Why We Must Strike a Green Deal for Our Planet: The ‘Make-or-Break Decade’

Anna Sophie Herken, Business Division Head at Allianz Asset Management and a “40 over 40” Germany 2020 Alumna, knows there is more to be done when it comes to protecting our planet. In this episode of our new series Questions on Finance, Anna urges everyone to put sustainability at the heart of economics in order to stand a chance at saving our future

by Anna Sophie Herken | 14 Jun, 2022
Anna Sophie Herken Q and F Make or Break Decade

The year when the world first crosses the 1.5°C above pre-industrial levels is looming. A recent forecast by the World Meteorological Organization puts the likelihood of at least one of the next five year’s exceeding the 1.5°C limit set by governments at 50:50 (48%).

This is not just a random number. As the earth heats up, everything we love is at risk: 1.5°C is a threshold that will bring far more intense droughts, fires, flooding, heat, and storms than the present. This will create an environment increasingly harmful for billions of people and, indeed, all life on this planet.

An opportunity to transform our economy and usher in a way of life that is more inclusive towards people, the environment, and other species.

Urgent action is demanded to avert unprecedented and irreversible climate change. However grim the situation, it is also an opportunity to transform our economy and usher in a way of life that is more inclusive towards people, the environment, and the other species with who we share our planet.

Crucial for Future Generations

The European Commission has recognized the urgency and created a Green Deal that seeks to transform the region from a high- to low-carbon economy without reducing prosperity and while improving people’s quality of life through cleaner air and water, better health, and a thriving natural world.

If that sounds ambitious, it is. Throughout the 20th century, economic wealth and progress rested on burning fossil fuels. Now nearly every aspect of the European economy is to be overhauled to reduce carbon emissions, from energy generation to food consumption, from transport to manufacturing and construction.

Ursula von der Leyen, President of the European Commission, underlined the importance of the Green Deal when she said, “The 2020s is the make-or-break decade.” What we achieve in this time will be crucial for future generations.

Putting Sustainability at the Heart of Economics

Examine the Green Deal closely, and you will see it is far more than a plan to avert the worse of the climate crisis. It is also a growth strategy that puts sustainability at the heart of economic policies. This strategy comes with important targets. One is to reach European-wide net-zero carbon emissions by 2050 and a 50%-55% cut in emissions by 2030 (compared with 1990 levels).

The second is to achieve fair and inclusive economic growth for all. The European Commission plans to accomplish this through a list of public benefits, including cleaner energy, more public transport, longer-lasting products that can be repaired, reused, and recycled, through improved living conditions and a healthier environment.

The list touches all aspects of our lives and impacts multiple value chains. Jobs will be created, the commission believes, in high-tech industries from renewable energy to electric vehicle manufacturing and sustainable building, providing the basis for a globally competitive and resilient economy. The deal also aims to ensure that this transition is fair, tackles inequality and addresses the concerns of those whose employment and incomes are affected – ensuring no one is left behind.

Did you know...

A third of the world’s public climate finance comes from the EU and its member states (europa.eu)

As part of the Green Deal, the European Commission proposes zero-emission from new cars by 2035 (europa.eu)

160,000 additional green jobs could be created in the construction sector by 2030 (europa.eu)

What’s on the List?

We all should read the list because it has implications for us all. The cars we drive, the houses we live in and the jobs we will have in the future – the Green Deal will influence all of this. In essence, it is about creating a clean and prosperous economy. This is a daunting task, and comparisons have been made to the turmoil that came with the Industrial Revolution – but the journey is already underway.

Given the magnitude of the ambitions, it’s no surprise that there are challenges. Today, most people live in a linear economy where we extract resources, produce goods & services for consumption, generate waste, and then repeat the process. Transitioning to a circular mindset where we reuse and recycle will be tough. This needs training, upskilling, social inclusion, and the education of communities – all of which the European Commission is seeking to do.

Climate change is not a European phenomenon. The global community needs to step up and make a concerted effort.

The Green Deal is undoubtedly a significant step forward, but climate change is not a European phenomenon. The global community needs to step up and make a concerted effort. One can imagine the complexities of reaching a similar Global Green Deal, but this is precisely what our planet needs.

Skeptics might ask if a Global Green Deal can be effective? But as long as we continue to emit greenhouse gases, temperatures will continue to increase, our oceans will become warmer and more acidic, sea ice and glaciers will continue to melt, sea levels will rise, and our weather will become more extreme.

These are all signs that our planet’s delicate ecosystems are under pressure. If we push them too far, they will collapse, and we will no longer be able to strike a deal and be forced to live, as far as that is possible, with the consequences.

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