Window of opportunity for EU-China environmental cooperation

25/03/2018

The creation of China´s Ministry of Ecological Environment announced last week is one of the major green news this year. The new ministry, headed by Li Ganjie, will be in charge of climate policy, marine environment and pollution from agricultural sources, in addition to the tasks of the old Ministry of the Environment.

A more powerful ministry is good news both for China and for global environmental governance. Coordination at the national level can improve. For example, climate policy can more closely be connected to other policy areas such as air pollution, water protection and biological diversity. Hopefully, disruptive infighting between different governmental bodies can be reduced. Another significant change is the creation of a new Ministry for Natural Resources, bringing together responsibilities for forestry, agriculture and land resources.

The organisation changes can also facilitate international cooperation. At a press conference on March 17, Li Ganjie emphasised China´s role in global governance `to build a clean and beautiful world´. The European Union and its member states should move quickly to make good use of this opportunity. Here are three examples of possible areas for deepened cooperation:

Air pollution. China´s efforts to reduce emissions are yielding results.  With Xi Jinping likely to stay in power for a long time, cleaner air will most probably remain one of the major items on the political agenda. Li Ganjie has already indicated that stricter limit values will be set for particulate matter (PM 2.5) for the period after 2020. The European Union and its member states are already cooperating with China in this area, but more can be done for example regarding: policy measures for better fuel quality including shipping, economic instruments for cost-efficient reduction of sulphur and nitrogen oxide emissions, coherent strategies against volatile organic compounds (VOCs), and in-use vehicles control. Deepened cooperation on air pollution is also relevant in an East Asia regional context, where well-designed involvement of third parties such as the EU can help bridge historical tensions between China, Japan and Korea.

Climate change. Since Donald Trump took office, China and the European Union are the two main drivers for continued global efforts to combat climate change. Strengthened cooperation can include  knowledge sharing on carbon taxes as a complementary strategy to the highly risky Chinese emission trading experiment, joint assessments on the efficiency of policy measures (that can feed into a developed `Policies and measures´part of the climate convention), and reducing negative climate impacts of infrastructure investments (with the Belt and Road initiative as one example).

Non-toxic material cycles. China has a crucial role in global production networks and value chains. This is also true for recycling. Last year´s ban on imports of plastic waste has raised concerns in rich countries dependent on exporting such used materials to China. However, the ban is understandable given the health and environmental problems linked to often illegal waste imports. Instead, the decision and further ambitions of the Chinese government can give useful impetus to more ambitious policies within the European Union, for example to the negotiation on the new strategy on plastic waste.  Europe and China can cooperate more closely in global frameworks such as the Basel convention and international governance of chemicals. Another aspect is the ecological effects of imported natural resources, well highlighted in a recent report by China Council and in the European Union´s conclusions on resource efficiency.

There are of course many other possible areas for deepened cooperation and much is already happening. However, now is a good time for a more coherent and strategic approach, and closer coordination between EU member states. From a geopolitical perspective, such cooperation can also facilitate long-term stability in the region, including Korea and Japan in a broader EU-East Asia context.


Canada and Europe can show green transatlantic leadership

11/03/2018

Canada is putting environmental issues high on its agenda for the G7 Presidency. `We are looking at a zero-plastics-waste charter´, said Environment Minister Catherine McKenna this week at the World Ocean Summit in Cancun. As chair of G7 this year, Canada would like the rich and powerful countries to agree on far-reaching goals for recycling of plastics and waste reduction. `We could build on goals like having 100 per cent reusable, recyclable or compostable packaging´, said McKenna.

Earlier, Prime Minister Justin Trudeau announced climate change, oceans and clean energy as some of the priorities for the G7 Presidency. The progressive agenda also puts emphasis on gender equality. Quite a contrast to president Trump. It will be most interesting to follow developments in G7 this year, including the June Summit in Charleroix, Quebec.

Canada has a long and proud tradition in environmental policy, even if the level of ambition has varied in recent years depending on the political leadership. For example, the North American country was a forerunner in efforts to protect the ozone layer, resulting in the Montreal protocol. Canadian Maurice Strong played a crucial role both for the Stockholm conference in 1972 and for the Rio conference in 1992.

With Justin Trudeau at the helm, Canada is once again in the forefront of environment policy. The introduction of carbon taxes as part of the ambitious national climate change strategy is one such example. There are also a number of promising initiatives at province level.

