The recent announcement of the Solomon Islands-China security agreement has caused quite a stir in Canberra and Washington, even being described as Australia’s worst foreign policy failure since 1945 by the Labour party – which was then still in opposition. 

Frederick

The recent announcement of the Solomon Islands-China <a href="https://www.brookings.edu/blog/order-from-chaos/2022/05/06/does-the-china-solomon-islands-security-pact-portend-a-more-interventionist-beijing/">security agreement</a> has caused quite a stir in Canberra and Washington, even being <a href="https://www.theguardian.com/australia-news/2022/apr/20/scott-morrison-fends-off-claim-solomon-islands-china-pact-is-worst-foreign-policy-failure-since-1945">described</a> as Australia’s worst foreign policy failure since 1945 by the Labour party – which was then still in opposition. Whilst much of the concern has focused on the future security dimensions of this agreement, and how they may threaten Australian and US interests in the Pacific through an expansion of Chinese influence, the agreement is also a case study in how Western failures in assuming credible climate-action leadership are damaging their influence and diplomatic standing in regions of strategic significance.
Although the importance of climate action has risen within the political priorities of Western capitals in the last decade, it arguably still takes a back-seat in foreign policy. This leaves an opening that some actors – such as the People’s Republic of China – have been happy to exploit. To prevent a large-scale loss of influence in key regions, therefore, the major Western actors (here conceptualised to include the European Union, the United States, Australia, the United Kingdom, and New Zealand) urgently need a strategy change.
<h1>Australia and the US: Failing the Pacific Nations</h1>
For the Solomon Islands, along with most other Pacific island nations, the climate crisis poses an existential threat to survival. As such, they do not have the luxury to treat the climate crisis as a non-priority. Consequently, Pacific island states have been some of the most vocal proponents of international climate action, as seen in their strong support for the 2017 Paris Agreement, their attempts to build regional bodies to coordinate joint solutions, and the legal action taken for recognition under international law for the harm done by climate change. The Western response to these efforts, however, has caused severe frustrations.
The US has long been the dominant player in the Pacific, extending all the way back to the Second World War, since which it has issued security guarantees to the region’s island nations and sought to foster economic cooperation. In recent years, however, the region has been diplomatically neglected by Washington despite a wider foreign-policy pivot to the Indo-Pacific region. Troublingly, the US climate actions – among them the temporary withdrawal from the Paris Agreement during the Trump administration – have demonstrated a lack of urgency, willingness, and credibility in its climate leadership. Although the Biden administration has increased American efforts in combating climate change, the domestic political situation in the US does not bode well for reliable international environmental leadership from Washington, making it an unpredictable partner for Pacific nations. While the response to China’s forays in the region from the American foreign policy establishment has been largely framed in security terms, policy-makers would be well-advised in heeding the fact that security and climate-security are intrinsically linked for Pacific Island nations.
Even more notably, Australia, traditionally the leading nation from within the region due to its economic, political, and territorial standing, has failed to live up to the expectations of its regional partners. Obstructive Australian conduct in regional climate negotiations, which runs counter to the country’s signature of the 2018 Boe Declaration that identifies climate change as the regional priority issue, has severely damaged its regional diplomatic standing and leadership role. This was demonstrated, for instance, when Australia nearly caused an abandonment of negotiations during the 2019 Pacific Island Forum over its defence of intense coal-use and limited emissions-targets – both of which are not only extremely harmful for the environment, but contribute to condemning the Pacific Islands to large-scale losses of their territory and livelihoods. While Australia remains the main economic and political partner of most of the region’s nations, climate-driven frustrations are slowly eroding this standing – a fact that has been recognised by the new Labour Party government and led to the launch of a diplomatic push to repair ties and restore Canberra’s influence. Whether this policy push proves fruitful will, ultimately, depend on its sincerity and the resources allocated to it.
Beijing has been able to capitalise on American and Australian policy failures so far, with many Pacific island nations finding it a more credible regional partner on climate change and development than either Australia or the US. While this shift is also driven by economic incentives, the climate aspect cannot be disregarded as a key factor. In the eyes of Pacific nations, China’s commitment to reaching the goals of the Paris Agreement, as well as pledges to assist in the mitigation of the impacts of the climate crisis have shown local elites that Beijing is taking their concerns seriously and acting with greater resolve than traditional allies. Coupled with a diplomatic charm offensive by top Chinese officials, this has swayed numerous islands to support Chinese foreign policy goals, with Kiribati and the Solomon Islands severing official ties with Taiwan. Policy-makers in Canberra, Washington, and Wellington fear that this presents the beginning of a wider shift towards China among the islands’ policy elites, and that proposed security and economic agreements will ultimately lead to Chinese economic dominance – or, worse even, Chinese military bases being established. Although the leaders of the Pacific Islands rejected a comprehensive multilateral security partnership with China in late May, broad agreement on climate issues and disaster management within the draft agreement should spark worry and further action among Western capitals.
<h1>Lessons from the Solomon Islands</h1>
What the Solomon Islands case shows is that a lack of consideration for the concerns of nations bearing the brunt of the climate crisis undermines the overall strategic goals of Western nations. The importance of climate action in international politics is only going to grow in the future, having already seen intense and prolonged effects in many countries – predominantly located in the global south. Desertification in North Africa and the Sahel, sustained heat waves and floods in South Asia, and concerns of island nations about their existence due to rising sea levels and the collapse of maritime ecosystems are but a few examples of acute climate-induced events in regions with strategic and developmental importance whereby environmental concerns are already politically paramount – and likely to increase.
If the EU, UK, US, and Australia do not urgently help addressing these challenges, solutions will be sought elsewhere with strategic rivals. Considering the larger shared foreign-policy priorities, such as the prevention of an expansion of Chinese influence and the promotion of the ‘democratic model’, climate action needs to occupy a more central role in their diplomatic efforts and would complement the aforementioned objectives. To this end, afflicted nations need to be engaged proactively and at a high-level, not only through reactive diplomatic efforts when another power offers up an alternative that threatens Western influence. Furthermore, credibility needs to be restored or strengthened by actively committing to and meeting the aims of the Paris Climate Agreements. Only once such actions are pursued, and affected nations feel that their concerns are being understood and acted upon, can further losses of influence like in the Solomon Islands be prevented.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

