For any fight in the general interest, leadership is needed to avoid failure. So, at this vital conjuncture who will take the helm? Such a question is unlikely to be frictionless as leadership on climate is almost certainly bound to move away from the liberal dogma of free markets being allowed to fix themselves. Politically, governments and leaders may also be reticent to move outside the status quo if they feel it might lose them elections.
However there are models of change from history that can help orient us. While they may stir sad collective memories, they can aid us moving forward.
While his opinion as a citizen may be different, his contractual obligations to his company seem to bind him to a certain path of action.
Companies, though perhaps not all, can be convinced to strategically move away, gradually, from the carbon economy that has turned out to be a threat to us. Investors may also be inspired to allocate their capital to more ecologically sustainable projects while simultaneously starving out those companies that continue to harm the planet.
However, while there is certainly some good will, and clearly the change process has begun, does the rapidly worsening climate crisis and the pollution of the environment with materials made from oil mean we can rely on the private sector to take the lead when the transitions have already been so slow?
The need for the state
At such a conjuncture, one of huge social uncertainty and risk, scientists and engineers face massive pressure to deliver innovations. Yet historically, times of calamity have been times of creativity. The experts deliver.
In terms of the economy, we can be certain that the needed social rebalance will cause contraction in some industries but flourishing in others. Private consumption will also decline.
The classic arguments against state leadership: institutional slowness, less efficiency than the private sector and a lack of technical expertise, should not be easily dismissed. However, we also clearly see that the private sector, which has played a huge part in causing the current crisis and has failed to orchestrate itself efficiently to respond to it or raise the capital needed to mitigate it systemically, is not fit for purpose here.
In situations which threaten the whole country, it is the duty of nation states to take the lead and act. While there are valid doubts about the ability of states to act, these doubts cannot be allowed to prevail if there is no alternative.
Of course, there will be healthy competition between states and groupings of states. Some will organise themselves better than others. In doing so, they will lay the foundations for their economic development after the transition is complete. The sleepers (those states that neglect science and progressive industry) will be the losers.
Will the public sector take the lead?
First, we should try to visualise what national states should do in the short and long term.
Below are some steps that governments are likely to begin with in order to start systematically dealing with the repair of ecosystems:
• Build a state administration system for rapid structural change of national economies.
• Engage and consult with scientists working in national and international research institutions on the most appropriate defensive strategies.
• Focus initially on immediate threats and prepare measures against them: protection of coastlines from flooding, high-performance drainage systems for heavy rainfall, expansion of the existing disaster protection organisations, emergency plans for different likely scenarios.
• Review and adapt various types of infrastructure to accommodate higher loads.
• Develop and impose restrictions and bans on harmful activities in both industry and private households.
• Develop and set incentives for private households to adjust their consumer behaviour.
• Require industrial companies to develop new and sustainable technology.
• Organise competition between providers based on speed, costs and, before all, suitability.
• Prosecute and punish those who cheat or endanger the process of transition.
• Soften the impact of transitions for citizens and businesses that face disadvantages owing to the transition.
• Form and maintain alliances with other governments to find balance between states with different levels of affectedness, technical equipment and expertise and natural and financial resources.
• Work towards societal consensus.
• Levy taxes and issue debt instruments to finance the rescue operations.
In a nutshell: Governments need to analyse, plan, regulate, coordinate, negotiate, monitor, explain, finance, invest, enforce and impose discipline.
With increased support from scientists, governments will also be better informed on the nature of climate change and thus be able to implement more precise measures.
There is no other way to manage the process as efficiently as possible and without the interference of special interests.
It could happen that, owing to technological development, the direction of climate change mitigation could change. In a not too distant future, fusion energy could be an alternative to green energy, providing it could be developed with low externalities.
The scenario described above does not correspond to the model of a free market economy. The similarity with another system that is only vaguely present in the collective consciousness, namely the war economy, is striking.
However, there are essential differences to a war economy:
• In the case of the climate change crisis, the interest of all states is directed, even though not equally, towards the same goal, namely the repair of global ecosystems.
• There can be disputes over issues of solidarity and burden-sharing, but there will be little or no incentive for resource-exhausting warfare.
Only governments can hold the reins with the help of scientists and engineers from a variety of disciplines.
Scientists and engineers will develop and continuously update strategies for mitigation; plans may change as innovation occurs.
Despite the need for action, it does not appear that the repair process is imminent. Governments may be aware, but they have not yet “sold” the required new macroeconomic regime and the incisive burdens to the overwhelming majority of their citizens. Press reports and international conferences on climate change may lead the public to the conclusion that the fight against it is the first priority, but this is not yet true. Readiness seems only likely to come when new disasters do.
We need to feel more pain before we will swallow the toad. The communication of scientifically sound information is underway yet it is unlikely to be enough.
Those governments that perform weakly in the transition, for example by not listening to the experts, will set their countries back in international competition.
