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If the Global Gateway is to compete with the Belt and Road Initiative, it must go big, green, digital, and ethical. And it can prove it in Latin America  The European Union launched its Global Gateway initiative in December 2021, but its results have not yet matched the expectations it raised. If it is to compete with China’s Belt and Road Initiative (BRI), the Global Gateway must be bold, green, digital, and ethical. The digital alliance that the EU is setting up in Latin America and the Caribbean provides an opportunity for the EU to put its money where its mouth is.  On 14 March, the executive vice-president of the European Commission, Margrethe Vestager, and several ICT ministers from Latin America and the Caribbean established the EU – Latin America and Caribbean (EU-LAC) Digital Alliance – one of the European Commission’s initiatives launched in the framework of the Global Gateway programme. The alliance will focus on three pillars: investments in connectivity, aimed at closing the gap in internet access between the region and the EU, and within and between the countries of the region; cybersecurity, where despite the great progress made by the region, significant gaps remain that threaten citizens, businesses, and sovereign states alike; and digital rights, a field of enormous potential, as both regions share a human-centric approach to digital transformation. The project is of major strategic importance and potential for the EU. Russia’s invasion of Ukraine has given new prominence to the EU’s relationship with Latin America and the Caribbean. The region comprises 33 countries which are key to sustaining a rules-based multilateral order and whose votes China and Russia have courted in the United Nations General Assembly. There are also massive investment opportunities in the green and digital sectors in Latin America and the Caribbean, making it an important region in the EU’s search for strategic autonomy. However, relations between the two regions have gone through numerous ups and downs since leaders first spoke of a “strategic association” at an EU-LAC summit in Rio in 1999. In recent years, the EU financial crisis, the United States’ lack of interest in the region, and the covid-19 pandemic have allowed China and, to a lesser extent, Russia to expand their presence in the region: while EU trade with the region doubled between 2008 and 2018, China’s trade multiplied tenfold thanks to its strategic approach through the BRI, which has added to China’s already significant foreign direct investment flows and loans to the region. The EU is seeking to revitalise this relationship. But for the EU-LAC partnership to be successful, it is essential that these political agreements and declarations are accompanied by a meaningful investment agenda and package, as well as a clear roadmap for implementation. So far, the EU’s approach to the region has focused on programmes such as the Bella submarine cable connecting Europe and the region and the Copernicus Earth observation satellite system, which lack the scale to change perceptions of the EU. For its part, the Global Gateway programme is far from mobilising the €300 billion in investments initially announced, and the €3.5 billion  earmarked for investment in Latin America is insufficient to alter the strategic balance in a region where the required investment just for connectivity is estimated at $51 billion. The digital transition that the EU and the countries of the region want to promote could be the catalyst for a change of step in relations The digital transition that the EU and the countries of the region want to promote could be the catalyst for a change of step in relations. But for this to be feasible, certain conditions must be met. Firstly, if the Global Gateway is to be attractive for the region and effectively compete with the BRI, it must rebalance its geographical focus to pay more attention to the region. At present, 60 per cent of projects are focused on sub-Saharan Africa, while only 20 per cent are devoted to Latin America, and another 20 per cent to Asia. It should then focus more efforts on digital initiatives: currently, energy and green transition initiatives make up 80 per cent of projects, while digital initiatives account for 15 per cent and social initiatives for 5 per cent. The projects identified in the digital field are almost exclusively focused on connectivity issues, such as financing fibre, cable, satellite, and 5G investments. Closing connectivity gaps is urgent. Currently, over 35 per cent of Latin Americans still do not have access to a fixed broadband internet connection, and 20 per cent do not have mobile broadband access  – twice the average for OECD countries – concentrated in the lowest income quintile and rural and remote areas. However, the digital agenda in 2023 must be one of transformation, not just connectivity. It should therefore include issues such as cybersecurity, the digitisation of public administrations and services (including health, migration, justice, and taxation), training and education in key skills, the regulation of artificial