Search

Begin New Search Topic Climate Change Political Geography Europe Content Type Policy Brief Publishing Institution German Institute of Development and Sustainability (IDOS) Publication Year within 3 Years

1. Priorities for a Development-Friendly EU Carbon Border Adjustment Mechanism (CBAM)

Author:
Clara Brandi
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as part of its “Fit for 55” climate-policy package. The European Commission had announced this trade-policy instrument under the Green Deal in 2019 as a means of implementing more ambitious climate-policy goals without energy-intensive sectors transferring their emissions abroad (carbon leakage). The CBAM proposal envisages imposing a levy on imports in certain energy-intensive European sectors that is proportional to the carbon content of the goods concerned. The proposal complements the EU’s existing Emissions Trading System by requiring importers of goods purchased from especially energy-intensive sectors (steel, cement, electricity, fertiliser and aluminium) abroad to purchase carbon certificates based on emissions data from abroad. CBAM is primarily designed to promote an ambitious climate policy for the EU. However, the EU’s current proposal creates the impression that it is mainly about improving domestic competitiveness at the expense of climate-policy effectiveness and development prospects. The draft legislation must now be fleshed out in detail by the EU member states and the European Parliament. In addition to addressing climate-policy effectiveness and compatibility with WTO legislation, account must also be taken of the impact on European trading partners, and, in particular, poor developing countries. Many developing countries are expected to face additional export costs as a result of the CBAM. The EU should carefully evaluate the associated disadvantages for developing countries and work towards achieving a development-friendly design of the mechanism. Corresponding improvements should be made to the CBAM in the EU’s legislative process going forward: • The EU must ensure that the border adjustments do not have a detrimental impact on poor countries. Least developed countries (LDCs) should be exempted from the CBAM. • The EU should provide targeted support to the developing countries affected by the mechanism, for instance, by building their capacity for implementing the CBAM and for reducing carbon emissions in the sectors concerned. • The EU should assist low- and middle-income partner countries with the decarbonisation of their manu¬facturing industries. • The EU should also recycle revenue from the CBAM by deploying it primarily for climate-policy purposes abroad. • The affected countries should be involved to a greater extent in future through consultations and diplomatic dialogue in the process for further develop¬ing the mechanism.
Topic:
Climate Change, Development, Treaties and Agreements, European Union, and Carbon Emissions
Political Geography:
Europe

2. The External Dimensions of the European Green Deal: The Case for an Integrated Approach

Author:
Svea Koch and Niels Keijzer
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The European Green Deal conveys the EU’s ambition to adjust and “green” its economic growth trajectory and become climate-neutral by 2050, as part of its contribution to the Paris Agreement and the Sustainable Development Goals. While being ambitiously pursued within the Union’s own borders, the Green Deal also has strong external ramifications, as the EU leaves a tremendous ecological footprint in other parts of the world. The EU has referred to this “external dimension” of the Green Deal without further defining it, and appears to primarily understand it as a reflection of the internal strategies and as a call for the EU’s partner countries to follow a sustainable recovery trajectory similar to its own. A number of proposed EU domestic strategies (e.g. biodiversity, blue economy or farm-to-fork) contain chapters on global aspects, yet the EU seems to follow a predominantly sectoral logic to implementing the external dimension of the Green Deal. This approach has certain shortcomings. For one, it creates uncertainty for partner countries on how to adapt to the EU’s new rules, regulations and standards, and the extent of EU support for adjusting to this. It also creates a vacuum for member state engagement by means of their economy, finance, climate and foreign policies. Last but not least, it lacks clear governance mechanisms to address potentially conflicting policy objectives and to strive for greater coherence of domestic and external EU policies. Ultimately, the EU needs to define the different external dimensions of the Green Deal and promote an integrated approach. Whereas this applies universally to all partner countries of the EU, we focus in particular on developing countries in this paper. We consider these dimensions to be (1) promoting the Green Deal in bilateral and regional cooperation, (2) ensuring coherence and addressing negative spillovers, both in trade and domestic policies and (3) the EU’s global leadership in multilateral fora. Combining those three dimensions and governing them across EU institutions and member states allows for the external response to become an integral part of the EU Green Deal. Such an integrated approach allows the EU to claim leadership vis-à-vis other global powers, make credible commitments in multilateral fora for successful “green diplomacy”, and use its market and regulatory power to transform itself and others. In its bilateral relationships, the EU needs to strike a “deal” in the true sense of the word: together formulating and “owning” cooperation agendas that are clear in terms of what is in it for the EU’s partners and how the EU will cushion the potential negative adjustment costs of partners. Overall, the EU needs to avoid a “projectisation” of the external dimension of the Green Deal and clarify how the different Commission services and member states aim to work together to deliver the Green Deal, including through its various external policy areas, of which development is just one.
Topic:
Climate Change, Development, European Union, Economic Growth, and Green Deal
Political Geography:
Europe