The European Green Deal: A Tool for Strategic Engagement in the Arctic?

Arctic environmental changes are a harbinger of more entrenched global crises. According to the latest data, warming in the region is occurring at three to four times the rate of the global average. However, if the Arctic has become ground zero for climate change, the reverse is also true. While the Arctic should not only be essentialized as a parable for climate change, but complex regional changes also engendered by the environmental and climate crises have profound effects on the rest of the world. In this destabilized international environment, major economies are now moving away – at least discursively – from fossil fuels consumption and toward a greener future.

Domestic Environmental Regulations as Foreign Policy?

After a disappointing COP26 in Glasgow, future climate policies will need to produce seismic effects to meet emission targets and avoid global collapse. Even the watered-down Glasgow Climate Pact calls on State Parties to the United Nations Framework Convention on Climate Change (UNFCCC) to “accelerate adoption of green policies, energy-efficiency measures, phase-out coal power and inefficient fossil fuel subsidies.” In this context, global economic powerhouses are starting to realize that their own survival as leading geopolitical powers and markets is at stake. Without a green transition, there might not be a global economy. Environmental protection and sustainable development are not only confined to domestic policies. The question of decarbonizing fast and efficiently is now a matter of economic survival and foreign policy. Decoupling economic growth from carbon-heavy and environmentally damaging activities will have to become a key feature of industrialized nations’ policymaking toolbox.

One of these global policy kits are the European Union’s efforts to become the first climate-neutral continent by 2050 under the new policy and legislative package known as the European Green Deal (EGD)[1]. As it overhauls its current energy and environmental regulations in a broader attempt to limit global warming, the EU aims to become the first major economy to reduce greenhouse gas emissions by at least 55% by 2030. To achieve such a lofty but vitally necessary goal, the EGD uses a variety of different domestic objectives across its economy and society, including biodiversity, sustainable food systems, sustainable agriculture, clean energy, sustainable industry, sustainable mobility, eliminating pollution and climate action. In doing so, it aims to institutionalize a form of green thinking. One that aims to decouple economic growth from resource use and fosters an inclusive just transition, at least in theory.

While the EGD is an effort to deeply transform the European economy, it has ramifications outside the EU. It will set the EU's global policy priorities in the decades ahead. As such, the EDG is also a foreign policy tool for the EU with profound geopolitical consequences[2], both in the EU’s immediate neighborhoods and beyond. To come back to the Artic, one of the EGD’s first foreign policy impact was to shape the most recent update of the EU's Arctic policy – the Joint Communication on A stronger EU engagement for a peaceful, sustainable, and prosperous Arctic[3].

The EU’s green(er) credentials mean that the Union’s has now explicitly taken a stance against importing fossil fuels from new Arctic exploitation projects. Ever more mindful of its Arctic environmental footprint[4], the EU wants to work on a multilateral legal obligation not to allow any further hydrocarbon reserve development in the Arctic or contiguous regions. While the idea of such proposed moratorium triggered some debate among Arctic and non-Arctic states, the overall question of no more fossil fuels essentially concerns the EU's global positioning as a promoter of international environmental law and as a leading actor in the fight against climate change.

Environmental Protection and Economic Concerns

This is far from a radical change of direction for Brussels as sustainable development has been part of the EU legislative framework since the Treaty of Maastricht. However, the current developments represent a shift in how the EU sees the foreign policy potential of environmental action. As the biggest economic market, internal EU standards have external reach. The extraterritorial application of EU laws, known as the “Brussels effects”[5], gives the EU the potential to act as a global regulatory power in key areas such environmental law by enacting unilateral regulations with effects in other jurisdictions as part of its external action toolbox. For better or for worse, the EU’s broad competences in the domain of climate change and sustainable development mean that decisions made in Brussels on specific environmental fields can and will impact the Arctic at large – not only the European Arctic[6].

Although the EGD’s implementation and effects within the EU are yet to be felt, this kind of climate-energy domestic changes might offer a lesson for any state willing to engage and legitimize their presence in Arctic affairs through the development of an Arctic policy. Building an Arctic narrative and developing a distinct Arctic policy should only be regarded as secondary to building a regulatory environmental and economic framework that considers the ongoing changes in the Arctic. As the EU demonstrates, focusing on internal legislative changes including their ramifications in the Arctic is crucial to become an honest Arctic actor. Greenhouse gas emissions schemes, internal climate policies and goals, and market mechanisms all impact the Arctic’s environmental security.

More stringent international climate policies that consider or even provide alternatives to current discourses around (un)sustainable economic growth is needed. But regulatory changes can only start from home. For instance, building climate coalitions (so called "climate clubs") that combine target carbon pricing and trade sanctions to avoid free riding are gaining more European attention[7]. Recently, Germany’s new Chancellor (and then Finance Minister) Olaf Scholz argued that the EU needs to create a climate club with other countries like the United States, Japan, and possibly even China to avoid trade friction linked to green tariffs a planned carbon border levy[8]. The basic idea of such climate club is for countries, that are willing to reform, to jointly set a faster pace than what has been, for example, adopted and discussed at COP26. To protect each other against competitive disadvantages members are to define a common CO₂ price that applies in all participating countries. Imports from third countries should be subject to a climate tariff to prevent free riders and eventually offer other countries an incentive to join the club. The European Commission has already proposed introducing a carbon border adjustment mechanism mirroring to the internal EU emission trading system and EU internal climate action, which would account for emissions occurring outside of the EU related to selected imported products and resources.

Environmental Protection and Arctic Inaction?

As climate change disrupts borders, ways of life, food chains, biodiversity, and the long-term habitability of many parts of the Arctic and of the Global South[9] and Indigenous lands[10], the EU's internal environmental commitments to a just transition are more than ever a foreign policy issue. Greenhouse gases reduction, climate mitigation, and adaptation need to become key pillars of all industrialized nations' foreign policy toolbox. Strategizing any country’s involvement in Arctic affairs is not only a matter of military action or trade opportunities. Arctic actions can also happen with enacting domestic legislations with aim to contribute to climate justice and to foster transformative change worldwide. Foreign policy action is key here. Putting the priority on the Arctic requires more global and interlinkages cooperation, from high-level diplomacy to grassroot involvement. Of course, EU environmental actions, in and of themselves, will not be enough to tackle climate change and avoid global environmental collapse but it a step in the right direction. With the EGD, Brussels aims to lead the way toward a more sustainable Earth and, as a result, positioning itself as the global climate leader.