including public finance, investment for transformative change, public governance; leading to improved governance models for sustainability
  • the people and economy cluster talks of sustainable lifestyles and business models, and improved skills and competences enabling sustainable societies
  • all within a global context of partnership and changing value chains to achieve sustainability in complex geo-politics.

In the final section, the report concludes: “It emerges clearly from the foresight process and analysis that the necessary systemic changes require collaboration across all of society”. No small challenge then.

Areas of concern

Looking at the report as a futures project, we can see a number of clear areas of concern.

The most obvious is the assumption in all four scenarios that Net Zero is achieved. In fact this is really a visioning exercise with four different routes to a common outcome. This is the task that was set. The Joint Research council has also developed ‘reference scenarios’ of the global standing of the EU in 2040, in which only one scenario will lead to a future where the EU is on track to reach climate neutrality.

Putting that to one side, we might also question the choice of axes of uncertainty. The  “Policy mix” axis lacks definition, and contains many nuanced differences.

We would also doubt the viability of the scenarios, from their descriptions. Clearly, scenarios should challenge the status quo, but the assumptions within them have to be seen as credible and internally consistent.  Ceding tax, energy and some social policy to the EU level or extended EU federalism are well into the far-reaches of plausibility.  A social nirvana where crisis engenders a continent-wide rush to value human relationships is far beyond that. Adopting a stance of relentless positivity means that barriers and challenges are not properly identified.

The report’s conclusion that achieving Net Zero requires systemic change is welcome. Whether it is possible in many, less optimistic but perhaps more realistic, scenarios remains an open question.

Written by Huw Williams, SAMI Principal

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

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