Can the European Union lead the world’s ecological transition?

The European Union is in a green state of mind. Last December, the new president of the European Commission placed the fight against climate change at the top of her list of priorities. In less than 100 days, Ursula von der Leyen has presented the general principles of her Green Deal for ecological transition with the objective of achieving carbon neutrality for the continent by 2050.

Europe’s commitment to reducing emissions is good news for the planet, which continues to show signs of warming. For example, 2019 was the second hottest year on record (after 2016), 1.1 °C above the period between 1850 and 1900, considered to be representative of pre-industrial conditions.

The member states of the European Union combine to form the world’s second largest economy and, along with the United Kingdom, which is currently in the process of leaving the Union, the world’s third largest emitter of carbon dioxide behind China and the United States. But even if the EU manages to meet its targets, it will not be able to solve the global climate crisis on its own.

Brussels wants to convince the rest of the world that green industrial transition is possible. To do this, its leaders are using dramatic language that seeks to resonate. Von der Leyen, for example, has called the Green Deal “Europe’s man on the moon moment”.

It’s no coincidence that the leaders of the European Union’s member states met just one day before the United Nations Climate Change Conference (COP25) in Madrid in order to reach an agreement on commitment to carbon neutrality. Poland was the only hold out in the declaration: it has said that it supports the objective but cannot currently commit to achieving it. The other 27 countries approved a text committing themselves to the goal of carbon neutrality by 2050.

Their message was heard loud and clear in Madrid. “It certainly had an impact. It shows that the EU is serious about the climate,” as Wendel Trio, who attended the summit and is director of Climate Action Network (CAN) Europe, the continent’s largest network of environmental associations, told Equal Times.

2020 could be a crucial year for deciding the fate of the planet, in large part because at the Glasgow Climate Summit this November (which will be the COP26), all of the countries will have to renew (or even increase) the commitments they made when the Paris Agreement came into force in 2016, according to the timetable agreed upon then. Four years ago, European governments agreed to reduce their emissions by 40 per cent compared with 1990. Europe now aims to reduce its emissions by at least 50 per cent by 2030 and 100 per cent by 2050.

Step one: putting its house in order

If the European Union wants to set an example for the rest of the world, it must first prove that it is serious. Its first opportunity to do so will come in June, when the European Commission publishes its evaluation of the national climate transition plans submitted by the countries of Europe. In these documents, each state will set out its strategy for making climate objectives a reality.

Also in June, the leaders of the 27 will meet in Brussels to reaffirm their ambitions. It will be then that Poland decides whether to commit to the goal of carbon neutrality by 2050 and whether the countries’ leaders will increase their commitment beyond a 50 per cent reduction in emissions by 2030. Some countries, such as Denmark, the Netherlands, France, Spain and Portugal have signalled their willingness to increase the target to 55 per cent, while others, like Romania and Bulgaria, remain sceptical.

In order to convince Poland (and the others), the European Union has launched a continent-wide investment plan, which aims to generate up to €1 trillion (US$1.12 trillion) in green spending over the coming decade. This number does not correspond with public investment but with money that the Commission intends to mobilise through projects financed jointly with member states, along with private investments generated through public guarantees in order for green projects to receive advantageous loans.

The part of the investment plan raising the most expectations is the Just Transition Fund, which includes €7.5 billion in direct aid to convert the economies of Europe’s most polluting regions, such as mining regions, and which will include items dedicated to training workers who will lose their jobs. In order to receive European money, regions applying for aid will have to develop a transition plan.

“The Just Transition Fund can serve as an important tool for meeting the challenge while including the social dimension” in ecological transition policies, says Ludovic Voet, confederal secretary of the European Trade Union Confederation (ETUC).

Voet is optimistic about the plans of European institutions but criticises the fact that only European countries claiming aid are obliged to draw up transition plans. “For us it should be strategy first, money second, not presenting a strategy just to get money.”

If Europe succeeds in achieving a transition “that leaves no one behind,” as von der Leyen has repeated on several occasions, Voet believes that the Old Continent can have a positive effect for workers and the climate throughout the world. “If the idea is successful [in Europe], it can help trade unions throughout the world to demonstrate that just transition and carbon neutrality can be realised.”

In addition to its ‘financial arm’, the Green Deal includes measures aimed at reducing transport emissions, protecting the continent’s biodiversity and reducing water, air and soil pollution.

The plan, which is currently little more than a road map, is not without its critics. Franziska Achterberg, EU Food Policy Director at Greenpeace, believes, for example, that certain points don’t go far enough: “They are not prepared to deal with large industries. They don’t talk about overconsumption of meat and dairy and they are very cautious in what they say about cars.”

Step two: convincing the Asian dragon

If the EU increases its climate targets in June, it would send an important message to the world, above all to China, the largest emitter of CO2 (although the average person in China pollutes half as much as the average American). And if Beijing were to move towards carbon neutrality, it could play a significant role in persuading other world leaders before they travel to Glasgow.

