Climate Change
Climate Diplomacy
Sustainable Transformation
Global Issues
North America
Lou Del Bello

Migration, political and financial crises threaten the European Union’s very existence. But the destabilised political landscape after the US elections is an opportunity for the EU to lead by example and show leadership. Pushing forwards on pan-European energy transition and trade partnerships with China will be key to ensuring implementation of the Paris Agreement.

The European Union is facing multiple crises that could threaten its very existence. Migration, financial turmoil in the Eurozone, and the UK’s withdrawal from the bloc would all be enough on their own to cause Brussels a headache. Together, they are shaking the EU to its core.

The fight against climate change provides a beacon of hope in this bleak political landscape. Under the climate action umbrella, the EU is uniting member states in pursuing the ambitious goal to reduce emissions by up to 95% below 1990 levels by 2050.

At a time when the Paris Agreement could be at risk, should the US decide to obstruct it, the EU has the potential to lead by example. However, experts say that real progress can only be achieved if climate action is weaved into the EU's political fabric; it is not enough to address the issue separately within individual sectors, such as energy security or infrastructural development.

A new energy agenda for the European Union

The latest building block for a pan-European clean energy transition is the 'winter package', a set of proposed measures to organise the distribution of energy across the continent, with a focus on clean sources.

"It is a comprehensive energy and climate agenda, and I think it is an indication of how Europe is taking forward the opportunities that come from this crisis," says Karsten Neuhoff, head of climate policy at the German Institute for Economic Research. "[The plan is] trying to integrate different aspects, addressing the energy security concerns of Eastern European countries, together with the sustainability concerns of some Western European countries." The reforms play out while the EU tries to reduce the cost of energy services and create more jobs.

Neuhoff believes that a clear pathway to decarbonisation will eventually become mainstream in most sectors, including those connected to building performance and the development of better materials. "I think that the big benefit of doing this at a European scale is that we can bring together different interest groups and a broader set of perspectives," he says.

Although the package has been heavily criticized for regulating the dispatch of energy to the grid in a way that could promote fossil fuels over renewables, Neuhoff maintains it provides a healthy balance between integrating more solar and wind into the grid and addressing power interruptions. "A joint approach breaks the deadlock between renewables and energy security, which would lead us to lose half of Europe each time," Neuhoff says.

Leading by example

Albeit slow, European progress has the power to inspire other countries to take up the climate challenge during the current political shakeup. Despite most UNFCCC member countries showing defiance in the face of Trump’s electoral win, there is a significant risk that his climate denial and related foreign policies could destabilise the framework set out in Paris.

The new US President could undermine climate action in a number of ways, even without 'cancelling' the Paris Agreement, as he infamously promised. For example, he could choose to cut climate finance. This would directly harm developing countries, and may mean that they in turn decide that without financial support they cannot fulfill their pledges.

It is not just by setting a good example that the EU can help to prevent other countries from following the US as it walks away from its Paris commitments.

"On the foreign policy end, the EU needs to develop policies that can support partners all over the world," says Susanne Droege, a climate policy and international trade expert at the German Institute for International and Security Affairs. She says that the EU would not be able to fill the potential US$2 billion gap left by the US, "but of course this increases the pressure to do more about climate finance [and engage] emerging economies and the private sector" in the green economy.

Helping China make a business case for climate action

International partnerships will also be key to making the business case for sustainable transition. As the US global influence as one of the key climate players, the EU's friendship with China is one example of a trade and policy exchange that could become very significant.

Having recognised that too many people were suffering from the impacts of deadly pollution in Beijing and other major cities, China has embarked on a major cleanup, which includes greatly accelerating renewable deployment. The country is trying to combine economic growth with emissions reduction, and it is now emerging as an unlikely climate champion.

The partnership with the EU is proving vital to sustain this fine balance. For example, European markets are hungry for climate-friendly components and refrigerants. This huge customer pool provides China with an opportunity to upgrade its manufacturing sector, which is why it said yes to phasing down the production of harmful heat trapping coolants under the latest amendment to the Montreal Protocol. But it is not just about fridges.

China is planning to roll out a carbon trading scheme worth at least $100 billion per year by 2020. Under such a system companies can trade emission allowances, putting a price on carbon that encourages efforts to reduce emissions.

"Next year, the carbon trading market will cover 5 billion tons of CO2 emissions, about 50% of total carbon emissions in 2016," says Yang Fuqiang, climate and energy adviser with the Natural Resource Defense Council (NRDC). "Over time, this would become the world's largest carbon trading market, linking up with other similar schemes abroad," he says.

Currently, the EU manages the world’s biggest Emission Trading System (ETS), which covers just under half of its total emissions and includes over 11,000 power and manufacturing plants in 31 countries. China has teamed up with the EU to learn from its experience – and its mistakes.

"Free allowance allocation was too generous" says Susanne Droege. "And in a very early learning phase, companies realised the high gain potential from free assets". After the 2008 crisis the EU was unable to correct this mistake and emission prices collapsed. "There was no real incentive to invest in climate protection, and the problem still persists," she says.

While the EU missed some important opportunities to rectify the rules of its carbon market, China can start afresh, with a more straightforward if less democratic decision-making process. However, Droege notes that to secure greater influence within the UNFCCC China still needs to develop the kind of thorough foreign policy strategy that the US had under Obama’s remit.

It is within the sphere of UN climate politics that the US’s absence will be felt most strongly, and where the EU can make the biggest contribution to preserving momentum: "[At the latest climate talks] in Marrakech many people were discussing the situation in the corridors in a very open manner," says Yang. "We think that the EU is best placed to take the leadership role previously held by the US, and collaborate with China and become a leader in climate negotiations."


Lou Del Bello is a journalist specialised in climate science and policy. @loudelbello

Disclaimer: The views expressed in this article are personal.


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