Europe Daily Bulletin No. 12967

9 June 2022
Contents Publication in full By article 32 / 32
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No. 061

Dans l’urgence climatique


Our planet is heading towards warming of +2.7°C in 2050, a long way above the target maximum of 1.5°C hoped for at COP21 in December 2015. At the start of 2022, the disappointment of COP26 is still echoing, as is the apparent ‘selfishness’ of the States, which continue to use massive amounts of fossil energies even though they are well aware that they are the cause of behind the changes we have observed, without any global authority stepping forward to stop this fatal slide”, stress Michel Derdevet and Clémence Pèlegrin, who coordinated this collective multi-disciplinary work bringing together contributions from 21 authors (our translations throughout). The aim of the book is to “explain, transparently and accessibly, the major challenges brought about by the energy transition, which are all too often hidden by moralising comments that do nothing to help people to understand the real challenges facing them”. The very least that can be said about the book is that it does exactly what it sets out to, in a pocket-sized format and at a modest price.


In a chapter entitled “Abundance, scarcity, equity”, the French economist Christian de Perthuis stresses the importance of building a ZEN world (zero emissions net), which will require, firstly, “curing ourselves of our addiction to fossil fuels” and, secondly, reinforcing natural carbon sinks – the ocean and the biosphere – and reducing emissions of methane and nitrous oxide, the main source of which is agriculture. “What is at stake here is 20 to 25% of global emissions (…). To reduce these and restore the earth’s capacity to reabsorb CO2 emitted into the atmosphere, the principal tool will be to bring about an agro-ecological transformation: moving to ecologically intensive agricultural practices, which protect the forest environment and are based on making the most of the diversity of our natural capital, in other words biodiversity”, the author explains, before going on to stress that “one of the main challenges in building a ZEN world will be to coordinate these dual transformations with their different logics. The energy transition aims to fight against the abundance of fossil energy, which has allowed us massively to increase the abundance of goods and services available to us. The agro-ecological transition consists of investing in the abundance of life, an abundance that has been jeopardised by the erosion of biodiversity. Accelerating the energy transition requires the setting in place of an economy based on rationing, in the logic of a bioeconomy which invests in the diversity of life”.


Like many of the other authors, Christian de Perthuis flags up the risk of increasing social inequality. “Imposing the rationing of fossil energy without corrective measures mechanically aggravates pre-existing inequalities. Firstly, the wealthy have the resources to adapt to the constraints placed upon them by the regulations. Furthermore, if their carbon footprint is considerably higher than that of poorer people, as a proportion of their income, the cost of the energy represents a much lower burden. If fossil energy becomes more expensive, this is therefore far more of a burden on the budgets of the least wealthy. As shown by the ‘Yellow Vests’ movement in France, the use of this type of instrument without redistributive measures can have a cost politically and delay the necessary programming of the rationing”. She goes on to stress that “the lesson we must learn from this is that we must accompany the upscaling of the carbon tariff by redistributing its yield. A redistributive carbon tariff consists first and foremost of rechannelling the income from the tax to the lowest-income individuals. This could take the form of a single per capita payment or a targeted payment to the lowest-income decile to save public money. This redistribution will not offset the spatial inequalities resulting from living at a greater or shorter distance from urban centres, which were a major part of the ‘Yellow Vests’ protest. Including a spatial criterion in the financial distribution would be technically complex and, more importantly, counter-productive, as it would encourage people to live further away. To tackle spatial inequalities, it would be better to target specific aid into low-carbon mobility and improving remote living”.


The Dutch political scientist Dirk Buschle weighs in on the geopolitical dimension of the Green Deal. “Believing that the Green Deal aims solely to implement the Paris Agreement of 2015 and to keep global temperature rises below 1.5°C would be a serious misunderstanding”, argues, reiterating the “significance of the second-line intentions which launched us into an unprecedented adventure: becoming pioneers of the next phase of technological and economic development and not being disadvantaged in comparison to other global powers, such as China and the United States”. “At the same time, it is clear from a geopolitical point of view that the brave new world obtaining its energy from renewable sources is not the end of dependency, but a new start”, Buschle, claims, going on to explain: “first of all, the sun shines more and the wind blows more in other parts of the world. This does not just limit Europe’s capacity to produce enough green electricity to satisfy growing demand, it also destroys any dream of gaining independence in the production of the second fuel source of the Green Deal: green hydrogen. Every strategy, including that of the European Union, acknowledges that imports of hydrogen on a huge scale will be inevitable. Furthermore, the technology required to produce renewable energy depends on access to a number of critical minerals and rare earths which are mined outside the European sphere of influence”. Although he acknowledges that “Europe will probably come out an overall winner from decarbonisation”, he considers that “we should probably be worried about the fate of the losers, particularly the oil and gas states which depend on income from the export of fossil fuels, and the problems and conflicts that their destabilisation may lead to, regionally or globally”. (Olivier Jehin)


Michel Derdevet (edited by). Dans l’urgence climatique – Penser la transition énergétique (available in French only). Gallimard. Collection Folio Actuel. ISBN: 978-2-0729-7290-4. 288 pages. €8,20


Les nouvelles doctrines des banques centrales


The latest edition of the Revue d’économie financière, published in March 2022, is given over to the “new doctrines of the central banks” and features some 15 articles bringing together 24 authors from central bankers, economists and academics.


Philip R. Lane, a member of the board of directors of the ECB, unpicks the latest monetary policy strategy published by the European Central Bank in July 2021. He considers that setting a medium-term target of 2% inflation “will allow (…) monetary policy to take account of considerations such as balanced economic growth, full employment and financial stability”. The former chair of the Economic and Monetary Committee, Pervenche Berès, comments on the accountability of the ECB to the European Parliament and the delicate balance to be struck between independence and credibility, monetary dialogue and democratic legitimacy.


