The European Commission should push ahead with its plan to enshrine a 2040 emissions target in law, which will provide a crucial waypoint between 2030 and 2050. But it should also take steps to mitigate risks including trade tensions and rising inequality.
An ambitious 2040 target can be a North Star for Europe’s climate policy. Back in February, the Commission’s energy and climate departments published a recommendation to pursue a 90% per cent emissions reduction from 1990 levels, from the 55% per cent target already established for 2030. This would encourage the front-loading of emissions cuts in the 2030s, leaving only the hardest-to-abate sectors such as agricultural emissions to be tackled in the 2040s.
Such an ambitious climate target would set the tone for more sectoral policies and signal to the private sector that the EU is committed to aggressive decarbonisation. But the real challenge lies in developing the policy framework needed to achieve it and, importantly, managing the many distributional issues that will emerge from deep decarbonisation.
Ambition with accountability
There are many reasons to be optimistic. Europe’s electricity sector is already in the midst of a rapid transformation, with cheap, zero-emissions wind and solar being rapidly deployed in many member states.
Clean technologies in the transport and heating sectors, like electric vehicles and heat pumps, are becoming more affordable and accessible. Sophisticated modelling exercises by academia and the European Commission have demonstrated the technical feasibility of delivering rapid decarbonisation in a few decades.
Yet many real-world, out-of-model risks threaten the EU’s ambition to be almost carbon free within 15 years.
Geoeconomic instability could affect the EU’s access to materials underpinning clean technologies if the simmering trade disputes evolve into full-blown trade wars, meaning that the cost of the green transition would increase for everyday ordinary citizens.
Delivering sharp emissions cuts in the 2030s is also dependent on scaling up novel technologies like carbon removals. This broad category of technologies has yet to demonstrate that it is affordable, although more deployment may drive down costs over time.
Ensuring fairness in the climate transition
Deep decarbonisation will create both winners and losers across all segments of European society, with private households increasingly affected. The EU’s carbon pricing scheme, the Emissions Trading System, will expand in the coming years, raising the cost of fossil fuels used for heating and transport. While mechanisms exist to redistribute revenues from carbon pricing to protect the most vulnerable, it will need to be well- implemented to ensure that decarbonisation does not exacerbate existing inequalities.
Given this multitude of risks, European climate policy should be based on the concept of resilience. Key risk factors for the green transition, such as clean technology costs and the impact on vulnerable citizens, must be closely monitored across the continent as decarbonisation progresses.
Moreover, the policy framework for achieving the 2040 target should include risk preparedness, with pre-planned responses to potential adverse outcomes. By adopting a risk and resilience approach, the EU can improve its chances of successfully navigating the path to a decarbonised economy.