Why is the EU–Russia Climate Diplomacy Important?

Why is the EU–Russia Climate Diplomacy Important?

04/2021  | Reading time: 10 minutes

The instrument of climate diplomacy links the goal of transition to a climate-neutral economy with the pursuit of European strategic autonomy. The most important element of the European Green Deal is the promise of a clean, affordable, and secure energy supply. However, the transition may have important consequences for the future of EU–Russia relations.

At the beginning of her mandate, European Commission President Ursula von der Leyen announced to lead a “geopolitical Commission.” Little did the newly elected president know about the future challenges posed by the COVID-19 pandemic. While setting up her college and throughout the negotiations of the European Union’s next seven-year budget and the recovery fund, President von der Leyen kept in mind the green priorities she had promised before her election. The European Council’s budget agreement in December 2020 achieved a balance between the twofold challenge of managing the complex economic consequences of the pandemic and pursuing the green transition.

The Green Deal as part of the European Union’s geopolitical ambitions—the resilience aspect of the green transition

The COVID-19 crisis has revealed the downside of globalisation to the European Union, as supply disruptions have highlighted the risks of the European economic system’s reliance on its external suppliers. In light of the pandemic’s crushing consequences, the European Union has learnt the importance of reducing its dependence on external actors when it comes to critical infrastructures and had a more strategic outlook on the question of resilience.

The European Commission defines strategic resilience in a four-dimensional framework entailing social and economic, geopolitical, green, and digital dimensions. As the global crisis increased economic and technological competition between the world’s leading powers, access to natural resources becomes a strategic security question. The European Green Deal is a project that connects the green to the economic and geopolitical dimensions of the European strategic resilience through its transformative agenda. In order to better understand the European Green Deal’s importance in Ursula von der Leyen’s geopolitical pursuit, it is practical to consider a definition of strategic autonomy: “Strategic autonomy is the ability to act autonomously, decide, implement decisions, rely on one’s own resources in key strategic areas. Strategic autonomy implies the freedom to choose . . . with whom to partner. . . . It is an opportunity to transform dependencies into interdependencies. . . . Strategic autonomy could lead to reduced dependency on external actors, better protection of EU values and interests worldwide, and bring greater economic benefits.”

The most prominent element of the Green Deal from a geopolitical point of view is its promise to supply clean, affordable, and secure energy. Green energy resilience is about reaching climate neutrality by 2050 while eliminating our dependency on fossil fuels, reducing our impact on natural resources, and developing a clean and circular economy. The main sources of external dependency in the energy sector continue to be gas and oil. Investing in clean power sources would allow the EU to potentially further reduce the share of conventional energy sources. The European Green Deal provides a framework for a clean energy transition, positively impacting domestic energy production within the European Union, even though the transition to climate neutrality could risk replacing our reliance on fossil fuels today with one on raw materials sourced from third countries tomorrow.

The state of play in European energy autonomy

As a consequence of its reliance on external actors for fossil fuels, it has been difficult for the European Union to assert strategic autonomy in the energy field. Domestic primary energy production in the European Union has seen a decline in the past decades due, on the one hand, to severe falls in the gas production of the United Kingdom and the Netherlands, and, on the other, to the reduction of hard coal production. Because of both this decrease in domestic production and the increase in European energy demand, the EU’s natural gas import has been growing at a slowly accelerating rate. The European Union and its member states are now all net importers of energy. The leading supplier of fossil fuels is Russia, while the United States and Colombia ranks second and third, replacing two main historical partners, Norway and Algeria. Forty per cent of the EU’s natural gas and hard coal imports come from Russia today, and the growing trends of dependence give a reason for energy security concern.

Different energy dependency rates across the member states

Even though growing energy dependence on external suppliers is an EU-wide phenomenon, the degree of the member states’ dependence varies. In 2018, the largest net importers of energy in absolute numbers were Germany, Italy, France, and Spain. Relative to population size, the largest net importers in the same year were Luxembourg, Malta, and Belgium. This variation in ranking can be explained by differences in the member states’ energy mixes. According to the technological development level of their industries and their access to natural resources, member states’ energy mixes contain varying proportions of coal, gas, oil, nuclear power, and renewable energy. And despite its increasing fossil-fuel imports, the growing proportion of the renewable energy’s contribution as the European Union’s main source of primary energy is very promising in the fight against climate change.

Until now, fossil fuels have dominated the EU’s power supply because they provide a more stable supply and they used to be produced much cheaper than electricity from renewables. A large part of the cost of renewable (and nuclear) energy is the cost of the technology itself. Through large-scale investments, renewable energy prices have been dropping to levels now lower than those from fossil fuels, and the widespread use of renewables will soon drive energy prices down globally. From a European strategic autonomy point of view, investing in renewable energy brings twofold benefit: on the one hand, lower prices on the energy market mean more bargaining power, while, on the other, the construction of energy storage systems will make it possible to further stabilise the supply of electricity.

