Faster Action Urged from the EU to Value and Protect Nature

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The writer is Europe’s Futures fellow of the Institute for Human Sciences-IWM and non-resident fellow at Bruegel

The European Commission recently unveiled an economic security strategy in response to various threats, including Russia’s actions in Ukraine and competition for important raw materials.

While EU member states have differing opinions on how to implement this strategy, discussions are ongoing regarding industrial policy and trade restrictions. This shift represents a significant departure from the previous 30 years of prioritizing trade as a means of transformation and the past 70 years of focusing on economic integration as the primary security strategy.

Unfortunately, political leaders are failing to address the most pressing threats to economic security. For decades, we have overlooked the dangers of becoming overly dependent on certain suppliers and ignored the environmental costs associated with our economic model, both domestically and in the countries where European-bound goods are produced.

Economist Partha Dasgupta’s groundbreaking 2021 report on incorporating ecological externality into economics highlighted the immense costs of losing essential ecosystem services. However, progress in valuing nature and assessing climate risk has been slow.

While the EU has made strides in developing a carbon market and capitalizing on low-carbon energy opportunities, there are still no effective mechanisms in place to protect oceans and forests. Destruction is often profitable, while conservation as carbon sinks and biodiversity reserves is not considered in economic performance metrics.

Efforts to address these systemic risks are gradually gaining attention in EU policy circles. The European External Action Service and the European Commission are set to release their first joint paper on climate security, providing a comprehensive overview of the threats posed by environmental degradation and climate change.

The European Central Bank is also studying how to account for nature-related risks within the financial system, recognizing the impact of environmental degradation on production processes and the creditworthiness of European companies.

It is essential for European-level institutions to take responsibility for environmental impacts, as climate degradation is a long-term, transnational problem that affects all European citizens. Currently, the burden falls on national governments, leading to a blame game when it comes to implementing climate risk mitigation policies.

Political leaders should emphasize the costs of inaction to highlight the necessity of addressing these security threats. Voters need to understand that investing in natural security is more cost-effective than dealing with the aftermath of natural disasters and biodiversity collapse. This requires a long-term perspective that extends beyond the next election cycle.

Every European institution must step up and take action to mitigate environmental impacts as soon as possible.