Tough action on climate change is 'cost-effective', EU report shows

Higher emissions targets are more efficient, according to a draft policy document setting out a low-carbon roadmap to 2050
Fiona Harvey guardian.co.uk 18 Feb 11;

Proposals to raise Europe's ambitions on tackling climate change have been strongly boosted by a new analysis showing tougher action on greenhouse gases is "cost-effective" and already achievable in practice.

Europe's existing targets will be easily surpassed on current policies, according to the analysis. This means that taking on a higher target now is more efficient in the longer term.

Green campaigners said the document demolished the arguments against more ambitious targets. "The case is now unanswerable," said Ruth Davis, chief policy adviser at Greenpeace.

The plans, contained in a confidential draft policy document circulating in the European commission, could cost heavy industry an extra €12bn (£10bn) to €20bn within the next few years, and would have profound effects on a broad sweep of economic sectors, from construction and transport to farmers, who will fall under the environmental spotlight as never before.

But imposing stricter limits on emissions would let Europe regain its international leadership on climate change, and breathe new life into the stalled United Nations negotiations, according to EU officials.

The draft briefing document shows that Europe is on track to comfortably exceed its existing climate change targets of cutting emissions by 20% by 2020, and on current policies will reduce greenhouse gas emissions by 25% by that date.

This means that without any extra effort, by 2020 Europe will be well within reach of the higher target of an emissions reduction of 30% which some member states, including the UK, are pushing for.

Raising the current emissions-cutting goal to 25% would be "cost-effective", according to the draft, and by 2030 the EU should aim to cut emissions by 40%, rising to 60% by 2040.

The briefing, which sets out a low-carbon roadmap for the EU to 2050, includes controversial proposals to reform the EU's emissions trading scheme by reducing the number of carbon permits available for companies to buy. This would force businesses to cut their carbon output by substantially more than many have planned for, and would cost about €12bn to €20bn at current carbon prices.

The confidential 13-page document is being passed around the various commission departments and member states for comments. A leaked copy has been shown to the Guardian.

It forms the basis for the discussion on whether the EU should retain its current target of reducing emissions by 20% by 2020, compared with 1990 levels, or toughen this target to 30% cuts.

Some member states – including the UK, Germany, France and Denmark – have argued for the tougher target, but the EU's energy commissioner, Günther Oettinger, has warned it would lead to the "de-industrialisation" of Europe, an analysis disputed by other experts.

Among the recommendations in the 2050 roadmap are:

• A 25% emissions cuts by 2020, 40% by 2030, 60% by 2040.

• Businesses covered by the EU's emissions trading scheme should have their surplus carbon permits set aside. The surplus arose because of the effects of the recession, but if companies are allowed to hang on to all the spare permits, they will scarcely need to cut emissions at all for the next five years.

• All new buildings should be designed as "intelligent low- or zero-energy buildings", with any extra costs from this repaid by fuel savings.

• At least €10bn should be invested annually in carbon capture and storage technology, which must be used "on a broad scale" after 2035.

• Farmers could halve the greenhouse gas emissions from agriculture by 2050, with improved practices. But the need to grow more food, and the reduction in emissions from energy generation will mean agriculture will account for a third of EU emissions by the middle of the century, putting farmers at the centre of any climate policy.

• The use of biofuels, which has been attacked by environmentalists, could be reduced if the EU steps up its efforts on electric cars.

Achieving the low-carbon energy and transport systems needed would cost about €270bn a year over the next 40 years, according to the roadmap, equivalent to about 1.5% of GDP on top of the 19% of GDP that is invested in infrastructure and new technology annually.

Although this sounds like a lot, the commission notes that the increase would "simply take us back to the investment levels before the economic crisis", and is still much lower than the rate of investment in key emerging economies such as China (48%), India (35%) and Korea (26%).

Davis said the document showed that the current EU climate targets were too weak, and should be strengthened. "This analysis demonstrates that Europe will easily meet a 25% emission reduction target by fully implementing existing policies," she said. "The implication is that the more ambitious 30% target, which is an essential part of the strategy to kick-start growth in the vital clean-tech sector, is now easily within reach. If we can hit the commission's trajectory simply by staying in neutral then the case for stepping up a gear and aiming for 30% is now unanswerable."