Launching an ecological reconstruction plan

Argumentation and justification

Coping with climate change and the collapse of biodiversity, while adapting our territories to the changes already underway, implies a profound transformation of our development model. Distributing resources more equitably, drastically reducing greenhouse gas emissions, saving natural resources, depolluting soil and water and restoring ecosystems are all projects that need to be launched as quickly as possible.

The importance of public impetus and guidance

In order to achieve these goals, it is essential for the State to take action, and more generally for public authorities to get involved at their various levels of responsibility. Today, our production and consumption systems and infrastructures are totally inadequate to enable us to reverse current trends. Market initiatives are largely insufficient to correct our trajectory, if they do not go in the opposite direction. The scale of the transformations is such that real planning is needed.

Only governments (in this case, taking into account the European context) have the legitimacy not only to prepare for the future in the general interest, but also and above all the ability to drive and steer such an in-depth economic reconstruction plan. In many key sectors, complex public policies need to be devised, combining different levers and tools: public investment, support for private investment, regional planning, public procurement, regulatory and fiscal measures. As we can see, without planning and coordination, it is illusory to envisage achieving the necessary level of economic transformation.

However, the plan for ecological reconstruction must not be left to experts and “know-it-alls”. It must be fed by national and regional debates involving citizens, economic players and representatives of social forces, in order to determine which projects make sense at local level. It presupposes the effective implementation of and respect for the principle of subsidiarity, i.e. delegating to mayors, regional councils, businesses and citizens the task of carrying out the necessary investment programs in their territories (by giving them the means to do so).

Last but not least, policy development and evaluation must be based on sector-specific performance indicators that have a concrete link with the social and environmental objectives pursued. This is essential if we are to monitor progress and, if necessary, correct course. In a recent study ²Carbone 4, for example, identified the following indicators for three key sectors ³ to assess whether France is on track to meet its climate objectives.

Investment is at the heart of the ecological reconstruction plan

While not limited to this, the reconstruction plan involves a major investment effort in new infrastructures where they are lacking, and in bringing existing ones up to ecological standards. Transport, energy and water networks, vehicle and ship fleets, building stocks, machine inventories: our entire stock of physical capital, our entire economic heritage, needs to be brought up to ecological standards.

It’s about developing the economic infrastructures of the 21st century. Those that will enable us to gain energy independence at national level (by no longer relying on fossil fuel imports from geopolitically unstable countries or dictatorships, and which are also likely to shrink). ⁴), collective (through the renovation of public buildings) and individual (by reducing household energy bills); produce quality food without polluting our water, our soil and therefore ultimately our bodies and those of our children; limit global climate change and its dramatic impacts (rising sea levels, storms, floods, drought, etc.); save our forests ⁵ and guarantee their capacity to store carbon over the century; to preserve our landscapes and the diversity of living beings from which we derive so many benefits (food, medicines, timber, textiles, but also beauty and relaxation, etc.); to repatriate entire stages of production chains to Europe and France to reduce our dependence for strategic and essential goods; to increase the resilience of our economy, which will be increasingly challenged by climate change and the collapse of biodiversity.

This plan will also enable us to redirect regional planning, to re-create high-quality public services in the most deprived areas, to rebuild a rail network that is currently being dismantled and to develop piggyback transport, to put an end to the model of suburban housing estates and peri-urban shopping malls, to develop poly-farming around towns, whose centers need to be reclaimed, and to boost short distribution circuits.

Finally, in addition to physical infrastructure, it is also essential to invest in support and social transformation. We need to relearn how to produce, to move from a linear model (extract, transform, use, throw away) to a true circular economy, where one person’s waste is another person’s resource; relearn how to consume (in smaller quantities, without waste, more locally, choosing products according to their environmental impact); and support the professional transitions of those who today work in activities, such as the coal industry, that cannot continue if the transition takes place. The transition will create many jobs ⁶but we still need to help people retrain.

The need for substantial public investment

Clearly, the needs are colossal. There is no exhaustive study of the investments required. In particular, no study to date has taken into account the cost of the “just” transition in its threefold dimension of professional transition, reconversion of territories (in France, for example: Fos/mer, Dunkirk) and aid for households most exposed to increases in carbon prices and basic resources. However, it is possible to give some orders of magnitude (see box)

To meet these needs, it is of course important to mobilize private finance, but this is clearly insufficient. Rhetoric betting on the development of green finance alone is illusory ⁹.

It is essential to mobilize public budgets on a much larger scale than is currently the case. This requires us to reconsider the priority given in public finance to “good budget management”, which is limited to monitoring the public deficit and debt. ¹⁰.

One of the consequences of this budgetary stance can be seen in the decline in net public investment. ¹¹ in Europe in the 2010s.

Public funding is essential for ecological reconstruction for three main reasons.

• Public-sector assets must also “make the ecological transition ¹² This will require a much greater mobilization of public investment (unless we want to privatize all our public assets).
  
  
• Transition projects are not necessarily attractive to private investors.

