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The new US approach to CEE

Today, Joe Biden will be sworn-in as the 46th President of the United States after a very tumultuous election process. But today has arrived anyway. And energy- and climate change-related topics seem to be the first items on Joe Biden’s agenda. He is set to rejoin the Paris Agreement, from which Donald Trump exited last November; to block the Keystone XL pipeline, the controversial project that would bring crude oil from Canada; and he would regulate methane emissions.

Already during his presidential campaign, Biden had defined climate change as “the existential threat of our time” and outlined a bold plan called Clean Energy Revolution to turn this threat into an opportunity that would revitalise the US energy sector. 

Jason Bordoff, Founding Director of the Centre on Global Energy Policy at Columbia University underlined the urgency aspect of Biden’s climate agenda, due to a shift of priorities among the population and the impacts of climate change we are already witnessing. 

“It is also important the connection between climate action and green recovery, with a strong focus on job creation, equity and justice,” he said during a webinar organised by the Centre on Global Energy Policy. 

Rejoining the Paris Agreement: easier said than done

However, there is a long road ahead. US emissions in 2020 decreased as a result of the coronavirus pandemic, but still, they were between 2 and 7 percentage points lower than the target the country had committed to.

Vice President Joe Biden giving remarks at the US-China Climate Leaders Summit in 2015.

Kelly Sims Gallagher, Academic Dean and Professor of energy and environmental policy at the Fletcher School at Tufts University pointed out that other countries and governments have all higher ambitions. The European Union has committed to reducing emissions by 55 per cent by 2030 and President Xi Jinping pledged that China would become carbon neutral by 2060. 

“The US is also obliged to increase the target and it is going to take some time,” said Mrs Gallagher during the webinar organised by the Centre on Global Energy Policy, adding that she expects an announcement to come around June.

Climate change fully integrated into the US foreign policy

Joe Biden has promised not only to rejoin the Paris Agreement but to also to lead an effort to get every major country to ramp up the ambition of their domestic climate targets. In other words, he committed to fully integrate climate change into the US foreign policy and national security strategies, as well as the country’s approach to trade.

“The US needs to take a very strong dose of humility,” continued Mrs Gallagher. “Other countries might think that we push them hard to reach their targets or to join the Paris agreement and then during the Trump’s Administration we literally left the Paris Agreement. Therefore, at this moment we are not approaching foreign policy issues in a position of strength and it would be better to make our own house in order first.”

But when it comes to foreign policy we can see a very positive signal: the appointment of former secretary of state John Kerry as international climate envoy, the latest addition to what is considered to be the most experienced and high-level climate team in the US history.

And two are the other parties that the US must take into account: China, the biggest emitter worldwide and Europe, which aspires to become the first climate-neutral continent by 2050. 

It is also up to Europe to strengthen Transatlantic ties

Regarding the European Union, a couple of years ago, Donald Trump defined it as one of the biggest foes of the US. Now it is Biden’s turn to repair this “diplomatic damage”. Indeed, some fear that the incoming administration won’t be enough and many years are needed to undo the actions of the past. 

“It is a wrong approach by European partners to see the Biden administration as a saviour able to rectify alone the ruptures in Transatlantic relations and clear up all the mess left behind by the Trump presidency,” argues Daniel Hegedüs, Fellow for Central Europe at the German Marshall Fund of the United States. “The revitalisation of the Transatlantic partnership needs commitment and engagement from both sides of the Pond.”

According to him, the intention to embrace and deepen multilateralism in general and Transatlantic partnership, in particular, is obviously present in Washington, demonstrated by the call of the new administration for a coordinated US-EU approach on China or by the readiness to return to the Paris climate accord. In contrast, the closing of the EU-China investment deal raises well-justified questions in Washington about the rather selective approach pursued by the European partners to strategic coordination and partnership.

“It became a truism to say that Joe Biden is perhaps the last Transatlantic president of the United States,” he tells CEENERGYNEWS. “European partners should see this as a never returning opportunity to strengthen Transatlantic ties and should demonstrate their sincere commitment and active engagement as well. Expecting the US to deliver alone would be a strategic failure.”

China’s and Russia’s strong energy presence in CEE

One thing that started with Trump and will probably continue with the new President, will be a fortification of the US presence in Europe, trying to replace Russia’s and China’s influence. This is particularly true in Central and Eastern Europe, where the Russian and Chinese influence is more present in terms of investments and bilateral agreements, very strong in the energy sector. 

China and Russia are both involved in the construction of new nuclear reactors, the first one being present in Hungary, after winning the tender to expand the Paks nuclear plant, while Chinese are still in the game to built new reactors in the Czech Republic. 

On the other hand, Poland and Romania have already chosen the US to be its nuclear partner. During the summer, former US Secretary of State Mike Pompeo and Piotr Naimski, Polish government plenipotentiary for strategic energy infrastructure initialled an agreement to cooperate in the field of civil nuclear technology development. Later in October, also Romania signed a draft intergovernmental agreement on the expansion and modernisation of its civil nuclear power program.

“No concepts and strategies lay ready in the drawer how the US should reengage with Central and Eastern Europe,” explains Mr Hegedüs. “[…] The new US approach to CEE will be based on the triangle of security cooperation, democracy assistance and infrastructure development.”

Vice President Joe Biden and former President Barack Obama.

The new presidency appears to be committed to continuity also regarding the US contribution to the Three Seas Initiative (3SI) Investment Fund. Last October, Keith Krach, the Trump administration’s Undersecretary for Economic Growth, Energy and the Environment announced that the US agreed to pledge up to 1 billion euros to the 3SI, with targeted investments in the transport sector, energy and digital infrastructures.

“While the scale of the contribution is obviously modest and the 3SI Investment Fund is far from being a game-changer at the field of infrastructure development in CEE, through a gradual increase of the US contribution it could provide an alternative to Chinese or Russian loans along with private investment rules for Central and Eastern European governments,” Mr Hegedüs underlines. 

After all, as Petr Tůma, visiting fellow with the Atlantic Council’s Future Europe Initiative recalled, Biden was among the strongest supporters of the CEE region’s accession to NATO when the US Congress discussed the issue in the 1990s. He was also Obama’s interlocutor with the Balkans, Central Europe and the Baltics, so he understands the region very well and the opportunities and challenges that come with it.

Sustainable investments

And currently, most countries from the CEE region are committed to the European Green Deal and are transforming their energy industry towards a low-carbon economy. What role the US investments will play is the big question of future US-CEE relations.

“With even the most coal-heavy economies of the Central and Eastern European region moving toward a more sustainable and future-oriented energy mix, this offers a huge opportunity for US investment and cooperation at the energy field, especially in countries where US energy companies are already at the market and cooperation with them is part of the national energy strategy,” points out Mr Hegedüs.  

To him, the opportunities are there from the renewable sector through nuclear energy to LNG, carbon-capture technologies and smart grids. 

“The question is how new political dynamics in US-CEE relations can pave the way for US investment in the CEE energy sector and we will be able to see through the next two years how dynamics unfold,” he concludes. 

Photos: Joe Biden’s Facebook profile and presidential campaign’s website.

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