The Global Green New Deal: The New Norm? ^†

Abstract

The Global Green New Deal (GGND) has had a resurgence through calls for ‘building back better’ from COVID-19 by way of a green recovery. News headlines suggest that the world has, so far, missed this opportunity, yet close analysis of the data reveals a more subtle trend at play. An aggregate analysis of COVID-19 stimulus measures from the perspective of plurilateral summit institutions reveals that both the G7 and the BRICS countries have implemented a proportionally higher volume of clean versus dirty stimulus measures. This indicates that the GGND could indeed be ‘the new norm’ even as it continues its nascent emergence. However, a significant gap remains between the G7 and the BRICS countries in their respective proportions of clean versus dirty stimulus measures. Given the role of the same groupings as respective net carbon importers and net carbon exporters, there remains an ongoing risk of ‘carbon leakage’. In making this connection, this paper underscores the potentially crucial role that carbon border adjustment measures will play as the GGND continues to emerge as a possible ‘new norm’ of global governance.

1. Introduction

Through strategic public investments in sectors such as energy, transport, and industry, a Global Green New Deal (GGND) seeks to decouple economic development from carbon emissions, when rebuilding an economy post an economic shock. The GGND was first proposed in 2009 by the United Nations Environment Program (UNEP) [1]. The UNEP’s proposal for a GGND included three elements, domestic stimulus, public policy change, and international coordination [1]. Plurilateral summit institutions (PSIs) play major roles in driving the latter and, as such, form a major part of the contemporary global governance landscape. Given that they also represent a sizeable share of the global economy and greenhouse emissions, PSIs also play key roles in either driving forward or hampering progress towards a GGND [2,3]. The resurgence of the GGND framework in 2019, when paired with the opportunity of ‘building back better’ from COVID-19, presented the first window to assess the practice and consequences of the GGND for global governance from the perspective of PSIs.

This paper takes an early opportunity to explore empirical variation in the green recovery practices of the G7 and BRICS countries in their recovery from COVID-19 through a novel interrogation of open-source data from the Global Recovery Observatory database. Then, it considers how this practice may impact global governance, specifically from the perspective of the trade–climate nexus. The paper begins by outlining the original GGND framework and its normative resurgence in 2019. Section 2 continues with an overview of the link between the GGND and ‘building back better’ and provides early insights as to the implications of this practice of the GGND for the trade–climate nexus. Section 3 describes the methodology of the paper, including the datasets it analyses and the framework of the ‘norm lifecycle’ it employs. Section 4 discusses the findings of the results, and their implications for global governance. Section 5 presents a summary of the ways in which the GGND can and cannot yet be considered the ‘new norm’. Given the preliminary nature of this research and considering the ongoing nature of the COVID-19 recovery, this paper also outlines areas for future research throughout.

2. Research Background

The GGND can be conceived as a norm bundle containing norms that facilitate the twin goals of decarbonisation and development. To understand the foundation of the GGND as a norm bundle, one must examine the constituent elements of the original framework. Since the GGND framework has evolved since its conception, it is also necessary to assess its form and substance in light of its recent resurgence and, only then, is it possible to view the opportunity that COVID-19 provide through calls for ‘building back better’ from COVID-19. While the GGND is a nascent trend, it is already prompting divisions among the PSIs, including the G7 and the BRICS countries. In turn, contention over green recoveries in global governance are being expressed in the domain of international trade. In this way, the trade–climate nexus is key to the normative diffusion of the GGND. The following section provides an introductory commentary in each of these areas.

2.1. Understanding the Global Green New Deal

The UNEP outlines three broad objectives of the GGND: to make a major contribution to reviving the world economy, to reduce carbon dependency and ecosystem degradation, and to further sustainable and inclusive growth [1] (pp. 5–6). To reach these objectives, the UNEP describes three core elements of the GGND. The first is state-led economic stimulus [1] (pp. 6–9). This stimulus should decarbonise carbon-intensive sectors such as energy, transport, buildings, and agriculture [1] (pp. 6–9). The second element is domestic policy reform [1] (pp. 9–12). Reforms include eliminating environmentally harmful subsidies and strengthening environmental legislation [1] (pp. 9–12). Complementary to domestic stimulus and policy reform, is the third element, which is international coordination [1] (pp. 12–16). This element includes changes to the policy architecture governing international trade, aid, global carbon markets, and technology transfers [1] (pp. 12–16). The GGND was launched in response to the global financial crisis. Upon release, it received a degree of domestic support from states, including being part of former U.S. President Barack Obama’s legislative agenda [4]. Yet, its uptake remained limited and consequently, the world saw an increase in greenhouse gas emissions that soon exceeded levels seen prior to the global financial crisis [5] (pp. 3–8).

