EU: When 40 Is Only 33

Coming to Warsaw, ECO was feeling somewhat optimistic. Fresh statistics suggested that global CO2 emissions growth has slowed a bit, which could be the first sign of an approaching emissions peak. In September, China announced took a major positive step -- a direction change in its coal policy. Three key industrial provinces must peak and decline coal consumption by 2017 and ban new dirty coal plants.

But then came the damaging announcements by Australia and Japan, whose shifts are in the negative direction.
After a week like this, we certainly don’t need more bad news.  But according to rumours, the European Commission is preparing a proposal for a 2030 climate target of a meagre 40% reduction against 1990 levels.

The EU has long been seen as setting a global high water mark on ambition.  Yet now it is undermining its own objective to keep global temperature below 2°C.

Yes, 40% seems like a lot – so let’s explain what this means.  A 40% target for 2030 would in practice bring the EU on a pathway towards real emission cuts of merely 33% by 2030 due to the amount of surplus emission allowances in the system.  Indeed, in order to accommodate the huge oversupply of surplus pollution permits in the EU’s carbon market, any 2030 target would need to be 7% stricter.

Instead, the proposed level would be inadequate to steer the EU’s energy system away from coal, or to drive transformational investments into renewables and energy savings. Instead of investing in clean technologies, EU industries can largely escape meaningful pollution pricing and rely on the overhang of surplus emission allowances on the EU’s carbon market well into the next decade. Fortunately, 40% is not the only number in the mix. The UK has called for an EU target of 50% by 2030, while Finland’s environment minister stated the EU’s fair share is between 40% and 60% emissions cuts by 2030.

The EU “Green Growth” group, consisting of the UK, Germany, France, Italy, Spain, The Netherlands, Belgium, Portugal, Sweden, Denmark, Finland, Slovenia, Slovakia, Romania and Estonia, have called for an ambitious EU emissions reduction offer to be put on the table before Ban Ki-moon’s leaders summit in 2014.

So when the European Commission publishes its policy proposal in January and EU leaders discuss it during the EU summit in March 2014, they must insure that the rumour of 40% (remember, that's effectively 33%) doesn’t turn into any kind of reality.

The spotlight is really on Germany, where coalition talks are also rumoured to be considering a minimum 40% climate target by 2030. Germany, of all countries, should know how important it is to get the incentives and infrastructure correct across Europe in order to deliver its own Energiewende – and a 40% target wouldn’t do that. Climate Action Network Europe is calling on the EU to commit to at least 55% domestic emission cuts by 2030, on top of which would come the EU’s international effort. Moreover, a binding EU renewable target of at least 45% and an energy savings target of 40% are needed to provide certainty for investors and drive  true transformation of the energy system.

Does the Commission have in mind any kind of equity indicators whatsoever when planning for a 40% target?  And how big a global emissions budget is assumed? It doesn’t sound like the EU is assuming anything that would give a reasonable chance of staying below 1.5/2°C.  

To be sure, the EU has a long-term emission reduction goal of 80 to 95% reductions from 1990 levels by 2050. Achieving this would be in the EU’s own economic interests as well as inspiring others to follow suit – a real ‘ambition driver’. But 40% by 2030, with all the loopholes in the system, would take the EU off track. We will hear reassuring voices next week as ministers arrive, but what will they be assuring us?  We need to see the EU we have until recently known – all about ambition, action and the clean energy future.