The stability of international relations is highly valued, but sometimes difficult to achieve. Ups and downs are normal in every relationship, between individuals as well as between States. When we look at the transatlantic relations today, either the relations between Germany and the USA or between the EU and North America, sometimes governments have very opposing ways to deal with common challenges.
One of the questions that international relations pose is how to find new approaches to improve them in times of difficulties. There are many ways to strengthen ties, yet, they are not necessarily based on political or governmental relations. When only one government plays a zero-sum game, the other one is likely to lose. Therefore, it might be an advantage to find a more informal way to tighten the ties between countries. Informal ways could include actors from society, like civil society organizations, economic actors, academic institutions or individuals.
For the purpose of proposing an idea that could strengthen the transatlantic economic relations in an inclusive manner, we thought about a way to foster cooperation between North American and European companies, that would also include political actors, academia and representatives from the civil society. We propose to challenge transatlantic relations and to break them down to a societal level when it comes to climate change. The overall objective for the concept would be to boost a common ecological agenda between Germany and the US, that has the potential to be further elaborated by involving players from other regions.
Forums for environmental cooperation, for example the Ecologic Institute, that is present in Berlin and Washington DC, already exist. They want to enhance economic relations between the EU and the USA in the ecological sector. An institution with a similar goal is the Transatlantic Climate Bridge Initiative that has been created to facilitate exchange and national investments in the climate change and energy sector in each respective country, without crossovers. Those organizations, that are based on governmental initiatives from 2008, provide frameworks and rules to promote a transatlantic cooperation in the green sector. Their aim is to include actors from the entire society and to facilitate the exchange between stakeholders of a “green” world.
Our proposal is to take a different approach by creating an economic forum, Green New Deal 2.0, that would principally include businesses, from start-ups to multinationals, on a voluntary basis. Additionally, representatives of governments, academia and the civil society could be present in a purely consultative role to express non-binding suggestions.
The heart of Green New Deal 2.0 would be a R&D fund diverse companies would contribute to by spending a percentage of their R&D costs yearly. The presence of diverse industries would demand to break the forum down in smaller entities. Consequently, the organization would establish committees with distinct companies’ representatives for each sector. Then, the fund would allocate an equal amount of money to the diverse represented sectors and call for applications to solve problems, defined by each committee, that concern each sector through ecological approaches. Subsequently, companies that plan to solve the specific problem in a specific period (up to five years) will hand in their proposals. After that, each sector will choose several projects (up to three). We suggest that more than one project should be supported because there are uncertainties. A project might fail, even though the idea initially seemed reasonable and logical. There is also the danger of bad faith, i.e. a business might take a challenge without disclosing their documents in a transparent manner, which would make them subject to exclusion.
Governmental, academic and civil society representatives would join the committees by commenting on current and future challenges which will help the decision-making process for allocating money to proposals. The chosen projects will be funded by the forum’s resources during the ongoing time. Participating companies should present their progress quarterly, which gives room for improvements if needed. Having completed a challenge, a company will grant access to its solution. That would compensate all participants for their fund-contributions.
In sum, a forum enhancing the exchange about climate change-related issues would benefit the participating companies, but also the global society. More investments in research would permit diverse businesses to adapt to current and future challenges which they will face either way. By promoting joint actions, the participants in the New Green Deal 2.0 would prove that they care, for their company, for the future, for innovation and for an open-minded approach towards cooperation. A particularly nice aspect would be to bring together big companies that have much experience, with small enterprises and new start-ups that might be full of innovation. At first, it might be difficult to abandon one’s individual stand as a purely profit-oriented entity. However, the advantages and gains that the forum would offer have the potential to mitigate possible threats. Yet, participants need to show strong ethics and compliance and must truly envisage common gains instead of individual ones.