intelligence, and data governance. Alongside the deployment of 5G and investment in digital, technical, and soft skills, this would bring the financing requirements for the region closer to $300 billion, which is 3 per cent of regional GDP. To address these geographical and thematic imbalances, the region therefore requires a more intensive European investment plan. The Global Gateway envisages mobilising private financial resources by setting up co-financing mechanisms from development banks, in particular the European Investment Bank, the CAF bank, Central American Bank for Economic Integration, and the Inter-American Development Bank. Despite the current meagre projections, it should be possible to mobilise the funding. After all, the EU is the leading foreign direct investor in Latin America, its telecom companies are global players, it plays a pioneering role in digitalisation in banking, insurance, infrastructure, energy, public services, industry, agriculture, and mining, and it holds first-class cybersecurity and hybrid threats capabilities. The launch of the digital alliance is expected to be accompanied by a business meeting of key Euro-Latin American companies, which, if confirmed at high-level, is a promising sign.   The EU’s digital agenda is attractive to third parties compared to China’s BRI because it includes green, social, and ethical components, making it an ally of the green transition, not a competitor. Many of its initiatives contribute to both digital and green goals, including the development of the ‘internet of things’ for the design of smart cities, the use of big data and cloud data to monitor the temperature of the oceans, and artificial intelligence applied to the protection of biodiversity. Europe’s rights-based, human-centric approach to digitalisation should also appeal to Latin America and the Caribbean. The region is seeking to align its approach with that of the EU, with a special focus on social, gender, and territorial inequalities and inclusiveness, which are not Chinese priorities. The cost of these inequalities is huge: achieving full gender parity in Latin America would expand the region’s GDP by $2.6 trillion – the equivalent of Brazil’s economy. Closing the internet access gap and investing in skills will help reduce these inequalities in the region, especially among women and in rural areas, and help younger generations. The Global Gateway has been criticised for over-promising and under-delivering. The EU-LAC Digital Alliance offers an opportunity for the EU to show the worth of the Global Gateway and demonstrate that it can offer an alternative to the Chinese Digital Silk Road.

Spain is suffering a prolonged drought, sparking water rationing in some parts of the country because of depleted reservoirs, causing the wildfire season to start months earlier than usual and destroying crops or farmers deciding not to plant them, which could push up food inflation (13% in April).  April was abnormally hot. The state meteorological agency Aemet said temperatures were between 7ºC and 11ºC above the average, making that month the hottest since records began in 1961. The temperature at one point in Andalusia reached an unprecedented 38.8ºC in Córdoba, underscoring Spain’s vulnerability to climate change. The temperature cooled down in May, but there was very little rain.  Spain’s dramatic situation came as the World Meteorological Organisation predicted that annual average temperatures will most probably break records again in the next five years.  So desperate are people for rain that parishioners in the Andalusian city of Jaén held a procession this month, bearing aloft a statute of Christ known as El Abuelo and calling for the first time since 1949 for the Lord to open the heavens and bring rain.  The Socialist-led coalition government announced an unprecedented €2.2 billion package of measures, including increasing the availability of water by building desalination plants and doubling the proportion of water reused in urban areas. Olive oil production –Spain accounts for 45% of the world’s supply– could be more than halved this year. The government also announced legislation that will ban outdoor workers when the meteorological office issues high temperature alerts. This followed the death of a Madrid street sweeper during last July’s heatwave.Drought is not a new phenomenon in Spain, but this one is something extraordinary. Spain has not had ‘normal’ levels of rain for three years. Just 12 litres per square metre of rain fell in the first three weeks of April, one-quarter of the normal amount. In early May, 27% of Spanish territory was in either the drought ‘emergency’ or ‘alert’ category, creating a tinderbox. Blazes ravaged 54,000 hectares of land in the first four months of the year, three times the amount in the same period of 2022, according to the European Forest Fire Information System (EFFIS).  