Climate Targets: The ‘How’ Matters
OpinionZEW President Achim Wambach on EU Climate Policy
Within the space of a few days in September, EU Commission President Ursula von der Leyen and German economic minister Peter Altmaier both publicly called for the creation of a climate-neutral economy by 2050. Each of their proposed initiatives focuses on augmenting CO2 reductions. But the success of European and German climate policies will depend on more than meeting climate targets alone.
In her State of the European Union address on 16 September, EU Commission President Ursula von der Leyen emphasised the importance of tackling the climate crisis within the framework of the European Green Deal, which aims to make Europe the first climate-neutral continent by 2050. A few days earlier, German economic minister Altmaier presented the Charter for Climate Neutrality and Economic Strength, whose 20-point programme includes annual reduction targets and the creation of climate-neutral public institutions by 2035.
The two-degree target implies a global decline
The September announcements show that politicians in Europe are ready to enact ambitious plans and put legislators to work on new climate bills. For all the enthusiasm, however, it is important that decision-makers not lose sight of the big picture. Keeping global warming well below two degrees Celsius can only be achieved if we succeed in reducing emissions globally. The EU produces only around ten per cent of global emissions; Germany, a mere two per cent. While Europe can help achieve the two-degree target, pursuing stricter emission reductions at all costs is not the most effective strategy.
China is the world’s largest CO2 emitter, with annual emissions twice as high as Europe’s. Chinese President Xi Jinping has stated that no decline in emissions is foreseeable before 2030. The same is likely to be true for India, whose booming economic growth will produce large amounts of greenhouse gas emissions over the next decades. If these and other countries are to pursue ambitious climate action, it must be affordable.
Climate-friendly technology must be competitive
What is the most efficient way to reduce emissions? What new climate mitigation technologies will be developed? How can these be rapidly made available around the world? The German chemicals, engineering and automotive industries are world leaders. Their technologies can set standards in decarbonisation, provided they remain competitive. The loss of their global market share due to EU climate policy serves neither European companies nor their employees. Moreover, it would ultimately hurt the climate and disincentivise other countries from following Europe’s path.
Technological innovations are just one piece of the puzzle. Governments also need to create new organisational structures that encourage global climate neutrality. For instance, how should emissions trading be organized to address all sectors? What is the best way to induce countries with different interests to act in concert? Here’s where Europe and Germany stand to make a big difference. Of course, European countries must also reduce CO2 emissions in the process, but what matters is how they go about it.
European climate policy must focus consistently on efficiency in addition to technology and organisation. Altmaier’s charter, which seeks to “achieve climate goals while maintaining economic strength,” is a step in the right direction. But the implementation will be crucial. Is the burden roughly the same across economic sectors, or is it skewed? How can governments ensure that industries adopt better technologies? Which emissions end up getting displaced instead of abated? Efficiency and reproducibility abroad are the benchmarks with which to measure the true worth of Europe’s climate policy.