The EU's Green Barriers – Issue #54
Unravelling the EU's Deforestation Regulation and its impact on global trade
News of the week
Last Tuesday, the EU adopted the European Union Deforestation Regulation (EUDR).
With that, exporters to the bloc will have to show these products were grown on land not been deforested after December 31, 2020. As the Economic Times reported, coffee, leather hides, skin, preparations, oil cake, paper and wood furniture are among an estimated 1,200 product lines affected.
This is an interesting development. Not because it might curb deforestation in the global south. It probably won’t. As in the case of EU’s carbon taxes, firms might ship cleaner coffee beans, say, to the EU and environmentally dirtier stuff elsewhere. And yet, the development is significant. As with carbon taxes, the EU is using “green” barriers to boost domestic manufacturing. As Ajay Shrivastava, a co-founder of GTRI, an economic think tank told the Economic Times: “The products targeted by the EUDR are those the EU wants to reduce imports of while promoting exports and its desire to bolster local production.” Along the way, countries like India might lose as much as $1.3 billion in export earnings each year.
While this would only be a small dent in India's total global trade, more of its trading partners from the developed world look set to join the EU's ranks. The G7, which issued its climate and energy communique late last week, also coughed up a joint Clean Energy Economy Plan. Besides from consensus for accelerating the energy transition, the CEEP also indicated agreement among G7 nations on the need for harmonised trade regulations and that the G7 would coordinate efforts to enable requisite reforms at the WTO. The communique itself included an aim to achieve global peak emissions by 2025 and global net-zero emissions by 2050. These targets face a stiff challenge on the grounds of equitability, and will almost certainly involve rapid peaking and cuts in major non-G7 economies such as India and China as well - both countries have stated in the past that their emissions will likely continue to grow into the next decade.
In these small ways, the world of tomorrow takes shape with its rebalancing of supply chains, economic activity and employment. CarbonCopy has written earlier on how this rebalancing will affect India’s steel sector. After that, Down To Earth has given us a deeper dive into Carbon Border Adjustment Taxes (CBAM).
At this time, the country is resisting these barriers. As Reuters told us, India is now planning to challenge CBAM at WTO. Some of this is ironic. As we saw in solar panels, India too has used import barriers to support local manufacturers.
On other fronts, a clutch of familiar processes continued to play out. India is trying to sign long-term gas contracts. The Adani saga continues. For a summary of all that has happened, read these two columns – one and two -- by Bloomberg’s Andy Mukherjee. Gujarat is vying to become a green hydrogen hub. This is interesting too.
Telangana, as we hear, is making a big play to corner EV manufacturing in India. Not just countries – but provinces too – are jockeying to capture the industries of the future. This, needless to say, is a global trend. Speaking of wooing the EV industry, Tesla reportedly, is once again considering setting up a car plant in India. Down under, Western Australia is capitalising on its Lithium deposits.
India saw another large pumped storage tender – this time from Madhya Pradesh. In related news, The Economic Times reported last week that pumped hydro storage projects will no longer be required to procure green clearances. The MoEFCC in a notification, reportedly cited the "lesser impacts" and the importance of pumped storage projects in India's low-carbon development strategy. The notification comes three months after a proposal submitted by the Power ministry advocating for tax breaks and 'rationalised' clearance processes. While pumped storage projects are typically different from conventional hydropower projects, they also involve heavy construction and submergence.
Other news. After 29 years, wild boars have reappeared in J&K. It’s unclear why. One possibility? They might have crossed the Line of Control, the de facto border with Pakistan-administered Kashmir, where the wild boar population has increased in recent years. Another possibility? They might be moving to cooler climes.
Elsewhere in the country, heat has built up again. In the middle of last week, India’s peak power demand soared to what Business Standard called the “historic high” of 220 GW. This report in Indiaspend describes what it’s like to live under such roiled weather. NTFP collections are suffering as well. Locals in Reasi are worried about the impacts of Lithium mining in their district. And the government is making it harder for outsiders to visit Great Nicobar.
Video of the week
On the plight of Himalayan birds due to climate change, a report from Arunachal’s Eaglenest sanctuary.
Climate long-reads of the week
Last-known female Yangtze softshell turtle, which represented Vietnam’s ‘turtle god’, found dead (Scroll)
How Long Will It Take For China’s Nuclear Power To Replace Coal?(Forbes)
In the Shifting Embrace of the Ganga: During monsoon season, Arati Kumar-Rao returns to visit the ancient, deified Ganga—and the communities who live along her shifting banks. Feeling the life that pulses through the delta, Arati bears witness to both the life-giving benevolence and devastating waywardness of the river. (Emergence). This is your lyrical environment piece for the week. Arati’s book will be out soon, incidentally. One awaits eagerly.
China’s loans pushing world’s poorest countries to brink of collapse(AP)
Is a concocted coal shortage being used to benefit Adani-operated mines in Hasdeo Arand? (Caravan)
Making Chennai’s public transport climate resilient (Citizen Matters)
CBI Case Against Environmental Lawyer Has No Evidence To Back Allegations Made But Will Deter Litigation (Article-14)
Zimbabwe to Take over Carbon Credit Trade, Void Past Deals (Bloomberg)
The Lithium Problem: An Interview with Thea Riofrancos (Dissent)
Orcas have sunk 3 boats in Europe and appear to be teaching others to do the same. But why? (LiveScience)