Category: Environment

Barroso, left, at Thursday's news conference with Denmark's Thorning-Schmidt in Copenhagen

A good chunk of the Brussels press corps has been in Copenhagen this week for the formal kick-off of Denmark’s turn at the EU’s 6-month rotating presidency. Days of back-to-back ministerial briefings and ceremonial events have focused intensively on the Danish government’s “green growth” agenda – down to the green skirt-clad Danish National Girls Choir performing “Plant a Tree” at a concert attended by EU bigwigs Wednesday night.

But when it came to today’s official handoff of the EU reins to Danish prime minister Helle Thorning-Schmidt, there was a slight hiccup: Denmark’s Vestas, the world’s largest maker of wind turbines, chose the same day to announce it was cutting 2,335 jobs – most of them in its home country.

Is it possible that people are overreacting to the crisis at Japan’s stricken Fukushima nuclear facility? That is certainly the belief of Aris Candris, chief executive of Westinghouse Electric, one of the world’s largest suppliers of nuclear reactors.

During a visit to a corporate retreat on the outskirts of Brussels, Candris took time to give the Brussels Blog his view of the crisis, one that is sure to inflame the nuclear industry’s many critics, particularly in continental Europe.

While Candris understands the hysteria caused by the accident, he predicts that its impact on public health will ultimately be quite small, with most people living in the evacuation zone around the plant exposed to no more radiation than a typical x-ray.

“We’ve done a piss-poor job of communicating with the general public,” he told the Brussels Blog. “It’s unfortunate that we have a shared heritage with the bomb, which scares the hell out of people.”

The European commission has asked member states to begin testing imported Japanese food for increased radiation levels, although officials believe that health risks for consumers are low.

That assessment is based on the fact that Japanese agricultural exports to the European Union are limited to begin with – particularly from the affected regions. Moreover, the disruption and devastation from the earthquake and tsunami are likely to reduce those exports even further.

Among the hundreds of confidential US diplomatic cables disclosed by WikiLeaks thus far, very few have dealt with Washington’s relations with the EU. But occasionally, EU leaders have popped up in summaries of other international events in which they have only tangentially been involved.

The most pointed EU-related revelation to be released thus far comes in a 2008 cable from the American embassy in Moscow following French President Nicolas Sarkozy’s heated September 8 confrontation with Russian Foreign Minister Sergei Lavrov over the Kremlin’s invasion of Georgia.

The US account of the “at times…openly hostile” meeting, where Sarkozy “at one point grabbed FM Lavrov by the lapels and called him a liar in very strong terms,” has been reported widely. Less noticed, however, was Moscow’s reception of José Manuel Barroso, the European Commission president.

In a section labeled secret and “noforn,” meaning it was not to be shown to non-American officials, an unnamed French source retells how “the Russians treated Barroso harshly and condescendingly, and tried to exclude him from many of the sessions.”

A wall of resistance from European Union governments and industry stands in the way of the efforts of Connie Hedegaard, the EU’s climate action commissioner, to secure a pledge from the 27-nation bloc to cut its greenhouse gas emissions by even more than it is already committed to doing.

Hedegaard contends that the EU can afford to set itself higher targets, because Europe’s recent recession – the worst in its history – reduced economic activity and so slashed the cost of meeting the goals set in 2008.  The EU’s basic target is a 20 per cent cut in emissions by 2020 from 1990 levels.  Hedegaard would like to raise the target to 30 per cent, thereby maintaining Europe’s self-image as the frontrunner in world efforts to tackle climate change.

If you’ve been breathing a bit easier of late, there may be a reason: carbon dioxide emissions covered by the European Union’s cap-and-trade system fell a remarkable 11 per cent last year, according to preliminary data released by the European Commission. That is the biggest one-year fall since the emissions trading system began five years ago.

Unfortunately, the drop was not owing to the sort of forward-looking, green technology investments so frequently touted by Commission president José Manuel Barroso. Instead it was an unintended gift from the worst economic crisis since the Depression, which has slowed industrial activity. In weight loss terms, this is a bit like shedding 5 kilos through the accident of a stomach flu as opposed to the sustained virtue of diet and exercise.

What does 2010 hold in store for the European Union?  With people in Brussels only just drifting back to work after a couple of weeks of snow, sub-zero temperatures and seasonally adjusted flu, it seems too brutal to plunge straight into topics such as the “2020 Strategy“, the “Reflection Group“ and other elusively named EU initiatives of which we are certain to hear more as the year moves on.

What one can say is that the EU ended 2009 feeling rather more pleased with itself than perhaps it had expected 12 months previously.  Despite suffering the most severe economic contraction in its history, the EU avoided a meltdown of its financial sector, stuck fairly well to its rules on fair competition and free trade, and even witnessed a return to growth in certain countries.

