Impact of the EU carbon policy on the globalization and ESG agenda

Abstract

The article sheds light on the national climate policies under the influence of the EU “green” agenda towards a new wave of deglobalization. We address issues related to the main provisions of the carbon dioxide (СО 2 ) emission trading system implemented by the EU and posit that European climate policy can enhance the process of reducing interdependence and integration between EU member states and non-EU countries. We suggest that the EU’s global climate leadership, increased use of environmental taxes and stimulation of economic growth based on low-carbon technologies such as hydrogen, energy storage and carbon capture, utilization, and storage (CCUS) can lead to deglobalization. Based on a case study of Finland as an EU member and China as a BRICS representative, we observe the effect of the applied carbon tax on the development of national economies and propose that similar policies across the EU and around the world minimize the risks of deglobalization.