Extending The European Green Deal Into Eurasia
The European Green Deal should be extended to include the Eurasian Economic Union.
In June, the European Commission will present a package of bills detailing the European Green Deal, a strategy that aims to reduce CO2 emissions by 55% to 1990 levels by 2030, improve energy efficiency by 32.5%, and increase the share of renewables in the energy mix up to 32%.
One of the critical instruments of the deal must be the Carbon-Border Adjustment Mechanism (CBAM). Better known as the “carbon levy”, CBAM will be the second building block in a cross-border carbon management system that began to take shape in 2005, when the European Union launched its emissions trading system (EU ETS). Unlike the latter, CBAM will directly affect almost all non-EU countries that export a bright palette of raw materials, including vital fossil fuels to the EU.
If countering measures are imposed, this will definitely lead to a progressive inflationary process, higher raw materials prices and could potentially even downgrade the competitiveness of many EU-based manufacturers.
Bringing not only a challenge but an opportunity
Among these exporting countries is Russia, for which carbon levy is often viewed as a clear and a present challenge, while in reality, it presents an opportunity. First, because Russia has already done a lot to decarbonize its economy. In 2018, CO2 emissions in Russia amounted to only 52.4% of the 1990 level, as follows from Greenpeace. This was achieved through a radical restructuring of the economy that occurred after the collapse of the USSR, when employment and output in industry and agriculture declined, while in the environmentally neutral service sector, it grew.
Russia will not be satisfied with what has been already achieved. In 2016, the country joined the Paris Climate Agreement, and in 2019 it ratified them, officially committing itself to reducing emissions.
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