The EU is getting ready to ratify the Paris Climate Agreement. This is good news, but the proposal published today should not overshadow the problematic lack of ambition for the upcoming proposals on the EU’s climate instruments, writes Roland Joebstl.
Roland Joebstl is Climate and Energy Policy Officer at the European Environmental Bureau (EEB).
In Paris, Climate and Energy Commissioner Miguel Arias Cañete and EU member states played a crucial role in ensuring that the final agreement acknowledged the importance of trying to keep global warming below 1.5 degrees Celsius.
However, since then the EU executive and national governments have been busy in backroom negotiations on the EU’s largest climate instrument, the Effort Sharing Decision (ESD). The expected proposal may introduce a list of loopholes letting member states off the hook on climate action and putting the EU on the wrong track, contradicting the objectives of the Paris Agreement.
The majority of the EU’s GHG emissions happen outside the Emission Trading System (ETS) and should in the future be covered by a new ESD that will address emissions from agriculture to transport, buildings to waste management, SME manufacturing to the service industry.
Research shows that ambitious energy efficiency and emission reduction policies can bring jobs and more investment in clean transport, energy-saving homes and environmentally-sound agriculture. By pushing for loopholes, member states risk delaying these investments and undermining the path to decarbonisation.
What are the loopholes member states want?
- Member states are attempting to find creative ways of setting the starting point for the next emissions reduction period. The EU is on track to overachieve its 2020 climate target and is likely to cut its greenhouse gases by 25%, compared to the target of 20%. Some member states therefore want to start counting their future emission cuts from the theoretical 2020 targets, even if their real emissions are significantly lower. This would inflate the EU’s carbon budget for 2021-2030 by 750 million tonnes of CO2 equivalent. To avoid this, the 2021 starting point should be based on real emissions levels or at the 2020 target level if the latter is lower.
- The second loophole stems from the oversupply of allowances in the ETS. The EU ETS is currently oversupplied and this is expected to continue until 2030. Transferring surplus ETS allowances into the ESD would not lead to less pollution in the ETS sector, but would delay action to cut emissions from the non-ETS sectors, and lead to more pollution in the EU up to 2030. Some member states want to use surplus allowances to emit more greenhouse gases in the transport, agriculture, waste and buildings sectors. The oversupply of allowances needs to be addressed in the reform of the EU ETS and must not be transferred to the ESD.
- The last loophole takes advantage of the capacity of ecosystems to emit and absorb greenhouse gases. These carbon cycles in our forests, wetlands and soils are currently counted separately under land use change and forestry (LULUCF).
European soils and forests are estimated to act as emissions sinks and annually store more carbon than they emit; an amount comparable to the annual greenhouse gas emissions of Spain. However, this trend is reversing as we intensify the way we use our ecosystems. These emissions and removals estimates are also potentially subject to large annual fluctuations and uncertainties related to the impacts of climate change on these ecosystems.
Some member states want to use forestry offsets to be free to emit more greenhouse gases in the agricultural sector, in particular. This could mean up to 1.35 billion tonnes of emissions credits from land use change and forestry (LULUCF) that would significantly undermine the ESD.
The successful Paris agreement now requires the EU’s climate policy to be significantly strengthened, not undermined. Yet the latter may well happen if the ESD is riven with loopholes and real climate action is avoided by banking on uncertain emission sinks.
Allowing member states to use forest growth to delay action in critical sectors such as energy, agriculture or transport would delay necessary structural changes and ultimately increase transition costs towards a low-carbon economy.
Last week, the coordinators of the European Parliament’s Environment Committee asked the Commission to ensure a robust ESD proposal and insisted that member states should not be able to use forests to lower their emission reduction efforts.
With the ratification process now moving forward, Commissioner Cañete should present a revised Effort Sharing Decision and new rules for land use, land-use change and forestry. To maintain the credibility and momentum created in Paris, Europe needs to ensure that the ESD results in effective climate action in the transport, buildings, agriculture, small industry and waste sectors and is not undermined by loopholes.
The EEB is signatory to the joint letter of 23 European and national organisations demanding that the 2030 Effort Sharing Decision is fit for purpose.