The European Environmental Conscience in EU Politics

A Developing Ideology

Thomas Hoerber, Gabriel Weber, Thomas Hoerber, Gabriel Weber

• Publisher: Routledge
• Year: 2021
• Topic: Politics & International Relations
• eBook ISBN:
  9781000509267
• Subtopic: European Politics
• Index: Politics & International Relations

Based on empirical studies of European energy and environmental policies, this book suggests that, in combination, these two policy fields form a consensus in the EU which might also become the basis for a new European ideology, namely European 'sustainabilism'.

It asks why an environmental conscience has grown since the late 1960s in the industrialised world and shows that whilst there is undeniable environmental degradation during this time, and that a European environmental conscience has mainly developed through successive steps of European integration in energy policy. In this connection between energy and the environmental we find one driver for European integration and indeed European identity. If sustainabilism should become a European ideology, it will substantially influence the way future Europeans will live.

This book will be of key interest to scholars and students of European Studies, International Relations, Political Science, History, Economics, Sustainability Studies, Environmental and Energy Policies in Europe.

Part 1 Energy and environment in the European Union

1A linked emissions trading scheme under alternative scenariosImplications for Europe and Brazil

Thais Diniz Oliveira, Angelo Costa Gurgel, and Steve Tonry

DOI: 10.4324/9781003022855-3

Linkage of national climate policies is increasingly gaining relevance in the climate policy architecture, especially after the provisions introduced by the Paris Agreement. Article 6 of the agreement provides the foundation for carbon pricing at the international level to comply with Nationally Determined Contributions (NDCs). Although not explicitly mentioned as “Emissions Trading”, the agreement envisages the use of “internationally transferred mitigation outcomes” (UNFCCC, 2015, p. 7) to achieve significant progress on emissions mitigation.

In light of that, developing countries are encouraged to also take action with the support of developed countries. In the past, developing countries had been involved in climate change mitigation through flexibility mechanisms, as hosts of Clean Development Mechanism (CDM)¹ projects, or, in some cases, by committing to voluntarily reducing emissions. A nationwide Chinese emissions trading scheme (ETS) has been launched recently, following several years of experience with subnational pilot markets (see Barnes, Li, 2021: in this book). The nationwide Korean ETS has been active since 2015 and envisages cooperation with New Zealand in the future (World Bank et al., 2017).

Carbon trading is likely to become even more common post-2020, as further countries plan or at least investigate the potential for ETS adoption.² As a result, linkages have the potential to develop among participants in the future.

To date, a small number of active national and subnational carbon markets are involved in or are open to the concept of ETS linkages. Examples include the California, Quebec and Ontario link (the Western Climate Initiative, WCI) and the Regional Greenhouse Gas Initiative (RGGI) in the northeast of the US. The European Union Emissions Trading Scheme (EU ETS), the largest and most consolidated system in the world, displays willingness to link with other compatible systems, which means other ETS systems with similar environmental integrity and system architecture could potentially link up. There is currently a Norway-EU linkage, which also regulates the aviation sector. Literature in this regard underlines potential opportunities from the use of market-based instruments in a framework of international cooperation, since aggregate emissions reductions are achieved at a lower cost (Bodansky et al., 2014; Burtraw et al., 2013).

In this research, linking occurs exclusively through cap-and-trade schemes set up at the country level. Under this approach, there is a price for pollution which equates marginal abatement costs (MACs)³ between regulated jurisdictions, thereby increasing access to abatement options and making it possible to attain the proposed mitigation target at a minimum cost to society. Hence, the system with a higher pre-link carbon price benefits, as it can buy cheaper allowances, whereas the system with a lower pre-link price gains as a result of higher abatement and the sale of allowances. Besides contributing to greater cost-efficiency, linking ETS systems can increase market liquidity and potentially lower the risk of carbon leakage. The concept of carbon leakage refers to incentives for polluting activities to move to jurisdictions with less stringent climate regulation, where production costs do not account for emissions reductions.

Some aspects need to be considered when deciding on linking. For instance, one can mention existing differences on the level of ambition, the ETS design and regulatory rules, potential domestic distributional impacts and political support. Rather than enhancing environmental effectiveness, a bilateral link where the relative stringency of targets or the design features of the ETS differs among participants may impair climate protection. Engaging in linkage demonstrates the effort to establish comparable caps and to attract political support to reduce emissions. On the other hand, it can also show that lower ambition is acceptable or that there is a loss of national regulatory control. Another potential issue of linking ETS is the regional disparities associated with distribution of financial transfers from permit trading between partners. An option to alleviate those effects is recycling those revenues obtained.

The EU ETS is the largest and most consolidated system in the world, which accounts for 45% of the EU’s emissions of power generation, energy-intensive industries and aviation sectors. Several studies have been carried out in order to evaluate linking with the EU ETS, including the possibility of linking with non-EU schemes such as South Korea, China, Australia and California. Some of these studies investigated the effects of sectoral ETS linkage under different circumstances. For instance, Gavard et al. (2016) modelled a sectoral ETS on electricity and energy-intensive industries in the EU, the US and China, simulating autarky (i.e. domestic ETS without engaging in international trade of permits) and linkage scenarios. Hübler et al. (2014) assessed a Chinese ETS regulating energy-intensive industries, electricity, heat, petroleum and coal products considering a potential cooperation with the EU ETS. Results from these studies showed an increased adoption of low-carbon technologies, a lower international leakage and generally a greater degree of acceptance from developing countries to participate in the carbon market set by developed countries.

