Towards a data-driven European twin transition: an analysis of the EU data sharing strategy from a conceptual lens of Pareto efficiency

COVID-19, climate change, and Russia’s invasion of Ukraine have underscored the importance of environmental sustainability and digitalisation for maintaining the EU’s economic stability, social resilience, and global position. Green and digital transition strategies have emerged as a response to these immediate challenges, aiming to mitigate their negative impact on European citizens and businesses and ensure the EU’s smooth transition to an environmentally sustainable digital economy. While green and digital transitions are often viewed as separate issues of conflicting nature, their interaction presents an immense potential for the EU’s increased growth and global competitiveness, indicating the importance of a twin transition for the future of Europe. As an intersecting central element of both the green and digital transitions, data can play a critical role in the achievement of the European twin transition. Through regulation, data sharing can be used as an effective instrument to leverage data towards the EU’s mutually reinforcing green and digital transitions. Embracing this approach, this article first demonstrates how data as an economic good can be leveraged through regulation as a catalyst for the twin transition by using data sharing as a redistribution mechanism that reallocates the socio-economic value of data. It then adopts Pareto efficiency as a conceptual benchmark to analyse to what extent the current EU data strategy contributes to the twin transition based on this framework. Finally, the article concludes with a brief discussion on how the Digital Omnibus may affect the interplay between the EU’s data strategy and its twin transition.