BRUSSELS – In what could be a watershed moment in the global effort to tackle climate change, Europe on Wednesday challenged the rest of the world by presenting an ambitious plan to move away from fossil fuels in the nine coming years, a plan that also has the potential to spark global trade disputes.
The most radical, and perhaps controversial, proposal would impose tariffs on certain imports from countries with less stringent climate protection rules. The proposals also include eliminating sales of new gasoline and diesel cars in just 14 years and increasing the price of fossil fuel use.
“Our current fossil fuel economy has reached its limits,” European Commission President Ursula von der Leyen told a press conference in Brussels.
The effort, spurred by the European Commission, the EU bureaucracy, makes the proposal of the bloc of 27 countries the most aggressive and comprehensive plan in the world to achieve a carbon neutral economy by 2050, proposing big changes during this decade. To force the blow, Brussels has legally committed to reducing its greenhouse gas emissions by 55% by 2030 compared to 1990 levels.
Negotiations on the legislative package will be scrutinized far beyond Europe to see if and how a diverse set of countries, with democratically elected leaders from all political backgrounds, can hijack a fossil fuel economy – and provide cushions for those most affected.
The European proposal, which some environmental activists let’s say still doesn’t go far enough, raise the bar for the United States and China. President Biden has said he wants the United States to be a leader in efforts to tackle climate change.
A White House official said on Wednesday afternoon he was reviewing the European Commission’s proposals and broadly welcomed the idea of a border carbon tax. On Wednesday, Congressional Democrats took a preliminary step towards a similar tax, which they called an “import tax for polluters” also intended to reduce emissions.
The United States has pledged to cut emissions by 40-43% by 2030. Scientists have said the world needs to halve emissions by then, forcing the biggest polluters in history, namely the United States and Europe, to make the largest and fastest reductions.
Britain, which will host COP-26, international climate talks, in Glasgow in November, has pledged a 68% cut. China, currently the world’s largest carbon emitter, has said it aims for peak emissions by 2030, and is under pressure to set a more ambitious target ahead of the Glasgow talks.
China said it will launch a long-awaited national carbon market on Friday, which, when implemented, would be the world’s largest by volume of emissions. Under the plan, power companies would be given a fixed quota of carbon emissions each year, which they could buy and sell as needed.
The European Union’s detailed proposals mark just the start of what promises to be a difficult and deadly two-year negotiation between industry, 27 countries and the European Parliament on how to achieve the 55% reduction .
But ahead of the Glasgow talks, the proposals represent an effort by the European Union to assert global leadership in what must be a multilateral effort to reduce global emissions enough to avoid the worst effects of climate change.
“The EU’s policy package to stabilize our climate is the most comprehensive of its kind to date,” said Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research in Germany. “The extreme weather conditions around the world clearly illustrate that strong action is essential now if we are to limit costs and risks, and ensure a secure future for all. “
At the heart of the European roadmap is the increase in carbon prices. Almost every sector of the economy should pay a price for the emissions they produce, affecting things like the cement used in construction and the fuel used by cruise ships. The proposed taxes on imports of goods manufactured outside the European Union, into countries with less stringent climate policies, could potentially spark disputes within the World Trade Organization.
There are geopolitical implications. The proposed cross-border carbon tax could have the biggest impact on goods from Russia and Turkey, mainly iron, steel and aluminum, according to data analyzed by the Center for European Reform. The impact on US exports to Europe would be much smaller, according to the analysis.
The proposals, if adopted, would see the last gasoline or diesel cars sold in the European Union by 2035; demand that 38.5% of all energy come from renewables by 2030; increase the price of carbon emitted to make the use of fossil fuels more and more expensive; and financially assist those most affected by potential price increases.
The carbon border tax could not only disrupt global trade and spark disputes over protectionism, but it could also create new diplomatic fault lines ahead of the Glasgow talks.
The rally is an important time for major polluting nations to show what they will do to tackle the greenhouse gas emissions that have put the world on a dangerous warming path. All eyes are on the targets set by the United States and China, which currently produce the largest share of greenhouse gases.
Although the European Union produces only around 8% of current global carbon emissions, its cumulative emissions since the start of the industrial age are among the highest in the world. But as a huge market, it also sees itself as an important regulatory power for the world and hopes to lead by example, invent new technologies that it can sell and deliver new global standards that can lead to a carbon neutral economy. .
“Europe was the first continent to declare itself climate neutral in 2050, and now we are the very first to put a concrete roadmap on the table,” said Ms von der Leyen.
Some analysts have said that while the border carbon tax will impose new tariffs on imports, the proposals do not do enough to help developing countries move their economies away from fossil fuels. Others said the proposed jet fuel tax only applies to flights within the European Union and leaves 60 percent of fuel sales exempt.
Andrew Murphy, director of aviation at advocacy group Transport & Environment, said that “by not removing the tax exemption for flights outside the EU it still allows the majority to get by. case”.
The Executive Vice-President of the Commission, Frans Timmermans, in charge of the environment and the European “Green Deal”, recognizes the difficulty of the challenge. “We are going to ask a lot of our citizens,” he said. “We’re also going to be asking a lot of our industries, but we’re doing it for a good cause. We are doing it to give humanity a chance to fight.
The EU’s target of 55%, increased by law by 40% in June, has caused a major setback in industry, pressure groups and some member countries, especially in poor countries in Europe power plants, which have traditionally relied on fossil fuels. Thus, the Commission tried to build progressive markers for the industry, including free carbon credits for a decade and several million euros in financial aid.
One of the main proposals announced on Wednesday is a review of the European carbon market, known as the Emissions Trading System, under which major carbon producers like steel, cement and electricity pay their carbon emissions directly.
The hundreds of pages of proposed laws – which the Commission called “Fit for 55,” a slogan some have joked would be more suitable for a yoga studio – will be hotly debated and inevitably amended before becoming binding on the 27-member bloc.
Some fear that the poor will pay an unfair share of the cost of decarbonization and that it will be seen as an elite project, sparking more political backlash from populist parties and groups, such as the ‘yellow vests’ protests. of 2018 against a climate crisis. rise in gasoline prices in France.
It was a warning echoed by Pascal Canfin, the French chairman of the Parliament’s environment committee, who warned that the extension of the carbon market to heating and fuel could spark protests. “We lived it in France,” he said. “It gave us the yellow vests.”
But the proposals also include a Social Climate Fund, raised from these new taxes, which could provide up to 70 billion euros (about $ 83 billion) to help governments help those most affected.
The European Union is “the first major economy in the world to start translating the ambition of climate neutrality into real political action,” said Simone Tagliapietra de Bruegel, a Brussels-based economic think tank. “But if there is one principle that should guide the negotiations over the next two years, it is certainly the principle of climate justice.”
Mr Timmermans said “the onus is on the Commission to prove that this leads to solidarity and fairness in this transition”.
He added: “If we can prove it, I think the resistance will be less. If we fail to prove it, I think the resistance will be massive. “
Steven Erlanger reported from Brussels and Somini Sengupta from New York. Monika pronczuk contributed to reports from Brussels, Jack Ewing from Frankfurt, Jim Tankersley and Katie rogers from Washington and Vivian Wang from Hong Kong.