Why the EU-US trade agreement could be bad for the climate

16th September 2014

With the world’s largest climate march taking place this Sunday, now seems like as good a time as any to reiterate my concerns regarding fossil fuels and that dastardly EU-US trade agreement (TTIP) that everyone’s starting to talk about.

As with many things TTIP until we see the finalised text we cannot know for certain what the consequences are going to be, but we do have some idea of what the different sides want. The US for example, would like to see a change in the EU’s approach to regulating food and agriculture (much to the chagrin of many Europeans), whilst the EU are pushing for open-access to the US state-level procurement market (equally controversial in the US). Of course, neither side will get everything they want, but in the rush to embrace the perceived (and overstated) economic benefits of the TTIP there is legitimate concern from environmentalists, trade unions, and consumer groups alike that in the back and forth of negotiations both parties will compromise on previously entrenched positions. In fact, they will probably have to.

This brings me to climate, or to be more specific, energy. The EU are explicitly pushing for an energy chapter in TTIP and for the overturn of a 40 year US ban on oil exports. As it stands the US have been cold to the idea, but it is clearly an EU priority. Karel De Gucht, the outgoing EU Trade Commissioner has said, “I cannot imagine that there will ever be a TTIP without such (energy) provisions.”

On the surface, the reasoning is fairly sound. In the face of continued tension with Russia, the EU has realised the need to diversify its energy supply, and the inclusion of an energy chapter in the TTIP would theoretically go some way towards addressing this. The Financial Times published an editorial earlier this year forwarding this very argument, specifically highlighting the potential benefits of the US loosening restrictions on the export of liquefied natural shale gas. (My response can be found here).

However, both Commissioner De Gucht, and the Financial Times, have failed to properly consider the long-term risks associated with such a strategy.

First, we must acknowledge that anthropogenic climate change is a real issue, with real economic and social costs. This is not up for debate, it is an established fact. Any potential increase in greenhouse gas emissions as a result of TTIP would be an obvious step in the wrong direction.

Second, the removal of US ban on oil exports would serve to facilitate the export of tar sand oils, mined in Canada and refined in the US, to the EU. A study commissioned by the EU has found the average greenhouse gas emissions from tar sands extraction and processing to be 23 per cent higher than the average fuels used in the EU. Additionally, while natural gas may be the least carbon-intensive fossil fuel, there is still considerable debate as to the overall level of greenhouse gases emitted by shale gas due to the propensity for gas leaks from fracking sites.

Finally, and this is important, the necessary infrastructure investment required to facilitate the transport of liquefied gas across the Atlantic is considerable and decidedly long term. A new report by the Global Commission on the Economy and Climate has confirmed that high-carbon investment over the next 15 years will only serve to “lock in” the risks of dangerous climate change. Not only would the inclusion of an energy chapter in the TTIP fail to adequately address issues of energy security in the EU in the short term, it will also create bigger problems going forward. To compound matters further, liquefied gas exported from America would most likely not be competitively priced, due to the costs associated with liquefaction and transportation.

With so little to gain, why then, at a time when the all the evidence is screaming at us to wean ourselves off fossil fuels, are we even contemplating committing to costly projects that will lock us into fossil fuel dependency for the coming decades? Are our leaders really that foolhardy and reckless?

Samuel Lowe is a Campaigner for Friends of the Earth working on trade, finance and land issues. He tweets as @SamuelMarcLowe