Of course, survival came at a heavy price.  The sharp increase in budget deficits and public debts incurred as a result of the crisis has not only wiped out all progress achieved on Europe’s fiscal front since the euro’s launch in 1999.  It has also prompted concern about the ability and willingness of the hardest-hit countries, such as Greece, Ireland and Spain, to make the sacrifices in living standards and adjustments to public policy that will be necessary to stay in the same monetary union as Germany.  And the fiscal condition of the UK is truly terrible.

The EU can take pride in having modestly advanced its enlargement process in 2009.  This was never going to be easy in a year of such harsh economic conditions.  But in the end there was progress to report for a clutch of aspirant countries, notably Albania, Croatia, Iceland, Montenegro and Serbia.  Against that, one has to state bluntly that it was a bad year for EU attempts to stabilise Bosnia-Herzegovina.  This could return to haunt the EU in 2010.

Then there was final approval of the Lisbon treaty – a matter of almost total indifference to the non-European world, but a cause dear to the hearts of EU policymakers, who had battled valiantly for almost a decade to change some of the rules governing the way the EU goes about its business.  Nothing spoke more eloquently of the importance of this formidably obscure document than the relief on everyone’s faces after Irish voters said Yes to the treaty in October, and after Czech President Vaclav Klaus dropped his objections to it a few weeks later.  The Lisbon rules won’t transform the EU, but there is – for the moment – a collective will to make them work for the general interest.

What about the bad omens of 2009?  If one was Bosnia, another was the EU’s inability to achieve much in the grey zone of former Soviet states that divides the bloc from Russia and is increasingly turning into an area of political and economic rivalry.  The EU’s optimistically named Eastern Partnership took off in May, but its credibility was undermined by a lack of funding and by the absence of most of Europe’s top leaders at the Prague launch event.  In 2010 Ukraine, which holds a landmark presidential election on January 17, willl be the key country to watch.

Probably the most worrisome omen was the dénouement of the Copenhagen world conference on climate change, when the EU found itself abruptly frozen out as a handful of other states, led by the US and China, tried to frame the final compromises.  As Carl Bildt, Sweden’s foreign minister, told me a few days later: “We’ve been taught some lessons about the realities of the so-called multipolar world.”

Quite so.  If I were to hazard one prediction about 2010, it is that Europe will receive one or two more lessons on the same subject.

The biggest fights at European Union summits are usually about money.  It’s no different this time.  At their final summit of 2009, the EU’s 27 national leaders have been wrestling in Brussels with the question of what contributions each country should make to a “fast-start” fund to help developing countries address climate change.

It looks as if EU governments will come up with an offer of about €2bn a year – much of it coming from rich countries such as France, Sweden and the UK - for the three-year period of 2010 to 2012.  “Anything above €2bn will be an impressive offer,” European Commission president José Manuel Barroso said this morning.

That, of course, is not how many developing countries will see matters.  Some will regard a sum of €2bn as pitifully small.

Nevertheless, a EU offer along these lines would represent about one-third of the amount that Yvo de Boer, the top United Nations official for climate change, says is needed from advanced nations to generate immediate action on climate change in developing countries.  The rest is supposed to come from the US, Japan and other highly industrialised nations.

Inside the EU, the problem is that some member-states, especially in former communist eastern Europem are significantly less well-off than others.  They are reluctant to stump up money for non-EU countries that are classified as “developing” but have millions of affluent citizens.  As Barroso put it: “The situation in Bulgaria and Romania is not the same as in Germany and Denmark.  We cannot ask EU countries under International Monetary Fund programmes, or with huge deficits, to make very considerable efforts.”

It goes without saying that, if disputes as bitter as this are breaking out over relatively small sums of financial aid, imagine how difficult it will be to persuade the world’s rich countries to part with the far larger amounts that are likely to be necessary in the medium term.  The EU estimates that by 2020 developing countries will face annual costs of about €100bn to fight climate change.  Not all of that will come from advanced nations, but a fair proportion will have to.  And we are likely to see the same battles going on in the EU about who should pay as we are today.

On Tuesday a numerically impressive delegation of Europeans will be in Washington for the first formal US-European Union summit since Barack Obama’s presidential inauguration last January.  Fredrik Reinfeldt, Sweden’s prime minister, will be there in his capacity as leader of the country that holds the EU’s rotating presidency.  So will Carl Bildt, Sweden’s foreign minister.  So will Javier Solana, the EU’s head of foreign policy.  So will Benita Ferrero-Waldner, the EU’s external affairs commissioner.  So will José Manuel Barroso, the Commission president – and from what I hear, a few other bigwigs are going along for the ride as well.

This is quite a turnout.  It would be nice to think it reflects an exceptionally warm and constructive relationship between the Obama administration and its EU allies.  But as a timely new report by the European Council on Foreign Relations points out, the real picture is less rosy.  “To Americans, these summits are all too typical of the European love of process over substance, and a European compulsion for everyone to crowd into the room regardless of efficiency,” write the authors, Nick Witney and Jeremy Shapiro.