If the forum could be established under the auspices of the transatlantic relations, it would enhance the intercultural economic and communications exchange and strengthen ties between companies that informally promote the relations. It would provide an access to R&D investments for small and medium sized enterprises and start-ups, that may have great ideas but less means to explore them. Long-lasting cooperation could be created. Furthermore, businesses would find new solutions to problems in a common way. Making the results a common good will grant companies an easy access and accelerate the green transition. The inclusive approach guarantees all participants the option to apply new standards and technologies. Thinking further, the forum could include actors from developing countries, which would result in making the world a greener, environmentally more healthful and, thus, more peaceful place. Thinking still further, the forum could be used as a prototype for creating similar cooperative forums all over the world.
Katharina, what a great and concise idea! Could you possibly elaborate on the benefits for (major) businesses to join the Green New Deal 2.0. Especially if they have ties to the current American government, I imagine convincing them of joining this deal might be complicated?
Dear Christin,
Thank you very much for your feedback and for your excellent question. I thought about the benefits for major businesses for a long time. I would distinguish two major categories:
1. Financial/economic benefits
2. Ideological benefits
Imagine that we have a large company in the construction sector with a 100M Euro revenue, 20M Euros profit per year and an average yearly R&D investment rate of 5% (5M Euros per year; source for average R&D spending: https://www.strategyand.pwc.com/global/home/what-we-think/innovation1000/rd-intensity-vs-spend-2014). This company has a great, theoretically feasible idea on how to improve a specific material and to make it more sustainable at the same time. However, it would take about three years of R&D and it would cost, in sum, 25M Euros. When all other parameters stay the same, the costs for this single project would exceed the average yearly R&D spending by 60%. Thus, the company must decide if it develops an expensive idea that gives them an individual advantage and enhances the product’s sustainability, to sell it to the competition or to just continue business as usual.
Now, if the company is a member of Green New Deal 2.0, it could get a funding through the common fund. In the aftermath, our company would have to share the information with all the other partners in the segment but this might still be an economic gain.
My idea was to convince businesses to work together for common gains. They would have the option to “consecrate” a share of their wealth to a global purpose. Essentially, ideological gains would be new relations between players in similar industries and the share of information. Furthermore, participating in Green New Deal 2.0 might also improve a company’s reputation, as people see that the business is open-minded and willing to cooperate, help others, in a way that leads to global benefits.
Probably, there are still other benefits I did not yet think about. If you have anything in mind, please let me know.
Concerning your second question, you’re right. It might be difficult to convince businesses that have ties to the US government. Yet, I wanted the forum to remain mostly apolitical because of governmental changes and instabilities in public policies which frightens many economic stakeholders. Political economic relations can enhance international relations or it can weaken them and build mistrust. We saw that the last transatlantic investment treaties brought much dissatisfaction; on one hand the public opinion was quite negative, on the other hand the US government felt somehow displeased. Although CETA is signed, TTIP does not seem to advance, and has many opponents on both sides of the Atlantic Ocean. After TPP, it seems unrealistic that TTIP will be signed anytime soon (still, I can be wrong). Therefore, I thought about a mean to improve economic relations in a way that would not necessarily include governmental actors and that would improve environmental collaboration.
You’re right that challenges will be present when it comes to convincing companies to join a common fund, and opponents will likely try to stay out of the idea. But we can also see that some of the most innovative companies in the US cut their ties to the government and want to further green strategies (https://www.bloomberg.com/news/articles/2017-06-01/musk-jumps-off-trump-train-in-wake-of-paris-pullout-decision). This leaves the option to first gather interested participants who might convince, after initial success stories, other players.
I would very much like your opinion and ideas on the topic!
Dear Katharina,
thank you for your detailed reply, you obviously have convinced me of your idea! You stated that the Green New Deal 2.0 would entail financial/economic and ideological benefits. I wonder if they don’t also further political benefits. Trying to forge a common agenda on how to meet climate change has been such a straining undertaking for national politicians – even before the US left the Paris Climate Agreement. Now, would your proposal not shift the responsibility from political actors to global companies and thus into an economic realm where it can be met more efficiently? And could this ease political tension that arose over the discussion of climate change while at the same time merging a political civil society? I might be thinking too far ahead already, but the current G20 demonstrations have me wondering if there lies not political gain in giving up political responsibility to other stakeholders, like in the form of your proposed Green New Deal 2.0. What do you think?
