The European Union at a Crossroads: Reassessing the Future of Sustainability Leadership

The normative leadership of the European Union (EU) in advancing the green agenda has been established over the years through foundational commitments to the Kyoto Protocol, Paris Agreement, and UN Sustainable Development Goals. Such frameworks have laid the foundation of the EU’s core sustainability policies, principally the EU Emissions Trading System (EU ETS). The success of the EU ETS in significantly reducing emissions from European power and industry plants has precipitated transregional mechanisms such as the Carbon Border Adjustment Mechanism and the EU Deforestation Regulation, reinforcing the EU’s sustainability leadership in systematically advancing the global environmental agenda. The “Brussels Effect,” the vanguard hallmark of the EU in standard-setting, is further cemented through the paradigmatic EU Global Gateway, which has been an effective vehicle for advancing sustainability and green transition, particularly in emerging economies. This chapter elucidates a recent change in the EU’s sustainability policy that has called into doubt the EU’s preeminent green global leadership role. The discussion explores the economic and geopolitical foundations of the growing pro-business, anti-green stance in the EU, notably the competitive pressures exacerbated by the United States, coupled with the dynamics surrounding the emergence of China and Japan as potential global sustainability paragons.