‘Monetary policy cannot do everything’. This limitation should protect the central banks from excessive expectations which, by taking them away from their mandate, would damage their credibility. But it should not prevent them from getting involved in tackling future challenges: rise in public indebtedness, potential slow-down of growth, climate change, rising inequalities”, write François Villeroy de Galhau, governor of the Bank of France, Vincent Bignon and Bruno Cabrillac. “Once again, inflation is at the centre of an intensive debate: it has moved in a few months from questioning the structural weakness of ‘absent inflation’ – for more than a decade – to fears of a return to excessive and long-term inflation”, they note. They deal at length with the two major challenges of climate change and tackling inequality. Although they consider that “budgetary and fiscal policy must remain the principal tool to tackle inequalities because it is, by definition, more targeted than monetary policy and more politically legitimate in terms of the challenges of redistribution”, they consider that “monetary policy could and should take account of these challenges in the framework of its mandate”.


By pursuing its mandate of price stability, the central bank contributes over time to reducing inequality of income (…). The continuous decline, over the longer term, has helped to preserve the purchasing power of the poorest members of society. The question arises regularly with the accommodative monetary policy in place since the crisis of 2007. This policy has helped to reduce inequalities of income mainly by increasing employment (…). From 2013 to 2019, the Eurozone created more than 11 million jobs, 3 million as a result of the effects of monetary policy. In times of recession, like during the Covid crisis, moreover, monetary policy averted the loss of many jobs. Conversely, the reduction in income on savings affected the wealthiest members of society the most”, the authors point out, although they seem to have forgotten, in their pro domo argument, that the “wealthiest members of society” were more affected by the overall highly favourable fluctuation in stock exchange rates than by earnings on their savings. However, they acknowledge that the “drop in interest rates is one of the factors in the increase in the prices of real estate and shares, which has increased inequalities”, but note that “this increase in real estate prices benefits all homeowners, who represent more than half of all Eurozone households”. The poorer half? (OJ)


Association Europe-Finances-Régulations. Les nouvelles doctrines des banques centrales (available in French only). Revue d’économie financière edition no 144. Q4 2021. ISBN: 978-2-3764-7060-1. 308 pages. €32,00


Vers une guerre des normes ?


The recourse to lawfare is standing out as a growing tendency in international relations, which will only increase further in the short to medium terms”, Amélie Férey writes in a study identifying the various axes of the manipulation of standards and international law by State players with a view to establishing, maintaining or reversing a power balance in order to coerce rivals (our translation throughout).


Lawfare can take the guise of the reinterpretation of a principle of law in favour of one or more actors of strategic competition. The author points out that Turkey uses this method in its attempts to modify exclusive economic zones in the Mediterranean. The same applies to Chinese demands on the China Sea. A second category of lawfare consists of issuing new standards by means of legal lobbying deployed to benefit a power strategy. “The current controversy over the regulation of cyberspace provides an illustration of the strategies used by states, which can circumnavigate the collective mechanisms of international discussions”, Férey stresses, going on to explain that “the United States, for instance, proposed an interpretative guide of the law on armed conflict in cyberspace, known as the Tallinn Manual, which aims to counter the position shared by Russia and China, which consider that international humanitarian law should not apply in this new conflict space. Conversely, China is using its influence within international organisations to promote an Internet architecture that corresponds to its own interests, for instance in the framework of the International Telecommunications Union”. The practice consists of using national or international courts to limit the freedom of action of a given party. Under this heading, the author includes the use by the Palestinian Authority of the various legal mechanisms available to it to force Israel to comply with international law, the extra-territorial application of American law, the imprisonment of a French executive employed by Alstom in the United States or the legal offensive being pursued by the United States against the Chinese company Huawei. The fourth and final category concerns reputational effects. “As elements to build or destroy legitimacy, the law is an extremely influential tool”, Férey observes, adding that “accusing a power of flouting international law, even in the absence of proof, may for instance undermine the legitimacy of a military operation underway or cast doubt over foreign policy position”. (OJ)


Amélie Férey. Vers une guerre des normes ? Du lawfare aux opérations juridiques (available in French only). Institut français des relations internationales. Centre des études stratégiques. Focus stratégique edition no.108. April 2022. This study can be downloaded free of charge from the website http://www.ifri.org


La clause d’assistance mutuelle


This note analyses the potential of the mutual assistance clause (article 42.7 TEU) and its limitations. Estelle Hoorickx and Carolyn Moser point out that triggering the clause is no walk in the park and that the moral obligation of assistance it places on the member states allows them to decide for themselves on the nature of the aid they provide to the State facing armed aggression on its own territory. Since it places no obligation on the member states towards the EU and its institutions, the authors consider that it can be supposed that “should an institution be the victim of an armed attack, the host State would trigger the clause in its place and stead”. “It would then have to decide to implement this provision bilaterally – the host state assuming the leadership of operations and liaising with the other member states – or to confer this role on an EU body or institution”, Hoorickx and Moser explain, going on to point out that the “Strategic Compass recommends (…) that the military headquarters of the EU (…) play a role in the implementation of article 47.2 TEU, but only by request of the member states”. (OJ)


Estelle Hoorickx and Carolyn Moser. La clause d’assistance mutuelle du Traité sur l’Union européenne permet-elle de répondre adéquatement aux nouvelles menaces? (Available in French only) Institut royal supérieur de défense. e-note 40. 11 May 2022. This note may be downloaded free of charge from the website of the Institute: http://www.defence-institute.be


Russian invasion of Ukraine