A ‘Carbon Budget’ will set Europe on a trajectory to climate neutrality

Establishing a Carbon Budget will indicate that we are serious about climate neutrality and that we are going to pursue a stable climate policy for the next 30 years, explains Finnish MEP Nils Torvalds.
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By Nils Torvalds

Nils Torvalds (FI, RE) is shadow rapporteur for Parliament’s Framework for Achieving Climate Neutrality report

27 Nov 2020

Ursula von der Leyen first opened up the debate over climate targets in her July 2019 speech as European Commission President-elect. That was, according to reports, a concession made to win the support of Parliament’s S&D and Renew Europe groups. At the same time, it indicated that a new balance of power was forming in the Parliament.

But the real question was - and remains - how workable this new coalition of three and four is. First some words about the new situation. In the vote to approve the new Commission, the “von der Leyen majority” of EPP, S&D and Renew Europe tried to establish itself. No easy task. The EPP and S&D had in their political DNA a tendency to think only in terms of duopoly. That habit was not easy to break away from.

At the same time, a fourth member - the Greens - indicated that they could join the ruling coalition on certain terms. “Certain terms” is the Achilles’ heel of all groups in the European Parliament. Because Parliament is free from real responsibility, there is always a tendency to over-play demands. The pretext for these blown-up demands is usually put in terms of “we need to have something to give way in the negotiations with the Council.”

“The Carbon Budget will make the difference and indicate that we are serious about climate neutrality and that we are going to pursue a stable climate policy for the next 30 years”

This is a problematic approach, as was seen during the negotiations which centred around the percentage of the CO2 reduction target for 2030. “At least 55 percent” was seen as too little by three of the groups, while for the EPP it was seen as the maximum. At the same time, everybody - even in their clearest moments - understood that the percentage would be the central piece of the whole negotiating process.

In the endgame phase, I was pretty convinced that going too high would make the negotiations with the Council very complicated. That’s when I settled for 60 percent. A 60 percent reduction of CO2 by 2030 could establish a functioning and credible trajectory down to climate neutrality by 2050.

It would at the same time indicate that the “at least 55 percent” trajectory, cherished by the Commission and the main players in the Council, carried risks and had serious shortcomings.

Stating that you could summarise the elements of a future functioning EU climate policy in two sentences: first, the starting point 2030, and second, the trajectory, was therefore crucial. We know, almost for a fact, that the Council in December will be unable to go further than this “at least 55 percent net”, which actually equals roughly 52.8 percent according to the terms used by Ursula von der Leyen and Frans Timmermans during the debates in 2019.

It also means that we are easily going to end up with a climate policy slightly less ambitious than we would need. So how can we remedy this? That was the question going around in my head during the first shadow meetings. And I think I have found a solution.

The “at least 55 percent net” argument showed that the Commission played around with figures, which again indicated a real and serious risk: that industry would not believe the sincerity of the EU’s climate policy. This would have disastrous effects.

We have for the time up to 2050 - in the best-case scenario - two investment cycles. If the first of them is not taken seriously, we won’t be able to reach the goal. That’s why I had to press for a carbon budget approach.

“So far, decisions have been made in terms of environmental concerns. That’s nice and good, but now we need the hardware and the industry that keeps Europe competitive globally and in the long run”

A carbon budget is an objective measurement of the amount of CO2 we can emit during this process down to neutrality. It therefore establishes a trajectory free from political fiddling around with shaky numbers. And to be able to force this through I needed the 60 percent as Parliament’s figure for 2030.

The figure of 60 percent shows that we are running a risk here by going down to “at least 55 net.” This risk has to be compensated by a carbon budget.

The Carbon Budget will make the difference and indicate that we are serious about climate neutrality and that we are going to pursue a stable climate policy for the next 30 years. That is a precondition for investments. Then we need just one more thing: a European industrial policy.

So far, decisions have been made in terms of environmental concerns. That’s all good and well, but now we need the hardware and the industry that keeps Europe competitive globally and in the long run.

And we are not alone in this endeavour; China said that they will be on this path a bit behind us. Japan also indicated that they will run. And go to California - they are already running.

Read the most recent articles written by Nils Torvalds - On the threshold of a circular economy

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Energy & Climate
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