Moderator

Jos Delbeke, European Investment Bank Climate Chair, School of Transnational Governance, EUI

Speakers

Susanne Droege, Senior Fellow, Global Issues Division, German Institute for International and Security Affairs

Billy Pizer, Professor of Public Policy, Sanford School of Public Policy

Vangelis Vitalis, Deputy Secretary, Trade and Economic Affairs, New Zealand

Through its commitment to climate neutrality by 2050, and a 55% reduction by 2030, the EU sets a high standard for the implementation of the Paris Agreement. The main policy instrument applicable to most companies in the energy and manufacturing sectors is by setting a price on carbon through its EU Emissions Trading System. To limit the risk of carbon leakage and to encourage other countries to up their ambition, the EU is preparing for a Carbon Border Adjustment Mechanism (CBAM) that would ensure a level playing field for industrial commodities. One can anticipate major political opposition to such a measure from trading partners such as Russia, China and the US. Furthermore, major ‘technical’ questions such as on comparability of climate policy measures will have to be addressed, while the European Council has endorsed the idea of making the CBAM a new EU ‘own resource’ to finance the ‘Next Generation EU’ borrowings. The European Commission will be making a legal proposal for a CBAM in June 2021 with a view to making it operational by 2023. The EU will have much to explain to its international partners in the World Trade Organization as part of its bilateral trade agreements, and in the context of the international climate process, in particular in the run-up to Climate COP26 in November 2021.

Introduction

Jos Delbeke, EIB Climate Chair, School of Transnational Governance, EUI

The EU adopted ambitious climate targets that will be implemented through its Green Deal policy. At the 2020 UN General Assembly, China declared its intention to become carbon neutral by 2060. Since then, similar ambitious targets were adopted by Korea, Japan, South Africa as well as by the newly elected President of the US, Joe Biden, who has also decided to return his country to the Paris Agreement. This opens up encouraging perspectives for the next round of climate negotiations, COP26, to be organised in the UK in November 2021. One of the major questions on the table will be how to turn around economies after COVID-19 and seize the multiple opportunities created by new sustainable technologies. Massive new investment is required and interest rates are historically low, but still many issues need to be addressed. Are major economies ‘greening’ their post-COVID-19 recovery policies? Are they moving away from fossils fuels and old technologies? What about regions and workers who find themselves without a place in the low-carbon future? Are sustainable finance discussions delivering? How can possible short-term impacts on international trade patterns be addressed?

Introduction

Jos Delbeke, EIB Climate Chair, School of Transnational Governance, EUI