Spain’s last severe drought was in 1993-96 when around one-quarter of the population was subject to water restrictions. Some towns in Andalusia had supplies cut off for more than 15 hours a day. In 2008 a prolonged drought forced the authorities to bring in water to Barcelona via boat to guarantee domestic use. Catalonia is again one of the most affected regions. Restrictions in many areas have been in force since March, including limiting showers to five minutes, banning the cleaning of cars and the watering of gardens. At the town of L’Espluga de Francolí (population 3,600), water supplies are turned off for nine hours during the night. The Sau reservoir, a key drinking water source, is so low that a medieval village, flooded when the reservoir was created in the 1960s, has emerged.  Rain is very unevenly distributed in Spain. The areas with the highest water abundance per surface unit are in the north and Galicia (known as the ‘wet’ Spain), much more sparsely populated than in the south, in particular, with values higher than 700 mm/year. A popular saying among Galician farmers –la lluvia es arte– (‘rain is art’) was once turned into a tourism slogan. In the rest of the country (the ‘dry’ Spain), water availability does not exceed 250 mm/year. The lowest water availability in Spain occurs in the Segura basin, where it does not reach 50 mm/year (around 20 times less than in Galicia and five times lower than the national average).  In the late 1970s the Spanish government turned Murcia, Alicante and Almería in the south-east –an area where water is minimal and none of the major rivers flow– into ‘Europe’s market garden’ by transferring water from the Tagus through the 300km Tajo-Segura Trasvase, a system of pipelines and an aqueduct. This feat of hydraulic engineering was originally planned during the Second Republic in 1931, built during the Franco dictatorship and put into service after the dictator’s death.  In a country with 17 regional governments of different political colours, as of the 1978 Constitution, water management is a sensitive issue that crosses boundaries and inflames sentiments. One of the major providers of water for the trasvase is the vast reservoir at Buendía in the region of Castilla-La Mancha, where I have long had a house. Farmers there feel aggrieved when they are restricted in using ‘their’ water because it is needed elsewhere. The trasvase has long been embroiled in disputes over how much water should or should not be transferred through it.  Farmers in the south-east benefiting from the trasvase, who produce around 70% of Spain’s vegetables and a quarter of fruit exports, are up in arms over the plans of the Socialist-led minority national government to raise the minimum level of the Tagus at source as this will result in less excess water being transferred. The level needs to be increased in order to remain in line with EU regulations on river water levels, following court rulings. Ecologists say the Tagus is at risk from overexploitation by agriculture and climate change. The plan aims to increase the river’s flow from 6 cubic metres per second to 8.6 cubic metres by 2027.  Without sufficient water, 100,000 jobs are at risk, according to the farming association SCRATS. The father of the novelist Antonio Muñoz Molina, who had a market garden in Úbeda, Andalusia, used to greet ecstatically the year’s first rain with the following words: Es lo mismo que si estuvieran cayendo billetes verdes (‘It’s as if it were raining green banknotes’, in reference to the 1,000 peseta notes at the time).  The politics of the trasvase are complicated: the Socialists control the region of Castilla-La Mancha and back the national government; Valencia, which Alicante forms part of, opposes the plan, despite being also governed by the Socialists, as does Andalusia, where Almería is located, and Murcia, both of them regions run by the conservative Popular Party (PP).  Farmland surrounding the Doñana national park, Europe’s most important wetland and a UNESCO World Heritage site, has been particularly prone to illegal wells. The authorities have long turned a blind eye. Virginijus Sinkevičius, the EU’s environmental chief, attacked a plan last month by the government of Andalusia to increase the amount of irrigable land around Doñana by 800 hectares. This would be tantamount to an amnesty for the strawberry farmers who have already sunk illegal wells there. He said the bloc would use ‘all the means available’ to make sure Spain complied with a 2021 European Court of Justice ruling condemning it for breaking EU rules on excessive water extraction in Doñana.  Farmers switched some years ago from olives to strawberries and other berries, which consume more water. Close to half of Spain’s aquifers are already in poor condition. Before 1985, groundwater was treated as private property and thus not subject to any regulations.  In another part of Andalusia, near the city of Malaga, the Civil Guard arrested 26 people in raids on illegal wells. The Guard’s environmental crimes division identified 250 infractions by fruit farmers. Spain is Europe’s biggest producer of tropical fruit.  Prime Minister Pedro Sánchez called the drought ‘one of the central political and territorial debates of our country over the coming years’. Resolving the water problem will require a national political consensus, something that is woefully lacking in so many other areas.