The stumbling block
The issue of immigration is stirring up emotions all over Europe, but in order to consider the appropriate rational response, we need to first distinguish between the different forms of migrations. In fact, only one of the four categories of immigration distinguished below is to be classified as a challenge:
Migration of High-Net-Worth Individuals (HNWI)
Let's start with the probably smallest group of migrants, which is also the least debated: very wealthy people who are able to move from one country to another with ease. Members of this group seldom encounter rejection and in some cases are actively sought after by countries.
HNWI can weigh up their motives and choose their targets according to their criteria. These include, for example,
security for personal life and wealth
quality of life
quality of the healthcare system
landscape or climatic preferences
quality of schools and universities.
Protection of wealth is frequently a major motivation for migration among the super wealthy and countries with low or no income tax are popular in this regard. On the other hand, while certain countries encourage HNWI to migrate to them, the benefits are not always as great as they might expect, especially when the migrant’s assets do not always accompany them to the country they are settling in. Furthermore, with laws that say an individual faces taxation if they spend more than 182 days in a country, those wishing to avoid this, simply rotate through different countries each year thus avoiding paying any income tax at all.
The number of migrants from this group is increasing, and the countries concerned are well known.
This group of migrants does not pose major challenges to European states.
2. Migration within the European Union: everyone with an EU passport
Article 45 of the Treaty on the Functioning of the European Union and Regulation (EU) No 492/2011 on freedom of movement for workers within the Union guarantee the freedom of every EU citizen to take up a job in any other state of the Union and to settle there with their family. This freedom of choice is a cornerstone of the European Union. It has led to significant migratory movements, which, due to the enlargement of the Union into Central Europe, have been accelerating gradually since the 1990s. In most cases, families put down roots in their new place of residence and do not move back to their countries of origin, although they maintain ties there.
The disadvantage of this migration is that citizens whose education took place at the expense of their home states now move to member states with higher wage levels and better career prospects, in effect creating what is known as an internal ‘brain drain’ scenario, where talented workers move out of the country of origin, depleting the national workforce. The receiving states thus strengthen their national economies at almost zero cost to them and at the expense of domestic countries responsible for their education and socialization.
These implications were clear from the outset, but the net benefits from a large economic area with free movement of people, capital and goods outweigh the drawbacks. Free movement has had a predominantly positive impact on the prosperity of citizens. Changing this structure and enacting new restrictions on internal migration would have a negative impact on the powerful new industrial structures that have emerged over the years.
Traditionalists should be very careful when they argue against free migration within the Union as there is a long-standing practice of it within the continent. The last two centuries have seen massive migrations within the area that now makes up the European Union: the countries of origin were mainly Italy, Poland and Greece. These movements are themselves a valuable component of European identity and increased wealth.
3. Migration from outside the European Union: skilled labour
While the world population is still increasing, a simultaneous decline in birth rates has been evident worldwide for many years. The trend is more pronounced in Europe, where population numbers are increasingly moving towards shrinkage.
Clearly it is not possible to fill the gaps in the labour market out of the continent's existing population. This would not change even if Europeans could be persuaded to sharply increase the current birth rate. In that unlikely case it would take at least two decades for a generation to become visible in the labour market.
Many industrial processes and services can be designed through additional automation in such a way that even fewer human resources are needed than now. This may mitigate the bottleneck somewhat, but would not eliminate it.
If there is no quick turnaround, Europe’s economies will inevitably enter a shrinking process.
The only possible countermeasure is to enter the global competition and attract talent for the known gaps in the labour market. This has been crystal clear for a long time, but fear of traditionalist and conservative voters’ sensitivities has led to most governments to only address the issue in the abstract and try to cook the necessary debates on a low flame. Slogans like "We are not a country of immigration" earn significantly more public applause in Europe than "We urgently need lots of immigrants". Yet everyone knows from their own experience that when a tooth hurts, it is better to go straight to the dentist. Postponing the treatment makes the pain worse.
The fight for human talents is not much different from the struggle for other scarce resources such as raw materials or technical components. The difference is that the competition for material things is rarely a source of cultural friction. Imported goods and commodities don’t arouse sensitivities among traditionalist voters. When it comes to human migration however, public decision makers tend to tread more cautiously and thus do not give the issue the visibility which corresponds to its actual relevance.
The Europeans are now operating a "Blue Card" system, which allows people from outside the Union to take jobs offered to them and apply for nationality after five years. This is a relatively arduous path for applicants. The “Blue Card” approach is less attractive than the more successful American "Green Card" system in which holders are granted permanent residency from the outset, and after five years they can apply for US citizenship.
Under the present circumstances the winners in the competition for talent are likely to be those countries that have a tradition of continuous immigration, have a long history of selective immigration and have the lowest bureaucratic barriers for immigrants who fit into their labour markets. These would be, for example, Canada, the USA and Australia.
4. Migration from outside the European Union: refugees, skilled or unskilled
The right to be granted asylum is not only enshrined in national constitutions and laws, it is also based on:
The right to asylum protects people irrespective of their origin who are exposed to political, racial or religious persecution in their home country. These rules, born out of painful historical experiences that includes the societies of Europe itself, are more than set in stone. All European national states are firmly bound by them. Debates about their abolition are as pointless as those about the abolition of gravity. Yet they are common.
