A green and innovative recovery

By Pascal Lamy

There’s no better way to express our commitment to the future of Europe than to invest in research and innovation, as it will help Europe develop the next generation of clean technologies and speed up its economic recovery. This is something EU leaders should keep in mind when they meet on Friday, writes Pascal Lamy.

Pascal Lamy is the president emeritus of the Jacques Delors Institute (JDI) and president of the Paris Peace Forum. He was the director-general of the World Trade Organisation from 2005 to  2013.

In the mid-1980s, I was serving as chief of cabinet of the then President of the European Commission Jacques Delors. At the time, we were building the foundations of what were to become the European Single Market and the euro.

However, when the Berlin Wall fell in 1989, our priorities shifted dramatically. Led by Delors, the EU quickly pivoted to turn a once-in-a-generation moment into an opportunity to inspire and unite Europe.

I worked later as director-general at the World Trade Organization. My tenure there coincided with the 2008 financial crisis, which at the time was the global economy’s worst setback in decades.

Overnight, we went from focusing on organising an ever-more-connected global economy, to stemming alarmingly sharp drops in global trade as financial markets teetered on the brink of collapse and pushing back protectionist pulsions.

Neither example provides a perfect parallel to this unprecedented, knife-edge moment in our history.

Yet as we chart our European economic recovery from coronavirus and towards a greener future, both experiences help illustrate something I think is important to remember: It is impossible to predict the future, but we need to rise to meet every crisis with the resolve to recover better, to make our societies more resilient and more sustainable.

That’s certainly the case now. At the start of the year, none of us thought we would be here. Like the speed of the Berlin wall’s collapse, or the depth and severity of the financial crisis, coronavirus blindsided many of us.

Now – with the European Council having to decide on the Commission’s proposals, with the strongest, wealthiest country in the bloc, Germany, ascending to the Council’s presidency for the next six months – we have an opportunity to truly transform Europe and finally make the European Green Deal a political and economic success.

One area that’s particularly ripe for enacting the kinds of bold, visionary EU policies we need to build a better, cleaner Europe for all of us is research and innovation (R&I).

Consider this: for the EU’s economic recovery to truly succeed and endure, it needs to set us on the proper pathway to achieve climate neutrality by 2050.

But as the proposed economic recovery package and long-term EU budget currently stand, research and innovation takes too much of a back seat. The current approach is lacking, it is piecemeal and the sea-change we need is not yet here.

This is unacceptable. As detailed in the recent “Greener After” policy paper published by think-tanks Europe Jacques Delors and the Jacques Delors Institute, we have all the required tools to make the European Green Deal the engine of the economic recovery.

Let me underline three general R&I policy remedies that can recharge and transform our economy to achieve climate neutrality by 2050:

First, ensure the European Green Deal guides member states’ own recovery and resilience plans. Then, orientate the broader EU R&I policy landscape more fully around delivering climate neutrality.

This can be achieved in part by setting strong, clear targets that reorganize and enhance EU R&I policy instruments and initiatives, including Horizon Europe and the European Innovation Council.

Second, work with coal- and carbon-intensive regions to ensure that the Just Transition funds they receive is invested in research and innovation in those areas. To be sure, not every region can be a major research hub.

But strategically deploying EU R&I funds in key European regions will help make the just transition a reality and help to ensure that economic disparities are not entrenched for the next generation.

Finally, as we build consensus around the potential of policies like the Industrial Strategy to increase our competitive sustainability, we must leverage Europe’s R&I expertise to become more competitive and more sustainable in the globalized economy and help create new markets for Europe’s cutting-edge innovations.

At the WTO, we understood well the vital role R&I plays in the global economy. Doubling down on EU R&I investments now helps Europe develop the next generation of clean technologies – then ensures that as those technologies scale up and reach global markets, the continent will reap the economic rewards it deserves.

There’s no better way to express our commitment to the future of Europe than to invest in the R&I. We know we need to speed our economic recovery to cope with the unemployment wave in the making and beat climate change.

For all these reasons, cutting into the funding which the Commission has proposed for R&I for the recovery package as well as for the next EU budgets would be shooting in our own foot. If anything, it should be increased, not decreased. We have an opportunity to bring R&I to the fore now.

Let’s seize it.