Ambitious climate policy in the EU can underpin a sustainable economic growth that supports the development of a competitive, modern economy that delivers benefits for all, and acts as a beacon of inspiration to the rest of the world, writes Dan Jørgensen.
Dan Jørgensen is Denmark’s minister for Climate, Energy and Utilities.
The EU has less than four months to agree on an enhanced climate target for 2030 and submit it to the UN in line with our global commitments. We must seize this opportunity to show global leadership and put pressure on other global parties to follow suit.
The Commission will put forward its plan for the 2030 target this week. This will mark the start of negotiations. As experience shows, these are very difficult negotiations. There has previously been – understandable – concerns about competitiveness, financing, level of ambition and whether other global actors will reciprocate.
Despite the very short timeline to conclude the negotiations, I believe that this time we should confidently face the global challenge and take leadership. A climate target of at least 55% emissions reductions is not only necessary. It is also possible. We can achieve it in a way that is fair, cost-effective and preserves the EU’s competitiveness.
Firstly, the EU is already well on the way to 55% by 2030. According to the latest assessment from the European Commission from 2018, the EU is expected to reduce greenhouse gas emissions by 46% in 2030 compared to the current target of at least 40%.
The projected overachievement is due to the extensive climate and energy legislation the EU has put in place since the adoption of the target in 2014. Therefore, we must also set a target of at least 55% – we have already seen the EU overachieve on its 2020 and current 2030 target and we should also allow for this possibility for the enhanced 2030.
Secondly, we have strong tools to achieve the reductions in an affordable way to the benefit of Europe’s citizens and businesses. An effective price on carbon provides incentives to reduce emissions cost-effectively across member states.
The Agora Energiewende study of 2020 underlines that an effective carbon price supports the most cost-effective achievement of an enhanced 2030 target.
Along with the rest of the EU climate and energy regulation, the Emissions Trading System (ETS) has the potential to take us much further. The ETS should be strengthened to deliver further reductions.
And it should be extended to road transport and heating in buildings to secure a more uniform price signal across sectors backed by an ambitious enabling framework of supporting policies.
In addition, we need regulation that provides incentives for an effective, climate-friendly and competitive agricultural production across the EU. Such a modernised regulatory framework will deliver the reductions needed to get us to at least 55% by 2030 and set the EU on the right path towards climate neutrality by 2050 at the latest.
However, it would be premature at this stage to set out the precise way to achieve the target, as that would pre-empt the Commission’s package of legislative proposals due next year. This autumn we must agree on an enhanced target and a set of principles that will give the right guidance to the achievement of the target.
Thirdly, we have put significant financial support in place for a more ambitious climate policy.
30% of the expenditures in the new EU budget and the recovery efforts under Next Generation EU shall comply with the objective of EU climate neutrality by 2050 and contribute to achieving the Union’s new 2030 climate targets, which establishes a strong basis for enhanced ambition.
The financial support will in particular benefit the most challenged economies in Europe and the overall budget and investments for the recovery can support the transition, realising the potential of the green oath “do no harm”.
This is key to ensure the investments needed to reach at least 55% by 2030 and not least to ensure a just and socially balanced transition.
Ambitious climate policy in the EU can underpin a sustainable economic growth that supports the development of a competitive, modern economy that delivers benefits for all, and acts as a beacon of inspiration to the rest of the world.
Fourth, the EU has a lot to gain from taking the lead. Our economy and competitiveness will benefit from developing the solutions of tomorrow and the world will look to the EU for a responsible and ambitious approach to the common threat of climate change. We cannot wait for other major economies to move – we have to show them how.
This autumn, the leaders of the European Union have a chance to show real global climate leadership by delivering a strong and credible response to the climate crisis. Let us not miss this unique opportunity to lead by example.