However, due to the differences in their energy mixes, the starting points from where EU member states need to transition to a carbon-free economy are inequitable. On an EU level, this would result in a multi-speed renewable transition. Different member states are at different levels of building renewable power capacities, and most of them rely heavily on nuclear power in order to achieve the climate goals set by the European Commission.

Nuclear power is a low-carbon and reliable source of electricity that is more suitable for smaller countries than renewables, as it requires far less land. It could be a suitable long-term solution for the more densely populated member states to conform to the new decarbonisation targets in parallel with curbing reliance on imported fossil fuels and improving the security of energy supply. However, finding construction parts for the nuclear plants has become increasingly hard in recent years because there are only a few suppliers present on the market. Consequently, the limited number of suppliers is driving the price of nuclear power up, while it does not necessarily improve the nuclear-using member states’ exposure to the risk of energy dependence.

It is, therefore, important for the European Commission to recognise the differences among European regions and their varying interests. Decarbonisation might hurt, for example, member states with a lesser proportion of renewables in their energy mix. Thus, ensuring the diversification of the energy mix in the medium term will allow social and economic adjustment. Natural gas, bio-methane, and decarbonised gases can reduce emissions significantly with well-known and proven technologies and costs, not hindering European competitiveness while in the period of replacing solid fossil fuels.

An asymmetrical interdependence with Russia

The most important element of Russian–European bilateral relations is energy. Pipelines are Russia’s main diplomatic tool, and completing the Nord Stream 2 project is crucial for Russia in order to scale back on its Ukrainian gas transit. The Nord Stream 2 pipelines connecting Russia to Germany faced strong criticism from the European Commission because they risk an increased Russian presence and create an energy security threat to Europe. As the general concept of strategic autonomy is expanded to trade and climate policy, the risk the European Union runs is determined as the sum of the risks each member state takes. The European Commission’s original proposal to jointly negotiate the project was rejected by the Legal Service of the European Council. The European Commission has since then approached the topic in a market-based manner, encouraging the diversification of energy suppliers.

The member states have varying degrees of dependence on Russian energy, based on their energy mix and their other trade relations with the country. Germany, being the biggest market for Gazprom’s exports and Russia’s most significant European trade partner, has the highest bargaining power in energy, while Southern and Central and Eastern European countries are seeking to diversify their supply with a southern opening and American LNG.

Yet the fact that a considerable share of Russia’s revenues comes from energy exports creates a relation of interdependence with the European Union. Therefore, we cannot talk about European dependence only. Energy trade is the most important pillar of EU–Russia relations, and the former’s move towards a carbon-neutral economy will greatly affect the latter, which is, thus, susceptible to losing its biggest oil, coal, and natural gas export markets over the next thirty years. Consequently, a rapidly modernising European Union might be considered the geopolitical winner in their relationship in the short term. However, this development could also lead to the further deterioration of Russia–EU interlinkages and the reduction of shared interests and might intensify the existing structural discord between the two sides. By enhancing its self-reliance using renewable energy, the European Union might lose its most influential strategic tie to Russia, so increased European strategic autonomy might also come with an obligation to find other ways in its diplomacy.

While Russia uses energy policy as a powerful geopolitical tool, the European Union must contend with the more passive role of a multilateral rules-based regulator. Nevertheless, the imminent threat of losing its largest market combined with the European Union’s norm-setting position might be sufficient to urge the Russian government to realign its strategy with the requirements of the European Green Deal.

The future role of climate diplomacy

Since 2018, climate policy has been an integrated part of European foreign and security policy, and the link between energy security and climate change adaptation has been strengthened. Climate diplomacy can be understood as a form of targeted foreign policy to promote climate action through reaching out to other actors, cooperating on specific climate-related issues, building strategic partnerships, and strengthening relations between state and non-state actors, enhancing, thereby, climate action and strengthening the union’s diplomatic relations. The limitations of the European self-reliance—namely, the scarcity of land that can be used for renewable primary energy—require, in the medium term, a stable supply of fossil fuels. In the long term, cooperation between the EU and Russia in the development of new renewable technologies is crucial, as the EU will have to find new diplomatic ways in order to replace the currently strongest bond between the two actors.

The future of energy relations with Russia will be one of the determinant factors in the success of the European Union’s climate diplomacy. Climate diplomacy has an ever-growing role in reinforcing EU–Russia relations via cooperation in the transition towards a carbon-neutral world. Even though the EU’s intergovernmental nature and the specific energy interests of each member state may pose challenges to finding unity, the current pandemic has strengthened the political will to pursue European strategic autonomy. An integrated, greener European energy market will entail the convergence of interests towards external actors and will reinforce cohesion amongst the member states.

 

Opening pic is by Markus Distelrath (Pexels)

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