A single European Union cleantech manufacturing capacity target should be based on an understanding of the situation in each cleantech sector. Securing a competitive edge in cleantech manufacturing has increasingly come to be seen as a priority for Europe. China’s dominance of this sector and the subsidies offered under the United States Inflation Reduction Act (IRA) (Kleimann et al, 2023), compelled the European Commission in February 2023 to publish a Green Deal Industrial Plan with the goal of boosting the European cleantech sector and speeding up the transition towards climate neutrality (European Commission, 2023a). The industrial plan’s regulatory pillar is the draft Net Zero Industry Act (NZIA), which includes a target for the European Union by 2030 to have the capacity to manufacture at least 40 percent of its cleantech deployment needs (European Commission, 2023b). Assessing Europe’s cleantech manufacturing capacity Meanwhile, basic facts on the status of cleantech manufacturing in Europe are missing from the discussion, which has so far been mainly about global shares of cleantech manufacturing capacity (Figure 1). When looked at from a high-level perspective, China is dominant but this perspective does not allow the situation in Europe to be captured fully. Figure 1: Regional shares of manufacturing capacity of selected clean technologies, 2021  To address this, we provide an overview of Europe’s current cleantech manufacturing capacity and compare it to current cleantech deployment levels. This assessment is useful for two reasons. First, it allows for a better appreciation of the scale of the EU’s manufacturing capacities. Second, it shows that adopting a one-size-fits-all 40 percent manufacturing target, as proposed under the NZIA, may make little sense considering the very different situations of different clean technologies. A caveat is here important. A significant share of European cleantech production is currently destined for export and not the EU domestic market. We ignore this trade dimension and compare only domestic cleantech manufacturing capacities to deployment levels, thus taking an approach that is similar to the NZIA and its 40 percent headline target. Our analysis covers the manufacturing and deployment levels of five technologies pinpointed by the NZIA: solar photovoltaic (PV) panels, wind turbines (onshore and offshore), electric vehicle batteries, heat pumps and electrolysers (Figure 2). A variable picture Figure 2 shows the limited scale of the EU solar PV industry. EU countries installed 41.4 GW of new solar PV capacity in 2022, while EU manufacturers only produced 1.7 GW of wafers, 1.37 GW of cells and 9.22 GW of modules (SolarPower Europe, 2023). In other words, EU solar manufacturers, had all their output been deployed in the EU, would have met only 4 percent, 3 percent, and 22 percent of solar deployment needs, respectively. For wind turbines, however, Europe is well placed. In 2022, EU countries installed 19.2 GW of new wind power capacity in 2022: 16.7 GW onshore and 2.5 GW offshore (Wind Europe, 2023). In 2021, for onshore wind capacity, EU manufacturers produced 17 GW worth of turbine blades, and more than 11 GW of nacelles and towers (Wind Europe, 2023), equivalent to 102 percent and 71 percent of the deployment needs of the following year. For offshore capacity, they produced blades, nacelles, and towers equivalent to 2.9 GW, 6.7 GW and 7 GW respectively (IEA, 2023), or the equivalent of 116 percent and 286 percent of the deployment needs of the following year. Meanwhile, over 90 percent of clean energy transition-related additions to battery capacity in the EU in 2021 were related to electric vehicles (Bielewski et al, 2022). European electric vehicle sales in 2021 amounted to 2.3 million units, roughly equivalent to a battery capacity of 156 GWh. But domestic battery manufacturing capacity hovered around 60 GWh, or the equivalent of about 38 percent of the domestic deployment needs (but currently representing only about 7 percent of global manufacturing capacity) (IEA, 2022). Heat pumps produced in Europe mostly serve the domestic market. In 2021, global heat pump production capacity (excluding air conditioners) was 120 GW. The EU contributed about 19 GW and accounted for 68 percent (Lyons et al, 2022) of Europe’s 2.18 million newly installed heat pumps. China supplies most compressors for air-air pumps, while Europe remains the main source for air-water and ground-source pumps. Finally, water electrolyser manufacturing capacity in Europe stands currently between 2 GW and 3.3 GW per year (Hydrogen Europe, 2022), many times more than the current installed capacity, which is equal to 0.16 GW (European Commission, 2023c). The wide disparity between the current manufacturing capacity and deployment is explained by delays between investment decisions and operational deployment, lack of hydrogen demand compared to supply capacity, and regulatory bottlenecks. It is noteworthy that EU electrolyser manufacturing capacity is still far from the 17.5 GW/year target set for 2030. Too easy for some, too hard for others One implication of this analysis is that applying the same 40 percent manufacturing target to each cleantech sector as set out in the NZIA proposal, may make little sense considering the very different situations of different clean technologies. For solar panels, reaching this target would be very challenging and likely very costly, while it would be much easier (and even too conservative) for other technologies, including wind turbines and batteries. It is also unclear to what extent the target would apply to the components and materials used in the identified clean technologies. This is a crucial issue, because access to these components is often a major bottleneck for domestic manufacturing in Europe (Le Mouel and Poitiers, 2023). Instead of setting cleantech production targets, the EU would better focus on facilitating private sector investment in cleantech by providing the right enabling framework conditions. That is the only course of action that might ultimately secure Europe a competitive edge in cleantech manufacturing.

