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1. From Interconnection to Integration: German-Italian Energy Relations and the SoutH2 Corridor

Author:
Pier Paolo Raimondi and Wolfgang Münchau
Publication Date:
01-2024
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
On 22 November 2023, the German Chancellor, Olaf Scholz, and the Italian Prime Minister, Giorgia Meloni, signed a German-Italian Action Plan.[1] The Plan promises greater collaboration between the two countries on the biggest challenges currently facing Europe. Among these priorities is environmentally sustainable economic growth and the acceleration of climate protection. While the Action Plan is relatively terse, focusing on the establishment of fora for greater cooperation rather than providing a detailed roadmap, its energy and climate section does highlight a specific project as an example of closer cooperation: the acceleration of the completion of the so-called South-Central Corridor for the transport of hydrogen throughout Europe. This Corridor has the primary function of enabling the import of hydrogen produced in North Africa into the very core of Europe and thus to the high-demand areas of Germany and Northern Italy. One especially important part is the so-called SouthH2 Corridor, which includes a pipeline running the entire length of the Italian peninsula before connecting to Southern Germany via Austria. There are strong political and strategic arguments for a deeper energy cooperation between Italy and Germany, despite some differences.[2] Hydrogen and gas infrastructure is a key area where intensified cooperation is crucial.[3] Through the SouthH2 Corridor, the two countries have indeed expressed their willingness to collaborate precisely on hydrogen infrastructure, notably the SoutH2 Corridor. However, such cooperation cannot be limited to the infrastructural part; it must extend to a series of related issues in which both countries should seek to align their political and legal initiatives, starting from overcoming uncertainties regarding the development of hydrogen demand and the use of other net-zero technologies in both countries. In short, cooperation on infrastructure can be used as a jumping off point for a deeper collaboration on and exchange of information about their broader transition strategies. Such bilateral coordination would also contribute to the achievement of EU Green Deal objectives more broadly.
Topic:
Climate Change, Bilateral Relations, Natural Resources, Regional Integration, Pipeline, and Energy
Political Geography:
Europe, Germany, and Italy

2. The State of EU-US Digital and Energy Cooperation

Author:
Federica Marconi, Wolfgang Münchau, and Irene Paviotti
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
In a time of rapid technological advancements and changing energy paradigms, the European Union and the United States are trying to coordinate their efforts to navigate the complexities of an ever-evolving landscape. Transatlantic dialogues and cooperative endeavours are key mechanisms for mitigating tensions and fostering a common assessment of the opportunities and risks arising from these advancements. Critical in this regard are the problems of governance emanating from technological development and its consequences in the digital sphere as well as the delicate balance between security, competitiveness and environmental targets in the energy dimension.
Topic:
Climate Change, International Cooperation, Political Economy, Governance, European Union, Transatlantic Relations, Digital Policy, and Energy
Political Geography:
Europe, North America, and United States of America

3. Climate resilience and Cook Islands' relationship of Free Association with Aotearoa / New Zealand

Author:
David J. Kilcullen
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
On 1 January 2020, the Cook Islands was removed from the OECD Development Assistance Committee’s List of Official Development Assistance (ODA) Recipients. Having been assessed as a “high-income status country”, this re-classification rendered the Cook Islands ineligible for OECD development assistance. It was unfortunate timing. The Covid-19 pandemic hit a few months later and caused a significant contraction in the tourism sector on which the Cook Islands is economically dependent. The result was, by the government’s own description, a “severe recession” with a total contraction of -21.6% of GDP in 2020/ 2021. Thus, only months after being recognized as having a sufficiently high income as to no longer warrant OECD development-assistance, the Cook Islands lost nearly a quarter of its GDP. This was especially significant for a country that is particularly susceptible to climate change and weather-related hazards. The Cook Islands is made up of 15 coral atolls and volcanic islands. Over 90% of the residents of the 12 inhabited islands live within one kilometer of a coastline. In addition, its already modest population of just under 15,000 people is rapidly decreasing (down from approximately 17,500 in 2016), undermining social and economic resilience to shocks. Despite notable economic growth in the years preceding Covid-19, greater infrastructure and other investment remains essential to brace the country for future climate-related changes. A question thus arises as to the benefits of Free Association in circumstances where the former colony faces crises.
Topic:
Foreign Policy, Climate Change, History, and Resilience
Political Geography:
Europe, Denmark, New Zealand, and Cook Islands