In 2001 President George W. Bush was so taken aback by his first experience of EU-style summitry that he halved the frequency of the US-European meetings to once a year.  Last April, however, the Europeans managed to entice Obama into visiting Prague for a session with all 27 EU heads of state and government.  “Administration sources are frank that Obama’s encounter… left him incredulous,” say Witney and Shapiro.

One sympathises.  Even Europeans know that their inability or reluctance to put a sensible limit on the number of people who represent them is a weakness.  How much worse it must be for a practical, results-oriented kind of guy like Obama.  He would surely like nothing better than a summit where the Europeans speak with one voice and don’t need a dozen limousines to get them to the White House.

But it’s a problem that shows no sign of going away.  Take the G20.  This increasingly important group, which brings together the world’s leading industrialised and developing countries, does not in fact have 20 faces around the table but 24, of which eight are European.  It’s much the same at the International Monetary Fund.  And when the EU started formal consultations on exchange rates and other issues with China’s leaders two years ago, they sent three people to Beijing – Jean-Claude Trichet, the European Central Bank president; Jean-Claude Juncker, Luxembourg’s prime minister and the head of the 16-strong group of eurozone finance ministers; and Joaquín Almunia, the EU monetary affairs commissioner.  That might just have been acceptable, except that a separate European delegation was in Beijing at the same time for a EU-China summit, and President Nicolas Sarkozy of France was also flying around China doing his own thing.

Will the situation improve once the EU has its first full-time president, one of whose tasks will be to represent the EU in external relations?  Unlikely.  At times I have the impression that the regular bilateral summits with the US, China, Russia, India, Japan and so on don’t even mean a great deal to EU leaders.

I well remember a EU-South Africa summit held in Bordeaux in July 2008.  Sarkozy, who represented the EU because France held the bloc’s rotating presidency, hosted Thabo Mbeki, the former South African president.  But Sarkozy left the summit early because he had a more pressing engagement in Paris on the same day.  With whom?  Barack Obama… then a mere presidential candidate.

According to an opinion poll, more than half of Denmark’s population has little or no confidence that world leaders will strike an agreement on fighting climate change at December’s landmark United Nations summit in Copenhagen.  It is just a hunch, but I reckon one impulse behind this pessimism is the widespread European suspicion that China, which recently overtook the US as the world’s biggest greenhouse gas emitter, will play an unconstructive role at the talks.

What if this suspicion is unfounded?

China’s official position is that the US, Europe and other developed regions bear the primary responsibility for cutting emissions.  In spite of its rapid economic growth, China regards itself as a relatively poor country that, on a per capita basis, consumes much less energy than the developed world.  China had no binding emission targets under the 1997 Kyoto Protocol and may well refuse to accept such targets at Copenhagen.

But too few Europeans recognise that China’s leaders know they have a climate change problem and fully intend to deal with it.  According to the authoritative International Energy Agency, Chinese carbon emissions from fossil fuels soared by 129 per cent between 1990 and 2005.  Coal accounts for 70 per cent of China’s energy consumption and oil for another 20 per cent.  As China’s economic growth continues, so will the country’s urbanisation, a process that will greatly increase demand for energy.  Curbing emissions is now a national necessity.

China’s leaders certainly do not take kindly to lectures on climate change from politicians in the developed world.  However, as Duncan Freeman and Jonathan Holslag argue in a recent paper for the Brussels Institute of Contemporary Chinese Studies, this doesn’t mean the Chinese authorities haven’t given serious thought to the question.  For example, the 11th Five Year Plan for 2006-2010 set a target of a 20 per cent cut in energy intensity per unit of gross domestic product by next year.

Under a 2007 initiative, China aims to increase the share of renewable energy in total primary energy consumption to 10 per cent by next year and 15 per cent by 2020.  China is often portrayed in Europe as a country so hell-bent on economic growth that it is opening one new power plant every week.  Less well-known is that China operates a shutdown programme that in recent years has closed more than 7,000 small and inefficient power stations.

As in Europe, Chinese leaders are trying to use their fiscal stimulus, adopted to tackle the global financial crisis and recession, as an opportunity to put a “green” accent on industrial policies.  According to analysts at HSBC bank, about 38 per cent of China’s package is “green”, covering investments in railways, power grids, the environment and energy efficiency.

The European Union, which adopted a widely publicised climate change plan in December 2008, likes to portray itself as the world leader in the field.  Increasingly, however, what distinguishes the EU from China is method, not content.  The Europeans, multilateralists by instinct, like to set things down in binding international agreements.  China, notoriously prickly about its sovereignty, is less keen on this approach.

But this doesn’t mean China isn’t determined to fight climate change.  It just means China’s policies will be driven by domestic considerations rather than international pressure.

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Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.

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