European Climate Action will Facilitate a Low Carbon Future
Pauline Lowe, Policy and Research Executive, writes about the need for swift action and implementation from the forthcoming EU Commission under President-elect Von der Leyen for a Europe-wide transition to a Low Carbon Economy
Last week’s Intergovernmental Panel on Climate Change (IPCC) report on climate change and land use was timely. It was published just after we experienced the hottest July ever recorded, Greenland losing 11 billion tones of ice in one day and Brazil undergoing a 68% deforestation increase compared to July 2018.
It is now even more urgent that we take action to limit global warming to 1.5 degrees above pre-industrial level. Continued dependence on fossil fuels and overusing our valuable natural resources, will only result in major economic and social consequences for businesses, communities and citizens.
Preventing climate change through cutting Greenhouse Gas (GHG) emissions is a key priority for the European Union (EU). The EU’s first energy package adopted in 2008 looks to reduce emissions by 20% and sets to increase renewable energy share by 20%. In 2014, these figures were increased to a 40% cut in emissions and a 32% share of renewable energy by 2030. Four years later, the Commission presented its vision to create a climate-neutral (reaching net-zero GHG emissions) EU economy by 2050, increasing the commitment from a 80-95% emission reduction.
Backed by 22 countries and supported by many European businesses, carbon neutrality is set to become a reality. However, reported projections note that EU-wide reductions of emissions by 2030 will reach only 30% below 1990 levels, based on existing mitigation measures.
The risk that we might miss our 2030 targets means that the EU must take immediate action to increase efforts to invest in renewable energy, sustainable transport and facilitating the business transition. If efforts are not increased, the risks associated with climate change will only worsen over time.
This level of urgency highlighted by scientists and climate youth activist Greta Thunberg, was internalised by many European voters in May. Making history, 69 Green Members of Parliament (MEPs) were voted in by citizens, which places the party in fourth place, ahead of the new far-right bloc. While consumer sentiment and voter preferences are beginning to align with the action required, governmental climate achievements are yet to meet the action needed.
In response to this, Ursula Von der Leyen, the newly elected Commission President, has pledged to build a low carbon European future.
As a part of her presidency bid, she presented political guidelines that would envisage a European Green Deal proposed in her first 100 days in office. There are three key areas within these guidelines that must be delivered if progress is to be made.
Energy neutrality
The proposed European Green deal is based on a commitment to enshrine climate-neutrality into law by 2050, which upholds the Paris Agreement goals and EU targets. Two notable ways in which President Von der Leyen plans on achieving this is through firstly, an extension of the Emissions Trading System (EU ETS). She proposes to extend the EU ETS (international system for trading greenhouse gas emission allowances) to cover the maritime sector, possible extension to traffic and construction, as well as reduce the free allowances allocated to airlines over time.
Secondly, President Von der Leyen plans to introduce a Carbon Border Tax that seeks to avoid carbon leakage which prevents the relocation of carbon-intensive production to non-EU countries and ensure our companies can compete on a level playing field.
Sustainable Investment
To create a low carbon economy, major investment is needed to develop sustainable infrastructure projects. President Von der Leyen plans on placing green and sustainable financing at the heart of our investment chain and financial system by transitioning parts of the European Investment Bank (EIB) into ‘Europe’s climate bank’. In 2017, only 20% of the EU budget was spent on climate-relevant action.
While the EIB is committed to 25% of all expenditure to climate objectives, President Von der Leyen’s proposal of doubling this investment by 2050 will be crucial to future-proof the European economy. To support this, she plans that the Sustainable Europe Investment Plan of supporting €1 trillion of investment over the next decade will come to fruition.
Resource preservation
The perception that our natural resources are in abundant supply is no longer supported. Preserving these resources will be key for our transition to a low carbon economy. President Von der Leyen has pledged to create a Biodiversity Strategy for 2030. This will seek to prevent any further biodiversity loss in Europe.
In terms of aiding the business transition to a low carbon economy, she proposes to create a new Circular Economy Action Plan which will focus on sustainable resource use, especially in resource-intensive and high impact sectors such as textiles and construction. Not only will such a strategy aim to reduce-use, but it will also open up economic opportunities and reduce operating costs for business. In addition, President Von der Leyen proposes lead on the issue of single-use plastics.
Future-thinking
While climate change has many associated risks, preparing and transitioning to a low carbon economy comes with many advantages and benefits for businesses and communities across Europe. All these proposed commitments under this European Green Deal would support the EU to segue towards climate neutrality. Therefore, it is imperative that these commitments do not just become speaking points but translates into concrete action.
Chambers Ireland has made a series of recommendations on what needs to be done nationally but has also been working with Eurochambres to ensure that the new Commission is taking climate change seriously and supports business, particularly SMEs, to transition.
Over the next few months, leadership and action-oriented solutions must prevail. Leaders and policy makers across the EU must step up and work collaboratively to ensure the commitments under the Green deal, bringing us one step closer to climate neutrality.
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