4. Into the Blue Pacific: Why the EU Should Help Island Nations Address Climate Change and Maritime Insecurity

Author:
Elisabeth Suh and Hanna Gers
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
The ‘Blue Pacific’ is a vast region in the South Pacific, encompassing 30 million square kilometers, three million inhabitants and 14 nations. Its consists of thousands of islands threatened by climate change – a concern aggravated by geopolitical competition. The EU can help mitigate these challenges through capacity-building for climate adaptation and maritime security and regional consolidation. This overlaps with European strategic interests, including establishing itself as a trusted outside power.
Topic:
Security, Foreign Policy, Climate Change, European Union, and Strategic Interests
Political Geography:
Europe and Pacific Islands

5. The Disruption of Arctic Exceptionalism: Managing Environmental Change in Light of Russian Aggression

Author:
Kai Kornhuber, Kira Vinke, Evan T. Bloom, Loyle Campbell, Volker Rachold, Sara Olsvig, and Dana Schirwon
Publication Date:
02-2023
Content Type:
Special Report
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
The Arctic is directly affected by the interaction of two ongoing global crises: climate change and Russia’s war of aggression against Ukraine. With its temperatures rising four times faster than the global average, the Arctic is facing dramatic environmental consequences. Meanwhile, retreating sea ice has led to increased economic interest in the Arctic and its growing geopolitical importance. Thus, understanding and managing the global and local implications of environmental change in this region requires urgent scientific and diplomatic collaboration.
Topic:
Climate Change, Environment, International Cooperation, and Russia-Ukraine War
Political Geography:
Russia, Europe, Central Asia, Arctic, and Americas

6. With Charisma, Stick, and Carrot: Reviewing the Effectiveness of EU Climate Diplomacy

Author:
Zuzanna Nowak and Stefania Kolarz
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
Last year’s COP27 in Sharm el-Sheikh, Egypt, was a major challenge for EU climate diplomacy, which, despite the unfavourable external circumstances (e.g., the war in Ukraine and economic turbulence), contributed to the conference’s positive outcome. The EU, as a global leader in the fight against climate change, seeks to increase its influence with external partners. Many of them would not have joined the climate action without its support. In addition to participation in policy dialogue, among the EU’s main tools of influence are various types of incentives and forms of support, as well as leverage measures such as political conditionality. However, the effectiveness of these tools is still being refined.
Topic:
Climate Change, Diplomacy, European Union, and Influence
Political Geography:
Europe

7. Climate Protection Litigation on the Rise

Author:
Szymon Zaręba
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
In the last several years, national courts and international institutions have increasingly begun to treat conservative or climate-adverse actions by states as violations of their obligations under international law and human rights. This has been followed by some countries more affected by climate change and engaged in international bodies to put more pressure on Global North states to protect the climate. The sympathetic attitude of international courts towards such complaints may, in the long term, force the need for increased climate ambition or even compensation payments by, among others, Poland.
Topic:
Climate Change, Human Rights, International Law, Courts, and Litigation
Political Geography:
Europe, Poland, and Global Focus

