Climate change action is central to Europe’s growth strategy, but not yet to European foreign policy.
The past year saw a step-change in the role of climate in European socio-economic planning. In response to the economic hardship caused by the pandemic, recovery funds were dedicated to advancing (30%) or doing no significant harm (70%) to the Continent’s green transition.
Will 2021 be the year the EU leverages its hard-won climate progress for a role in shaping the rules of an emerging global clean economy? Can it cement itself as a geopolitical player in the international climate conversation as the US re-enters the field? In short, will we see the emergence of next generation EU diplomacy that puts the transition to a climate-safe world front and centre?
Why European climate leadership still matters
On January 25th, just days after the US Presidential inauguration, all 27 European foreign ministers will meet to discuss EU energy and climate diplomacy in 2021. The conclusions from these meetings are normally a niche affair, centred around negotiations at the annual UN climate change summit (COP). However, with climate action becoming more important to European economic interests and geopolitical relationships, there are at least three reasons why European foreign ministers should consider kick-starting a step-change in EU foreign policy:
- 2021 is a critical year for climate action. The next year could either set the globe up for a decade of deep decarbonisation or conversely, lost development. Swift and coordinated diplomatic action from all potential climate leaders – from the EU to the UK, to the US, to vulnerable countries – will make all the difference. With its strong domestic commitments Europe now has the credibility to push for global climate action. We need to see diplomatic alliances broker the big political decisions around green recovery investments to ensure all countries have access to finance for green resilient recoveries.
- This year could determine whether the EU is part of shaping new global economic and financial rules. The G7 is soon to turn into a net-zero club and the EU, US and China are gearing up for significant public investments in the green transition. Competition for the emerging clean economy is already emerging – for market shares, critical resources, and new supply chains – and soon, for who will set the standards. Currently, Europe’s ahead of the game when it comes to clean economy and sustainable finance regulation and has the market power to build alliances around high quality standards. Taking a leadership role means shaping rules that support its own long-term competitiveness in growing green markets, an opportunity not to be missed. But it will need to significantly invest in outreach to trade partners and competitors – essentially in diplomatic capacity – to fully realise this potential.
- The EU and member states’ climate literacy and leadership ambition will be put to the test this year as climate cooperation with the US ramps up. Both the US and China have made multilateral climate action part of their geopolitical positioning. The Biden administration has gone one step further and appointed the most climate–literate cabinet to ever grace Washington D.C. (some may argue anywhere). Foreign Affairs ministers can prepare themselves by agreeing to clear EU priorities for diplomatic outreach and alliance building, particularly with the US.
With Italy chairing the G20 and co-chairing COP 26 with the UK this year, Europe has a means to act. There are also other bilateral efforts like the proposed transatlantic agenda for global cooperation and numerous international trade and investment negotiations likely to run through much of 2021.
The next year could either set the globe up for a decade of deep decarbonisation or conversely, lost development. Swift and coordinated diplomatic action from all potential climate leaders – from the EU to the UK, to the US, to vulnerable countries – will make all the difference.
What does putting climate at the centre of EU diplomacy look like?
- Recognising the critical path to climate ambition in 2021, and a successful COP 26, runs through a global green recovery and international cooperation. Doing so ensures all countries will have access to vaccines plus the fiscal space to investment in a recovery compatible with the sustainable development goals (SDGs) and Paris commitments. With many countries struggling to stay solvent and deliver vital public services, investing in green transitions and achieving higher climate targets remains an unthinkable luxury for many. Active European diplomatic outreach and alliance-building for international solutions to unlock capital for developing countries would be a welcome step. Europe could also give guidance and support for greening economic recoveries.
- Leveraging regulatory expertise while tackling tensions over Carbon Border Adjustment Mechanisms (CBAM), green trade conversations and emerging green economy standards. Issues around climate and trade, a level playing field post green stimulus spends and emerging green economy standards are set to escalate in 2021. The EU will have to decide how much it wants to proactively shape a cooperative approach to these issues. A maximalist approach would see the EU initiating comprehensive diplomacy with major clean technology and carbon intensive trading partners. It would also mean significant diplomatic outreach on aligning international approaches to sustainable finance and green bonds standards. At the least, the EU should consider diplomatic outreach to key partners in the US, major economies and the European neighbourhood around cooperative approaches to implementing Carbon Border Adjustment Measures.
- Re-centring European energy diplomacy around a on sustainable energy transition. As recently outlined in our “Energy diplomacy beyond Pipelines” report, the European Green Deal will have far reaching implications for fossil fuel consumption. If the European Green Deal is to serve core strategic interests, there needs to be fundamental transformation of the EU’s approach to energy diplomacy. One of the most immediate tests in 2021 will be whether European diplomacy gets behind the growing momentum on ending public finance for fossil investments.
Delivering this proactive approach will require the EU – both the Commission and member states – to continue significantly growing dedicated climate, energy, and clean economy diplomatic capacity. Given all the benefits outlined above – isn’t it worth investing in the next generation of EU diplomacy?