Annotation The features of the implementation of the industrial policy of the European Union aimed at achieving the goals of ensuring the functioning of green energy are considered, an assessment of the prospects for regional and global development in the context of rising prices for energy products is given The beginning of 2023 showed the correctness of scientists who have long warned about the strengthening of the negative impact on humanity of natural and climatic changes, natural disasters, man-made disasters and their consequences, which leads to a decrease in the sustainability of global economic and social development. The most incomplete list of them includes the earthquake in Turkey, the danger of a new pandemic, the strongest tornado in the USA. As for the problems of climate change for the European Union countries, at present the problem of drought and the increasing shortage of fresh water is becoming increasingly urgent there. Moreover, in the most unexpected places, natural hazards that are not characteristic of the region, including volcanic activity, may also occur. Clearly, overcoming this kind of problem will require, at a minimum, a reliable energy supply. However, the orientation of the region's industrial policy towards green energy, the creation of capacities for the production of alternative energy sources means, if we do not consider the negative environmental consequences of this, a sharp decrease in the reliability of energy supply. This is all the more important since the EU own energy production is at a rather low level. The prospective restructuring of regional gas supply means for the EU a significant decrease in the competitiveness of goods produced in the region, which, without the supply of cheap Russian natural gas, leads to the loss of the main markets.  At the same time, it is possible that regional crises, such as climate, environmental, migration, demographic, food, logistics, which continue to intensify, will one day lead to global consequences, including a financial crisis. And it will eventually lead to an exchange crisis, which will necessarily spread to commodity markets with appropriate consequences. In a natural way, ordinary EU citizens understand how the abandonment of a cheap and reliable source of energy supply will end, including its long-term consequences. And the companies of the global energy market are now confident that the time has come for long-term contracts. The fact is that modern competition, conducted by individual subjects of international relations in a very specific way, began to deny international law, primarily the UN Charter (at least Article 1.3). The result of all this will be serious disproportions in the development of the global economy and very many will have to refresh the survival skills formulated by Robert Baden-Powell (1857-1941) at the beginning of the twentieth century.

At the end of March, the negotiations that started in June 2021 on the accession of the United Kingdom to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) were successfully concluded, reflecting radical changes in British trade priorities after Brexit. More broadly, this move by London undoubtedly confirms the special importance that the Indo-Pacific region has acquired in the concept of "Global Britain" and in its subsequent relevant updates. The signing ceremony is scheduled for July 2023, for which the trade ministers of the participating countries and the United Kingdom will meet in Auckland (New Zealand). As a result of London's accession, this bloc will surpass the EU in terms of the combined population of its constituent countries. However, unlike the European Union, which the United Kingdom, on the contrary, left, the CPTPP does not have - to the satisfaction of British Eurosceptics - its own court like the EU Court of Justice, or a supranational budget. The union operates as a multinational trade agreement. An important obstacle that hindered reaching an agreement more quickly was London's refusal to weaken national food standards. But in the end, Ottawa (Canada) backed down on calls for London to lift the ban on importing beef with growth hormones. Beijing has also applied for membership in the CPTPP following London (the Chinese application is dated September 16, 2021, but negotiations have not yet begun). However, with London's accession as a full member of the agreement, China's chances of joining the bloc look somewhat weaker, as London is likely to obtain veto power on this issue. It is possible that they will use this veto under the pretext of ensuring higher trade standards within the agreement (including issues related to ecology and food safety). In any case, as It is known, the current British Prime Minister Rishi Sunak refers to China as a "systemic challenge", which London intends to respond to with "dynamic pragmatism." Currently, the CPTPP includes 11 states (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam), none of which are European. These countries collectively account for 13% of global GDP. The new partnership replaced the Trans-Pacific Partnership agreement of 2016 with 12 participants, after former US President Donald Trump withdrew the US from the agreement in 2017. In 2020, the 11 countries of the CPTPP accounted for 8.4% of goods and services exported from the United Kingdom. In turn, 6.8% of imports to the United Kingdom came from these countries. The terms of the Trans-Pacific Partnership eliminate unnecessary barriers to mutual trade of services by opening financial markets and reducing obstacles to cross-border investment, facilitating data exchange, increasing