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Damned If You Do, Damned If You Don’t: EU Climate Edition

The EU was long accused of not doing enough against climate change. Now it is doing too much?

Berlaymont Brussels Belgium
Night falls on the Berlaymont, seat of the European Commission, in Brussels, Belgium (Shutterstock/Jasmin Zurijeta)

Environmentalists have for years hectored the EU for not doing enough to fight climate change (when it is doing more than the world’s other major economies).

Now that it has proposed to force other nations to copy its standards or lose access to the European market — as part of its ambition to reduce net greenhouse gas emissions to zero by 2050 — the bloc is again assailed by leftists, this time for being “neocolonialist”.

Talk about being damned if you do and damned if you don’t.

What is the EU proposing?

The European Green Deal is a sprawling set of initiatives that touches on everything from clean energy to ecological farming.

Three proposals have drawn the ire of self-proclaimed anti-colonialists:

  1. Bring aviation and shipping into the EU’s emissions trading system. Planes and ships would have to buy pollution rights, just like factories and power plants, even if they travel to or from outside the EU.
  2. Charge a carbon border tax: an import tariff equivalent to the difference between the EU carbon price and that in the exporting country.
  3. Beef up “trade and sustainable development” chapters in trade deals. Countries would need to meet EU standards, including in environmental protection and labor rights, to trade with the bloc.

What is the rationale?

The logic for the first proposal is straightforward: currently only flights within the EU have to buy pollution rights and the shipping industry is excluded from the trading system altogether.

A carbon border tax is meant to offset competition from countries with lower environmental standards and thus make it economically viable for European farmers, manufacturers and other polluters to invest in cleaning up their production processes. It will be difficult to find the right price, though: the EU would have to calculate not just the total carbon footprint of an imported product, but also at which stage of the supply chain emissions were created.

EU trade deals already include chapters on trade and sustainable development, but they are not enforced. When a country doesn’t reciprocate market access, it can be taken to a dispute settlement panel. When it cuts down forests or exploits its workers, the EU can call a meeting.

The European Commission has been wary of cutting off business with countries that don’t meet their sustainability commitments, arguing they could simply trade with others. An alternative is to reward countries that protect the environment with even lower tariffs. But some members states argue that is too weak. France is holding up ratification of a trade deal with Mercosur — which would eliminate nearly all tariffs with the South American trade bloc — so long as Brazil doesn’t halt deforestation in the Amazon.

Who is upset?

Brazil’s Jair Bolsonaro, who calls the EU’s policies “colonialist”.

Other critics include Indonesia’s Joko Widodo and Malaysia’s Mahathir Mohamad. Not exactly the world’s leading champions of environmentalism and free trade.

The far-right Bolsonaro has dismantled the deforestation program of his left-wing predecessors, which included satellite monitoring, personnel on the ground and laws to punish land theft. He has also repealed a ban on growing sugarcane in the vast river basin.

Indonesia and Malaysia together produce 85 percent of the world’s palm oil, which is used in everything from biofuels to shampoo. Fires set to clear forests for palm plantations are a major source of greenhouse gas emissions. The destruction of these forests is driving orangutans and species of rhinos and tigers to extinction.

Brazil and Indonesia rank 143 and 56, respectively, out of 178 countries in the Heritage Foundation’s Index of Economic Freedom. Malaysia, at 22, is economically freer, but it is not a full democracy. Freedom House points out that Mahathir’s ruling party manipulates elections and intimidates journalists. Religious and sexual minorities face legal discrimination.

Yet these countries’ broadsides against European “colonialism” and “protectionism” are taken seriously by some.

An article in MIT Technology Review argues the EU’s proposed carbon border tax “reflects the colonial practice of wealth transfer from the developing to the developed world.” openDemocracy claims the Green New Deal is built on “green colonialism”, because the EU would still need to import raw materials from developing countries to produce electric batteries and solar panels. Earth.org accuses the EU of “foreign domination through ‘sustainability’ initiatives that exploit the resources of poorer nations.” The Equinox initiative for racial justice believes the EU is trying to “exploit and overpower countries in the Global South … under the guise of reducing global carbon emissions and building green technology.”

These claims have been aped by Al Jazeera, Euronews and the Financial Times.

What’s the alternative?

If they don’t want the EU to leverage its market power to affect change around the world, what would the critics have it do?

It’s hard to find out. Many of their so-called proposals are really hollow buzzphrases: “assess the extent to which policies exacerbate structural racism,” “assess Europe’s carbon footprint from a global lens,” “audit the European Green Deal through a racial justice lens,” “avoid the mistakes of the continent’s colonial past,” “decolonize norms of engagement,” “develop an equity framework.” I’m sure that would keep them busy (apply for EU grants here), but it doesn’t do anything for developing countries.

The only concrete recommendations I could find are:

  1. Apply the same standards to foreign goods as Europe applies domestically. Which is odd if you think a border tax and conditions in trade deals are colonialist. Outright demanding that other countries adopt your standards, and refusing to import products that don’t, would hurt developing countries even more!
  2. Fund the UN’s Green Climate Fund. Of which the EU is already the largest contributor by far.
  3. Extend access to low-interest financing. When, again, the EU is already the largest donor of public climate finance and the largest donor of developmental aid in general.

Perhaps there are recommendations I overlooked, but the ones I found don’t match the scale of the problem. Green funds and low-interest loans aren’t going to end neocolonialism. Either the accusation is overblown or the critics need to come up with better solutions.

While we wait, the EU is actually doing something to reduce global greenhouse gas emissions.