2.2. The Normative Resurgence of the GGND

Recent legislative and policy proposals reveal a resurgence of the GGND. In 2018, as part of the IPCC report on reaching the 1.5 °C temperature target of the Paris Agreement, a policy of achieving ‘net-zero’ emissions was recommended [6]. The next question was “How could this be achieved?” The answer was provided by Congresswoman Alexandra Ocasio-Cortez as part of a rallying call for a proposal for a Green New Deal [7]. Following this, a Green New Deal Bill was tabled in the United States [8]. Although the bill failed to pass, it sparked a wildfire of debate with embers travelling across oceans, with proposals that were also tabled in the United Kingdom, European Union, and Australia [9,10,11]. Local green new deals were passed by a range of local and state actors, including London and New York [12,13]. These proposals for broader green new deals have seen more varying degrees of success, yet all have provided insight into the normative character of the GGND. It is from this foundation that the GGND’s normative resurgence in response to COVID-19 prompted calls for ‘building back better’.

2.3. Building Back Better from COVID-19

Proposals for a GGND have been further amplified by calls for ‘building back better’ from COVID-19 [14]. ‘Building back better’ is a term that pre-exists COVID-19 and implies an opportunity for resilient, inclusive, and environmentally friendly recovery, post disasters [15]. To that end, the United Nations General Assembly urged states to implement a “climate and environment responsive approach to COVID-19 recovery efforts” [16]. States have since recognised the importance of ‘greening’ their COVID-19-related domestic stimulus packages [17]. The European Union, the United Kingdom, and South Korea stand out as particular ‘norm entrepreneurs’ of the GGND through their policy plans to explicitly respond to COVID-19 by way of a green recovery [18,19,20,21]. Countering norm entrepreneurs are ‘norm antipreneurs’ who seek to disrupt norm diffusion of the GGND [22] (p. 311). Examples of states acting as norm antipreneurs of the GGND include Russia and Saudi Arabia [23,24] (pp. 10–11, 13–14). At the same time, international organisations are also increasingly embracing their roles in coordinating the ‘global’ element of the GGND [25,26,27]. Therefore, both state and international organisations can be viewed to form a ‘community of practice’ of the GGND [28]. PSIs, such as the G7 and the BRICS countries, are intermediaries among state and international organisations, possessing qualities of both. Thus, with this context in mind, PSIs are a useful perspective from which to assess the norm development of the GGND.

2.4. Plurilateral Summit Insitutions as Norm Entrepreneurs and Antipreneurs

The increasing uptake of green recovery has consequences for the long-term decarbonisation trajectories of states and collectively informs the chances of the world obtaining the temperature targets of the Paris Agreement [29]. Yet, for global governance, there is already a clear schism emerging among the PSIs. Norm entrepreneurs of the GGND, including the European Union and United Kingdom, have strongly influenced the activities of the G7 and G20 to act as a vehicle for norm diffusion. This has resulted in the G7 members committing to a green recovery in their Carbis Bay Communiqué [30] and the first recognition of the importance of carbon pricing by the G20 Finance Ministers in their Rome Communiqué [31] (p. 3). G7 member states have now all committed to green recoveries domestically, prompting unprecedented levels of climate-specific funding. Leading examples of this are the European Union’s Next Generation EU project which directs one third of its spending to climate change and President Biden’s proposed Build Back Better framework which directs a significant stimulus to clean energy as a backbone of America’s ongoing economic recovery [19,32]. Members of the G7 built on this track record in their efforts at COP26 in November 2021. This included expanding the Build Back Better World (B3W) plan first launched at the G7′s Carbis Bay Summit and which sought to offer climate-conscious infrastructure investment [33]. Similarly, COP26 was also used as a platform for G7 members to announce collaborative plurilateral and bilateral partnerships with key BRICS countries, including South Africa and India [34,35]. These are illustrative of the kinds of nascent, yet innovative, approaches that norm entrepreneurs take to diffuse the GGND’s norms.