At the same time, the CETA agreement between Canada and the EU is scheduled to soon enter into force. It is already applied provisionally, with the EU Commission for example having solicited comments on the forthcoming regulatory cooperation.

The EU and its Member States share many values with Canada, including on environment. There are many reasons to reinforce the cooperation with an ambitious joint green agenda. For example, the EU Commission recently put forward its strategy on plastics and a number of Member States are already moving ahead. Why not start with jointly pushing for a global agreement to ban plastic microbeads in consumer products?

Such green cooperation between Canada and the European Union would also provide a well-needed contrast to the foreign and trade policy of the Trump administration.


Toyota breakthrough on magnets illustrates need for EU state aid reform

25/02/2018

A breakthrough for next generation motors, with far-reaching implications for sustainability. Toyota´s press release this week regarding “the world’s first neodymium-reduced, heat-resistant magnet” will facilitate the mass introduction of electric vehicles and new applications in for example robotics. The magnet does not use terbium or dysprosium, and the amount of neodymium needed has been substantially reduced. All these three rare earth elements have been designated as critical materials with only a few suppliers world-wide.

Japan is a world leader in material science. The government has since many years funded research into new types of magnets. When China restricted the export of heavy rare-earths in 2010, decision-makers in Tokyo increased funding for research and innovation aiming at reduced dependency of substances such as neodymium, dysprosium and terbium. This included both basic science at universities and applied research in institutes and companies.

Toyota is an impressive company with massive R&D investments. The governmental agency NEDO has also played an important role for the present breakthrough. As in other fields, NEDO has promoted new types of magnets by coordinating and partly financing efforts by the private sector. In this case, the program “Development of Magnetic Material Technology for High-efficiency Motors for Next-Generation Automobiles” has had a significant effect. The foundation in 2012 of the Motor and Magnetic Materials R&D Center (MagHEM), with the participation of government funded research institute AIST, has also been important.

The breakthrough illustrates a wider point. Japan allows for a greater amount of state aid to applied research and demonstration projects in companies than the European Union. NEDO plays an important role in this regard and has historically contributed to the commercialisation of green innovations such as the blue LED lights. The same applies to South Korea, not to mention China.

European researchers have pointed out the restrictive EU state aid rules as an obstacle to green innovations. For example, Måns Nilsson at the Stockholm Environment Institute together with co-writers makes this point in an excellent article on electric vehicles.

Reforming the EU state aid rules could be an important factor in making Europe greener and at the same time promoting competitiveness.


A carbon tax might be better for China than emission trading

04/02/2018

“I was responsible for milk quotas in my previous Commission position. Emission trading for carbon dioxide is not something I believe in.”

The director in DG Environment was sceptical when a guest asked about emission trading as a policy option back in 1992. Later, the successful Swedish green tax reform was one of the inspiration sources behind the Commission proposal for a European energy and carbon tax. The first choice for the climate experts in Brussels was a tax, not emission trading.

However, it was not possible to achieve consensus around the European Commission proposal due to objections from in particular the United Kingdom. The European emission trading system (ETS) emerged as an alternative. Now, the ETS is well established, but still has problems after many years of low prices for the certificates.

Against this backdrop, the enthusiastic statements from Brussels policy-makers on the new Chinese emissions trading system seem oversimplified.

During recent years, there has been problems in the Chinese pilot markets with inter alia too many emission permits issued and a lack of tough sanctions towards companies not paying for emission certificates.

The national system will to start with only cover power production. Experts have questioned the lack of a ”hard cap” for total carbon dioxide emissions from the sector. Instead, emission certificates will be allocated to power plants according to their electricity production.

There are a number of other question marks. In addition to the lack of a cap for total emissions, the crucial issue of effective verification is not convincingly addressed and it is unclear how transparent the system will be to the public.

An upstream carbon tax on coal and oil has been identified by the OECD and others as easier to implement than emission trading permits. Even when China has now decided to try a national ETS, there is still the opportunity to apply a carbon tax in the non-ETS sectors. Such proposals have been developed, and even if there are recent negative statements from Chinese policy-makers regarding a carbon tax, the idea should not be abandoned.

The European Commission is investing heavily in promoting emission trading in China. A few weeks ago, ICF was awarded a ten-million-euro contract to support cooperation between the European Union and China in this area.

