The Next Generation European Union
At the end of the year 2019, a new coronavirus was detected in humans and by the first quarter of the year 2020, the World Health Organization declared it the pandemic of Covid-19. Social distancing was the immediate response to stop contagions and almost every country across the globe decreed a lockdown with either partial or full confinement. The pandemic represented an economic, social, and political upheaval (Sarkis, 2020). Two years later, some economic and social activities returned to normality while a few others operate under new normality conditions. Amid the numerous effects of the pandemic, one that accounts for transcendent consequences is the increased awareness of climate change and natural resource degradation. Despite previous global climate action agreements such as the Kyoto Protocol or Paris Agreements, progress in global warming mitigation was gradual and insignificant. Conversely, the pandemic showed the unsustainability and brittleness of the current economic and production systems. The confinements and cease of transport and industrial activity represented a break for natural resources and an opportunity to rethink human relationship with nature in a post-Covid era.
As a result of a deeper and broader analysis of the desired society in a post-Covid19 era, the European Union has not considered the recovery as the sole restoration of the previous economic and social conditions but as a lifeline to reach no net emissions of greenhouse gases by the year 2050 and the transition to an economy with growth but without resource extraction and waste. The European Union in the future is one in which people can live in an environment with fresh air, clean water, renewable energy, healthy affordable food, and reliant on longer-lasting products that are repaired, recycled, or re-used. The aspirational goals are incorporated in the Next Generation European Union (Next Generation EU, n.d.), considered as the new Marshall Plan for Europe comprising the deployment of over a billion Euros to boost growth, investment, and reforms in two main instruments. The first one is a short-term perspective program for the years 2021-2022 aimed to revitalize the economy. The second is a Recovery and Resilience Facility comprising a multi-year plan for the years 2021-2027 based on six pillars:
- 1.
Green transition.
- 2.
Digital transition.
- 3.
Smart, sustainable and inclusive growth including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong small and medium enterprises.
- 4.
Social and territorial cohesion.
- 5.
Health and economic, social and institutional resilience, with the aim of, inter alia, increasing crisis preparedness and crisis response capacity.
- 6.
Policies for the next generation, children and youth such as education and skills.
In Next Generation European Union, the twin challenge – i.e., green and digital transformation – is a key priority. Covid-19 highlighted the critical and strategic role of digitized solutions. In this case, the digital transformation is aimed to develop strategic capacities in supercomputing, artificial intelligence, cybersecurity, digital skills, and wide use of digital technologies across the economy and society. In a fully digitized EU, the basis for competitiveness is the ability to innovate and employ the most advanced technology in using inputs rather than the low input cost paradigm.
On the green side, the extraction of raw materials with increasing costs makes evident its reduced availability, climate catastrophes occur more often and with more devastating effects, and the incapacity to process all the waste polluting oceans and soils, altogether demand an urgent change in the linearity of our industrial and economic patterns “take-produce-use-waste” for a more resilient circular economy that eliminates waste and decouples from material extraction.
As Covid-19 created a turning point, the following chapter analyzes the conditions in the European Union that open a policy window of opportunity ideal to implement the green and digital transformations, converging with changes in social and individual behaviors that reinforce and smooth the necessary transitions. With propitious conditions for a green and digital transformation, in the next sections the authors focus on the analysis of the circular economy and the role of blockchain technology facilitating the information management required for efficient coordination and innovation in circular production patterns. In addition to previous works studying blockchain technology in circular supply chains (Wang et al., 2020; Nandi et al., 2021; Sarkis, 2020), the authors bring the concept of tokenization of sustainable products from Narayan and Tidström (2020) to the blockchain architecture which would allow the full traceability of items and create a dynamic cloud of information necessary for market coordination towards a zero-waste economy. The contribution presents two real use cases where blockchain and tokenized products are applied to the circular economy. Finally, the authors expand the case for blockchain-based decentralized finance (DeFi) applications to financialize and monetize the tokenized green economy.