Carbon Market Watch Newsletter – September 2020

Europe’s renewed climate commitment under scrutiny

Dear friends,

The European Commission has proposed to strengthen Europe’s 2030 climate target to at least 55%. While a very positive development, the new target nevertheless falls short of what science says is needed for the EU to do its share to keep global warming at safe levels. Critically, unlike the previous target, it includes the possibility of using carbon sinks by forests and land to reach the target, thereby deflecting from the top priority of eliminating pollution and the use of fossil fuels in sectors such as transport and industry. This is not the message policy-makers should be sending.  The devastating fires across the globe already provide a grim reality check on thinking that we can rely on trees to absorb continued CO2 pollution.

The Commission’s climate target plan also includes the prospect of extending the EU carbon market to road transport and buildings. Various studies have found that this would not significantly cut pollution from these sectors. We outline the reasons why this is a bad idea in this post. A key risk is undermining other, more effective climate regulation in these sectors. Instead of obsessing over carbon pricing, the political capital of the EU Green Deal should be spent on strengthening legislation like CO2 standards for cars and binding energy efficiency measures for buildings.

All EU governments have handed in their final national energy and climate plans (NECPS). Last week, we also heard the Commission’s general assessment of these plans, while country-specific assessments are expected around mid-October. NECPs are key tools for defining the specific actions needed to stop the climate crisis. As such, they should also support Europe’s green recovery. Our recent PlanUp reports found that the plans of Poland, Hungary, Romania, Italy and Spain include many more details than the draft versions and encouraging examples such as reviving rail transport or promoting clean energy projects. But they are not up to reaching the EU’s current climate goals, let alone the higher ambition as set out in the EU Green Deal.

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