“A System Change Compass – implementing the European Green Deal in a time of recovery” – a report co-authored by SYSTEMIQ and The Club of Rome outlines the framework for implementation of the European Green Deal. Implementing the European Green Deal and its related implementation documents – while addressing the most urgent economy
recovery needs – is stated to be “the best way to deliver Europe’s future prosperity.”

According to Ursula von der Leyen, the President of the European Commission, it “provides guidance for a systemic realisation of the European Green Deal by addressing the real drivers of resource use and environmental pressures”. Moreover, she describes the report as a “welcome counsel on how best to act” in order to achieve progress on the European Green Deal.

Redefining system conditions

According to the report, 10 system conditions need to be addressed and redefined in order to make the European Green Deal successful and to deliver the Sustainable Development Goals.

Within this framework, the 10 principles of the System Change Compass translate into 30 system-level policy orientations for rule-makers. They are also described as “guidelines to enable policymakers to shape economic activities in a way that ensures they stay within our planetary boundaries”.

For instance, the 1st Compass principle “Redefining Prosperity: Embracing Social Fairness for Real Prosperity” corresponds to the following three guidelines:

  1. Balance policy attention from income and wealth creation to income and
    wealth distribution, and ensure that economic transition contributes to
    equality and social fairness by guaranteeing universal basic services and
    minimum levels of income
  2. Create conditions for social acceptance of the transition by: enhancing
    reskilling and educational programmes; introducing a funding mechanism
    to support transition; supporting lower- and middle-income groups to help
    absorb the costs introduced by all economic ecosystems
  3. Replace part of the income-based taxes with resource-based taxes to
    address resource as well as social policy targets

The 6th Compass principle “Redefining Incentives: Introducing the real value of social and natural capital” corresponds to the following three guidelines:

  1. Follow the policy principles in all economic ecosystems, which would reflect
    and include all costs, like carbon pricing or resource taxes, related to
    environmental and health impacts (so-called “externalities”)
  2. Reduce, without further delay, all harmful and unsustainable subsidies
    supporting extraction, consumption and disposal of natural resources;
    strengthen producer liability and use freed-up funding to support activities
    reducing natural resource use, especially in hard-to-abate sectors
  3. Prioritise investments in “rebooting” nature and update environmental
    standards to take into consideration systemic interactions between
    climate–biodiversity–health, to ensure greater resilience to future shocks

Furthermore, the report argues that the current organisational model must move from being focused on economic activities to being organised around economic ecosystems that are holistic in scope and demonstrate a direct link to natural capital and our respect for the planetary boundaries. The core idea is simple: people don’t need products and services; they need their societal needs to be met. So, for example, they don’t need cars, but mobility; they don’t need refrigerators, but fresh and healthy food; they don’t need house ownership, but high-quality, affordable and safe living space.

To meet these societal needs, the framework identifies 8 economic ecosystems. Four of these directly meet a specific societal need (the healthy food, built environment, intermodal mobility, and consumer goods ecosystems). Four additional economic ecosystems support the first four ecosystems in their delivery of societal needs.

Finally, the report outlines a list of priorities in each of these 8 eco-systems. For instance under “healthy food it lists”: Organic food and beverages; Regenerative agriculture; Sustainable aquaculture and fishing; Reduce and valorise food waste; Urban agriculture; Product reformulation for nutritious food and Alternative proteins. Under the “Built Environment” eco-system the priorities are: Smart urban planning; Rethink built environment ownership; Repurpose underused buildings; Retrofit existing buildings; Fluid and sufficiency-oriented space management; Circular and net-zero housing.

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