海角大神

In 2019, European Commission President Ursula von der Leyen boldly declared 鈥淓urope鈥檚 man on the moon鈥� moment, as she announced the continent鈥檚 plans to be carbon neutral by 2050. The European Green New Deal would, among other bold proposals, halve Europe鈥檚 greenhouse gas emissions by 2030, decarbonize the energy sector, and influence environmental standards internationally by raising Europe鈥檚 own.

But the European Union produces only 10% of the world鈥檚 greenhouse gas emissions,聽so聽having what is聽widely considered the world鈥檚 most ambitious climate change policy plan聽isn't聽enough to fix the problem.

And so to realize its green ambitions, the EU intends to reach beyond its borders, to bring along countries including the United States and the globe鈥檚 No. 1 polluter, China. The challenge is determining who can be coaxed to come along for the ride, and what levers Europe can pull 鈥� such as a carbon tax on imported goods 鈥� to bring them on its turbulent journey towards a greener future.

鈥淪tringent climate policy will create winners and losers in society,鈥� says Sonja Peterson, a climate economist at the Kiel Institute for the World Economy. 鈥淚ndustries will have to change, new fields of work will be created. But, ultimately, EU climate policy is of little help alone. It will be very important to get the U.S. and China on聽board to reach temperature targets [of the Paris accord]. Though, I think it can be helpful to show how聽decarbonization can work in Europe first.鈥�

鈥淲e have to take everyone with us鈥�

Europe鈥檚 leadership intends to leave no person behind as it attempts to overhaul nearly every sector, from transportation to agriculture to energy, via regulation and legislation.

鈥淭he biggest challenge within the next couple of years will be to design this transformation in a way that brings people along,鈥� says Vicki Duscha, business climate policy analyst at Fraunhofer Institute for Systems and Innovation Research. 鈥淲e have the goal to take everyone with us. If we do it right, there will be new jobs created. This transformation won鈥檛 be possible without the people.鈥�

Ironically, the COVID-19 pandemic has presented an opportunity. Not only has the world-at-a-standstill triggered in a sharp reduction in carbon emissions, but聽it has聽allowed the EU to roll out a stimulus package in which聽roughly 鈧�275 billion ($335 billion) has been dedicated to a recovery effort that will also combat the effects of climate change.

鈥淚n principle, I think Europe鈥檚 goals are reachable,鈥� says Dr. Peterson of the Kiel Institute. 鈥淢any studies show, with which mixture of technologies, we can become completely carbon-neutral. But in reality, this is a huge challenge and we鈥檙e far from the goal. The steps that are missing are much more demanding than what鈥檚 already been achieved.鈥�

Lenora Chu

Heike Fesinger (left) and her partner, Udo, march in a demonstration to protest Daimler's decision to phase out combustion engine production at the Mercedes-Benz plant in Marienfelde, a locality of Berlin. They have worked at the plant for 38 and 40 years, respectively.

The path is clear in certain industries such as energy, but more challenging in emissions-heavy sectors such as agriculture and transportation.

鈥淟iquid fuels seem to be the best way to decarbonize transportation. Yet, we have ideas about a climate-neutral liquid gas, but we鈥檙e far away from generating the amounts necessary,鈥� says Dr. Duscha. 鈥淭he same holds for agriculture; there are only a handful of technological possibilities to reduce methane, and we鈥檒l also have to change our dietary habits. That鈥檚 hard to address from a political point of view.鈥�

And the transition could spark a public backlash as it starts to affect jobs. It already is at the world鈥檚 oldest Mercedes-Benz plant, in the Marienfelde region of Berlin. This year, Daimler management announced plans to phase out combustion engine production there as the company turns toward electric motors. The factory, which Daimler has run since 1902, might be downsized, prompting hundreds of workers to protest earlier this month.

鈥淵ou can鈥檛 just stop using the internal combustion engine right away,鈥� says Heike Fesinger, who, along with her partner, Udo, was marching on a cold, overcast day. She started at the plant as a lathe operator 38 years ago, and is now a test-equipment instructor. 鈥淭his factory shouldn鈥檛 be closed down just because some CEOs missed the boat for e-mobility. The transformation needs to go slower.鈥�

Setting standards, even outside Europe

Even if Europe convinces its own people to embrace the green path, it remains to be seen whether other countries will follow along. The U.S. has a stated goal of becoming carbon neutral by 2050, while China this year announced plans to peak CO2 emissions in the year 2030, and aims to become carbon-neutral by 2060.

鈥淭he three biggest emitters are聽China, the U.S., and the EU, with everyone else trailing in their wake,鈥� says Jeremy Shapiro, research director at the European Council on Foreign Relations. 鈥淎ny sort of three-way agreement with them would set the tone.鈥� That might include, say, setting a standard for assessing the carbon content for exported industrial goods.

Yet the U.S. policy-making environment is incredibly polarized, and America is emerging from four years under a president who refused to acknowledge climate science. Meanwhile China, for decades the world鈥檚 factory floor, can鈥檛 easily curb emissions in an economy still so reliant on a coal-powered industrial sector.

If other countries do not follow along, Europe may need to deploy its unmatched regulatory capability, and the mechanisms that spring from that, to increase its sovereignty and ability to act, say experts.

That includes a border carbon adjustment, which the EU intends to finalize in 2021. Such an adjustment is most likely to take shape as a tax levied on imports into the EU, pegged to the amount of greenhouse gases emitted in their manufacture. This 鈥渃arbon tax鈥� is being discussed in part because international cooperation might fall short; it would attempt to subject international industry to the same terms of competition as those inside Europe.

Under such a scheme, Daimler would derive little benefit from shuttering an engine factory in high-regulation Germany, moving production to a more-permissive China, and importing engines back into Europe. Simultaneously, such a tax would hamper foreign manufacturers from selling 鈥渄irty鈥� products to Europe. In other words, a carbon tax helps level the playing field.

鈥淐onceptually it makes a lot of sense,鈥� says Mr. Shapiro of ECFR. 鈥淏ecause if you don鈥檛 do something like this, the carbon would essentially get exported abroad. But it鈥檚 a very, very difficult thing to implement.鈥�

That鈥檚 not only because of the diplomatic tensions that would result, or the uncertainty around whether such a scheme would be compliant with World Trade Organization rules. There鈥檚 also the intricate logistics of determining the carbon content of an import. 鈥淚t might require insight into six different countries鈥� supply chains before you even get to Europe,鈥� says Mr. Shapiro.

Most exciting for the near term, say experts, is the industrial policy Europe would deploy in the race to develop green technologies.聽In certain sectors, including renewable energies, Europe has already shown the green choice can be low-cost enough to be profitable.

鈥淭hat鈥檚 giving people money,鈥� says Mr. Shapiro. 鈥淭hat鈥檚 always a bit easier to push through.鈥