eOlfflDl lflflAb l L lfO t SA I' VI I ' r i ' Sl'l''i'1'BSfl' '1 'a rt ' r INR Assessment CffREL Ewrope Addressing Climate Change Likely to Widen Political Fissures R-i'l- 1 '°t 1 b 1 1 4 c b 1 1 4 c b 1 1 4 d b 1 1 4 d _________________ Structural impediments in the EU also will work against finding timely solutions because member states have a high degree of autonomy on energy taxation and land-use policies and hold veto power at key stages of EU legislation __ ___ C l lRi rand ambitions - C 11REl European leaders and EU officials have long recognized the need to reduce carbon emissions in order to stem the dangers of climate change The year 2020 was the warmest on record across Europe significantly breaking the previous high mark and more than 1 9 degree Celsius above the long-term average between 1981 and 2010 according to the American Meteorological Society 1 Wide majorities of publics across nine of the largest EU member states rate climate change as a major concern for their countries On average 70% of the e publics say it i a major concern ahead of other issues such a terrorism the economy nuclear proliferation poverty ethnic conflict and migration 2 U REL lne EU set an ambitious target to be carbon neutral by 2050 and this pa t summer the European Commission proposed increasing its goal of renewables' share of energy consumption by 2030 from 32% to 40% 3 The EU aims to reduce transportation emissions by 60% by 2050 compared to 1990 levels 4 cu b ' J e reach these goals EU lawmakers have framed their climate goals the so-called European Green Deal as an economic growth strategy including for post- COVID-19 recovery The legislation covers a range of sectors and issues agriculture food production vehicle emissions energy con truction industrial production waste management biodiversity trnde and finance The EU plans to use its $2 2 trill ion 2021-27 budget and COVID-19 recovery plan to build a greener and more resilient Europe including a 121 billion fund to help the most carbon-intensive countries 5 Many European companies are at the forefront of renewable energy technology especially in the offshore wind sector W AliibJ w even climate exposure amid questions of who should pay b 1 1 4 c b 1 1 4 d b 1 1 4 c b 1 1 4 d xposuretot1e antic ipated effects of climate change varies across the conti nent and member states have different energy dependencies these differences will prove difficult to reconcile see map next page Industrial energy consumers won-y that the burden of adhering to climate regulations will make them less competitive globally and they have lobbied to soften EU requirements 6 • coREL 5- uthern Europe probably will suffer from persistent urban heat waves drought and wildfires straining budgets and the economy according to climate simulations Meanwhile northern Europe could see a rise in land prices as arable land elsewhere in Europe becomes scarcer which is likely to widen the income gap between the two regions according to the same simulations 7 eel4rlDCHl lll ttnl U t l e tf3ll t I ' 0I I Classified by INR Deputy Assistant Secretary Vic Raphael Derived from DSCG 17-01 D Declassify on 20311029 October 29 2021 INR-10076-2 1 QOHFID6Hf1Alh'FIEL 'F8 l ISA FYEY INRIAssessment Unclassified Exposure to climate change Norweg an Projected Impact In 25 - 30 ye ars selected countries ' eel 400 MIies 200 0 o 200 400 Kilometers SW ED D§ Drought i Fire I Ra in f looding Sea level rise ESTO IA EU member state Baltic Sea Sea Sources· Pol1t co LATVIA North Urban heat Intergovernmental Panel DE MARK on Climate Change European Commission 11TH I l' IRELAND ltl BF RU Ci I POLAND ATLANTIC B£LGIUM l KR NE ZECJ-TIA Ci OCEAN ' LOVAKI A rn A STRIA CtJ H ROMANI A m BULGARIA POR GAL 11 ll I Iv- SPA IN LJilU loni in 5ea CYPR S J Ol MALTA f Rlll lJ I Ult □ LU Boundary representation is not necessarily authoritative Medilerruneun Sec 15339 10-21 STATE INR • EG 4'0CL tn October Warsaw called for the EU to cancel or delay parts of Fit for 55 -the European Commission 's plan to reduce emissions by 55% by 2030-because of surging gas and electricity prices Poland is one of several EU member states concerned about the cost of transitioning from fossil to renewable energy 8 s G 1'1 Eb Hungarian Prime Minister Viktor Orban blamed the European Com mi sion executive vice president in charge of the Green Deal Frans Timmermans for what Orban claimed were wrongly designed policies 9 The two have previously clashed on rule-of-law issues t0 1fRlila Structural impediments slow progress c RF European environmental goal probably will run into the realities of EU and member-state fiscal rules For example there is a potential clash between climate objectives and the debt brake requirement COMFID6H ifhltLH l L YO bSA FVEY 2 CONFIUEIQ I IALiiREL IO U A I' 0 I I INRIAssessment governed by the German constitution potentially limiting the debt financing options for some climaterelated investments 10 a CCi'i1 L A push in July to add road transport to the Fit for 55 plan split the European Commission 11 Both German Chancellor Angela Merkel and the European Commission president Gem1an national Ursula von der Leyen wanted to apply the EU's Emissions Trading System to road transport which could affect consumers more than manufacturers A third of the commissioners reportedly asked for their dissent to be noted in the official minutes 12 • €Gii'R-H Fopulist and radical political parties rather than denying or obfuscating climate science are shifting their criticism to the expected costs of the energy ti-ansition French officials worry that another Yellow Vest protest movement which began in response to climate policy- related fuel tax increases will derail French President Emmanuel Macron's reelection bid in s rino 2022 13 b 1 1 4 c • C i'N UL Other structural impediments in the EU also will work aga inst find ing timely solutions Member tates have substantial autonomy on energy taxation and land-use policie and bold veto power at key stages of EU legislation 15 COl4riDEU-FhliL¥Rlil i g I'i O EVEY 3 CONFIDEN I IALiiREL i O USA POE I INRIAssessment U Sources and notes b 1 1 4 c b 1 1 4 c b 1 1 4 c 80tlFIDitl•IAb#R b i g Yi A11 P lii¥ 4