Dear Christin,
It is very inspiring to discuss with you because the exchange about the forum’s possible effects is one of the most important. Just to be sure: are you asking, in your last question, if there is a political gain in transferring responsibility to other stakeholders? If this is the correct interpretation, I try to answer.
I thought about the forum when I heard that the United States wanted to withdraw from the Paris Agreement and that there are still many supporters in academia, the civil society and in the economic context that want to further sustainability.
And I came to the point of not knowing anymore if political international relations could help to overcome this problem. Because when two countries discuss an issue that is actually perceived as a zero-sum-game from one side, it is quite impossible to enhance political relations concerning the topic, except if you manage to make the other one change their mind.
Your idea is interesting. When I was thinking about the forum, my idea was that representatives of specific sectors (academia, companies, etc.) could have an impact on their national politics and restart discussions by influencing on politicians in climate and sustainability issues.
When we talk about giving political responsibilities to other stakeholders, we have to consider the sensitivity of an area. National security, for example, is no topic that I would like to give into the hands of private stakeholders. In other areas, like in cultural politics private stakeholders could have targeted approached for promoting cultural agendas in each other region.
What would be your approach towards the same question? Do you think that private actors could intervene in some areas and support political institutions?
Dear Katharina,
yes, your interpretation of my reply/question was indeed correct
I fully agree that handing over political responsibilities to other stakeholders does not work in fields of ‘hard politics’, such as security or free trade. Yet in other fields, climate change, cultural exchanges, maybe even education, I see many benefits of approaches, such as the one you proposed.
If I understood you correctly, then we are on the same page here: Climate change is an issue that needs immediate attention, yet the political sphere, especially that of the US, does not react to it in a beneficiary manner, e.g. by making a climate sceptic head of the US environment agency. Therefore, forwarding environmental responsibilities to stakeholders would not only result in faster and more satisfactory outcomes, but also lessen the “workload” of the political administrations. It is possible then for both sides of the Atlantic to focus their political power on discussing topics where the opinions don’t differ quite so drastically and where cooperation is more feasible, e.g. security or trade.
Obviously, a New Green Deal 2.0 needs to be implemented carefully as to not appear undemocratic or elitist. Yet, I believe this idea is worth of further exploration and discussion and I hope it will be on the agenda of the final Atlantic Expedition group.
Thank you for this inspiring discussion!
Hi Katharina! Really a great idea. It’s important stay ahead in R&D. That you circumvent public/governmental structures is interesting. On the one hand it will gain easier allocation of resources and probably more diversity in R&D, but it lacks democratic legitimization. Could you imagine to include some sort of democratic process?
Dear Hendrik,
Thank you very much for your comment! First, I would like to define the term “democratic process” just to know if we talk about the same issue.
Democracy is the right of the people to exercise power. I would say that a democratic process is a way to express your opinion on order to communicate your interests. Oftentimes, democracy is the exercise of power by a people’s elected representatives.
Within the forum (as proposed), there are the following democratic approaches:
1. Democracy through elected committee members
2. Consultative status of government, academia and civil society stakeholders
3. Selection of projects based on the individual utility
First, my idea for the forum was to establish committees which would choose the projects that should be supported through the fund. We could ask about how to compose the committees. I think that each committee should be composed of members of different company-types (i.e. Start-ups, SMEs, large companies, etc.). They should be elected by all the members of each industry who must have an equal vote. Now the question is, if the member composition should be proportional or equal. Personally, I prefer an equal number of representatives to grant similar conditions to each participant. Members should rotate after a specific period, maybe after three years, when the first projects in each sector will be finished.
Second, other stakeholders of environmental affairs should have the right to comment and to observe the proceedings in the fund on a voluntary basis. That could further the common dialogue, without limiting the actual decision-making process by the committees. Companies must respect environmental legislations; they will be bound to comply with public policies. Yet, I think that businesses will know best what brings their industry further.
Third, when projects are selected based on their utility, there will be a rational choice. Lobbying would not be needed, as the results will be available for all participants.