The legal criteria do not extend to refugees who seek to migrate to another country for economic or climatic reasons and who are therefore unlikely to be regarded as refugees from a legal perspective. In order not to be classified unfavourably, refugees may exaggerate or embellish stories of persecution in their country of origin. It is difficult for the authorities of the receiving countries to properly verify the truth of such statements.
The examination procedures are complicated and take a long time. Even if an application is rejected, expulsion to the country of origin tends to be the exception. Suffice it to say that the length of procedures creates new social realities as applicants more or less take root, children are born and are shaped by the national school system.
Growing influx of refugees
The number of refugees is considerable and on average it has been increasing strongly over the years. According to Eurostat's findings, the number of asylum seekers in the Union in 2022 was 881,220 persons, up by 64% compared with 2021. Once individuals have been recognised as eligible for asylum, a second wave of immigration begins when family members are allowed to join them.
Some member states of the Union pursue a restrictive policy by enforcing the legal requirements very strictly or selectively, or even by infringing them. This leads to greater refugee flows to those countries that comply more closely with the rules.
As the authorities of the countries with the highest numbers of refugees become increasingly overloaded with examination procedures, processing times are getting longer. The accommodation of asylum seekers in camps is pushing municipal administrations to the limits of their capacity.
Xenophobic currents in the public debate are gaining support. Surprisingly, part of the growing opposition consists of former refugees and their descendants born or raised in the country who have obtained citizenship and successfully achieved social status in their new homeland.
When frightened or even traumatised people from a different cultural background enter a European country for the first time, their first impressions have a powerful influence on how they think and feel. In the case of many refugees, their first experiences are often crowded refugee camps, questioning, long waiting times, further questioning, etc. Bureaucracy weighs them down, and there is no end in sight.
While they are in limbo for a long time, the idea that dealing with bureaucracy is the way to a better life is imprinted in the immigrants' minds. This puts people on the wrong mental tracks and impairs their chances to settle in an industrial society. While they may become adept at filling out forms, they are missing essential cultural impulses and opportunities to learn and improve on valuable skillsets for an industrial economy.
The material interests of the immigration countries
If the member states want to maintain their prosperity, a proper discussion on immigration would mean that all four categories need to be considered.
The first two categories (HNWIs and citizens of other EU countries) do not pose major problems.
The third category ("Blue Card programme") is presently far too small. So a more thorough approach is needed.
This thorough approach could involve giving priority to pre-skilled immigrants from outside the European Union. Labour offices and companies know exactly which human resources are needed. This can be done with low bureaucratic barriers, high-quality language courses to introduce immigrants to the national mentality, help in finding accommodation and schools for children, advice on access to banks and tax advisors, and perhaps even tax holidays for a few years. The threshold before obtaining citizenship should be low for people who prove to be valuable contributors. Employers can be involved in the process of accelerating integration as they themselves have a legitimate interest of their own and will be supportive.
The approach to dealing with the fourth category (asylum seekers) can be to abandon the illusory goal of carefully assessing at the outset whether an asylum seeker has a legal right to stay. Any person whose identity has been verified, who has not already applied for asylum in another member state of the Union and against whom there are no security concerns, should immediately be offered a language course and a first job determined by the labour authorities. This is inconvenient for the applicants, but it provides them with a primary orientation and momentum. It is also more beneficial to their human dignity than the endless dependency on bureaucratic processes. If they prove themselves within a year, for example, they should be given a residence permit and the right to choose a job. This would also give a chance to people who would not be entitled to asylum but who fit into the labour market.
Formal procedures for asylum applications would be resumed only for applicants who cannot be integrated into the country's labour market. Applicants who do not meet the criteria for asylum should be included. Delinquent applicants should be excluded.
For the labour market, the reason for entering the country is not relevant. What counts is a committed and reliable workforce. So the primary responsibility here should lie with labour ministries and administration, while the overburdened immigration authorities are given some air to breathe.
War-disabled, traumatised and seriously ill people should continue to be given special protection and attention. Unfortunately, their number is not small.
Canada, a country with not quite 39 million inhabitants, is an example of a country that derives and updates its demographic needs very accurately from the labour market. There are numerous national and regional programmes that make it easy for needed immigrants to quickly gain a foothold in the country. And the country additionally uses the pool of asylum seekers to enrich the labour market.
“ . . . the Government of Canada is maintaining its target of 485,000 permanent residents for 2024 and completing the final step to reach 500,000 in 2025. Starting in 2026, the government will stabilize permanent resident levels at 500,000, allowing time for successful integration, while continuing to augment Canada’s labour market.”
The demographic gap in European countries is a well-documented fact. The EU's population is ageing and shrinking, and there are not enough people to replace the working population.
This demographic contraction will lead to a decline in economic performance and prosperity. The only way to avoid this is through well-managed immigration.
Traditionalists and xenophobes are against immigration, but they have no realistic solutions to the demographic gap. If we give in to them, we will condemn our economies to decline.
To develop a successful immigration programme, we should look to countries with a long history of immigration . These countries have shown that it is possible to manage immigration in a way that benefits both the host country and the immigrants.