To help China avoid the mistakes in Europe is certainly a worthy task. However, the Commission’s approach is unbalanced, strongly promoting one of the possible economic instruments. Maybe one reason is perceived economic benefits from a future linking between the European and the Chinese ETS systems, but such a linking is unlikely to happen.

A strategy to promote effective policies against climate change in other countries should take a wider view and for example devote more resources to advise on the introduction of carbon taxes. In the case of China, such a broader approach seems well-motivated.


Moving forward on climate

24/06/2010

 

Today, I was one of the speakers at a climate event hosted by IPPR, Christian Aid and WWF-UK. Below you will find a somewhat expanded version of my introductory remarks on Europe´s role in global climate politics.

——–

Two major questions are posed at this event: 

How can Europe regain its leadership?

How can it get others to follow?

As regards the leadership, I agree that the European Union was sidelined in Copenhagen and that there is a need to learn from that. The present economic crisis and austerity measures might also contribute to weakening the support for ambitious targets.

At the same time, however, it´s important to state that the EU still has what is probably the most ambitious climate policies of the major actors in the negotiations.

My first point is that the EU should not water down its commitments, which might be a real danger if Cancun is a failure and climate moves further down the policy agenda. In the short-term, defending what has been achieved must be part of the strategy.

When it comes to regaining Europe´s influence, the basis of leadership is what you do yourself.

The implementation of the 2008 climate and energy package is very important. Member States have to put forward convincing plans to reach the targets for reducing carbon emissions, improving energy efficiency and increasing the use of renewable energy sources. But Europe also has to move forward on new measures, for example on energy efficiency, carbon taxes and on improvements to the emissions trading system.

So, how do you build support for an ambitious climate policy in a time of crisis? Discussions before and at European Councils is something different from meetings of Environment Ministers.

There are a number of arguments that can convince top-level decision-makers why Europe should continue to take the lead.

First, of course, the risks of climate change. Policy-makers have to understand the dramatic consequences of a 3 or 4 degree change. There is still a tendency not to plan for worst-case scenarios. When public debate is focussing on the economy, it´s even more important  to continue highlighting possible abrupt effects from climate change.

Second, the long-term competiveness of  European industry. By not moving forward, other areas of the world will take the lead in the development of low-carbon technologies – both for climate policy reasons and to improve energy security. There is a real risk of Europe being overtaken by developments around the Pacific Ocean. Look at the green investment packages in China, South Korea. DG Climate Action has put forward an interesting analysis of this subject in a Staff Working Paper accompanying the recent Communication on a possible 30 percent reduction target.

Third, there is the issue about green jobs and green investment as a way out of the present crisis. Austerity measures will probably dominate political debate this year, causing public protests and posing risks of legitimacy to a number of European governments. There will be cuts also in environmental budgets and perhaps in development aid. But it will be difficult for politicians not to take action to reduce unemployment and for example looking at new ways of financing investment in renewable energy and power grids. This is also a lesson from Swedish experience during the deep economic crisis of the 1990s.

Fourth, the link between climate change and security is evident. The foreign and security community is starting to take climate change seriously. Present and potential conflicts in other parts of the world, energy security for Europe, conflicts over natural resources more broadly that feeds in to Europe´s security.  

Fifth, the European Union´s political need for world leadership in a time of shrinking economic influence. The people at the new positions established by the Lisbon Treaty are competing. One positive aspect of these turf wars is that all of them – Van Rompuy, Ashton and Barroso – want to be in the front on climate, at least as long there is not complete failure in global negotiations. I would particularly mention Herman Van Rompuy and his staff as a more important player in the time to come.

With so many strong arguments, I am optimistic that the European Union will continue to move forward on climate policies and play a progressive role in the global negotiations on climate. But to succeed, Europe must learn from the failure in Copenhagen.

That brings me to the second question: How can the EU get others to follow?

To a large extent, I believe the answer is trust.

One reason the EU punched below its weight in Copenhagen was the confidence gap between developed and developing nations. In other negotiations, co-operation between the EU and G77-countries has been important to achieve results: for example on the biosafety protocol of the convention on biological diversity and the export ban in the Basel convention. In Copenhagen, the BASIC countries did the deal with the US, apparently not caring too much about Europe. To change that next time, the EU must build stronger alliances both with countries like Brazil and South Africa, and with poorer countries. (Of course India, China and Russia are also important, but time does not allow me to dwell on those relations).

