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Europe vows to work against fossil-fuel investments globally

The EU’s executive arm is drafting a law, to be unveiled by June, that would start penalising imports of certain goods from countries with weak pollution rules, thereby helping to protect the competitiveness of local producers abiding by stricter standards. This push to export climate standards got a boost last week when President Joe Biden moved to restore the US as a member of the Paris climate accord, which seeks to limit global temperature increases to 2 degrees Celsius through steep reductions in greenhouse gas emissions.

The Biden administration is planning to host world leaders in a climate summit on Earth Day in April, a sign of the new president’s commitment to strengthen the Paris agreements. Biden, who has signaled he wants the US to encourage stronger climate action globally, will likely find the EU as a major ally in his initiatives.


“EU and member states’ foreign and security policy will systematically consider climate and environmental factors and risks,” the bloc’s foreign ministers will promise, according to the draft of their statement, which is still subject to changes when they meet in Brussels to discuss the wording on Monday. The transition to clean energy is highlighted as a security consideration, as it will reduce the EU’s “strategic dependencies” on imports from other countries.

The pledges are the latest in a series of policy initiatives comprising the so-called European Green Deal, a comprehensive package of measures that will push every sector of the region’s economy toward low and eventually zero greenhouse emissions. Officials in Brussels hope the sweeping overhauls will also help the bloc assert its “strategic autonomy,” which is constrained by the dollar’s dominance in international finance.

The European Commission is already on course to become the world’s largest issuer of green and social debt, which will be jointly backed by all EU member states. Brussels expects the issuance will turn the EU into a “global ‘green finance’ hub, bolstering the euro as the default currency for the denomination of sustainable financial products,” according to a policy document unveiled last week.

Adding to signs that weaning off dollar dependence has turned into a central policy objective, ministers on Monday will pledge to promote “the use of the euro in energy trading,” according to the draft of their statement.


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