business mobility, and ensuring regulatory transparency. All of this will support the British government's plans to turn the country into a global technology and service hub, strengthen semiconductor and critical mineral supply chains to produce electric vehicles and wind turbines.London already has trade agreements with most members of this trading bloc, but now these relationships can deepen, and 99% of British goods exported to the bloc countries will be subject to zero import tariffs. Tariffs on imports of Peruvian bananas, Vietnamese rice, crab sticks from Singapore, and Malaysian palm oil into the UK will be reduced (this is a controversial issue that has sparked discussion in the UK, as the production of palm oil, as ecologists point out, leads to deforestation of tropical forests). At the same time, according to assessments by the British government itself, joining the CPTPP is expected to add no more than 0.08% per year to the country's economic growth in the long term (while the slowdown in growth due to Brexit is estimated at 4%). Many politicians and trade experts rightfully point out that participation in the Trans-Pacific Partnership is not capable of compensating for the economic losses that the UK is experiencing due to its departure from the EU. Moreover, due to differences in its rules and standards from European regulations, Britain's accession will prevent it from returning to the European Union in case of a change of priorities. In other words, this agreement is like driving an additional wedge into the relationship between London and Brussels, which are just starting to improve. It is worth remembering in this regard that it was Liz Truss, a former trade minister in Boris Johnson's cabinet and one of the main advocates of independence from the EU, who submitted the British application to join the CPTPP. So far, for London, it is not so much a direct economic, but rather a strategic and symbolic acquisition, firstly due to the rapid growth (according to some estimates, up to 65% by 2030) in the number of middle-class consumers in a dynamically developing region, committed to innovation, and secondly, because of the fact that in the foreseeable future, mid-ranking trading powers such as Thailand and South Korea, which have already submitted applications, are planning to join the Trans-Pacific Partnership. Membership in the TPP is becoming more important for Britain due to the unattainability of a large trade agreement with the United States and the crisis in the World Trade Organization, which is currently unable to firmly enforce the rules of global trade. The matter is not limited to trade alone as London's foreign policy is clearly shifting towards the Indo-Pacific region. In this sense, Australia and Japan, concerned about economic pressure from China and its military ambitions, see Great Britain as a natural ally in opposing Beijing. It is assumed that stronger economic ties will lead to the strengthening of geostrategic alliances. Due to the high dependence of countries such as Chile on Beijing, which is the largest trading partner and main investor for Chileans, Britain's participation in the CPTPP, according to London's opinion, will contribute to the establishment of necessary connections that are seen by Britain's partners in the region as an attractive alternative to ties with China.

China’s silence towards the European Union’s electric vehicle probe could mean that a more harmful retaliation is on its way During her State of the Union address on 13 September, European Commission President Ursula von der Leyen announced that the European Union would undertake an anti-subsidy probe against the Chinese electric vehicle (EV) sector. This signalled a major step in the EU’s shift to a more aggressive trade defence against China and raises the question of how China will react, given the importance of the Chinese market to key sectors of the European economy (including the auto and luxury sectors), and also given China’s crucial role in providing goods to the EU for the green transition? An EU-China High Economic and Trade dialogue on 25 September in Beijing, between EU Trade Commissioner Valdis Dombrovskis and his Chinese counterparts, may have given a glimpse into China’s mindset. There were fears Chinese officials would respond aggressively to von der Leyen’s announcement during Dombrovskis’s visit but this was not the case. Nevertheless, the silence may be deceptive. Three main factors should be taken into account when considering potential Chinese retaliation. Subtle but harmful retaliation First, China might file its own anti-subsidy investigation at the World Trade Organisation against key European sectors. This would not be difficult since Europe has ramped up its subsidies massively since the pandemic, and more recently has attempted to gain more ‘strategic autonomy’ in sectors including semiconductors. There is very little the EU can do about this potential retaliation, which would be costly for the sectors targeted and for the EU’s image as a free-trade and WTO champion. Second, China could try to persuade EU governments that the Commission-led investigation should be withdrawn. A similar probe happened in early 2014, when the EU launched an anti-subsidy investigation into solar panels produced in China. President Xi Jinping visited then Chancellor Angela Merkel right after the anti-subsidy investigation was announced. Subsequently, the issue was settled quickly, with the Commission withdrawing the case from the WTO. Based on this previous experience, China might prefer to take up the issue bilaterally, possibly