The European Commission has proposed to strengthen its 40% greenhouse gas emission reduction target to 50% or 55% on 1990 levels in the next ten years. But this step does not meet the minimum level of ambition that climate science, and the EU’s own climate-neutrality goal, say is needed, writes Mirjam Wolfrum.
Mirjam Wolfrum is Director of Policy Engagement at CDP Europe, a Berlin-based organisation formerly known as the Carbon Disclosure Project. CDP supports companies and cities to disclose the environmental impact of major corporations, and aims to make environmental reporting and risk management a business norm.
Setting its 2030 target at the right level will make a fundamental difference to our economy and society. The world’s climate science authority, the United Nation’s Intergovernmental Panel on Climate Change (UN IPCC), has said definitively that an extra 0.5°C of warming will be catastrophic. It could cost the global economy up to $15 trillion in additional climate impacts, add 10 cm to the rise in sea levels, and multiple by 10x the chance of an ice-free Arctic Ocean in summer.
But, with the European private sector showing more willingness to do more than the Commission’s proposal, the EU can set its ambition level higher and show global leadership to be in line with the latest science.
Why 50% to 55% isn’t ambitious enough
Based on this insight, bringing the EU in line with the goal of the Paris agreement and its climate neutrality target would take at least a 55% drop in emissions – the upper limit of the Commission proposal.
This target is itself not ambitious enough to show global leadership. To put Europe’s 2030 target in line with the latest climate science – limiting warming to 1.5°C – would either call for a 60-65% 2030 target, or much more rapid reductions after 2030.
European companies are showing that it’s realistic to be more ambitious
To deliver these cuts – and more – the European Commission should more proactively encourage more companies to set science-based targets (SBTs) for reducing emissions in line with this 1.5°C pathway.
Companies’ targets are science-based if they are in line with meeting the Paris agreement. The SBTi has approved the targets of over 200 European companies so far, who are therefore already contributing achieving the cuts needed for the Commission’s proposed 50% – 55% ambition.
If just these 200 targets are achieved, reductions in GHG emissions equivalent to 6% (250 MtCO2e) of the EU’s annual total (4,483 MtCO2e in 2017) will be delivered.
Some of Europe’s heaviest emitting companies are now onboard, with cement makers LafargeHolcim and HeidelbergCement, steelmaker thyssenKrupp and heavy truck business Scania all with approved SBTs.
This progress – more than double the number have been set in the past 18 months than the previous 3 years combined – shows the scale and possibility for Europe to increase policy ambition in this area, as the corporate sector is already there.
These companies’ actions will make or break whether the EU is to achieve its new goal. And they are showing the Commission’s current proposal is too light.
Over 70 companies in Europe, for example, already have targets which are more ambitious than the EU Commission’s proposal and in line with a maximum of 1.5°C of warming. That group includes some of Europe’s most successful businesses like Mercedes-Benz, Unilever, and AB InBev. This ambition level is equivalent to the EU agreeing a 60% to 65% 2030 target.
Europe’s big businesses are now showing greater willingness to lead, so EU leaders should ask more to catch up and leverage the private sector to deliver on its target faster.
With critical decisions on how the EU’s new €750 recovery plan will be spent now being discussed, the right policies to encourage more ambitious target-setting is key. According to a review by CDP and Oliver Wyman before the COVID-19 crisis, at least double the volume of annual low-carbon capital investment is needed by companies if the EU is to meet its climate-neutrality goal.
Among the current group of European companies with science-based targets, at least €11 billion will be spent on achieving them. The EU raising its 2030 target and asking more firms to set science-based targets, are the best ways for this investment gap to be filled.