To build trust with developing countries, there are a number of important issues for the EU:

– delivering on fast-track financing

– supporting the Kyoto protocol as one option for post 2012

– helping countries facing climate-related environmental disasters

– confidence building measures such as developing certification schemes for emission reductions (as proposed by IPPR)

– listening to the concerns of developing countries in other areas of international environmental policies, such as biological diversity and recycling

– considering the way the EU acts in some parts of trade policy. For example the raw materials initiative – better to develop win-win policies than to threaten with economic sanctions. Or the external trade aspects of the EU2020 strategy. How the EU acts on trade issues will affect the level  trust in climate discussions. Look for win-win strategies such as free trade in low-carbon technologies.

– using possible leverage from reform of CAP and fisheries policies. There will not be enough reform in the short-term, but still there could be openings for improving trust. In the long-run, reducing agricultural production and export subsidies is necessary for a global green deal.

– delivering on Millenium Goals, inter alia on official development assistance. The June European Council stayed by the 2015 target for ODA but there is a need to defend this in the wake of the euro crisis.

– improving green diplomacy.  The Lisbon Treaty gives new opportunities, but there is also cause for concern given the present turf wars in Brussels.

Much is to be said about the road to Cancun and South Africa, but time does not allow to go deeper into the negotiating issues. Progress on issues such as forestry, hot air and verification is important. But there is also a need to look at the broader context. In the time frame 2015 – where are we then?

Most important now is to keep momentum. Let not disappointment after Cancun allow the whole process to collapse. If a legally binding agreement on emission targets is not possible in the near-term, agree on a step-by-step process.

One part of such a process could be a stronger focus on Policies and Measures, building on the relevant parts of the climate convention. Progress in this area has stalled since the 1990s.  For example, why not develop a protocol on minimum standards for energy efficiency, based on the UNFCCC?

To summarize: key for the EU is delivering on its own 20-20-20 targets, building trust with developing countries, looking for step-by-step progress in global negotiations based on policies and measures as defined by the climate convention.

Thank you.


Climate breakdown shows need for new EU environmental strategy

20/12/2009

 

After the failure in Copenhagen, many must consider what went wrong. Europe needs to rethink its international environmental strategy.

The European Union can look back at a number of green success stories. Working together with developing nations, Europe played an important role at the Rio Conference in 1992, for the Kyoto Protocol in 1997 and for progress in other fields, such as control of dangerous waste under the Basel Convention and the Biosafety Protocol under the Convention on Biodiversity.

But in Copenhagen, European leaders were sidelined by the US, China, India, Brazil and South Africa. When the deal between Barack Obama and the emerging economies was done, the European Union faced the choice either to agree or to be accused of stopping an agreement in Copenhagen. The press conference where José Manuel Barroso and Fredrik Reinfeldt were going to present the European view was delayed for more than two hours – a sign that discussions among EU Heads of Government were not easy.

José Manuel Barroso and Fredrik Reinfeldt at the Climate Summit. Photo: Gunnar Seijbold/Government Offices

Already before EU co-ordination started, Nicolas Sarkozy said that the deal was done. Once again, the big EU countries acted on their own, making the role of the rotating Presidency difficult.

The Swedish Presidency´s disappointment over the Copenhagen Summit was obvious.

Major fiasco, complete mess, totally inadequate, massive disappointment are words that spring to mind twittered Gunnar Caperius, adviser to the Minister for Environment.

The Minister himself, Andreas Carlgren, wrote on his blog under the title `Disappointed over the Copenhagen outcome´: What happened at the climate conference is really not what I and the EU have worked so incredibly hard for…Yesterday the USA, China, India, Brazil and South Africa made a deal on their own.

Of course, the responsibility rests with many players, mainly the US and China. But the Swedish EU Presidency was too weak, with clear divisions between Andreas Carlgren and Prime Minister Fredrik Reinfeldt.

What lesson can the European Union learn from the climate fiasco?

First, the world has changed. China is flexing its economic muscles more than before. India, Indonesia, Brazil and South Africa are taking a self-confident role on the global scene. The European Union must have a more coherent foreign policy in relations to such countries, not allowing them to divide Member States (as Russia has done on energy policy).

