BRUSSELS - On 8 March, the European Commission is expected to publish its analysis, Moving to a Low Carbon Economy in 2050, exploring how best to achieve Europe’s 80-95 percent emission reduction goal.

This briefing:
•    Outlines the current environmental and business context
•    Analyses the roadmap
•    Charts major companies calling for a 30% carbon target for 2020

Urgency
The imperative for immediate action and a long-term vision for climate protection are more urgent than ever. Last year was the hottest on record jointly with 2005. Nine of the ten warmest years in history occurred after 2000. Recent years have seen a dramatic rise in the number of extreme weather events, including last year’s runaway Russian fires and major flooding in Pakistan and Australia.

The economic case
There are direct economic incentives for moving to a higher climate target. A recent study for the German government by Oxford and Sorbonne Universities and the Potsdam Institute for Climate Impact Research (PIK), found that a 30 percent target for the EU could create up to six million jobs, net, by 2020. The price spikes of oil and coal this February, to $100 US per barrel and $145 a tonne respectively, underline the need to shield economies from fossil fuel price volatility.

Progressive companies see the need for better action on climate. Over the last six months   well-known brands, including Unilever, GE Energy, Philips, Allianz and Deutsche Telekom, have called on EU governments to support a 30 percent climate target for 2020. A list of these companies can be found in the table below.

Analysis of the roadmap
A recent draft of the Commission roadmap concludes:
•    All sectors of the economy have to contribute to emission reductions, with the EU’s power sector taking a leading role.
•    Within the EU, emission reductions in the order of 40 percent by 2030 and 60 percent by 2040 are required to economically achieve 80 percent domestic reductions by 2050.
•    Under the roadmap, Europe can look forward to average fuel cost savings of €175-320 billion a year.
•    To meet the 2050 target cost-efficiently requires a 25 percent carbon cut within Europe (domestic) by 2020. By respecting its energy efficiency targets alone, Europe could cut its     emissions by 25 percent.
•    In the Emissions Trading Scheme (ETS), measures need to be taken in the 2013-2020 phase to reward low-carbon investments and innovation.

Domestic emission reductions of 25 percent by 2020 equate to a 30 percent overall EU carbon target that the Commission assessed in a communication in May 2010. This assessment looked at 25 percent reductions domestically and 5 percent reductions through the purchase of offset credits in countries outside of the EU.

Greenpeace argues that the Emissions Trading Scheme (ETS), Europe’s carbon market for industry, and that emission reduction targets for member states (under the EU’s Effort Sharing Decision) should be reformed in accordance with a 30 percent target. The EU’s carbon market is the cornerstone of its efforts to decarbonise. But Europe is awash with surplus free credits, giving polluting industries a soft cushion to rest on rather than a belt to slim their emissions. Without reducing the number of credits in the carbon trading scheme, efficiency gains by some industries would create only more surplus of credits, making it easier and cheaper for others to continue polluting. Climate commissioner Hedegaard said on 28 February 2011 that “the ETS at present does not give sufficient incentive for innovation.” The draft roadmap suggests that a reduction of emission credits is required.

With over 17 percent carbon cuts already achieved by 2010, the EU has just under a decade to reach its existing 20 percent 2020 target. The roadmap shows that it has never been easier for the EU to step up to an unconditional 30 percent target. Therefore, Greenpeace  believes that a faster start in domestic emission reductions is needed by 2020 than what is suggested in the roadmap. As outlined in the abovementioned PIK report, there is a strong economic case for 30 percent domestic reductions by 2020.

Efficiency savings are a major element of the roadmap. However, as experience proves, today’s voluntary efficiency targets are not enough. A 30 percent target will ensure that they are met and will fix Europe’s failing carbon trading system.

Greenpeace demands
EU environment ministers meeting in Brussels on 14 March should:
•    Acknowledge that the existing 20 percent 2020 carbon target is out of date and doesn’t provide the necessary incentives for clean investments, innovation and job creation.
•    Call for an unconditional 30 percent carbon target. The Commission should provide analysis and proposals for this higher target. These should include strengthening the ETS and     EU Effort Sharing Decision.
•    The roadmap calls for the examination of funding mechanisms to support low carbon investments. Ministers should back this call and focus attention on the need to support energy     modernisation and emission reduction measures in Central and Eastern Europe, where a large low-cost potential for renewable energy and energy efficiency is available. The             International Energy Agency called for a similar focus on these states in a statement on 2 March.

Greenpeace EU climate and energy policy director Joris den Blanken said: “The Commission paper shows it has never been easier for Europe to up its climate effort. Raging wildfires and floods in recent years show it has never been more needed. What’s holding us up is a twisted carbon market and lobbyists trying their best to keep Europe in neutral.”

Greenpeace International climate campaigner Mareike Britten said: "Some of the biggest names in business are recognising that it makes sound economic sense to get our climate in order and move Europe to a 30 percent target. Now is the time for other progressive companies to demand leadership from the EU before it is too late to head off runaway climate change."
 
A growing number of companies supporting a 30 percent EU carbon target. New and unreported companies in support are Danone, Aviva, Unibail and Bodegas Torrest.

Acciona
Abengoa
Allianz SE
Alstom
ARCADIS
Asda Stores Ltd
Barilla
Beluga Shipping GmbH
British Sky Broadcasting
British Telecom
Bodegas Torres
Capgemini
Centrica
Cisco
Climate Change Capital
Danone
    T-Systems / Deutsche Telekom
 DHV Group
Elopak
Eneco
F&C Investments
General Electric Energy
Google
James Finlay Ltd
John Lewis Partnership
Johnson Controls
Johnson Matthey
Kingfisher
L’Oreal
Lloyds Banking Group
Marks & Spencer
Nestlé    Nike
Otto Group
Philips 
Skandinaviska Enskilda Banken (SEB)
SKAI Group of Companies
Sony Europe
Standard Life
Swiss RE
Tesco
Thames Water
Tryg
Unibail-Rodamco
Unilever
Vodafone
WS Atkins

Greenpeace calls on business in the EU to speak out in favour of innovation and green growth and to support an unconditional 30 percent carbon target by 2020, compared to 1990.