The Solomon Islands and the Growing Diplomatic Importance of Climate Action

The world’s ever-growing consciousness and urgency in addressing the climate crisis and its adverse effects has indubitably reached the realm of international trade. The European Union (EU) has sought to place itself at the forefront of these developments by making sustainability a key agenda issue, and announcing policies that promote increasingly environmentally-friendly trade relations with partner countries.

The world’s ever-growing consciousness and urgency in addressing the climate crisis and its adverse effects has indubitably reached the realm of international trade. The European Union (EU) has sought to place itself at the forefront of these developments by making sustainability a key agenda issue, and announcing <a href="https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-a-green-transition/">policies</a> that promote increasingly environmentally-friendly trade relations with partner countries. The extent to which this has become an imperative for trade policy thinking could be observed, for instance, in the indefinite shelving of the <a href="https://www.clientearth.org/latest/latest-updates/news/what-s-going-on-with-the-eu-mercosur-agreement/">EU-Mercosur</a> free trade agreement due to concerns around intensive deforestation in Brazil. More recently, the EU made waves by <a href="https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3661">announcing</a> the Carbon Border Adjustment Mechanism (CBAM), which is aimed at preventing <a href="https://ec.europa.eu/clima/eu-action/eu-emissions-trading-system-eu-ets/free-allocation/carbon-leakage_en">carbon leakage</a> through imports into the bloc, by tying trade to the emissions trading scheme (ETS), and incentivising producers in partner countries to green their production processes.
These recent developments have sparked questions about how genuine the EU’s sustainability drive is in trade, and whether mechanisms like the proposed CBAM are simply the newest tools to pursue protectionist policies at the expense of producers in developing and middle-income countries. This tension is central to the question of whether such EU policies are adequate and fair - a question that seems to have no easy answer.
<h1>EU: Sustainable Trade Pioneer?</h1>
As the EU seeks to move towards a sustainable economic model - outlined in its Green Deal - numerous consequences for its economic relations with external actors loom. In the economic realm, the EU aims to promote sustainability across the value chain and incentivise its firms to deliver goods at high environmental standards. To green operations, the EU includes dealings with trade partners outside of the EU, most prominently through proposals for supply-chain due diligence and the CBAM. The rationale behind these proposals is that, by setting high environmental standards for the common market, sustainable production is incentivised, but the competitiveness of EU firms may be worsened vis-a-vis external actors whose production practices are inexpensive and environmentally-harmful. As a result, and as will surely be argued by EU representatives at the World Trade Organization, measures like the CBAM represent a necessary market correction - not a distortion.
<blockquote>As a secondary effect, the EU would be exercising what LSE Professor Lloyd Gruber has aptly termed “go-it-alone power”. </blockquote>
That is, when policies or measures by a powerful actor unilaterally create a new status-quo within international political or economic relations that weaker actors have no choice but to adhere to due to a lack of alternatives. While the new environmental conditions for trade will be arguably worse than the previous status-quo for partner countries, this outcome is still preferable to the alternative of being excluded from EU markets entirely due to an unwillingness to cooperate. A ripple effect, under which other nations - predominantly of a similar developmental level to the EU - explore and institute similar policies, is already taking place as a consequence of this go-it-alone power. Hence, EU policy can be a blueprint for the overall reordering of international trade relations with a supposedly bigger focus on sustainability. A good thing then, right?
<h1>Kicking Away the Ladder</h1>
The picture blurs when considering the position of many developing and middle-income nations that trade with the EU. These actors argue that certain nations have developed and industrialised in heavily polluting ways, including in the production of goods, and consequently mark them as outsized producers of historical emissions. In their view, environmental trade measures deny the late-comers that same chance, undermine the principles of the liberalised trading order, and penalise their attempts at economic development despite very low historical contributions to emissions. This narrative that developed nations are “kicking away the ladder” (a term coined by economist Ha Joon Chang, originally in regard to intellectual property and other institutional requirements for developing nations) casts doubt on the fairness of EU environmental policies, and invokes the creeping spectre of trade protectionism by other means.
