Last night, on 12/13 December, with the exception of Poland, European leaders have agreed on the most ambitious Green Deal ever: Europe should be climate-neutral in 2050 and thereby become the world’s first climate-neutral continent. As can be expected with a complex and far-reaching deal like this, there are many ifs and buts, exceptions and conditions and not every country is equally eager. And as also expected, environmental organizations and activists find the deal not good enough and too late. Furthermore, the deal still has to be turned into new legislation in 2020 before it will be actively maintained. But, there is a deal. And this is good news. Not just for our planet, but also for Europe. It may very well be Europe’s last chance to stay relevant in the global political-economic landscape.
Europe as Museum of the World
Last year, Dutch novelist Ilja Leonard Pfeijffer published his most recent novel “Grand Hotel Europa.” This award-winning novel describes a slowly but surely deteriorating Europe, overloaded by tourists that wander through Europe’s cities as museums of the past. Located interchangeably in present time Venice and the fictitious “Grand Hotel Europe,” both are metaphors for Europe’s presumingly inevitable destiny: losing its relevance, except as the world’s largest museum. Because, as Pfeijffer suggests, there is so much past in Europe that there is no place anymore for the future.
Pfeijffer’s book is fiction. But only barely so. What he describes is as realistic as it can be. You just have to visit any major or reasonably old European city and you experience how it gets increasingly overloaded with tourists from all over the world. Cities like Venice and Amsterdam now even have policies to actively ward off tourists and direct them elsewhere.
Furthermore, like in Pfeijffer’s book, Europe has gradually lost its political and economic relevance in the world. Where it used to be the political-economic center throughout most of the 17th through 20th century, this position has long been lost to other continents—North America, Asia and the Middle East. Today, especially China is expected to take over this leading role, leaving Europe somewhere at the periphery of the global stage.
Why a European Strategy Is Needed
Companies need a strategy. They need a way of differentiating themselves to make sure they can offer something that others—customers—are willing to pay for. As argued in an earlier article, the same applies to countries. Like companies, countries compete for talent, investments and resources and they have an interest in selling products and services in national and international markets. This means they need a strategy too.
When countries are too small to compete on their own, they need a collaborative strategy together with other countries. Compared to countries like the U.S., China and India, it is obvious that no European country can compete on its own in the global, 21st century competitive landscape. This is why they need to compete together, as a continent.
One strategy for Europe could be to serve as the world’s museum, that people from all over the world visit for enjoyment and entertainment. From a resource-based perspective this would be a strong strategy because, more than any other continent, Europe is endowed with historical places, buildings, art and stories. Also from a market perspective it is a strong strategy. Looking at the ever-growing number of millions of tourists, there clearly is a demand.
As Pfeijffer vividly describes in his book, this is Europe’s de facto strategy. Not so much intentional, but as a matter of fact it is. But being the world’s largest museum is not a very sustainable strategy. On the long term, it is not very profitable and it gradually destroys the very resources it is based on. Therefore, if Europe wants to stay relevant, or even reasonably prosperous, it needs another strategy.
The Green Deal as Europe’s (and the World’s) Last Hope?
The Green Deal may very well reflect this strategy. Instead of gradually making Europe lose its relevance, it offers Europe the possibility to become relevant again. And looking at where Europe stands now, this may very well be the very last chance it gets.
Taking the lead in becoming climate-neutral is a differentiating strategy. No other sizeable country or continent so far has this strategy. As such, it would give Europe a first mover advantage, allowing it to take leadership in this particular area. Furthermore, also from a resource-based perspective it fits Europe. It is relatively well-equipped in terms of culture and resources to make it happen. And, perhaps even more important, it lacks traditional carbon-based sources of energy. Transitioning to alternative forms of energy may resolve this void.
Also from a market-based perspective it is a viable strategy. People and organizations increasingly ask for climate-neutral, eco-friendly solutions, especially in the home market Europe. Admittedly, in terms of the innovation adoption curve, it are still the “innovators” and “early adopters” who ask for it. But gradually the “early majority” is asking for it as well.
Executing this strategy is expensive. It is estimated to costs several hundreds of billions of Euros. But as any company knows, every major change is expensive, and one always need to invest before revenues come in. Furthermore, as the Green Deal’s commissioner Frans Timmermans points out, the alternative—not becoming climate-neutral—is likely to be even much more expensive on the long run.
If we look at Europe and the Green Deal from a strategy perspective, the conclusion is rather clear: go for it, now and for the very 100% because it fits Europe, there is a demand and it may be the very last chance Europe gets. And if we look at it from a global, environmental perspective, the conclusion is equally obvious: if we want to save this planet, someone needs to start making big changes and why should this not be Europe.
But of course, strategy and the environment are not the only factors playing a role. There is also politics. But as tonight’s deal might signal, those can be solved.
This post was published earlier here on my forbes.com page.
Image credit: Getty