Second, Europe must build stronger alliances with poor countries. During the climate negotiations, Sweden as EU Chair categorically refused to discuss new commitments under the Kyoto Protocol. This attitude provoked many developing countries, and in the end the European Union had to revise its position. Now, EU leaders, and the new High Representative Catherine Ashton, must find ways to increase trust among the poor countries.

Third, environment cannot any longer be seen isolated from trade and development policy. The refusal by China and India to move forward on binding climate commitments will certainly increase calls for border tax adjustments and other restrictive trade measures. That is a dangerous route.

The EU should instead use the review of the Common Agricultural Policy and the negotiations on the next long-term budget to reduce trade barriers and subsidies, and use this leverage to convince major partners to move forward on climate.


The Swedish Presidency: Effective but not Exciting

14/12/2009

 

It is too early yet to make a final assessment of the Swedish EU Presidency. Negotiating a climate treaty in Copenhagen is the most important goal for Fredrik Reinfeldt and his colleagues. At the end of the week we will know if this aim was achieved.

However, it is possible to summarize progress so far in other fields.

As others have noted, it has been a low-profile but effective Presidency. Sweden moved issues forward that were already on the agenda. One contributing factor has been the many skilled civil servants and diplomats in the Swedish administration.

After Ireland´s yes-vote, Fredrik Reinfeldt was successful in convincing Vaclav Klaus to sign the Lisbon Treaty. That was an important achievement, allowing the new Treaty to enter into force on 1 December. It paved the way for the appointment of Herman Van Rompuy and Catherine Ashton to the two new top positions in the EU.

Fredrik Reinfeldt´s leadership has been compared to a Volvo diesel, running at an even speed in a reliable way. In some areas, however, it would have been better with a modern eco-car with more acceleration.

It is hard to find many areas where Sweden really pushed the European agenda forward during these six months. Yes, an EU presidency should act in the interest of the whole Union, but it had been possible to take more initiatives during 2007 and 2008 that had been mature for decisions this autumn.

Environment is a case in point. The Swedish government was late in its proposals regarding the EU Sustainability Strategy review, and has taken few initiatives in areas such as chemicals, waste and biological diversity. The talk about `eco-efficiency´ did not lead to concrete decisions.

In some areas the reasons are ideological.

The centre-right government in Stockholm did not want to review the controversial directive on posting of workers, after a heated debate in Sweden regarding the Laval case. The conclusions at the December Summit on the post-Lisbon strategy do not contain much on good working conditions, gender equality or anti-discrimination, but these issues were never a real political priority for Reinfeldt´s Presidency.  

It is harder to understand the lack of initiative in areas such as environment or consumer protection where political parties in Sweden´s coalition government have traditionally had strong views.

Of course, there are exceptions.

Enlargement is perhaps the most important success story of the Presidency. Carl Bildt and his skilled collaborators played an important role behind the scenes to break the impasse in Croatia´s membership negotiations. There was also progress for Serbia and other parts of ex-Yugoslavia. Iceland started its route towards membership.

Carl Bildt also secured agreement on the European External Action Service. The Swedish Foreign Ministry did more to prevent a new Georgia crisis this summer than is publicly known, and managed (at least so far) to hold the EU together on Iran.

Justice Minister Beatrice Ask convinced her colleagues about a new Stockholm Programme with more focus on fundamental rights than before (her colleague Tobias Billström, however, was not able to change the repressive character of migration policy in Europe).

Health Minister Maria Larsson tried to hold the EU together in its response to swine flu and moved the issue of better antibiotics forward – an underestimated policy area.

But more often than not, Sweden followed the will of the big EU countries, for example on the appointment of Herman Van Rompuy and Catherine Ashton.

At a remarkable event, France met with 21 other countries to discuss the future of agricultural policy, excluding Britain and Sweden – a clear provocation to the EU Presidency. The deal on financial supervision allowed the UK to retain national control over its financial sector, while the Swedish government watered down proposals on the regulation of alternative investment funds.

The Swedish Presidency was much better than the Czech, but it was in some ways also an opportunity lost.

Now in Copenhagen, the EU position is to abandon the Kyoto protocol without having a new binding treaty to put in its place.

That is not very promising for the final assessment of the Presidency.

[UPDATE Sweden´s first EU Presidency took place in 2001. A detailed description is now available in my book “Anna Lindh och det nya Europa”. More information at www.annalindheuropa.se.]