with Germany again, rather than enter discussions with the Commission. But a major difference this time is the relative importance of the auto sector in the EU compared to solar power. The auto sector accounts for 14 million jobs in Europe and a good part of the EU’s exports. Exports of cars and components are heavily concentrated in a few EU countries, especially Germany. These exports to China have plummeted in 2023, with a close to 30% drop, and Chinese competition in third markets and even the EU market, has become much more intense. Third, also unlike the solar-panel probe, it is the Commission and not the sector being harmed that has filed the case. It will be harder for the Commission to withdraw the investigation because it would lose credibility. Merkel decided to accommodate Xi Jinping’s request in 2014 because she wanted to save the auto sector, even at the cost of hurting a smaller part of the German economy – the solar panel companies. The new investigation aims to protect the automotive sector. There could be consequences for major European auto companies producing electric vehicles in China, but jobs in Europe are now more important than the future of those companies in China. In any case, the future of European manufacturers is bleak; they seem to have already lost the EV race to their Chinese competitors. China will find it much harder to move the EU away from its decision to pursue an anti-subsidy investigation, differently to what happened in 2014. Lessons to learn There might be a lesson for Europe in what happened to Apple in China in September. Days before Apple’s launch of its new iPhone 15, Huawei launched its Mate 60 with upgraded functionalities which require high-end semiconductors. Beyond raising doubts about the effectiveness of US-led export controls on advanced semiconductors, this announcement constituted a direct challenge to Apple’s phone sales in China. Chinese officials were also prohibited from using iPhones and rumours spread in Chinese media in advance of the Apple launch about the underwhelming quality of the iPhone 15. Investors dumped Apple stock globally and the company lost about 6% of its value in a few days. China’s retaliation against the Commission’s anti-subsidy investigation might not be as direct and transparent, but it will still be harmful and might offer less room for the EU to respond. Europe’s strategic dependence on China is greater than in 2014 and this probe has the potential to cause a bigger fall-out for the EU. China has strengthened its position as a global power and uncompetitive behaviour could hit European core sectors harder because China has more power to retaliate. On the flip side, the stakes are higher for the EU given the importance of the auto sector in terms of jobs and exports. For that reason, China may not manage to deter the EU’s investigation as easily as it did in the past. But this may prompt China to threaten even larger retaliation.

Russia’s war on Ukraine has pushed the climate crisis off the agenda. But we need a ceasefire and global demilitarisation for a 1.5°C world War brings death and destruction – not least to the environment and climate. Russia’s invasion of Ukraine offers a depressing reminder of that fact, and further increases the military sector’s already enormous global CO2 footprint. In addition, the eastern Ukrainian cities where fighting is taking place are home to fossil fuel infrastructure such as chemical factories, oil refineries, and coal mines, the bombing of which produces a cocktail of toxic substances that has devastating environmental impacts. Efforts to arm the two sides, moreover, are consuming materials and resources that could otherwise go towards tackling the climate crisis. Based on the global C02budget, humanity has less than eight years to ensure it still hits its 1.5-degree warming target. To do so, we need to urgently implement reforms in all areas, to bring about ‘systemic change’, as the IPCC report from early April puts it. The military sector barely gets a mention in this almost 3,000-page document, however, with the word ‘military’ coming up just six times. You might thus conclude that the sector is of little relevance to the climate emergency. The reality is rather different. Using military hardware results in huge quantities of emissions. In the war in Ukraine, 36 Russian attacks on fossil fuel infrastructure were recorded in the first five weeks alone, leading to prolonged fires that released soot particulates, methane and C02 into the atmosphere, while oil infrastructure has been ablaze on the Russian side too. The oil fields that were set on fire in 1991 during the second Gulf War contributed two per cent of global emissions for that year. While greenhouse gas emissions are one of the most significant impacts of war, the quantity emitted depends on the duration of the conflict and on what tanks, trucks, and planes are used. Another is the contamination of ecosystems that sequester CO2. Staff from Ukraine’s environment inspectorate are currently collecting water and soil samples in the areas around shelled industrial facilities.Military emissionsThe ramifications for the climate can be catastrophic in scale. According to a study by the organisation Oil Change International, the Iraq War was responsible for 141 million tonnes of C02equivalent emissions between its outbreak in 2003 and the report’s publication in 2008. By way of comparison: some 21 EU member states emitted less CO2equivalent in 2019, with only six states topping that figure. Post-war rebuilding also produces significant emissions. Estimates suggest