The Environmental Union

BLISS was it in that pre-Lehman dawn to be alive. But to be European was very heaven. Before the world economy turned turtle in 2008, the European Union presented an attractive face to the world. Its scepticism about military force and love of global rules was a welcome counterweight to the cowboy unilateralism of George Bush’s America. The issue of climate change presented a golden opportunity for Europe to flex its soft power, economic muscle and high-minded internationalism for the good of mankind. Perhaps, mused some, the EU should rebrand itself the “Environmental Union.”

The crash, and the devastation unleashed across the euro zone, put paid to all that. But the environment is back. At their most recent summit, on October 23rd and 24th, Europe’s heads of government agreed on a climate and energy package that obliges the EU to ensure that by 2030 its emissions of greenhouse gases will be at least 40% lower than in 1990. To achieve that goal, each of the 28 members will have to meet its own legally binding target (these remain to be set). The deal succeeds an earlier one, signed in 2007, under which the EU agreed to a 20% emissions cut by 2020. It is supposed to pave the way to a reduction worth 80-95% by 2050.

The agreement was hard-fought and complex even by EU standards. Poorer countries such as Poland, which relies on coal for 90% of its electricity, demanded and won various sweeteners to ease their transition to cleaner fuels. Two “sub-targets” of 27%, on the renewable share of the energy mix and on improvements to energy efficiency, were included in the deal but have no teeth (the renewables goal is binding only at “EU level”, which leads one to wonder if the club will sue itself should it be missed). Spain and Portugal secured commitments to let them export surplus energy over the Pyrenees into France. An accommodation was even found for Ireland’s methane-belching cows.

It is not enough, growled the green lobbyists. They fumed that the targets will leave too much to do to meet the 2050 goal, because later cuts will be much harder to make than earlier ones. A more ambitious deal was probably politically impossible. But such complaints obscure the deeper truth: that Europe is on its way to becoming an emissions pygmy. In 2012 the EU accounted for only 11% of global greenhouse-gas emissions, next to 16% for the United States and 29% for China. And that number will continue to shrink as Europe’s economy declines relative to the rest of the world.

Developing countries argue that Europe has historical responsibilities to discharge, given the cumulative heat-trapping effect of its emissions over the centuries. Fair enough. But one reason why officials were so keen to strike a deal now is that on the climate (if on little else), the European example—they believe—can still inspire others. They hope that at a conference in Paris in December 2015, world leaders will be ready to sign a climate-change compact to govern emissions after 2020, having failed to do so in Copenhagen five years ago.

Indeed, in the run-up to last week’s meeting, officials wove a happy fable in which the EU deal would trigger movement in America, which in turn would inspire China. An “at least” formulation was attached to the 40% goal, enabling the EU to ratchet up its contribution if others show similar ambition.

Nor is Europe’s influence confined to the “soft” realm of cajoling and persuasion. Officials in California, for example, made several fact-finding visits to Brussels to investigate the EU’s emissions-trading regime when preparing their own, the world’s second-largest (it has since been extended to Quebec). Before its launch two years ago the Californians told sceptics that they had learned important lessons from the European example—even if these were largely about what to avoid.

The first cuts are the deepest

Like so many predecessors, the Paris conference will be billed as the world’s last chance to avoid calamitous climate change. This time, developments elsewhere may offer slightly more justification for the wilder hopes of European officials, especially when compared with 2007. Barack Obama, who has been flexing his regulatory muscles at home, has an eye on his environmental legacy, even if a Republican-controlled Congress will do its best to thwart him. The Chinese have hinted they may offer a date by when their carbon emissions will peak.

So the power of the European example may not be a complete figment of officials’ imagination. But its power is waning. Already relatively green, the EU risks being taken for granted in global climate negotiations; it is hard to imagine influential countries—China, say, or America—making concessions to win the Europeans over. The emissions-trading scheme, which covers 12,000 industrial polluters and half of Europe’s total carbon emissions, is at the heart of the EU’s plans—and it is a farce. The market is massively oversupplied with permits, which now trade for little more than €6 ($7.60) a tonne, meaning there is little incentive to ditch dirty fuels. Europe is actually burning more coal than ever. An Anglo-German plan to accelerate a withdrawal of permits from the market should help, although the Poles will yet again have to be talked round.

Although the EU will easily meet its 2020 target, that is thanks largely to its sickly economy. Recession is no remedy for climate woes. Indeed, the green rhetoric from European officials has lately taken a growth-friendly turn; with unemployment high and growth prospects flat, citizens will not take kindly to energy-price rises. As they translate their climate pledges into policies, Europe’s governments will have to tread carefully if they are to lead the world without leaving behind their voters.