8. Rebooting the European Union’s Net Zero Industry Act

Author:
Simone Tagliapietra, Reinhilde Veugelers, and Jeromin Zettelmeyer
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
In March 2023, the European Commission published a legislative proposal for an EU response to the US Inflation Reduction Act: the Net Zero Industry Act (NZIA). It is an unconvincing policy proposal, both for what is in it and for what is not in it. The proposal has five problematic aspects. First, it takes a top-down approach, in which specific technologies are selected for preferential treatment. Preferable would be a technology-neutral approach open to all current and future technologies that help tackle the net-zero challenge. Second, its blanket 40 percent self-sufficiency benchmark for EU domestic cleantech manufacturing by 2030 sends a protectionist signal, is poorly defined and does not reflect the differences in EU capacity in the cleantech sector. Third, it relies on the acceleration of permitting procedures as the main policy instrument, although this is not the main obstacle to cleantech investment in the EU. Fourth, it proposes more strategic use of public procurement. While this is an objective to be supported, the specific proposals are likely to be ineffective because of the way they are designed. Fifth and not least, the NZIA would lack a governance structure that would ensure effective implementation. In addition, the NZIA does not tackle three critical issues. It does not address investment obstacles related to failures of the single market. It does not tackle the coordination problem at the core of developing an EU green industrial policy. Finally, it does not develop an EU-level funding strategy, but rather relies on state aid, with the related risk of fragmentation. The European Parliament and EU countries in the Council of the EU should reboot the proposal and refocus its objectives, sharpening its limited instruments, improving its governance, and adding financial incentives to ensure implementation. In parallel, the EU should develop a broader green industrial policy strategy that leverages the single market in a credible manner, building a solid new governance framework and a new EU-level funding approach.
Topic:
Climate Change, Industrial Policy, Governance, European Union, Trade Policy, and Industry
Political Geography:
Europe

9. The potential of sovereign sustainability-linked bonds in the drive for net-zero

Author:
Alexander Lehmann and Catarina Martins
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
European Union governments have for some years issued green bonds that raise funds for climate-related spending. These bonds have been received well in capital markets but because they promise a certain use of proceeds, they complicate budget management and may not match investors’ claims of having an impact on national climate policies. Public commitments made by major investors and asset owners suggest that limiting climate transition risks and the assessment of the alignment of sovereigns with net-zero targets will now become key determinants of portfolio allocation. Yield differentials in bond markets are already beginning to reflect transition risks that arise from the inadequate pursuit by issuers of climate targets. Unlike standard green bonds, sustainability-linked bonds (SLBs) create a link between performance (outcome) indicators and the financial terms of the bonds. SLBs have grown rapidly in importance in private markets and are now being assessed by sovereign issuers. We show that sovereign SLBs could help incentivise climate policies in EU countries, and accelerate emission reductions. They would be an effective tool for signalling commitment. A common EU framework for issuance by EU countries would enhance capital market integration and the transparency of national policies, and would limit climate transition risks in EU capital markets more broadly.
Topic:
Climate Change, European Union, Finance, Carbon Emissions, and Sovereign Bonds
Political Geography:
Europe

10. The Emissions Reduction Potential for Freight Transport on a High-speed Rail Line Along the ‘European Silk Road’

Author:
Erica Angers, Aleksandr Arsenev, and Mario Holzner
Publication Date:
09-2023
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This report estimates the CO2 emissions of freight transport on a hypothetical high-speed rail (HSR) line along the northern route, from Lyon to Warsaw, of a ‘European Silk Road’ (ESR). Using a methodology consisting of predictions regarding the freight-carrying capacity of the future HSR, and the commodity-level switchover, our results indicate that a best-case scenario, at a project lifecycle of 60 years, in which all trains run with 257 tonnes of load, provides for a reduction of 176.2 Mt of net CO2 emissions compared with current levels. These lifespan savings are comparable to a reduction of net emissions by close to 24% of the overall EU transport sector emissions (excluding air transport) of one year (as measured by the net emissions in 2018). The net negative emissions in the optimistic full-capacity scenario will compensate for the construction costs in 13 years. Thus, the potential for emission reduction along the northern route of the ESR is quite substantial, given that this is just one line, with limited capacity. This hints at the importance that bold missions, such as the construction of a pan-European HSR network, could have for the definition of a European Green Industrial Policy that is capable of supporting the fulfilment of the goals of the Paris Agreement on climate change.
Topic:
Climate Change, Infrastructure, European Union, Economic Growth, Transportation, Logistics, Ecology, and Green Economy
Political Geography:
Europe