The framework introduced as part of this chapter considers linkage implications of a hypothetical Brazilian ETS with a similar sectoral coverage to the aforementioned studies. Among developing countries, Brazil has historically taken on a pioneering position when it comes to commitments to mitigate climate change. With approximately 3% of global emissions in 2014, Brazil agreed to reduce emissions by 37% and 43% of 2005 levels by 2025 and 2030, respectively, in addition to a commitment to stop illegal deforestation (Brazil, 2016).⁴

Notwithstanding the relatively low-carbon intensity of the energy mix, Brazil still relies on the production and consumption of fossil fuels, which has the potential to hinder genuine carbon mitigation towards sustainable levels. Therefore, climate policies aimed at energy-related sectors are required to help achieve national climate goals, as they correspond to approximately 36% of total emissions.

The Brazilian government has been supporting, in association with the World Bank, the Partnership for Market Readiness (PMR), a comprehensive group of studies based on carbon pricing for the post-2020 period. The legal principle for implementing market-based mechanisms to emissions mitigation was previously set up in the National Climate Change Plan (or PNMC in Portuguese) under Articles 4 and 6, even though there is a lack of detailed information on the market regulation. However, Brazil has not yet defined or even decided on whether to implement a domestic ETS. In addition, the current conservative agenda of President Jair Bolsonaro’s administration has undermined the leadership role of Brazil in implementing climate policies, thereby hindering the development of a national environmental consciousness. The recent events of deforestation in Brazil have revealed the devastating consequences of this policy orientation in environmental terms. Despite political uncertainties, the scientific community, public and private sectors, as well as NGOs have played an important role in discussing and promoting climate mitigation in Brazil (Oliveira et al., 2019) which would suggest that there is grass-roots support and commitment for progress – which are attributes consistent with an environmental conscience in Brazil.

The arrangements for market instruments in the Paris Agreement may encourage Brazil to design a carbon trading system. By taking the lead, Brazil may encounter new opportunities for climate cooperation with developed systems, the EU ETS being a potential candidate. This is due to the fact that the EU ETS displays a willingness to link with other compatible systems, which means that other ETS systems with a similar environmental integrity and system architecture could be a potential trading partner. By agreeing on integrating a common ETS, the EU would be asserting its political leadership, thereby expanding the European environmental conscience outside regional borders. According to Hoerber (2013), European integration in energy policy was a key strategy in the development of an environmental conscience and European identity, as discussed in this book. The ETS linkage would enable Europe to export its environmental conscience approach, including the need to pursue more ambitious climate policy objectives.

The proposed climate cooperation between Brazil and Europe would develop on trade relations between the partners to date. In 2016, the EU was Brazil’s second biggest trading partner with 18.1% of total Brazilian exports (Ministério das Relações Exteriores/Departamento de Promoção Comercial e Investimentos/Divisão de Inteligência Comercial, 2016). The establishment of the Brazil-EU strategic partnership in 2007 created space for the EU to share its environmental principles in order to strengthen the bilateral political dialogue. The focus of the partnership was for Europe to provide financial and technical cooperation on topics such as climate change, sustainable energy, science and technology. The effectiveness of these efforts in terms of promoting consciousness of climate change is questionable due to the limited advances in implementing concrete measures to date.

From the perspective of external environmental policy, this promotion of climate change standards outside of the EU is a key strategy the region has been adopting. The EU has been a major influential player in international climate diplomacy and negotiations, providing incentives and “capacity building” to developing countries (Dupont et al., 2018, p. 105). Given the slow progress towards a multilateral cooperation, the EU has been attempting to use its influence to incentivise external developments on climate policy either “by example” or by its internal legislation through bilateral settings.

Across a broad range of environmental issues, there is a comprehensive body of climate change law and policy to serve as an example for other regions. Lessons learned from the EU ETS are especially valuable experiences for the EU to disseminate to countries currently planning or implementing national ETS (Morgera and Kulovesi, 2012, p. 14). The EU ETS is one key element of the climate and energy policy package which entails mechanisms for allowing climate engagement at the multilateral level which are at the core of the EU international climate policy strategy (EU Commission, 2009). Once implemented, the ETS linkage cooperation may offer opportunities for Europe to retain and even enhance its leadership position in international affairs. Three factors are relevant for this role, namely, a credible and ambitious domestic climate policy, effective international engagement through climate diplomacy at several levels and the ability to attract followers (Dupont and Moore, 2019).

Considering the urgency in addressing environmental problems, arrangements for bilateral ETS linkages are innovative solutions whereby developing countries may take part. The implications of such proposals have to date not been investigated as carbon pricing and related linkages have just emerged as a reasonable alternative ...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• List of contributors
• Acknowledgements
• Introduction – the European environmental conscience in EU politics
• Part 1 Energy and environment in the European Union
• Part 2 Environmental policies in the European Union
• Index