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Longevity Partners USA
30 September 2021

Green Deals: differences between the United States and the European Union

In 2019, proposals for sustainable development plans – or “Green Deals” - were put forward by the European Union and the United States. Both plans are aimed at tackling environmental issues, most importantly climate change, while promoting economic growth and social justice. These plans have become increasingly important in the context of recovering from the COVID-19 crisis. The Green New Deal was rejected by the US Senate during the same year, whilst the European Green Deal was approved by the European Parliament in January 2020. This article focuses on the factors that could explain these different outcomes. 

A clear focus on climate action 

Both plans focused on climate action. Their central goal was to achieve net-zero emission in 2030 and 2050, in the US and the EU respectively. There is a strong focus on a just and inclusive transition, by aiding countries and communities that would have a harder time adjusting. Other topics include protecting and restoring biodiversity, reducing pollution, and moving towards a clean and circular economy.1,2

EU Green Deal: concrete steps towards carbon neutrality 

During my study I explored the various factors that might explain why, despite the similarity between these two plans, one was accepted in the European Parliament, while the other was rejected by the US Senate. An initial explanation can be found in the structure of these plans. The European Green Deal is more comprehensive and detailed, and the goals are both clear and measurable. The   fact that the EU Green Deal was underpinned by concrete policy measures has been key for its success. Examples of new laws and regulations introduced to reach the EU Green Deal targets include: the EU Climate Law, a new package of energy and climate laws (‘Fit for 55’ package), and the EU Climate Pact. 3,4 These policies provide a clear roadmap for the EU towards carbon neutrality by 2050 and the interim target of –55% GHG emissions by 2030. They also recognise the need to involve all parts of society in this transition to ensure that no one is left behind.   

What next for the Green New Deal?   

Under Donald Trump’s presidency, the US was the first nation to withdraw from the Paris Agreement. 5 Trump openly expressed his doubt and disbelief in human-induced climate change many times during his presidency. 6 Several other US politicians have made similar statements, all of which are supported by research that can often be traced back to the fossil fuel industry. This lack of political will to take action on climate change, and sustainability more broadly, is probably the main reason for the rejection of the Green New Deal. 

Unlike the EU Green Deal, the Green New Deal also lacked concreteness and failed to lay out the concrete steps that the Administration would take to implement it. Its goal of achieving climate neutrality by 2030 may be one of the main reasons for the disapproval it was met by. The target can indeed be considered as relatively ambitious. American critics mostly claim the plan is unrealistic and consider the deadline impossible to reach. 

The American Green New Deal has been relaunched in 2021. Although it is unlikely that the plan will be accepted as is, it is possible for it to influence the creation of other, more moderate, climate change measures, and serve as the implementation vehicle for Joe Biden’s ambitious climate agenda. After becoming President, Joe Biden immediately re-joined the Paris Agreement and has embraced the core values of the Green New Deal. He has pledged to cut emissions by 50% by 2030. 7

In his climate plan, Joe Biden aims to achieve zero net emission buildings and invest in decarbonization. This could provide more incentives for builders and investors to boost their sustainable activities and invest in greening their buildings.  

Understanding current regulatory requirements and future policy trends surrounding ESG issues is key for the success of your business strategy. Longevity’s experts are closely monitoring updates in the EU and the US policy framework for sustainable business. Our team can support you in understanding the specific implications these measures will have for your company and assist you in your compliance journey.  

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