By contrast, the norm antipreneurs amongst G20 member states have largely been attributed as reasons why G20 members, collectively, did not go further in agreeing to phase out coal in the G20 Leader’s Communiqué. The BRICS countries are also in an interesting position, having signalled varying degrees of commitment to green recoveries, ranging from China’s commitment to a net-zero target by 2060 through to Russia’s active rejection of the notion of a green recovery. At COP26, BRICS countries India and China also intervened in the closing moments of COP26 in November 2021 to change language from ‘phase out’ to ‘phase down’ coal [36]. This clearly indicates that, while norms such as the GGND’s energy transition norm are now seen as inevitable, there remains ongoing disagreement about the breadth, depth and timing of this transition. The divergence in the practices of PSIs reveals ongoing contestation over the normative diffusion of the GGND within global governance.

2.5. Implications of the GGND as the New Norm

The contestation of the normative character of the GGND is representative of the real-world implications it brings with it. The elements of the GGND are inherently interconnected and it is the trade–climate nexus that offers the best view of this connection. For example, without trade protections in place, changes in the domestic policies of states due to the GGND may result in ‘carbon leakage’. At the same time, mechanisms to prevent this through border adjustments could be challenged as a breach of World Trade Organisation (WTO) rules. Domestic green stimulus is also at risk of breaching the WTO’s rules on subsidies. For these reasons, the GGND’s international element could be simultaneously and mutually constructive in the form of climate clubs, or destructive in the form of a dispute resolution at the WTO. Other articles in the literature have examined the nuances inherent within the trade–climate nexus in much greater detail [37,38,39]. This paper, instead, seeks to review the risks it carries with the benefit of early empirical insights into the practice of the GGND.

3. Methodology

The world is still in the midst of efforts for ‘building back better’ from COVID-19. The current literature suggests that there is a large gap between this rhetoric and real-world practice [40,41,42]. However, most assessments either view the green recovery response as an aggregate or at a country-level basis. This neglects the role of PSIs which, as outlined above, play unique roles in norm building in global governance. To explore the roles they play, this analysis examines the green recovery practices of PSIs, as well as the implications of this for the trade–climate nexus. The presentation of two empirical snapshots of both domains doubt presents a crude picture. Therefore, it is important to highlight that this methodology only intends to provide a preliminary insight which should be continually tested as further practices develop.

To gauge the practices of the G7 members and the BRICS countries, first, this research analysed the open-source data from the Global Observatory Recovery database (GRD) [43]. The GRD was created in partnership between the University of Oxford, the UNEP, the Global Fiscal Policy Network, the German Agency for International Cooperation and the International Monetary Fund, PAGE, and the United Nations Development Program. As a database, the GRD provides the most comprehensive assessment and categorisation of the fiscal policies of a diverse range of countries [44] (p. 8). The GRD is an open-source database and is updated regularly as more recovery data become available. Updated versions of the GRD are released periodically to the public. This assessment employed the dataset versions released on 10 March 2021, 23 May 2021, and 11 October 2021, successively.

The objective of the GRD is to classify fiscal policy measures that form part of the economic rescue and recovery from COVID-19. For this task, the Global Recovery Observatory created an exhaustive system of 5 typologies, 40 archetypes, and 158 sub-archetypes [43]. Then, the Global Recovery Observatory used a sophisticated Likert assessment to determine the environmental, social, and economic policy impacts of the archetypes [44] (p. 6). Assessments of greenhouse gas emissions under the archetypes are uniquely subject to consideration of both the short-term and long-term emission profiles, given the differential impacts that both bring [44] (p. 6). In this way, archetypes are categorised to clearly distinguish between policies that support and harm the objective of combatting climate change [44] (p. 6). It is on this basis that the GRD categorises archetypes as either ‘clean’ or ‘dirty’ stimuli. ‘Clean’ stimuli include measures such as investments in renewable energy or clean transport. ‘Dirty’ stimuli include measures such as investments in oil and gas operations as well as airlines. This assessment focuses on the direct proportion between clean and dirty measures as being indications of the trends in the green recoveries amongst PSIs. However, for most measures, the database also provides data on the economic size of each measure (both in real terms and standardised to the U.S. dollar). Once this aspect of the database is finalised, the data could also be used for a more wide-ranging analysis of the volume of dirty versus clean spending and not only the proportion.

While the green recovery practice may initially be at a domestic level, the international trade effects are not far behind. The notion of ‘net-zero’ has increasingly become intertwined with the objective of the GGND and its intermediary by way of a green recovery. Examining the implications of this for PSIs also requires an examination of the latest trends in the carbon intensity of international trade. The newly established Climate Dashboard of the International Monetary Fund provides open-source data for this purpose [45]. This analysis used these data to aggregate the net carbon intensity of trade for the G7 members and the BRICS countries from 2009–2019 and plots them for visual analysis.

