2 November 2009: EU fails leadership test

EU leaders met last Thursday and Friday to discuss climate finances. They said that €100 billion a year should be transferred to the developing world by 2020 and were predictably upbeat about the outcome. “It’s a decision that enables the EU to continue taking a lead in the negotiations, a position that encourages others to deliver,” said Swedish Prime Minister Reinfeldt. (Sweden currently holds the rotating Presidency.) European Commission President Barroso described it as “an important breakthrough, which brings new momentum”.

However, it was basically a failure, for two reasons:

  • There were, in fact, no decisions arrived at – just some talk about numbers. The €100bn figure was intended as an aspirational total, to be divided between public and private sectors, and then between countries. The meeting said that between €22bn and €50bn should be public sector money. The Europeans did not specify the European share of this and even when the total – the public/private division and the contributions of the EU, US, Japan and so on – are all agreed, there is no commitment on what EU member states will give. These contributions are to be voluntary – which means they may never arrive.
  • There was no guarantee that financing would be new and additional. Oxfam has described the EU offer as “like a novice on eBay”. It says that:

… at least 75 million fewer children are likely to attend school and 8.6 million fewer people could have access to HIV/AIDS treatment if money that would otherwise have been spent on health and education is diverted to tackle climate change. Europe is committed to increase its overseas aid spending to 0.7% of national income. Climate financing must be over and above that. If not, rich countries are simply telling the world’s poorest countries to choose between building flood defences and building schools. If rich countries steal from aid budgets to pay their climate debt, the fight against poverty will go into reverse. The collapsed Doha round of trade talks was about pulling millions out of poverty, Copenhagen is about preventing billions from being plunged into poverty.

(See Oxfam International: The EU is treating climate deal like an eBay novice.)

The main reason why the EU did not perform better was strong opposition from eastern European countries, led by Poland. Poland is, in effect, a developing economy. It has enormous coal reserves and gets over 90% of its electricity and heat from this source (see Poland – climate and energy statistics). It is not willing or able to finance the low-carbon transition itself. Richer EU member states need to help with this, as well as with the developing countries outside Europe. To do so, it should stop the many billions of Euros being wasted on climate-destructive intensive agriculture under the CAP.

It should also invest much more of the economic recovery budget in the low-carbon transition:

Europe’s stimulus spending on greening the economy is dwarfed by China’s investment, with some EU countries diverting less than 2% of national recovery plans into sustainable industries. The disparity has sparked fears that ‘green jobs’ will migrate to Asia. Figures from HSBC show the percentage of EU spending directed towards green measures is less than 10%. This looks paltry when compared with, for example, South Korea, which has earmarked 80% of stimulus spending for greening the economy. Others are also racing ahead, including Australia with 40%, China with 34% and Japan with 15%.

(See Euractiv: EU outflanked by Asian rivals on green economy.)

Europe urgently needs to invest in the industries of the future, to protect humanity from climate disaster, but also to secure its own economic prosperity.


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