By EWA KRUKOWSKA
The European Union proposed cutting the regions
greenhouse-gas emissions by 40% by 2030, accelerating its
efforts to fight climate change.
The European Commissions strategy to reduce pollution,
curb rising energy costs and overhaul renewable-energy
policies in the next decade would require an average annual
investment of 38 billion euros ($52 billion) in the 28-nation
bloc, the regions executive arm said Wednesday in a
The current goal is to cut emissions by 20% in 2020 from 1990
levels, a pace that would lead the EU to a 32% reduction of
greenhouse gases by 2030.
The proposed design of future policies pits nations including
Germany and the UK, who are seeking stronger efforts to
protect the atmosphere, against Poland and its allies, which
rely mainly on fossil fuels to keep their economy
It also highlights the divide between energy intensive
companies, whose gas and power costs are more than double
their US and Asian competitors, and green lobbies such as
Greenpeace seeking deeper emission cuts.
The 40 percent greenhouse-gas target is probably the
maximum of what can be achievable if you want to unite all
these forces, EU climate commissioner Connie Hedegaard
said in an interview in Brussels. This is the common
denominator that weve been looking for for years.
The strategy is the start of a debate among member states,
which may lead to a draft law in early 2015. It also includes
an EU-wide target to boost the share of renewables in energy
consumption to 27% by 2030 and may include a pledge to boost
energy efficiency later this year, the commission said.
The proposal is an important first step to restoring investor
confidence in the EUs vision for a low-carbon energy
future, according to Stephanie Pfeifer, CEO of the
Institutional Investors Group on Climate Change in London,
which represents more than 85 companies with assets of 7.5
trillion euros. The EUs long-term goal is to cut
greenhouse gases by at least 80% in 2050.
Investors need policy fixed for the long-term to plan
multi-decade energy investments, said Pfeifer, whose
group includes Kleinwort Benson Investors and PensionDanmark.
The longer policy is delayed the more severe
Europes energy investment challenge becomes.
The spending required to meet the targets will be to a large
extent compensated by fuel savings, according to the
commissions president Jose Manuel Barroso.
We show that European leadership in global climate
action is beyond doubt and we show that we can do that in a
way that is beneficial for economy, Barroso said at a
conference in Brussels. What were proposing today
is ambitious and affordable.
The commission asked member states to consider a 2030
framework that focuses on the carbon-reduction target to
avoid conflicts with policies subsidizing renewable energy,
according to the strategy document. The EU wont extend
legally-binding renewables targets for individual member
states beyond 2020, instead setting an EU-wide goal,
according to the document.
Scrapping renewable energy targets is good news
for the economy and environment, according to Robert Stavins,
director of Harvard Universitys Environmental Economics
Program. The renewables goal conflicts with the EU emissions
trading system and removing it would lower the cost of
achieving the pollution cap, he said.
The European Environmental Bureau, the regions largest
federation of environmental citizens organizations, has
called on policy makers to reduce carbon discharges by at
least 60%, set a binding target for renewables at 45%.
The Commissions proposal falls well short of what
science tells us is needed to address the devastating
consequences of climate change and shows a serious lack of
vision and leadership by President Barroso, said Jeremy
Wates, EEB secretary general in Brussels.
The commission also seeks to strengthen its emissions trading
system from 2021 by making the supply of permits fall when
theres an accumulated surplus of at least 833 million
metric tons. Thats less than half of the glut estimated
to be about 2.2 billion permits by the end of last year,
according to Bloomberg New Energy Finance in London. If the
surplus drops below 400 million, the bloc would begin
returning allowances from the reserve to the market,
according to the document.
To align the cap-and-trade system, which puts emission limits
on about 12,000 companies, with the proposed 2030 climate
target, the annual pace of carbon cuts in the ETS would
accelerate to 2.2% from 2021 from 1.7% currently, according
to the commission. No international credits would be allowed
in the program after 2020 unless negotiators worldwide reach
an ambitious deal at a climate summit in Paris next year.
The cost of emitting a ton of carbon dioxide in the EUs
$53 billion carbon market slumped to a record low of 2.46
euros in April and traded at 5.16 euros Wednesday on the ICE
Futures Europe exchange in London.
EU heads of state will discuss the package at a meeting in
Brussels starting March 20. Energy and environment ministers
may take up the debate in May in Athens. The
commissions ambition is to have a political decision on
the direction of future policy in time for a Sept. 23 summit,
where UN Secretary General Ban Ki-Moon is seeking pledges
that can underpin a global treaty limiting emissions to be
approved in 2015.
The EUs regulatory arm may then propose draft
legislation by the first quarter of 2015, in time for the UN
global warming talks that culminate in December of that year.