© Unsplash/Philipp Katzenberger

The EU's new climate target: Moon Shot or Mission Impossible?

At the beginning of October 2020, the EU environment ministers held an informal meeting to discuss raising the European climate target for 2030. No final agreement could yet be reached. The new target is to be set out in the European climate law. What this means for individual Member States is still unclear. What is certain, however, is that the new target will be extremely demanding, and that success is by no means guaranteed.

Will 2020 be the year of climate protection? The European Commission has announced that Europe is to become climate neutral by 2050. To achieve this, greenhouse gas emissions are to be reduced by at least 55 percent by 2030 compared to 1990. In September 2020, China also announced plans to achieve climate-neutrality by 2060. Unlike Europe, however, emissions there are not to be reduced by at least 55 percent by 2030, but rather the emissions of greenhouse gases are to peak in 2030. In the USA, too, we might see a reversal of politics and a return to climate protection after the presidential election in November. Within the framework of the Paris Climate Agreement, almost 200 states have issued targets for the year 2030. These are to be updated in 2020 and strengthened if possible. In 2015 the Paris Climate Agreement has been a major step towards ensuring greater ambition in climate protection worldwide. 

New targets need new structures

The most important question now is how to achieve these goals. Neither the European Commission nor China or the rest of the world have provided a satisfying answer to this question. End of October 2020, the EU environment ministers will again discuss about increasing the targets. The European Parliament already pressed ahead and even called for an increased target of - 60 percent (1990 – 2030) at the beginning of October 2020. The 2030 climate target is to be set out in the European climate law. An update of the target path is currently prescribed every five years, based on the international cycle of the Paris Climate Agreement. The European climate law also stipulates that reductions must take place within the EU borders. International cooperation in the form of climate protection projects is not envisaged. The European institutions are expected to enter into trilogue negotiations on the draft law in the first quarter of 2021. Only after the target will have been confirmed, presumably in summer 2021, will the European Commission explore measures and instruments to achieve the target.

National contributions remain unclear

In order to meet the EU target, Germany will probably again have to shoulder an above-average national reduction target. Assuming that the distribution between the sectors covered by the European emissions trading system (ETS) and the sectors under the Effort Sharing Regulation, which includes transport, buildings, agriculture and "small industries", remains the same, the ETS sectors will have to reduce their emissions by around 72 percent and the effort sharing sectors by around 63 percent - always compared to 1990. In its study “Climate Paths for Germany” (available only in German), the BDI had analysed an economically efficient reduction path towards climate neutrality, understood as a 95 percent reduction compared to 1990. The study concluded that for the -95 percent path the emissions in Germany would have to be reduced by around 57 percent by 2030. The EU ETS sectors would need to reduce their emissions by 61 percent, those under the Effort Sharing Regulation by 55 percent. 

The European Union will face huge challenges since the 95 percent reduction path will require significant technological, financial and social efforts. Therefore, the 95 percent path is only imaginable if the G20 countries pursue ambitious climate protection underpinned by take concrete action. In addition, perfect political regulation is needed, i.e. the right decisions at the right time. We need to be completely open to new technologies, and the storage and use of carbon, for example, must not be excluded. Transitional technologies must remain allowed and the investment conditions for companies must be improved significantly. Whether we are looking at a Mission Impossible or at a Moon Shot remains to be seen. Yet, one thing is clear: the challenges are huge, the risks are obvious and the opportunities are still partly to be discovered.