that reconstruction in Syria will lead to 22 million tonnes of CO2 emissions. The rebuilding in Ukraine, too, will consume vast amounts of resources. At the World Economic Forum in Davos, President Volodymyr Zelensky stated that at least 5 billion US dollars of reconstruction funding was needed per month. Every effort should thus be made to achieve an immediate ceasefire – both for the sake of the climate and to avoid further human suffering. Emissions from armed forces and military equipment cause considerable environmental harm around the globe. And yet, bowing to pressure from the US, military CO2 emissions were excluded from climate treaties such as the Kyoto Protocol of 1997 and the Paris Agreement of 2015. As a result, they do not form part of their binding agreements and are neither surveyed systematically nor published transparently. The consequent lack of data means we can only make vague estimates as to the military sector’s impact on global heating. According to a study by Neta Crawford, co-director of the Costs of War project at Brown University, the US defence ministry alone is a bigger contributor to the climate crisis than individual countries such as Sweden or Portugal. This makes it the largest institutional source of greenhouse gases in the world. Globally, the military sector is estimated to generate around six per cent of all CO2emissions.Germany’s roleWith its new €100bn fund for the military, Germany seems willing to countenance further far-reaching climate impacts. This military investment will tie up financial and intellectual resources, making it highly unlikely that the 1.5-degree target can be achieved. That countries wish to better protect themselves against potential Russian aggression is understandable. But the public debate around this issue needs to balance an uncertain increase in security against a reduction in our ability to fight climate change. The German military was already responsible for around 4.5 million tonnes of CO2 equivalent emissions in 2019, significantly more than the 2.5 million tonnes contributed by civilian aviation within Germany. This is now set to increase. Just one of the F-35 jets ordered from Lockheed Martin emits around 28 tonnes of CO2 equivalent per tank of fuel. For comparison: the average annual emissions footprint in Germany is 11.2 tonnes per head. The income from the sale of fossil fuels provides ongoing funding for Russia’s war of aggression. From 24 February to 24 April 2022, the country’s fossil fuel exports via sea routes and pipelines had an estimated value of €58bn. The EU accounts for 70 per cent of that total, or €39bn, while Germany is the largest single importer of Russian fossil fuels at €8.3bn worth. Our fossil fuel dependency is thus a factor in both the climate crisis and the invasion of Ukraine. And yet representatives of politics and business are using the war as an excuse to delay the necessary socio-ecological transformation. While corporations still stuck in the fossil fuel age – such as BP, Shell, and Saudi-Aramco – are posting record profits, the climate crisis continues apace. The likes of Rheinmetall and NATO chief Jens Stoltenberg may champion climate-neutral warfare using eco-friendly tanks and hydrogen fuel, but this is surely not the answer. Western armed forces, security experts, and arms manufacturers are well aware of the significane of climate change, as evidenced by the numerous security strategies, policy statements, and sustainability reports published on the subject in recent years. These outline ways to adapt to a changing climate while ensuring the doctrines of growth and hegemony are nonetheless defended against any and all resistance.Ceasefire nowTogether with the EU and NATO, Germany is preparing for scenarios such as war, environmental disaster, and influxes of refugees in order to ensure its foreign policy will still be fit for purpose and its security interests protected. A cynical approach given that the worst affected – those who, as some see it, Germany needs protecting from – will be those who have contributed least to global warming. And one that seems even more absurd when you consider that the environmental destruction brought about by military investment and resource-related conflicts will help to further heat the climate. At the same time, steps are being taken to reduce dependence on fossil fuels. Nonetheless, a Greenpeace report published last year demonstrates that the majority of all EU military missions have links to the protection of oil and gas imports. This dangerous relationship between fossil fuels, military missions, and war needs to end. More arms mean more damage to the climate, not greater security. Rising defence budgets among NATO states will simply convince Russia and China to increase military investment in turn. At $2.1 trillion, global arms spending has already reached record levels. As the war in Ukraine goes on, the biggest challenge of the 21st century – the climate crisis – has slipped down the agenda. We mustn’t forget, though, that efforts to tackle that crisis can only succeed if all countries – including Russia – work together. The immediate demand is for a ceasefire, followed by measures to build trust, such as international disarmament treaties. Moreover, Russia will need outside help if it is to transition to a climate-friendly energy industry. What’s required is a fundamental socio-ecological transformation, with policy-making dictated by the needs of all. That may seem inconceivable at present, but what’s the alternative? Unchecked global warming would be catastrophic for the planet’s entire population.