To connect these snapshots of green recovery practices of PSIs and the carbon intensity of their international trade, this analysis adopted Finnemore and Skikkink’s model of the ‘norm lifecycle’ [18]. The norm lifecycle begins with norm ‘emergence’, where norm entrepreneurs seek to persuade other network participants of the value of a norm [18] (p. 898). Then, norms reach the stage of ‘cascade’, where through socialisation, states and other actors see norm adoption as a means of enhancing their legitimacy [18] (p. 898). Once norms have cascaded, they become internalised within the system. It is at the stage of ‘internationalisation’ where conformity with norms is sought and is reflected in professional and bureaucratic settings such as law and policy [18] (p. 898). Applied to the case at hand, it was green recovery practices that provided the best proxy for the emergence and cascade of the GGND as a source of norms and the international trade system that offered the best insights into internalisation of its norms.

4. Results

The results of the empirical analysis are summarized in

Table A1. Summary of the proportion of clean to dirty stimulus measures in response to COVID-19 by PSIs, rounded to 1 decimal point.

PSI	Country	March 2021	May 2021	October 2021
G7	Germany	78.3%	78.3%	78.3%
	France	86.8%	84.6%	87%
	Canada	75.0%	87.5%	88%
	Italy	63.6%	63.6%	50%
	Japan	83.3%	83.3%	85.7%
	UK	90.0%	89.0%	90.7%
	USA	26.6%	29.2%	29.17%
	Average	78.8%	78.0%	78.9%
BRICS	Brazil	45.0%	63.6%	66.7%
	China	59.0%	65.7%	65.7%
	India	29.0%	28.6%	33.3%
	South Africa	20.0%	14.3%	63.2%
	Russia	0.0%	0.0%	0.0%
	Average	43.3%	50.0%	57.1%

and

Table A2. Balance of CO₂ emissions embodied in millions of metric tons (rounded to whole numbers).

	Country	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
G7	Germany	−121	−127	−139	−96	−97	−105	−85	−123	−134	−150	−166
	France	−149	−150	−159	−136	−136	−140	−132	−147	−194	−223	−256
	Canada	−2	−15	−14	−10	−5	−5	10	2	9	−4	−2
	Italy	−106	−111	−106	−75−	−75	−78	−76	−59	−66	−53	−22
	Japan	−201	−217	−266	−281	−226	−213	−158	−142	−114	−48	−59
	UK	−118	−129	−126	−125	−129	−144	−143	−135	−119	−119	−126
	USA	−661	−694	−668	−718	−696	−706	−785	−910	−846	−896	−1388
	Average	−194	−206	−214	−206	−195	−199	−195	−216	−209	−213	−288
BRICS	Brazil	−45	−77	−85	−78	−81	−70	−13	−7	2	3	10
	Russia	310	317	314	235	207	233	321	321	274	225	221
	India	91	78	49	83	169	172	124	109	107	347	903
	China	1217	1432	1536	1565	1539	1484	1309	1429	1471	1488	1536
	South Africa	76	98	95	89	95	110	101	96	107	114	105
	Average	330	369	382	379	386	386	368	390	393	435	555

and are graphically presented below in Figure 1 and Figure 2.

Figure 1 displays the proportion of clean versus dirty stimulus measures employed in response to COVID-19 by the G7 and the BRICS countries, in intervals between March and May 2021 and between May and October 2021. Aggregating by PSI, in this manner, highlights the differentiation in the proportion of clean stimulus measures employed. The proportion of green recovery measures employed by G7 members remains high at 78% at all measured intervals. Moreover, while BRICS countries had a proportionately net-dirty stimulus in March 2021, this changed to a proportionally net-clean stimulus as of May 2021, a significant move upwards. Interestingly, the trend of an increase of around 7% in the proportion of clean activities among the BRICS countries continued between May and October 2021.

Figure 2 is based on aggregated data from the Climate Tracker of the International Monetary Fund. It shows the net balance of carbon dioxide emissions that G7 and BRICS countries embodied in their international trade. It reveals that in aggregate, the BRICS countries are net carbon exporters and the G7 countries are net carbon importers. The trend lines of the BRICS and G7 appear to mirror one another suggesting that trade flows between the two trading blocs remain a large source of carbon intensive trade on a global scale. Furthermore, a nascent divergence can be seen from 2017 to 2019 which indicates the presence of a growing disparity between their respective volumes of embodied carbon emissions.

5. Discussion

The above results are intended to provide a preliminary overview of the empirical practice of the GGND as ‘the new norm’ and its implications for the trade–climate nexus. From it, some possible trends for norm diffusion of the GGND can be identified which are discussed in this section.