“If the EU can get China on board before COP26, it would really change perceptions because it would mean that the EU is not acting alone but that China and Europe are working together and demonstrating their faith in the Paris Accords,” says Quentin Genard, director of E3G, a Brussels-based think tank specialising in climate issues.

As Genard argues in an article, in order to convince China, Europe has to show that its plan for industrial conversion is credible. While Beijing maintains that its environmental policies are already “ambitious,” as it wrote in a letter written jointly with representatives of Brazil, India and South Africa, at COP25 the Chinese asked for more commitment from the “developed” countries and that they comply with their own climate commitments before asking developing countries to increase their targets. “We have implemented climate policies and contributions that reflect our highest possible ambition, beyond our historical responsibilities. The moment to act is now, not next year or beyond,” they warned.

In order to convince Beijing to move towards climate neutrality, von der Leyen has the month of September circled in red in her calendar, when Germany will host a summit between China and the EU in Leipzig.

Trio of CAN Europe is confident that the green message will get through to Beijing if Brussels does its homework first: “China is organising a global summit on biodiversity only a few weeks beforehand. They want to be increasingly recognised as a respected international player.”

The third heavyweight in the spotlight is the United States, the world’s second largest emitter of CO2. Even though President Donald Trump withdrew from the Paris Agreement in 2017, not all of the signals coming from the country are negative. Several of the superpower’s largest companies, amongst the largest in the world, have committed to doing more for the planet.

One of the companies that has shown perhaps the most ambition is Microsoft, which wants to be carbon negative by 2030 and which will compensate for all of the pollution it has emitted since its creation in 1975. To do so, in addition to reducing its own emissions, Microsoft will develop a portfolio of CO2 removal and capture technologies and tree-planting and reforestation programmes. And it’s not the only company with major climate ambitions: Google claims to have been carbon neutral since 2007 while Apple claims that all of the energy it uses comes from renewable sources.

New York and San Francisco were among the American cities that declared a climate emergency in 2019, while New York State approved a law requiring it to be completely carbon neutral by 2050, a movement similar to the Green Deal in the European Union.

A victory for the more progressive and climate-sensitive Democratic Party in the November elections in the United States could bring more favourable winds for the country to approve its own Green Deal and recommit to compliance with the Paris Agreement. The elections could also have an impact on the atmosphere at the COP in Glasgow, which will take place just a week after.

At the last summit in Madrid, 73 countries committed to increasing their climate ambitions in 2020 and achieving carbon neutrality by 2050. If China and the United States join them this year, the balance could shift to the green side.

What happens if diplomacy fails?

While the diplomatic route appears to be the most effective for making the world face climate change, Frans Timmermans, vice president of the European Commission and the person leading the Commission’s work on the European Green Deal, warned at the last COP in Madrid that if the rest of the world won’t commit to the Paris Agreement, Europe “will not hesitate to protect its industry.”

The EU has three powerful tools for driving change. The first is the creation of standards. Since the EU is the world’s largest trading block, the requirements that Europe places on any product with regard to its design or energy consumption will have a multiplying effect across the globe. For example, if the EU requires vacuum cleaners to consume less energy, manufacturers may be compelled to sell more efficient vacuum cleaners throughout the world, since creating two production lines comes with a cost that companies generally prefer to avoid.

“Demanding compliance with strict environmental regulations as a condition for access to the EU market, with 500 million people, should be a strong incentive for all countries to adapt and change their production processes,” explains economist Simone Tagliapietra of the Bruegel think tank.

Another powerful tool is the inclusion of environmental clauses in the free trade agreements that the EU signs with the rest of the world. The last two agreements signed by the bloc with Vietnam and the Mercosur bloc, which have yet to be ratified, already require compliance with the Paris climate accords.

As the internal think tank of the European Parliament explains, these conditions are not a panacea as these clauses cannot be invoked in a dispute before the World Trade Organization (WTO). If one of the parties fails to meet its climate commitments, a panel of experts would be set up to evaluate the issue and make a series of recommendations. The Commission recognises that one of the greatest incentives for complying with these clauses is the pressure of public opinion and damage to the international reputation of countries that are not in compliance.

A third action being considered by the EU would be a border tax to compensate for additional costs that European producers would bear to protect the environment if other industries in the rest of the world do not. It would also serve as a means of preventing European companies from relocating to countries with more lax climate standards.

But this could prove to be complicated as it may be incompatible with WTO guidelines. There would also be technical difficulties: “How do you define the carbon content of products? You have to do it country by country because each state has different ways of producing. Countries know that this would be very difficult in practice,” says Trio.

The Glasgow summit in November could therefore mark a turning point in the fight against global warming, but that meeting will mark the end of a yearlong diplomatic journey.