The EU Green Deal: Internal and External Relation Implications
In July of 2021, the European Commission unveiled the Fit for 55 package, setting the ambitious target to reduce net greenhouse gas emissions by 55% or more by 2030. Accomplishing this target would be a crucial step towards accomplishing the objectives of the EU Green Deal. Both the acceptance of the EU Green Deal and the recent Fit for 55 adoption have significant policy implications for EU relations amongst the member states as well as with other global entities.
Background
The European Union began as a purely economic union, but has expanded to become a political force as well. Combating climate change is now near the top of the EU’s political agenda. In December of 2019, the European Commission presented their EU Green Deal, a set of policy initiatives aimed at making Europe the first climate-neutral continent by 2050. The initiatives covered a wide breadth of policy areas: emissions trading, use of renewable energy, energy efficiency, transportation, taxation, carbon leakage, and carbon sinks. About a year later, the objective was set into legislation as the European Climate Law and officially came into force in July 2021. The Fit for 55 proposals presented in 2021 lay out tangible policies to deliver on that original objective.
Political Implications
The EU Green Deal has significant impacts on political relations. For the purposes of this article, these are separated into impacts on internal relations, or those within the 27 EU member states, and external relations, or those between the EU and other nations.
Internal
Rather than a homogenous unit, the European Union is a conglomeration of nearly thirty countries that each have unique interests and challenges. The EU Green Deal lays out requirements for each of these member states. However, there is a wide range in the commitment level to Green Deal implementation amongst the nations. This variation has created tensions within the members and, ultimately, is likely to be the biggest threat to the EU Green Deal’s success.
Poorer EU countries and industry segments have already expressed discontent at the timeline of the decarbonization in the plan. They argue that it poses an unmanageable financial burden. Many of the EU Green Deal’s proposals call on member countries to contribute their own resources or sacrifice economic productivity towards environmental objectives. To give one example, the plan includes an ambitious expansion of the Emissions Trading Scheme, which essentially charges companies for their pollution. Households are likely to face higher fuel and heating bills as a result of this change.
Some governments are particularly worried about the reactions of their constituents to this increased cost of living. One French MEP, Pascal Confin, proffered that there would be consequences to the “mistake of extending the carbon market to heating and fuel.” He referenced the 2018 anti-establishment populist revolt in France, commonly referred to as the “yellow vest” revolt, as an example of backlash against a similar policy. Brussels is attempting to mitigate these tensions between member nations by evening out the costs of climate action. Around $85 billion from the EU budget may be allocated to a “Social Climate Fund,” which is intended to aid the EU citizens and businesses most harmed by the economic costs of decarbonization.
External
Excessive greenhouse gas emissions are not limited to the European Union. The leading greenhouse gas emitter is China at over 10 gigatons of carbon dioxide emissions, followed by the United States at around 5 gigatons. The Paris Agreement, presented in 2015, requires all member countries to set pledges that aim to keep the global temperature from rising more than two degrees Celsius above pre industrial levels. After the brief withdrawal of the United States from this accord in 2020, it is even more prudent that the EU Green Deal sets a galvanizing example for these top emitters and the rest of the world in general. The newest proposal presents a challenge to these global relations.
The July Fit for 50 proposal detailed a carbon border adjustment mechanism (CBAM) that would require importers to buy emission certificates in order to offset the emissions of carbon-intensive items. While the commission maintains that CBAM aligns with World Trade Organization (WTO) guidelines, several countries have already shared their “grave concerns” that these new restrictions will create unfair discrimination against their products that are imported in Europe. Colombia, Brazil, South Africa, India, and China are amongst those regions that are anticipated to be the most affected.
Summary
The EU Green Deal is a powerful political force, beyond its monumental commitment to emissions reform. With proposals that significantly impact member states and trade partners, it’s certain that relations will shift. Internally, there will likely be an exacerbation of the divide between poorer and wealthier member nations. Externally, the EU is creating friction between itself and key trade partners that are most affected by the new CBAM.
