Bending the Linear toward the Circular
Looking to Europe for Leadership
4 min read

Looking to Europe for Leadership

The world must look to Europe for global leadership in emissions reduction.
Looking to Europe for Leadership

Europe's five largest countries – Germany, France, the UK, Italy, and Spain – have a combined population about equal to that of the United States. They have a combined GDP about two-thirds the size of the US. Yet produce less than half the CO2 and related emissions of the US every year.

The 26-nation European Union (which no longer includes the UK) produces about 60% of the US total, and has reduced its overall emissions almost 40% from its peak 40 years ago.

The other largest countries by population – China, India, Brazil, Indonesia, Nigeria, Pakistan, Bangladesh, and Russia – are all heavy CO2 emitters, with dire emissions-reduction challenges facing them.

So the world must look to Europe for global leadership in emissions reduction, climate-change progressivism, and creating sustainable economies that should become more circular every day.

Big Meetings this Month
An upcoming G20 meeting in Rome and climate meeting, COP26 in Glasgow, put the focus on the Old World and its efforts to bend its economies toward a circular shape. The Glasgow meeting in particular has several key goals, including to “keep the 1.5C degrees (rise in overall temperatures) within reach,” and to “mobilize finance.”

The latter goals refers to a section of the Paris Agreement of 2015 calling for US$100 billion in climate-change abatement investment annually. The world is falling short of that, according to the World Resources Institute. In any case, our research has shown a need for at least $500 billion (total) to bring the developing world up to speed economically while staying on a sustainable path.

The Emissions-Reduction Challenge Index
Within our ongoing research at Tau Global Research, we've developed what we call the Emissions Reduction Challenge (ERC) Index, which integrates basic data about emissions with a complex ranking of socioeconomic development to determine the size of the challenge – the odds of achieving success, if you will – facing 144 nations of the world.

We're able to express the challenge in a single number that represents a natural logarithm. This in turn allows one to understand the relative difficulty – and often, enormity – of the challenge each nation faces. We've placed the 144 nations into four color-coded zones – green, yellow, red, and purple for those most dire challenges listed above.

The green zone has 38 nations, most of them small. The largest, and coincidentally greenest, is Rwanda and its 12 to 13 million people. That aside, there are 20 European countries in the green zone, including the Baltic Nations, much of former Yugoslavia, other former Soviet satellites, Malta, and all of Scandinavia. Switzerland and Ireland make the cut as well.

There is a unique story behind each of these 20 nations. Many of them remain relatively underdeveloped economically, so face the challenge of developing first-rank economies while pursuing sustainable power and all that goes with it. The more highly developed nations face the challenge of continuing on their path, exerting world leadership despite their relatively small size, and in the case of Norway, of eliminating oil exports that are not helpful to other nations when it comes to sustainability.

Europe has 13 of the 48 countries in our next level, the yellow zone of nations that face moderate challenges in driving towards sustainability. This group has a large number of African and other developing nations that currently do not emit much in the way of greenhouse gases, but must be supported by worldwide investors to build their economies in a sustainable way.

A Few Large Leaders
There are also several large European nations in this group: the UK, France, Romania, the Netherlands and Belgium. These nations have the opportunity to exert moral and tangible leadership, as they all emit significant amounts of CO2 and have a mixed record so far of developing renewable energy. The UK has migrated 28% of its electricity grid to renewable, giving Ancient Albion a leg up on emerging as a European leader (whether or not it's part of the EU).

Our research shows that most of Europe is focused on sustainability, including the sometimes languorous Italy, host of the upcoming G20 meeting cited above. Several political parties are trying to establish La Bella as a world sustainability leader. Longshot bettors should examine the country more closely, to see if it can someday emerge along the present-day lines of the UK, France, and Netherlands/Belgium.

* France's focus on nuclear energy over the past four decades has played a large role in giving it a carbon footprint about half the size of Germany's on a per-person basis, and one-third the size of the US's carbon footprint. The French mindset, focused on their language reclaiming its status as the world's lingua francaof diplomacy and other important discussions, is no doubt pleased with the country's role as a leader in sustainability. But nuclear does not equal renewable and sustainable, and France finds itself with 18% renewable energy generation at the moment, compared to the 28% of the UK cited above.

* The Netherlands and Belgium expand this emerging greenbelt from the UK to France and into the Low Countries. They both actually emit a high level of greenhouse gases, comparable to Germany on a per-person basis, but our data shows the two nations are also on a vector of technological and socioeconomic dynamism that equips them well for addressing their respective challenges. This is particularly heartening for Belgium, with so much of EU activity centered in its capital Brussels.

* Romania's relatively moderate challenge is partially a result from its years of economic torpor under Communism and the particularly egregious dictator Ceaușescu. But the country has made significant economic progress in recent years, and is a solid member of the top rank of nations in our Tau Index research of dynamic countries. Its neighbor, the smaller Bulgaria, has achieved similar progress and is also in the yellow zone of ERC Index nations.

* Germany must assuredly step up its sustainability game, as it currently resides in our “red zone” of very difficult challenges. Germany remains a large coal producer and consumer, and despite hard pulls from its political left to get the country fully on the sustainable track, this remains a highly federated, politically complex nation. The French may get some schadenfreude from watching its neighbor struggle, but yet, there's nothing wholly funny about the battle against climate change.