The Glasgow Climate Pact that countries signed on November 13, 2021 was perhaps the best compromise possible at the time, after two years of battling the covid-19 crisis. But it was insufficient.

To reduce annual global carbon emissions from 52 gigatonnes today to around 25 gigatonnes by 2030, states will need to engage in decarbonization much deeper, faster, and on a larger scale than they are committing to. were engaged in the pact. This is the only way they have a reasonable chance of limiting global warming to 1.5°C above pre-industrial levels. Even with the additional measures they agreed in Glasgow, annual carbon emissions are expected to be around 48 gigatonnes by 2030. Therefore, further efforts to reduce greenhouse gas emissions by 2030 , worth three times the content of the Glasgow Climate Pact, are needed to stay within the limits. the limit of 1.5°C.

The key question for the European Union and the rest of the world is: how to organize international cooperation – and competition – to accelerate global climate action? The EU should rise to the challenge by focusing on four pillars of European Green Deal diplomacy: trade, bilateral financial agreements, multilateralism through the United Nations and national implementation of its Fit for 55 climate package. .

To exchange

The EU has yet to articulate a trade policy that would allow national implementation of the European Green Deal – or protect it from possible retaliation from partners, competitors or adversaries disgruntled by its Carbon Border Adjustment Mechanism (CBAM). ). The union has long discussed carbon border adjustments as a distant prospect. However, this is now an urgent matter. Most countries – rich and poor, large and small – view CBAM as green trade protectionism. The EU should make it clear that the ultimate objective of the proposed trade measure is to avoid carbon leakage and loss of competitiveness, not to make carbon conditions perfectly uniform (by imposing equal tariffs on all products and services with all countries and companies). The union must also explain that, should the CBAM ever come into force, the revenue it generates will support the countries and people who are suffering the most from the climate crisis.

The European Commission has proposed a version of the CBAM designed to be compatible with the rules and principles of the World Trade Organization (WTO). But legality is not the true test of such a measure. The EU and its Member States must be prepared to face trade reprisals against the CBAM. When the bloc attempted to include greenhouse gas emissions from international flights in its emissions trading scheme, it quickly relented due to threats from foreign buyers of Airbus planes. Thanks to this experience, the EU now understands that it cannot go it alone with its proposed carbon border tariff – it needs the support of the United States.

The United States is warming to the idea of ​​a border tax adjustment: Joe Biden floated the concept in his run for president, and his administration is now embracing trade as a tool for climate action. If the US designs a carbon border measure alongside the EU and perhaps other powers, it will do so with China in mind.

The EU has set an explicit price on carbon through its emissions trading system. And China has its own carbon market – modeled after the European market (but only covers power generation, not industry as well). In contrast, the United States does not have such a market. Instead, the United States will need to rely on public and private investment, standards and regulations, innovation, and implicit carbon pricing to meet its ambitious goal of reducing emissions by 50-52 percent. by 2030 (as well as full decarbonization of their electricity sector by 2030). 2035). As the WTO excludes border measures based on implicit carbon prices, this leaves the United States with international environmental protection standards and other methods to turn trade into an instrument for green and decarbonized growth. .

The US, UK and EU still fail to see that climate justice and effectiveness in dealing with the global climate crisis are two sides of the same coin.

Ultimately, climate-related trade measures will be judged on their ability to create a positive dynamic of deep global decarbonization. This is something that other EU policies could achieve, in particular a proposal on deforestation in global supply chains and the prospect that only electric vehicles will be sold on the EU market after 2035. They will fail if they derail the global economy by triggering a mutually destructive crisis. trade war between Western powers and China (as well as other countries).

Climate finance

Financially, the Glasgow Climate Pact has failed to provide the international solidarity needed to support the countries and people least responsible for the climate crisis but suffering the most. International public funding was lacking during COP26 (the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change). Rich countries came to the conference thinking that the trillions of dollars of private investment coming from voluntary carbon markets would somehow compensate for their inability to provide the $100 billion a year of private capital. mobilized by public finance to developing countries – a commitment they made in 2009. Above all, the failure of the United States to make a significant public financial contribution to the Glasgow Climate Pact resulted in a disappointing compromise, because it gave China and other major developing countries political cover to avoid doing more.

While the EU is the world’s largest provider of public climate finance, it has failed to use its credibility to build bridges with developing countries – a role that UN Secretary-General Antonio Guterres evoked as an expectation during his trip to Brussels in June 2021. This remains an issue beyond COP26: as it seeks its strategic autonomy amid growing rivalry between the United States and China, the he EU is seriously neglecting the countries and people it could otherwise turn into strategic and trading partners at the forefront of the global race to zero greenhouse gas emissions.

Wealthy Western powers such as the US, UK and EU still fail to see that climate justice and effectiveness in dealing with the global climate crisis are two sides of the same coin. The UK hosted COP26 just months after drastically cutting its development aid budget. And the EU and its Member States continue to undercut their weight politically, by failing to coordinate their financial aid programs to support countries and companies engaged in energy and climate transitions. They should replicate initiatives such as the $8.5 billion package that the EU, US and UK have provided to support South Africa’s transition from coal to renewables. At the EU-Africa summit in February 2022 and COP27 in Sharm-el-Sheikh in November, more African and other developing countries are expected to receive such packages – be they those targeting coal or other aspects of decarbonization and adaptation processes.

Multilateralism

In a world where carbon prices and decarbonization speeds differ, multilateralism is crucial to building fair and effective climate coalitions. Vulnerable countries in Southeast Asia, Africa, Central and Latin America, the Caribbean and Oceania have long ceased to simply beg for money: some of them are taking the lead global race to net zero.

These nations should be at the center of European Green Deal diplomacy. The EU should use a combination of public and private funding arrangements to support African countries, including South Africa, Senegal, Côte d’Ivoire, Nigeria, Egypt, Kenya and Morocco, as well as small island states such as Barbados, the Marshall Islands and the Maldives. The Union should see this form of European Green Deal diplomacy as an investment rather than a cost.

National implementation of the European Green Deal

The EU is proud to claim its credentials as world climate champion. But it must now demonstrate this status by implementing the European Green Deal at home. By putting climate action at the center of its economic recovery, the EU would demonstrate its intention with deeds and not just words.

The next six months of the French EU Presidency and the ten months leading up to COP27 are packed with milestones in pursuit of the 1.5°C target. As it stands, the taxonomy proposed by the Commission – its list of environmentally sustainable activities – sends a weak and mixed signal on the acceleration of the energy transition, inside and outside Europe. The EU will have many opportunities to show what it really stands for through trade, public-private financing deals, UN diplomacy and alliances with and support from vulnerable countries. The union has decarbonized its economy more than most wealthy Western powers. But the EU will only face the real tests of European Green Deal diplomacy in the months and years to come.

Emmanuel Guerin is Executive Director of International Affairs at the European Climate Foundation.

The European Council on Foreign Relations does not take a collective position. ECFR publications represent the views of its individual authors only.