Taking Stock of the EU's Proposed 2030 Climate Target
The EU Commission last week published a white paper that describes its thinking on what type of climate and energy targets the EU should adopt for 2030. This was only the first milestone on the road to the adoption of such targets and it will likely take years until actual targets are agreed by EU member states. However, the white paper is significant as it is the result of an internal hard-fought political debate within the EU Commission, whose members span the whole EU-wide spectrum of various opinions.
The proposed targets are a 40% reduction in GHG emissions compared to 1990 levels and a 27 percent renewable energy share in EU’s energy consumption mix. In this post, I focus on the choice of the 2030 GHG target specifically. There are two main angles through which one could evaluate this target. First, does it put the EU on course to meet its long-term climate goals? Second, does it reflect EU’s “fair share” of the global carbon budget which must be met for global warming to be limited to 2°C?
Consistency with EU’s climate commitment
The EU is committed to reducing emissions by 80-95% by 2050 compared to 1990 levels. More specifically, the Commission’s low-carbon roadmap advises that the bloc reduce its domestic emissions by 80% (without the use of international offsets). According to the impact assessment accompanying the white paper, a cost-effective pathway towards the 80% target is one which reaches 40% in 2030 and 60% in 2040. These milestones imply a rather linear reduction in emissions from 2020 onwards, which I have plotted in the chart below.
Total EU emission in 1990 stood at 5.7 billion tons CO2e. By 2011 the EU had reduced this number 17% according to Eurostat data. The Commission assumes that, by 2020, the EU will have reached a 22% reduction.
After 2020, the Commission’s proposed 40% will quicken the rate of annual emission reductions. This results in equal annual reductions of 102 million tons per year between 2020 and 2030 and 114 million tons between 2030 and 2050. The proposed 40 percent target therefore puts the EU on an essentially linear track to achieve an 80 percent reduction by 2050. It causes substantial emissions reductions starting already in 2021.
However, 80% reduction is in the lower range of EU’s commitment to reduce emissions by 80-95% by 2050. The rest could be met with international offsets, as implied in the Commission’s low-carbon roadmap. The Commission’s white paper suggests that in the case of international climate action, the EU could adopt a more ambitious target and use international credits to meet the additional required reductions. However, without international climate action, it remains unclear whether, and if so how, the EU will achieve anything higher than the lower range of its 80-95% commitment.
Is the target a “fair” contribution to 2°C?
Defining a “fair” contribution is tricky but a necessary step in defining appropriate climate targets for individual countries or regions. Models analyzing fair contributions usually start with an assumption of the carbon budget available under a global warming of 2°C and allocate it to countries based on different effort sharing regimes, which use different principles for what is fair. Some allocate emission reductions so the GDP impacts are the same across countries, while others impose different carbon tax levels depending on the country’s historical contribution to global emissions.
Based on a range of effort sharing principles the IPCC 4th assessment report concluded that developed countries must reduce emissions by 80-95% by 2050 to meet the 2°C objective. This finding was later reflected in the EU’s long term climate commitment.
A recent study by Ecofys found that EU’s fair contribution to 2030 emission reductions involves a reduction between 39% and 79% (with a median of 49%). The study took into account a variety of effort sharing regimes, reflecting the wide range of results. Ecofys has also found that a “fair” 2020 target for the EU would be between 18% and 40% (with a median of 25%). In the chart below, I compare the Commission’s proposed target with the median targets, which reflect EU’s fair share of global reductions.
There is a clear discrepancy between the proposed 40 percent target and targets defined under fair contribution principles. The pathway implied by fair contribution targets calls for steeper reductions especially between 2020 and 2030. This pathway reaches an 87.5% reduction in 2050 (median between 80 and 95).
The choice of a 40% target therefore seems to reflect a shift of focus for the EU. The bloc appears to be more concerned with meeting its own long-term 80% reduction target in the most cost effective manner, as explained above. The EU likely sees itself trying to strike a balance between concerns for economic competitiveness and an ambition to lead the global climate fight. Achieving this balance is likely to be the driving force of the political deliberations that will now follow in the European Parliament and Council.
The views expressed in this article are not meant to represent the views of Thomson Reuteres Point Carbon.
I currently work as a carbon market analyst at Thomson Reuters Point Carbon with a main focus on the European carbon market. I write analysis covering carbon prices, policy developments, and market fundamentals. My other focus areas include aviation climate policy and reducing emissions from deforestation and degradation (REDD). I am interested in climate economics, the role of carbon prices ...
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