5.1. Different Speeds, Same Direction of Travel

The news headlines have suggested that the world is failing at ‘building back better’ from COVID-19 [46,47]. An aggregate analysis of PSIs suggests that a more subtle trend may indeed still be developing. Figure 1 indicates that both the G7 and the BRICS countries are now implementing a higher proportion of clean versus dirty stimulus measures in response to COVID-19. This could signal that state practice is now shifting from the status quo ‘grey’ economic recovery to a ‘green’ economic recovery. Notwithstanding this, the proportion is evidently higher in G7 countries. This supports the observation that the G7 has engaged more robustly with climate change as a global governance issue than other groups [48]. It also reflects the more prescient roles that climate change and green new deal policies play in the G7’s Carbis Bay Communiqué [30]. The fact that climate change does not feature as a topic high on the agenda of the BRICS’s summits is also reflected in their initial preference for dirty versus clean stimulus measures. However, the data for both May and October 2021 reflect a change in this, in which they are both now funding proportionally more clean measures than dirty as part of the COVID-19 response. This could be a more broad-based signal that, as the COVID-19 stimulus packages are shifting from the rescue to recovery phase in many parts of the world, they too are becoming greener. Nevertheless, Figure 1 demonstrates how there remains a proportional gap of 21.8% between the green recoveries of the G7 and the BRICS countries, as of October 2021. Importantly, Figure 1 also illustrates that the gap between the greenness of the recoveries of PSIs has indeed narrowed over the course of 2021. This reflects the fact that while PSIs may have the same direction of travel regarding a green recovery, the pursuit of this remains at different speeds.

5.2. Importance of Carbon Market Coherency in the Transition to Net-Zero Emissions

The potential that the GGND is becoming ‘the new norm’ faster in the G7 countries as compared with the BRICS countries, presents a dilemma due to the two group’s growing divergence as net carbon importers and exporters revealed in Figure 2. While this divergence exists, it is likely that strong border measures, such as carbon border adjustment mechanisms, are needed to ensure the coherency of domestic carbon markets and, concurrently, to ensure the GGND is not undermined by carbon leakage. At the same time, the norm cascade inevitably challenges the pre-existing norms at play. CBAMs may directly conflict with the norms of international trade law, such as most-favoured-nation national treatment. A prime example of the CBAM as a phenomenon is the mechanism proposed by the European Commission in July 2021. The European Commission’s CBAM is designed to apply an equivalent carbon levy on imported carbon intensive goods to ensure equivalence with like domestic products that are already subject to its own Emissions Trading System [49]. In response, Russia and China have signalled that they would consider bringing a dispute on such a CBAM to the WTO [49,50]. The result of this, should it occur, will prove a key window into the success of the internalisation of the GGND’s norms within global governance. Future research should assess the implications of GGND’s internalisation with the carbon intensity data from 2020 onwards, particularly, to see the impact that COVID-19 had on this metric. In the meantime, these preliminary insights from the trade–climate nexus underlines the importance of carbon market coherency in the global transition to net-zero emissions.

6. Conclusions

PSIs play a key role in global governance of the GGND, with their members holding roles as both norm entrepreneurs and antipreneurs. This paper provides a novel perspective on the green recovery practice of the G7 and the BRICS countries by contrasting their direct proportion of clean versus dirty recovery stimulus. It reveals that contrary to other investigations on an aggregate or individual basis, the G7 and the BRICS countries are now implementing the same or a higher proportion of clean versus dirty stimulus measures; a proportion which changed between March 2021 and May 2021. This indicates early evidence of norm diffusion of the GGND, suggesting that it could well be a ‘new norm’ in global governance. While both the G7 and BRICS countries are employing the same or higher amount of clean than dirty measures as a proportion, the green recovery trend is undoubtedly clearer in both the normative rhetoric and practice of the G7. The different speeds with which both the G7 and the BRICS countries are implementing green recoveries in their ‘building back better’ from COVID-19 has direct implications for the future of international trade. Statistics on the emissions intensity of international trade reveal that the G7 countries are net carbon importers, and the BRICS countries are net carbon exporters. They also indicate that the divergence between the two group’s net-carbon emissions from trade could well be growing. Therefore, strong border measures are needed to ensure the coherency of domestic carbon markets and, concurrently, to ensure the GGND is not undermined by carbon leakage. Consequently, while it cannot be said that the GGND is ‘the new norm’ in global governance yet, amongst PSIs there are nascent indications it could well be in the future.