Briefing Paper Effort Sharing – how to unlock the potential of non-ETS sectors in the 2030 climate package

                

 

 


The future of the Effort Sharing Decision will be key to securing a politically acceptable deal for the 2030 Package. It is the piece of law that gives effect to the GHG target and distributes effort of reducing emissions in non-ETS sectors among Member States according to their capacity. The Effort Sharing Decision covers nearly 60% of EU emissions.  Improving this piece of law has great potential to unlock benefits of investment and innovation in non-ETS sectors, which will be key to supporting a higher GHG target, and to ensuring a long term governance framework that can hold us on track to a nearly completely decarbonised economy by 2050.

WHAT EFFORT SHARING AND NON-ETS SECTORS CAN DO FOR THE 2030 CLIMATE PACKAGE

So far, most attention has been on the need for three binding targets and fixing the Emissions Trading Scheme (ETS). Bringing fresh eyes to the Effort Sharing Decision (ESD) reveals new options to increase the ambition and cost effectiveness of the GHG target, and to revitalise solidarity among Member States in the challenge of tackling climate change. At a time when creativity is needed to help bring the low carbon economy into fruition, the following is a snapshot of what Effort Sharing reform can do for the 2030 climate package:

  • Cover key GHG sectors: Sectors covered by the Effort Sharing Decision amount to nearly 60% of EU emissions. The EU can only be on track for its 2050 goal of a nearly fully decarbonised economy if it  spurs long term transitions in all key sectors by 2030 – not merely the power sector and heavy industry covered by the ETS. The role of national policies in transport, agriculture, buildings and waste will remain key to success.
  • Focus on cost-effective mitigation action: Recent reports show that much more can be done in non-ETS sectors often at high levels of cost effectiveness. Studies also show that a more effective approach to distributing the GHG target between Member States could improve the cost efficiency of the GHG target, helping support higher target ambition.
  • Allow for more ambition: The EU as a whole is already projected to achieve 16% reductions in these sectors by 2020. This is  beyond the mere 10% reductions required by ESD targets. Focussing action on a broader range of sectors can support a more ambitious GHG target and result in a wider range of co-benefits from the 2030 climate package. These co-benefits include improved air quality, resource efficiency, reduced pressure on fossil fuel imports, and healthier lifestyles from consumers. Improve long term investor certainty: Higher non-ETS targets for Member States, coupled with improved legal architecture can improve long term investor certainty in key mitigation projects. This will  help consolidate technological leadership and innovation in a broad range of sectors and create jobs in transport, agriculture, lighter industry, and commercial sectors.

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