Here are the foreign states that will be favored and disadvantaged by Europe’s Green New Deal

7 March 20213 years ago babelfish

A massive decline in fossil fuel consumption will restructure EU relations with Russia, Algeria, Azerbaijan, Kazakhstan and Libya. Renewable electricity and green hydrogen could be imported from countries such as Algeria and Morocco. The analysis of 5 experts on Le Monde

Five experts ( Mark Leonard , co-founder and director of the European Council on Foreign Relations; Jean Pisani-Ferry , economist at the Bruegel European Research Institute; Jeremy Shapiro , research director at the European Council on Foreign Relations; Simone Tagliapietra , economist of Bruegel, and Guntram Wolff , director of Bruegel ) observe, in an article in Le Monde , that the European goal of carbon neutrality by 2050 will profoundly change the Union's relations with foreign energy supplying countries, some of which will have to give way to newcomers.

The European Union (EU) goal of climate neutrality by 2050, the “Green Deal”, is not just a revolutionary exercise to change the continent's energy, consumption and travel habits. It also implies major changes in European foreign policy and diplomatic relations.

Today, around 70% of the EU energy mix is still based on fossil fuels, while renewables represent less than 15%. This situation will completely change over the next 30 years if the European Green Deal is successful.

A massive decline in fossil fuel consumption will restructure the EU's relations with its main suppliers, notably Russia, Algeria, Azerbaijan, Kazakhstan and Libya, whose economies are heavily dependent on energy exports to Europe. Ending Europe's dependence on fossil fuels would harm them and could even destabilize their governments.

As Europe accounts for around 20% of world crude oil imports, a sharp drop in European demand would also affect the world oil market by driving down prices, which would also harm producers who export relatively little energy to Europe, such as the 'Saudi Arabia.

Disadvantages and Benefits

In a recent study, we described how the geopolitical effects of the European Green Deal will be felt beyond the energy markets (“The geopolitics of the European Green Deal”, Bruegel, February 2, 2021). European industries are concerned about their competitiveness relative to their foreign counterparts, as they will have to pay higher prices for carbon and comply with stricter environmental laws.

The European Green Deal would protect these companies by introducing a so-called "border adjustment mechanism", ie a tariff on imported goods based on their carbon content, equivalent to the national carbon price. Such a measure will inevitably have an impact on trade flows and global politics.

While some countries will be handicapped by the European Green Deal, others will benefit. A greener Europe should import more clean energy products and inputs. China would benefit as it dominates the market for so-called rare earth minerals, which are essential for wind turbines, electric vehicle engines and other clean technology applications.

Furthermore, even if the EU reduces its consumption of fossil fuels, it will remain a major net importer of energy. This energy will now have to come from less carbon-intensive sources, such as renewable electricity and green hydrogen, which could be imported from countries with high solar and wind potential, such as Algeria and Morocco.

Secure the supply

The EU must become aware of the geopolitical risks of the European Green Deal and prepare a foreign policy strategy to manage them. This strategy should include both actions to control the direct geopolitical impacts of the European Green Deal and actions to encourage its global environmental leadership.

Actions in the first category would focus on helping neighboring oil and gas exporting countries prepare for the decarbonisation of the EU. The EU should work alongside these countries in their economic diversification, including in the field of renewable energy and green hydrogen, which could be exported to Europe in the future.

It should also improve its security of supply of key raw materials and limit its dependence on China by further diversifying its supply, increasing recycling volumes and replacing critical raw materials.

Finally, the EU should work with the US and other partners to create a "climate club", whose members will apply similar carbon adjustment measures at the borders. All countries, including China, would be welcome if they committed to abiding by the club's goals and rules.

Promote global coalitions

To be a global leader in climate action, the EU should strive to become a standard setter, especially when it comes to hydrogen and green bonds. Requiring compliance with strict environmental regulations as a condition for EU market access will provide a strong incentive for all trading partners to go green.

Furthermore, the EU should export the European Green Deal through sustainable energy investments in developing countries. This makes economic sense anyway, given that developing countries have lower marginal costs of reducing emissions than European countries. It would thus help EU companies to penetrate fast-growing markets, stimulating economic development and diversification in partner countries, which would be an invaluable foreign policy gain for the EU.

In addition, the EU should promote global coalitions to combat climate change, for example through a global coalition for permafrost and a global coalition for the reduction of CO2 emissions. Such initiatives would provide funding for global commons that require international cooperation.

Together, these actions form a foreign policy framework for the European Green Deal. They respond to the geopolitical challenges other countries are likely to face as a result of the Green Deal and, more broadly, increasing global warming, and offer ways to extend the drive for decarbonisation beyond the EU – which will be a necessity to ensure the success of the Green Deal. European.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/ecco-gli-stati-esteri-che-saranno-favoriti-e-sfavoriti-dal-green-new-deal-delleuropa/ on Sun, 07 Mar 2021 07:51:00 +0000.