European Commission: Strengthening EU Emissions Target Cheaper Than Expected

EurActiv and Reuters and the Guardian report that according to a draft Commission paper strengthening the EU’s climate target for 2020 is much less costly than estimated some years back.

The EU has so far committed to reducing its greenhouse gas emissions by 20% by 2020 compared to 1990 levels and indicated willingness to increase its target to 30% if there is a global agreement with adequate participation of the other major emitters. A global agreement is far off but there has been a debate that the EU should anyway increase its target to show leadership and reap frontrunner advantages. And due to the recession the 20% has virtually already been achieved anyway and the resulting oversupply in the EU emission trading scheme has depressed prices for emission allowances to record lows.

The issue was inter alia raised last year in the discussions about a low-carbon roadmap to 2050. In June 2010 European Ministers requested the Commission to assess the costs of moving to 30% in more detail. In particular the Central and Eastern European countries argued that no decision could be made before knowing the costs to individual member states.

According to the draft analysis the higher costs, while overall much less than estimated some years ago, would indeed mostly fall on the poorer member states in Central and Eastern Europe. The draft therefore suggests that the additional cuts should mostly be borne by the richer member states.

The mid- and long-term perspective is also not to be neglected. As the 20% does no longer require any ambition, it is likely that companies and consumers will continue to make high-carbon investments, locking in high-carbon infrastructure that will make it more difficult and costly to meet future targets after 2020.

Crucially, the cost calculation does apparently not take into account benefits such as lower health costs from reduced local pollution and lower costs from future oil price rises. EU climate commissioner Hedegaard tweeted yesterday that the EU’s oil bill  soared to €315 bln in 2011. “Who says it is expensive to invest in more energy efficiency in the EU? I am sure that the Saudis don’t mid that we continue BAU”

While the issue of strengthening the target lay dormant during the Polish EU presidency in the second half of 2011, the new Danish presidency now wants to push it forward with new vigour and hopes to adopt conclusions at the March Council meeting.

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