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May 19, 2014

EXPOSED: Transatlantic Trade Pact Endangers Action on Climate

LNG-tanker2-200One year ago, the Sierra Club submitted comments to the Office of the U.S. Trade Representative about a newly proposed trade deal with the European Union, warning that it could have irreversible effects on communities and the climate crisis we all face. Today, a leaked text of the proposed deal reveals that those comments were more than foreshadowing -- the health of our families, our communities, and our climate are indeed in danger.

"A trade alliance between the U.S. and the European Union could offer an opportunity to improve safeguards across the Atlantic that protect our air, water and other natural resources," I said in a press release just about a year ago. "However, a transatlantic trade and investment agreement would have devastating consequences if free trade is pursued at the expense of environmental protection and consumer and worker rights."

The Sierra Club worked with our European partner, PowerShift, a German non-profit organization working at the intersection of trade and energy, to analyze the draft of the European Union's proposal for trading raw materials and energy. Our partners at Earthjustice also published a detailed analysis of the text.  Unfortunately, the text reveals a dangerous proposal that threatens our climate and hinders the ability of governments and communities to tackle the crisis.

Despite the International Panel on Climate Change’s (IPCC) warning that roughly two-thirds of existing fossil fuel reserves must stay in the ground and that countries must urgently scale up renewable energy development and deployment to avoid climate catastrophe, this proposal would actually:

  • Expand fossil fuel exports from the U.S. to the EU, and therefore increase fracking and mining in the U.S.;
  • Limit the ability of governments to set the terms of their energy policy; and
  • Restrict the development of local renewable energy programs.

Let's dig inside the text to understand how it would put our climate at risk.

First, the proposal would increase trade in fossil fuels between the United States and the EU by abolishing trade restrictions on energy, which in the U.S. only exist for natural gas and crude oil. In particular, the proposal seems aimed at facilitating exports of liquefied natural gas from the U.S. to the EU.

Here’s what that means, concretely.
Right now, in order to export natural gas to the European Union, the U.S. Department of Energy must conduct a public analysis to determine whether exports are in the interest of the public. It’s a pretty simple policy: look before you leap. However, under the U.S. Natural Gas Act, the United States must simply deem exports in the public interest - with no review analysis - and automatically approve exports of natural gas to countries with which the U.S. has a free trade agreement that includes something called "national treatment for trade in gas." Apparently, the EU doesn’t believe that this flawed provision in U.S. law is sufficient. In its proposal, the EU has essentially enshrined this risky provision into the trade agreement.
Liquefied natural gas exports from the U.S. to the EU would lead to more dangerous fracking in the U.S. to feed foreign demand, increased reliance on dirty fossil fuels in the EU, and more climate-disrupting pollution. In addition, U.S. exports of natural gas would raise demand for U.S. natural gas, causing an increase in domestic gas prices and, therefore, a reduction in domestic consumption in the U.S. Don’t get too excited about decreased domestic consumption of natural gas: a decrease in gas consumption would shift the energy market back toward coal, not clean energy, according to an analysis by the U.S. Energy Information Association.
Second, the EU proposal would also limit governments from setting the terms of their own energy policy and handcuff their ability to protect their own air and water. The section on "transit" expands an existing trade rule guaranteeing so-called "freedom of transit" via the routes most convenient for international transit -- not for safety. That means that if, for example, tar sands are being pushed by pipeline from Country A to Country C, but have to travel through Country B, Country B could do nothing to alter the pipeline’s route away from key drinking water sources, valuable farmland, or highly-populated areas that could be devastated by leaks or spills. While a pipeline between the U.S. and the EU isn’t likely, the dangerous precedent set by this policy threatens communities around the globe.

Finally, it’s important to note that the only section of the draft text to deal specifically with renewable energy actually would restrict the ability of governments to create their own clean energy economies and build domestic renewable energy technologies at home. That is because the EU proposal prohibits governments from using "local content requirements" in renewable energy programs.
Local content rules, also known as buy-local rules, require that companies purchase or use goods of local origin. They have been a standard policy tool used by governments to nurture and grow new industries - like the wind and solar sectors. Governments must be able to adopt local content rules supporting their own local producers and suppliers in order to create clean energy jobs, localize production, and ramp up the number of homes and businesses they power - all which are tools for tackling climate disruption. Governments must have every tool at their disposal to be able to develop, grow, and support clean energy -- and the TTIP must not close the door on these programs.
In the words of EU Commission President Manuel Barroso, "Climate change is a defining challenge of our time." And in the words of President Obama, "Someday, our children, and our children's children, will look at us in the eye and they'll ask us, did we do all that we could when we had the chance to deal with this problem and leave them a cleaner, safer, more stable world?  And I want to be able to say, yes, we did."
These policy makers are right. Climate disruption is the defining challenge of our time, and we must do all we can to deal with this crisis. Sadly, this trade proposal takes us in the exact wrong direction. It would hinder us from acting on climate at a time when decisive action has never been more necessary. Dirty fossil fuels must stay buried in the ground if we’re going to avoid climate catastrophe. This proposal should be buried with it.
-- Ilana Solomon, Director, Sierra Club's Responsible Trade Program


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