ZEW Economist Sebastian Rausch on Stricter EU Climate Goals

The EU Commission has tightened the climate targets of the European Union for 2030. Instead of a carbon-reduction of 40 per cent compared to 1990 levels, the Commission will aim for a 55 per cent reduction. Professor Sebastian Rausch, head of the ZEW Research Department “Environmental and Resource Economics, Environmental Management”, comments on this matter.

“By tightening its carbon-reduction targets to 55 per cent by 2030, the Commission takes a consistent step towards achieving carbon neutrality by 2050. The EU would thus make a significant contribution to the Paris Agreement. However, the discussion about updating climate objectives should not obscure the key questions about how to implement these ambitious targets. This is particularly important because the choice of instruments and policy measures will have a major impact on how the economic burdens arising from the European green energy transition are distributed, who the potential winners will be and whether it will ultimately be a success.

The stricter climate targets will require the existing architecture of European climate policy to become more flexible in order to minimise economic costs and avoid undesired distribution effects within and between EU countries. The expansion of the European emissions trading system (EU ETS) and the update of national carbon-reduction targets outside the EU ETS according to principles of fair and solidarity-based burden sharing in Europe are central elements in ensuring that all EU countries are on the same page when it comes to climate neutrality.

In the future, the EU’s uniform CO₂ pricing scheme should be extended to include national efforts in the areas of transport, buildings, heating and agriculture, as it represents an important point of convergence in the debate on implementing the stricter climate targets.”