Dear Member of the European Parliament,

We are very pleased to share with you a new policy briefing by Carbon Market Watch and WWF, with the endorsement of Transport & Environment, that shows how the EU’s largest climate instrument can be made fit for purpose and deliver on the international climate commitments.

In light of the Paris Agreement, the EU has agreed to take action on climate change in order to pursue efforts to limit the temperature rise to 1.5°C. Europe’s contribution to this global effort will be determined, in large part, by its centrepiece climate policy instrument – the Effort Sharing Decision (ESD). The ESD regulates about 60% of the EU’s total emissions – those from sectors including transport, agriculture, waste and the heating and cooling of buildings.

In the summer, the European Commission will present a new legislative proposal to address the emissions from these sectors in the 2021-2030 period. A fit-for-purpose Effort Sharing Decision will bring about multiple benefits. It can drive the transition to a climate friendly economy and the sectoral measures to cut emissions will lead to more liveable cities, cleaner air, reduced energy poverty and more jobs.

It is however expected that the emissions from sectors covered by the ESD will have to be reduced by only 30% below 2005 levels by 2030. This proposed target is not nearly enough to support the transformational progress that Europe needs in our fight against climate change. Moreover, some governments and industries are trying to water down Europe’s climate action even further by introducing loopholes in the upcoming legislation. If they are successful, the EU is at risk of emitting 4.7 billion tonnes more CO2 than its Paris 2030 climate pledge.

Certain countries and industries are pushing for the following loopholes representing 4.7 billion tonnes of greenhouse gas emissions:

1. The use of carbon removals by forests to reduce climate efforts in the agriculture, buildings and transport sector, which could lead to additional emissions equal to 1,350 million tonnes of CO₂ equivalent.
2. Start counting future emission cuts from current 2020 climate targets, which would inflate the EU’s carbon budget, and could allow Member States to emit 750 million tonnes more carbon in the 2021-2030 period.
3. The use of surplus allowances from the EU’s Emissions Trading System (EU ETS) to emit up to 300 million tonnes more greenhouse gases in the non-traded sectors.
4. The carry-over of unused carbon permits and international offsets from the current policy to the post-2020 period, to release an additional 2,250 million tonnes of CO₂ equivalent under the 2030 Effort Sharing Decision.

To maintain the momentum created in Paris, the 2030 Effort Sharing Decision must result in effective climate action in the transport, buildings, agriculture and waste sectors. Such a signal from the EU will demonstrate to the rest of the world the strong political determination to translate the Paris Agreement into dynamic and meaningful action at home.

• Be in line with an overall greenhouse gas emission reduction target of at least -95% by 2050 supported by, at minimum, a 45% reduction in ESD sectors by 2030. Both objectives should be based on an EU carbon budget to stay well below 2°C and to pursue 1.5°C.
• Introduce an automatic mechanism which, every five years, allows for emission cuts to be accelerated as required by the latest science and/or allowed by technological potential, in line with the Paris Agreement’s commitments.
• Avoid loopholes which can undermine the EU’s 2030 greenhouse gas reduction target, by starting the countdown to the Member State’s 2030 climate targets from their actual emissions levels (rather than inadequate 2020 target levels) and by barring the use of EU ETS credits and land use offsets.
• Robustly govern the EU’s greenhouse gas emissions by ensuring that Member States produce annual, transparent and enforceable planning, compliance, and reporting documents
• Strengthen the coherence between sectoral policies by ensuring that emission reduction efforts made under the ESD are fully represented in National Energy and Climate Plans, and by enhancing the synergies between sectoral policies under the ESD.

Kind wishes,
Femke, Imke & William

Contact:
For further information, please contact:

Femke de Jong
EU Policy Director
Carbon Market Watch
[email protected]

Barbara Herrero Cangas
EU Policy Officer
Carbon Market Watch
[email protected]