At an informal meeting on 11 February, European leaders will discuss ways to rebuild momentum following the setback at Copenhagen.
Due to internal divisions the EU did not raise its emission reduction target to 30% before or during the UN Climate Summit in Copenhagen and had to settle for a non-binding “Copenhagen Accord” that falls well short of Europe’s objectives.
In an updated briefing, “30 Percent and Beyond – Strengthening EU Leadership on Climate Change”, environmental think-tank E3G argues that the EU should raise its unilateral emissions reduction target to 30%, and should table a conditional offer of a 40% reduction in the event of a fair, ambitious and binding international agreement.
"Copenhagen has not changed the fact that moving to 30-40% reductions is in the EU’s domestic interest,” said Nick Mabey, Chief Executive and Founding Director of E3G.
"Business has decided there is no high growth, high carbon future in Europe and is looking for the certainty it needs to scale up low carbon investment. 30% would bolster the carbon market and create the conditions needed to maintain EU leadership in the industries of the future”
Key conclusions from the briefing:
- As a result of the recession, the cost of achieving a 30% target is now estimated to be €104bn cheaper than the original 20% reduction was expected to be when first adopted.
- According to the IEA, by using offsets and surplus allowances banked from Phase 2 of the Emissions Trading Scheme, the EU could meet its current 20% target without any additional domestic abatement taking place. This would undermine the integrity of the ETS.
- Heavy industry has been a net seller of allowances during the initial phases of the ETS and could see additional windfall profits of up to €5.4bn by the end of Phase 2.
- The projected fall in the carbon price as a result of the recession also implies reduced auction revenue for governments from 2013 to 2020. In its impact assessment for the 2020 Climate Package, the European Commission predicted that a carbon price of €39/tonne and 50 percent auctioning would result in auction revenue of around €38bn by 2020. Many forecasts now put the price in 2020 at closer to €20/tonne, meaning auction revenues would be cut in half.
1. ‘30 Percent and Beyond’ is a briefing from E3G as part of their programme of work on Global Deal. The report, originally released in November 2009, has been updated to reflect the outcome of the Copenhagen Climate Summit.