In 2019, European Commission President Ursula von der Leyen announced Europe’s “Green Deal.” She described the climate plan as a “man on the moon moment,” a revolutionary transformation of the European economy that would lead to net-zero greenhouse gas emissions by 2050 and changes to nearly every sector of the economy.
But five years later, the Green Deal is unraveling. Far from charting a path toward climate leadership, the Green Deal has exposed the European Union’s deep structural weaknesses and its inability to reconcile environmental ambitions with economic, democratic, and geopolitical realities.
Over the past two years, opposition to the Green Deal has exploded—from farmers, industry groups and ordinary citizens, to populist political parties, and even the European People’s Party (EPP), von der Leyen’s own political group. The 2024 European Parliament elections saw a surge in right-populist representation, unified in their criticism of the green agenda. As a result, the Commission has quietly but decisively begun to roll back many of the Green Deal’s key provisions.
Recent reversals include watering down soil and chemical safety regulations, repurposing climate funds for military spending, watering down biodiversity protections, and censoring the phrase “Green Deal” from Parliament reports. Even the 2040 emissions reduction target, announced last week after long delays, includes major loopholes and exemptions, such as allowing EU countries to meet future emissions targets by buying carbon credits from other countries. The signal is clear: Europe’s purported “green revolution” is in retreat.
While the mainstream narrative blames “far-right climate denialists” and corporate lobbyists for derailing the Green Deal, this explanation is simplistic and evasive. The deeper reality is that the Green Deal has failed on its own terms—economically, ecologically, and politically.
Despite massive spending—$680 billion allocated between 2021 and 2027, or more than a third of the European Union’s total budget—the Green Deal has delivered negligible climate results. EU emissions rose in the last quarter of 2024 compared to 2023, and the longer-term reductions over the past 15 years largely reflect economic stagnation, pandemic lockdowns, and the economic shock from the war in Ukraine—not the fruits of green policy.
At the same time, the social and economic fallout has been severe. Households, farmers, and businesses have borne the brunt of higher energy prices, inflation, new taxes, and regulatory burdens. These policies may have suited Brussels technocrats and environmental NGOs, but they have alienated the wider population and damaged the Union’s legitimacy.
"The root of the problem lies in the approach the bloc has taken."
The root of the problem lies in the approach the bloc has taken. While the United States and China have been pursuing green industrial policy through massive subsidies, public investment, and targeted research and development in strategic sectors like electric vehicles, solar panels, and batteries, the European Union’s model is based on punitive taxation and regulatory overreach.
This strategy was always doomed. The bloc’s fiscal architecture—anchored in austerity, tight budget rules, and a toothless common budget—precludes the kind of ambitious investment needed for genuine green transformation. Unlike the US Inflation Reduction Act or China’s state-led development model, the European Union lacks both the tools and the ideological flexibility to pursue proactive industrial policy.
The European Union’s strict state-aid rules, bias against public ownership, and obsession with competition law systematically hamper large-scale green reindustrialization. The result is a paradoxical mix of hyper-regulation and fiscal strangulation, which neither spurs innovation nor alleviates the costs borne by the population. Fragmented governance, bureaucratic inertia, and the dominance of unelected technocrats mean that even where funds exist, implementation is slow, disjointed, and prone to failure.
Germany, the supposed leader of Europe’s green transition, provides a cautionary tale. The country’s “Energiewende” policy—pivoting to wind and solar while phasing out nuclear—has cost hundreds of billions of dollars. Yet the outcome has been underwhelming. From 2002 to 2022, Germany invested around $800 billion in its energy transition. But most of the gains in renewable energy were offset by the closure of zero-emission nuclear plants. According to a 2024 study, had Germany retained and expanded its nuclear capacity, it could have achieved a 73 percent reduction in emissions—compared to the modest 25 percent achieved—at half the cost.
One of the clearest examples of the Green Deal’s self-defeating nature is in agriculture. Farmers were told that they must reduce livestock, cut emissions, and turn land into carbon sinks. The logic is simple as it is baffling: With current technologies, one can only go so far in slashing emissions in the agricultural sector. Hence, policymakers, rather than incentivizing sustainable innovation or supporting small producers, focused on reducing agricultural production altogether.
Predictably, this has triggered massive protests. Small farms, which are more ecologically sustainable than industrial agribusiness, are being driven out by rules that accelerate land consolidation. The result is not only economic devastation for rural communities, but also ecological backsliding, as smaller farms are replaced by larger, more intensive operations.
The fact that such policies were promoted under the guise of environmentalism reveals the technocratic and ideological blindness of the EU apparatus—a system that pretends to be green but ends up empowering corporate agribusiness while punishing those who actually steward the land.
"Europe is effectively outsourcing its emissions"
The same logic applies to Europe’s broader industrial base. In the name of sustainability, Brussels has imposed new costs on European producers, making them less competitive globally and incentivizing the import of cheaper, dirtier goods from abroad. Thyssenkrupp, one of Europe’s largest steelmakers, has already warned of rising competition from Asia, leading to cutbacks in production. This is not just an economic problem, but a climate one: Europe is effectively outsourcing its emissions by deindustrializing at home while importing carbon-intensive goods from elsewhere.
Perhaps the most revealing episode in this story is the European Union’s energy policy after Russia’s invasion of Ukraine. Having chosen to decouple from cheap Russian gas as part of its embrace of the NATO proxy war in Ukraine, Europe turned to liquefied natural gas (LNG) shipped from the United States and Qatar—fuel that is not only more expensive, but also dramatically more polluting due to transport emissions. Thus, in one stroke, the European Union’s managed to undermine its own industry, raise costs for consumers, and increase global carbon emissions. It’s a perfect example of how ideology and geopolitics can combine to produce disastrous outcomes.
The European Union’s fundamental flaw is not that it lacks climate ambition—on paper at least—but that it lacks the economic and political instruments to realize those ambitions in a coherent, democratic, and socially just way. More centralization, as Brussels suggests, is not the answer—indeed, it is precisely this model of top-down, one-size-fits-all policymaking that has produced the current backlash. A more democratic, decentralized, and pragmatic approach to sustainability is urgently needed. But the biggest obstacle to that is the European Union itself.