By Mathew Carr
Nov. 6, 2020 — LONDON— The European Union continues to push for linkages to its carbon market, the world’s biggest by traded value, as it considers a much tighter emissions-reduction target for 2030.
As the U.S. is set to resume participation in the United Nations Paris climate deal, the EU is getting ambitious with its 2030 emissions-reduction agreement.
The target of a 60% emission reduction target vs 1990 levels is being flagged by the European Parliament, 5 points tighter than that proposed by the European Commission and a full 20 points more than the current level of 40%.
The parliament must be a bit crazy, you might think. Isn’t the EU worried all the profitable dirty industries will pack up and move to …well, pretty much anywhere else on earth?
The European People’s Party, the biggest group in the region’s parliament, is worried about just such a scenario.
“No other major economy in the world is anywhere near the direction the European Commission wants to go,” Peter Liese, EPP representative, told other lawmakers.
“The only argument I hear from the Environment Committee in favour of the 60% against the Commission proposal is that it is tactical. The Council (of nations in the EU) may be pushing us down, so we have to vote for something higher now. But firstly, the Council is already at 55% with a qualified majority, and secondly one cannot say to the people who are worried about their jobs, in the steel industry, in the automotive supply industry, etc. (that 60% was) was just a tactic. Let’s vote for what we mean and that is the Commission’s proposal: 55%!”
It’s fair enough that rich countries are worried about jobs, isn’t it?
When Europe and Japan (and other rich nations) agreed to targets under the Kyoto Protocol climate deal from 2008-2020, industrial output in China and other emerging nations surged, equalising global wealth. Or perhaps that was a coincidence.
Europe began its carbon market covering about half its economy in 2005, but so far, it’s been giving away carbon allowances — effectively rights to pollute — ever since, to factories covered by the program, the world’s largest by traded volume.
Here’s something that might surprise you, especially those in industry: A 60% reduction target for Europe is simply not ambitious enough, given the urgency of the climate crisis and historical responsibility.
That’s because the first half of emissions in any economy are much easier to cut than the second half. Plus, the EU can use emissions credits created by BRIC countries AND those proved before 2021, to cut its risks of taking on an ambitious 2030 target.
Europe has already shown this. It’s got a target to cut emissions by 20% vs 1990 by 2020 and it cut by 24% already by 2019. This year, it’s set to cut by another 15% or so in a single year because of the coronavirus pandemic, so it could potentially reach 30% by this year.
The EU can probably afford to cut by even 70%, or even 75%, by 2030. This is not just me saying it, it’s Yvo de Boer, former executive secretary of the UN Framework Convention on Climate Change. He was overseeing the UN climate process 2006-2010 (the UN doesn’t really oversee anything to be sure, but the UN is, or should be, a democracy, of sorts).
Countries and environmental lobby groups are thinking the oversupply in the Kyoto era (2008-2020) should mean the UN carbon credits produced already are “old rubbish” and they should not be transferred into the Paris era for compliance from 2021 and beyond.
But in actual fact, countries that produced those carbon credits, e.g., Brazil, Russia, India, China, should be rewarded, because companies in those emerging nations spent real money to help clean up the mess mainly created by richer nations.
Canada, China, Japan, New Zealand, South Korea are planning net-zero emissions targets in the 2050-2060 realm. India is considering a domestic carbon market, like China is, according to emissions-pricing news service Carbon Pulse:
My home country, Australia, where are you?
By linking to other carbon markets, the EU can dramatically cut the risks associated with its 2030 emissions-reduction target, both via borders and timeframes. Emerging countries can get good-value finance via carbon markets to leap frog rich nations economically speaking, or at least catch up, substantially.
Cutting by about 75% in 2030 by the EU, “I think that would help because you would significantly increase the level of ambition and, at the same time, you are cleaning up the system, by putting previous credits to some useful purpose in an enhanced-ambition context,” de Boer said Friday by telephone from Holland.
Emerging countries will be willing to pledge bigger emission reductions if they get finance from richer nations for that extra effort, de Boer said, citing Indonesia as an example.
Some of that help will be via carbon market linking under Article 6 of the Paris climate deal, the transfer of emission obligations.
Post 2020, Indonesia has set unconditional reduction target of 29% and a reduction target up to 41% that’s conditional on “international support”, compared with a business-as-usual scenario, by 2030.
These conditional targets are becoming very important for stirring global climate action, de Boer said.
If Biden wins office, he’s promised to make global climate cooperation a vital part of the U.S. foreign policy … the world might be on a better trajectory.
(Corrected, edited Friday evening, edited Sunday morning, more to come)