It is true that, historically, countries like Germany and France figure among the largest polluters, and that the average lifestyle in a European country is more emission-intensive than its equivalent in India, Botswana, the Philippines, or Brazil among others. All in all, European nations have a vastly outsized share of the global emissions output compared to their share of the global population.
Nevertheless, it is also true that current trends are quickly catching up middle-income nations in their cumulative historical emissions; China is currently the world’s biggest polluter and already in second place for historical emissions per the Carbon Brief. Similarly, intense deforestation has led Brazil and Indonesia to catch up to or surpass many European nations in this metric. One may argue that these nations’ share of the global annual emissions output has not yet reached their share of global population, meaning that they should be able to further increase their emissions. However, in order to lay the foundations for successful long-term economic development, the fundamental objective - especially for smaller developing countries - should be to develop while maintaining emissions as low as possible, consequently staving-off the heaviest adverse effects of the climate crisis.
<h1>The Way Forward</h1>
While recognising the interlinked nature of trade, and the role that demand from Europe plays in accelerating these trends in other places, these developments highlight the need for ways of pricing environmental externalities into the choices of consumers in Europe. Therefore, the EU’s go-it-alone power may be necessary at this point to establish momentum for a more environmentally conscious trading system. In order to make these changes effective, however, this cannot be allowed to simply make developing nations (especially smaller ones) worse-off compared to before. Should this be the case, it may undermine EU influence abroad and make future cooperation and concessions considerably more difficult.
Instead, the EU needs to put money behind its environmental proposals and actively help other nations and companies that export to the EU in their transition toward lower-emission production processes. By funding emissions-effective economic development in countries that need such assistance, fears of protectionism and uncooperativeness can be preempted. While the system of providing monetary and technical assistance to developing countries will not be perfect and will have to be contingent on numerous conditions in practice, it will emphasise that these policies also create winners and are based on the principle of international cooperation. It is, thus, absolutely crucial that monetary assistance is not just lip-service but translates to tangible outcomes. Excluding least-developed countries, which are not large polluters in production in the first place, from requirements under policies like the CBAM would provide a simple first-step for EU policy-makers, and further weaken potential resistance.
Brussels also needs to set an example by credibly pursuing and incentivising domestic initiatives for lower-emission production processes in all of the member states, reducing preferential treatment for domestic companies under schemes like the ETS, and meeting (or, ideally, exceeding) its 55% GHG reduction target by 2030. This way, a “do as I say, not as I do” situation can be avoided, and partners will more readily accept cooperation and dialogue on new requirements, like supply chain due diligence and the CBAM.
Hence, while the new environmental measures proposed by the EU are imperfect and not ideal for a large number of nations, they represent one of the only material manners in which change that counteracts the climate crisis can be achieved across nations on the supply and the demand side. Thus, they represent the best course of action within the constraints posed by the international trading system, given the urgency of the matters at hand. As outlined, significant commitments from the EU nations will be required to make these policies palatable to partners abroad and prevent “<a href="https://www.reuters.com/article/trade-protectionism-idAFL5E8LMKQL20121022">silent protectionism</a>”. Yet, if these commitments are credible, Brussels could keep the (proverbial) ladder in place, while creating second-order effects that extend far beyond the realm of trade and invigorate sustainable economic development in partner states.

Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

The Sustainability-Fairness Challenge in EU Trade Policy

In its current form, the EU Common Agricultural Policy (CAP), the preeminent instrument to support agriculture on the European continent, is defeating its own aims of sustainability and food security. In order to both meet sustainability goals and ensure the future food supply, the structure of the CAP needs to be reformed.

In its current form, the EU Common Agricultural Policy (CAP), the preeminent instrument to support agriculture on the European continent, is defeating its own aims of sustainability and food security. In order to both meet sustainability goals and ensure the future food supply, the structure of the CAP needs to be reformed.
<h1>The CAP and its evolution</h1>
The EU Common Agricultural Policy (CAP) was initiated in <a href="https://european-union.europa.eu/principles-countries-history/history-eu/1960-69_en">1962</a>, when the European Union was still the European Economic Community (EEC) and consisted of six countries instead of the current twenty-seven. Given the size of this expansion, the evolution of the CAP into the world’s biggest agricultural policy and subsidy tool is unsurprising. As the <a href="https://www.consilium.europa.eu/en/policies/cap-introduction/#:~:text=The%20common%20agricultural%20policy%20(CAP)%20was%20created%20in%201962%20by,quality%20food%20for%20EU%20citizens">longest-serving</a> common EU policy, it has continuously adapted to the necessities of member-states and their farmers; focusing on food security, before expanding its range to prioritize high-quality produce and guarantee the protection of European farmers. The policy rests on two pillars: the first pillar <a href="https://www.europarl.europa.eu/factsheets/en/sheet/109/first-pillar-of-the-common-agricultural-policy-cap-ii-direct-payments-to-farmers">consists of seven forms of direct payments to farmers</a>, which - among other factors - are tied to the size of a farm in hectares and, to a lesser extent, involve ‘greening’ payments under which farmers have to meet sustainability criteria. Within this framework, member states enjoy significant discretion over the allocation of payments. Moreover, the second pillar<a href="https://www.europarl.europa.eu/factsheets/en/sheet/110/second-pillar-of-the-cap-rural-development-policy"> makes provisions for rural development policy,</a> which include the protection and enhancement of ecosystems, climate-resilience, and regional economic development. ​ ​ ​ ​ ​ 
More recently, the climate crisis has started to change the paradigm of farming within the EU to include sustainability as a key objective of the policy. The last CAP agreements (which are agreed for cycles of 4 years) have upped their requirements for varied environmental measures. Furthemore, new headline EU projects like the <a href="https://ec.europa.eu/food/horizontal-topics/farm-fork-strategy_en">Farm to Fork</a> strategy and the <a href="https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en">EU Green Deal</a> lay out plans for tangible and positive action on sustainability that are linked to CAP processes. These measures are ambitious in their scope and set out many important policy priorities, making the constraints to truly sustainable agriculture that are currently embedded in the structure of the CAP all the more anachronistic.
<h1>Farm size and the coming crisis</h1>
The major flaw in the design of the CAP is its insistence that bigger is better. Spurred by the commendable objective of food security, the agreement has historically embraced agricultural economies of scale by tying subsidies to hectares, meaning that the biggest farms are guaranteed the highest EU-supported income from their national governments. Proponents of this arrangement within the member states and EU institutions argue that this is the only way to guarantee food security and remain independent of food imports. Despite this, it is undeniable that the incentives created by such a system are problematic in impactful and important ways.
