The Green Deal Program: Opportunities and Threats for Latin America

The European Union is launching the Green Deal, its challenge to tackle Climate Change with a broad program of measures to be taken until the year 2050, aimed at reducing global warming. The goals are to transform Europe to be carbon neutral by 2050, bringing about a reduction of 50% – 55% by 2030.1)

Europe’s action has drawn great international attention due to its regional and global consequences, both in changes related to decarbonization, social changes, mobility, setting high goals in reducing greenhouse gas emission sources, quality of life and in the responsibilities for sustainability and governance. The European people, through its political institutions, elections and demonstrations, are heavily involved in the environmental issue. Several countries and international organizations, are starting to take a stand against this initiative, even before the COP 26 in Glasgow, slated for November. The Secretary General of the UN has adopted a favorable position toward the European option, as several northern hemisphere countries have one as well. The European Union is starting a process of implementing measures in the decarbonization agenda of the global production chains, which supply the European economy. Therefore, this initiative needs to undergo a deliberation process in our continent regarding its stance on the positive and negative impacts of this proposal. The major issues regarding the increase in global temperature are due to matters such as fossil energy consumption, the use of products of petrochemical origin, global mobility, land use, and the industrial process, especially with regard to the matter of reuse and linear economy. The worthy initiative of the Green Deal shows the commitment of 25 European countries in bringing a structured proposal to the global debate, based on political pressure from voters and the European civil society, which see climate change as the most dramatic threat to the planet. The demand for this change is seen in the European consumers’ preference and in the financial sector’s strong initiative of engaging in ESG (Environmental, Social and Governance) financing.

Plans to achieve these goals were articulated in new legislation to foster a circular economy, real estate reforms, biodiversity, agriculture and innovation. Political actions are in vectors such as clean energy, sustainable industry, civil construction, and farm to fork, elimination of pollution, sustainable mobility, biodiversity and sustainable financing. Undoubtedly, this is an example of regional governance, which deserves respect because of the effort and courage in its framing. In this field, there are several opportunities for Latin America, such as being part of decarbonized global production chains, offering products with clean energy content, maintaining the biodiversity of its biomes, and being a recipient of ESG-type sustainable financing.

However, the European Green Deal model presents a series of great risks for Latin America if adopted globally:

a) The model is based on European reality and does not consider the regional particularities of other parts of the world, and it has serious mistakes in its specific proposals.

b) The Green Deal contemplates a series of instruments aimed at decarbonization, land use, and also the food production chain, without offering – until 2050 – any prospects of opening its agricultural market; thus, the measures will guarantee a closed European agricultural market, in addition to environmental and climate standards, which could be easily achieved if the European agricultural market were to be opened. The inevitable consequence is that others will do the same; that is, they will build their standards by closing markets, building a new protectionism in the name of the climate, and reducing the opening of global markets.

c) Ambiguity in mobility moving towards an aggressive electrification, with Europe’s electrical matrix being 80% unsustainable. The electrification of mobility in Europe is not necessarily reflected in decarbonization.

d) Local indicators in Europe are not suited for Latin America, or elsewhere in the world, some examples:

  1. Reduction of up to 50% of pesticides by 2050. So, Europe has a temperate climate, and because of the harsh winter, it needs fewer pesticides than South America, which has tropical climate, and where we have up to 3 harvests per year, without harsh winters.
  2. Giving full preference to short distance logistics over long distances. However, for large-scale production, as in Mercosur, the long-haul transport index in the cost of the product is negligible.
  3. Radical change of habits, reducing beef consumption, to reduce GHG. For a European population that has a per capita consumption above 80kg/pc/year, this may be a reality, but for some regions, like in Africa, that have a consumption of 8kg/pc/year, this does not make any sense.2).
  4. Creating a “Codex Alimentarius” based on European reality, with quality indicators applicable to a rich region, which will increase the value of food when implemented. For someone people, in Europe for instance, where spending in food accounts for 14% of the average family income, this may make sense, but for less favored nations, such as in the case of Latin America, where the value of food is equal to 50% or more of the family income, the story is different.

e) Direct incentives of 20 billion Euros/year in forest recovery and biodiversity must be seen from the angle of indirect subsidies to productive sectors. Forest recovery in Latin America, as well as forest management for industrial purposes, are carried out by the private sector, without subsidies, which is not the reality in Europe.

f) Discarding innovations such as sustainable bioenergy flex fuel for vehicles, which offer the same emission conditions as electric vehicles, prevents exports of both biofuels and vehicles with this feature from Latin America to Europe.

Although the Green Deal offers a very interesting concept for a holistic view of measures for the climate change problem, it does not incorporate the diversities of other regions and it does not open up its economy in the proposed period. Therefore, before taking the legislative measures for its application, the EU should hold talks with its partners to make the necessary adjustments, to avoid reactions, such as all regions making their regional programs. In the end, we would end up with green protectionism, a debate in the WTO on who is right about what, and we would not have the solidarity of solutions for our planet. Certainly, Latin America leaves the UN dialogue on the food system strengthened by its unanimous stances, and serves as a warning for a better dialogue with traditional partners, like Europe, before putting regional solutions into practice.

Simply exporting a regional model under these conditions will not be socially responsible or environmentally sound.

For a global problem, local solutions are not enough!

 

 

Ingo Plöger is a Brazilian Entrepreneur, President of the Brazilian Chapter of CEAL.

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