However, we could also think about an approach where each member votes for a project.
Did I understand your question correctly? What would be your idea of democratic legitimization?
Best,
Katharina
Dear Katharina,
thanks for your additional input and pointing this out – my mistake 🙂 I meant both: participation of citizens and elected bodies. I still see a small problem with how there could be a broader legitimization as the effects can be quite widespread.
You’re right the market (perhaps not individual companies) usually knows what he is doing and how to bring progress, but still it would need to be kept in check somehow as to conclude everyone, not only potential customers. And do you see a problem of firms not cooperation or even hindering the success of others?
I try to be a bit of an Advocatus Diaboli here, because I find your approach has a huge potential.
Regards,
Hendrik
Dear Hendrik,
First of all, sorry that it took such a long time to answer.
Thank you very much for your input and for your questions. I will try to answer this question, though I think that we will probably discuss the issue further, as I will most likely not provide you with a satisfactory answer.
The easier answer first of all: yes, there might be problems, when companies would not want to cooperate. Yet, I think that it would be from advantage to create a forum, based on voluntary participation. If that works out, other companies would probably join. A company that is a member but does not cooperate could be excluded and prevented from re-entering for a certain period. Furthermore, penalties could be established for enterprises that act in bad faith.
Concerning the democracy question, I wonder if citizens should participate in the forum. Your idea that civic participation would legitimize the organization further is a very nice one. Still, civic participation could hinder the forum’s progress. Therefore, if the forum should enable civic participation, we must think about a way to make that happen without hindering the companies’ activities. Citizens might, for example, indicate topics where they see a need for change. Then, the forum could target those specific ideas. However, the question is, if those indications should be binding or facultative.
What is your idea or approach for implementing a civic participation in an economic forum? Do you have further ideas?
Kind regards,
Katharina
Dear Katharina,
that’s a great idea. Let me add one point: I think messaging is very important when in comes to public support for a “Green New Deal 2.0”. In order to win a broad coalition of political allies, I would suggest to frame it in a way that conservatives in the US wouldn’t be suspicious of. What does that mean? Such a project should focus on language like “investment”, “free-enterprise”, “technological innovation” instead of “sustainability” or “climate change”. Studies have shown that public support for green policies is high even in rural areas that tend to vote conservative when the message is focused on economic opportunity.
– Florian
Dear Florian,
I appreciate your comment very much!
That is a great idea. I would love to combine both aspects. My idea was meant to be very liberal, to avoid possible conflicts and to improve relations that are economic as well as ecological. I think that it is necessary to somehow establish connections between sustainability and investment.
Concerning your comment, I think that the language should be adapted, depending on the public that is supposed to listen to the idea.
Would you mind giving me the link to the studies? I would like to get a deeper insight into the topic!
Kind regards,
Katharina
Hello Katharina, thank you for sharing such an insightful idea and article. I think it would be a great idea to include various actors in this economic forum you propose, Green New Deal 2.0, as it would bring more perspectives and resources to the table. However, have you considered how the costs and benefits of participating in this forum could vary for the different businesses? Although every participant will hopefully gain great insight from their participation in the forum, a start-up may have much less resources to offer than a multinational, which may alter the power structure of each discussion and action plan.
Maria
Dear Maria,
Thank you very much for your commentary and your question.
Yes, I thought about that. Let me just say, the benefits would be common. There would not be one company that has a bigger benefit than another one. The only parameter that affects the benefits on an individual level would be the assets of a company and, thus, the specific use for the company.
The costs should be shared on a proportional approach. That means that each company should invest the same percentage of their revenue into the fund. That might be 1% of the revenue. Each year, each company should invest the same percentage. That would be the money that will go in the fund. Afterwards, each sector should have an equal part of the total sum to finance its projects. My idea is that each company will have equal rights in the forum because they all invested an equal part of their earnings and that they should not enter in a conflict because one has paid more than the other one. It is a bit like the WTO-concept, only with companies.
Do you have an idea on how to guarantee the integrity of each participant and on how to avoid a struggle based on power and wealth?
Best,
Katharina