Climate Change: A New European Union Approach Is Needed

Abstract

The Emission Trading Scheme (ETS), on which the European Union (EU) targets to mitigate climate change are largely based, has proved to be inefficient, especially at counteracting the effects of global trade growth. In fact, although the replacement of European products with emerging Countries’ imports has led to an apparent decrease in EU’s emissions, it has, at the same time, brought about a substantial increase in global emissions, because of the lower efficiency and higher environmental impacts of most imported products. The risk is that the ETS, which was developed on a territorial basis, while unable to provide substantial benefits to the environment, proves to be an additional factor for CO2 increases, and the loss of competitiveness of EU’s industry, that is exposed to international environmental dumping. The strategy for Europe to set their irrefutable environmental targets, while protecting their manufacturing industry, must be mainly based on a system of emission tracking and specific labelling that acknowledges the higher environmental quality of the European products, thus enabling consumers to choose the most eco-friendly ones. Furthermore, a privileged taxation could replace the ETS system. It must be a non-discriminatory, non-protectionist taxation, that simply offsets the economic advantage of environmentally impacting products over eco-friendly ones.