The massive farms and monocultures that become viable, even desirable under this system, indeed guarantee food security in the short-term. But conceptualizing food-security in this manner inadvertently risks its long-term viability. It has been <a href="https://www.sciencedirect.com/science/article/pii/S1877343512001224">proven</a> that massive, intensely-farmed monocultures are contributing to the rapid degradation of soils, and while the focus on these concerns within EU politics is often placed on external countries’ practices, such as prospective free trade agreement partners, this same process is taking place within the bloc and actively incentivized by the CAP. A recent <a href="https://onlinelibrary.wiley.com/doi/10.1002/ldr.2879">study</a>, which used 2010 as a reference period, estimated that about 12 million hectares of EU agricultural land were being severely eroded each year, amounting to 7.2% of the total agricultural land stock. In the same study, the annual economic cost of erosion was estimated at €1.25 billion. If policies are not amended, the EU is heading for a fertile-land crisis, ultimately undermining food security in the longer term.
It has become undeniable that the climate crisis is already having intense effects on food supply. Extreme and unusual weather patterns have increased volatility for many key commodities, with frosts, floods, droughts, and fires adversely <a href="https://news.climate.columbia.edu/2018/07/25/climate-change-food-agriculture/">affecting the yields</a> of staple foods, from corn to wheat in the past years. Adding the effect of unchecked soil degradation from unsustainable monoculture farming to this would critically endanger the food supply in Europe, where the overall supply of suitable farming lands has <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(18)31788-4/fulltext">already substantially</a> decreased during the past century.
<h1>Sustainability and food security - a false choice</h1>
How can this be avoided? The next CAP needs to find a better balance between short- and long-term food security. Without question, both are vital to the functioning of any society and should, therefore, be reflected in our agricultural policy commitments - but the current balance is off. By removing the hectare criterion for basic income support and substantially expanding the scope and function of ‘greening’ payments, many of the harmful incentives for overfarming would be eliminated. Criteria for funding should thus be amended, with a base threshold of funding for all farmers and an additional funding emphasis on the sustainable practices used on farms. The latter, for instance, would build on existing ‘greening’ payments by tying subsidization to farms’ engagement in regenerative agriculture and rotating crop cycles that are in tune with local ecosystems’ demands.
Such an approach would yield many benefits - most important of which are the maintenance of biodiversity and soil fertility - and, consequently, guarantee the reliability of the future European food supply. A pivot to regenerative food systems that put less pressure on the soil would also allow for reduced use of fertilisers and pesticides, which are heavily used in Europe to <a href="https://onlinelibrary.wiley.com/doi/10.1002/ldr.2879">offset</a> small and medium productivity losses caused by soil erosion. Second-order effects would provide further benefits on a local level, with geographically smaller member states being able to draw more resources from the CAP than their geographical limits currently allow. As degradation is more prevalent in <a href="https://www.sciencedirect.com/science/article/pii/S0048969721051810#:~:text=In%20the%20European%20Union%20(EU,life%20(EC%2C%202020b).">southern</a> member states, the prevention of land loss would further serve to prevent economic hardship and job losses in these countries, which otherwise may have grave implications for intra-EU equity and cohesion.
<h1>Conclusion</h1>
In order to be feasible, such a shift has to be calculated and gradually implemented, as resistance from parts of the farming lobby, especially in countries like France and Germany that currently benefit the most from subsidies, is to be expected. Moreover, national politicians are unlikely to want to preside over sharp increases in food, further highlighting the need for a balanced and gradual approach. To avoid price increases and sharp adaptations, decisions that allow for a longer adjustment period that still makes sense within the bloc’s climate commitments and long-term food security objectives will have to be taken urgently. At its core, this readjustment is unavoidable. Now, EU policy-makers have to decide on what terms it will happen and how well the member states will be prepared for the changing realities of food security.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

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Frederick Thelen

Frederick Thelen

The Solomon Islands and the Growing Diplomatic Importance of Climate Action

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