> The financial profitability of ecological investments is not commensurate with their social utility. Some projects are too little or not at all profitable under current economic conditions, which do not properly value their ecological and social impacts (e.g. soil decontamination activities, developments to create ecological continuity, wetland restoration). Others are profitable in the long term, but the populations concerned do not have the means to invest. This is the case, for example, of energy-efficient building renovation, which is profitable in the long term thanks to the savings made on energy bills, but whose owners or occupants may be precarious or insufficiently solvent households.

> Some of tomorrow’s industrial sectors ¹³ are too weak compared to the economic leaders of the 20th century. They have little or no voice in public debate. They cannot rely on the number of jobs or sales they represent today. They have to compete with activities that have mature technologies, widespread skills, amortized investments and infrastructures in place. Public impetus is therefore essential to enable them to structure themselves and gain in maturity.

• The ecological reconstruction plan has a profoundly new feature.

We need to invest in rebuilding and transforming our infrastructures and production facilities, but we also need to support the divestment of existing productive capital that is too carbon-intensive or destructive of natural capital. The closure of coal-fired power plants is an emblematic example, but it is far from the only sector concerned. ¹⁴. In the long term, this disinvestment could prove very costly, both for private players and for governments if companies demand financial compensation following administrative decisions. To avoid industrial collapses and their consequences in terms of employment, it is necessary to anticipate and support the reconversion of sectors that will undergo profound changes, so that the transition can take place.

Related works and supports for the measure

We list below a number of initiatives and publications that are in line with the main thrust of the proposal set out here, i.e. the launch of an ecological reconstruction plan. They may relate to the content of the plan or to the modalities of its governance. This does not mean, of course, that the organizations and experts cited endorse the details of what is said here.

Reports on the launch of an ecological reconstruction plan

• Financer l’avenir sans creuser la dette (2011), Mettre la politique monétaire au service de l’avenir (2016), Libérer l’investissement vert (2018) and the book Agir sans attendre, Notre plan pour le climat (2019) – Fondation pour la Nature et l’Homme reports
• For a European recovery true to the green oath – Report by the Veblen Institute (May 2020)
• How can we finance an ambitious policy of ecological reconstruction? (2020) ; 2% for 2°C! Public and private investment needed to make France carbon neutral by 2050 (2022), Rapports de l’Institut Rousseau.
• Sustainability! Orchestrating and planning public action – France Stratégie (2022)
• Investing in the climate will contribute to overcoming the crisis (2020), Climate: what investments for the next five years? (2021), I4CE reports
• Sustainable Recovery Report by the International Energy Agency (June 2020)
• Building resilience: WWF recommendations for a just & sustainable recovery after Covid-19 – WWF Europe report (April 2020)
• Ecological reconstruction in Finland, BIOS, 2019.
• The plan to transform the French economy, The Shift Project (2022)

Calls, articles, videos related to an ecological reconstruction plan

• APPEL Libérons l’investissement vert! signed by 160 economists, (Alternatives Economiques, 2018)
• L’Etat doit prendre les commandes de la transition écologique, Opinion column by Cédric Durand and Razmig Keucheyan (Le Monde, 2019)
• Wouldn’t ecological planning be an effective way of reducing uncertainty about the future? Opinion column by Dominique Plihon (Le Monde, 2020)
• Urgence climatique : l’ardente obligation d’une planification impérative, video by Olivier Passet (Xerfi Canal, 2021)

This section is not intended to be exhaustive (fortunately!). If you know of organizations or experts who have also made interesting contributions to promoting a plan for ecological reconstruction, please let us know (including the reference to the text concerned) via the contact link (bottom right of the site).

Feasibility (legal and political)

This plan has become politically acceptable since the COVID crisis, which legitimized strong public intervention and led to the launch of European and French recovery plans. It should be noted, however, that the present proposal is not intended to promote a few years’ recovery, but rather a long-term investment plan over at least 10 years.

The complexity lies much more in the need to define the major areas of sectoral investment, adopt the relevant indicators, and put in place a governance structure that can inform and involve a wide range of local players.

Last but not least, the financing of the plan will require us to reconsider our doctrinal and political positions. In particular, speeches dramatizing public deficits and debts are resurfacing, and risk dooming the plan if they once again become the accepted credo. In addition, the plan requires a review of the rules of European economic governance (suspended during the COVID crisis), which prevent the mobilization of significant public investment. A proposal on this point, and on the modalities of public financing, will be put online shortly.

Other resources on The Other Economy

To better understand this measure, we recommend the following readings.

In the modules

• The Economy, Natural Resources and Pollution module, in particular Essentials 1 to 5, which deal with the ecological crisis.
• The public debt module
• The Role and Limits of Finance module, in particular the following sections: By themselves, the markets will not finance the ecological transition(Essential 10); “Green” or “sustainable” finance would be sufficient to achieve the ecological transition(Myth 5); It would suffice to switch financing from carbon-based industries to ecological projects(Myth 6).

In the

• European economic governance
• The public expenditure multiplier