A new report shows headway in reducing greenhouse gases and details the latest climate change policy developments.
On 30 November 2020, the European Commission (EC) adopted the EU Climate Action Progress Report Kick-starting the journey towards a climate-neutral Europe by 2050 (the Report). The Report, which is produced annually, details recent developments in EU climate policy and progress made by the EU and its Member States. The EC’s Directorate-General for Climate Action compiles the Report based on data provided by Member States under the Climate Monitoring Mechanism Regulation.
Recent climate change initiatives
The Report follows the implementation of several EU climate ambitions. In December 2019, the EC announced the European Green Deal, a comprehensive sustainability plan that includes a 2050 zero-carbon target. In March 2020, the EC undertook an Inception Impact Assessment on its 2030 Climate Target Plan that it subsequently presented. That same month, the EC adopted a new proposal for a European Climate Law to make the climate neutrality target legally binding in the EU.
The EU’s response to the COVID-19 pandemic has also been environmentally focused. Last spring, the EU announced a recovery package of which 30% — amounting to €1.8 trillion — will target advancing the climate transition by helping Member States address their sustainability challenges as well as increase green jobs and competitiveness.
In September 2020, and as part of the 2030 Climate Target Plan, EC President Ursula von der Leyen called for a greenhouse gas emissions reduction target of at least 55% compared to 1990. The proposal for a European Climate Law was amended in September to include the new target of 55% reduction for 2030.
The Report’s findings
The Report begins by emphasising that EU greenhouse gas emissions in 2019 fell to the lowest level in three decades, which coincided with a GDP growth of 1.5%. Other notable findings of the Report include:
- Emissions covered by the Emissions Trading System (EU ETS) saw the greatest reduction in 2019, dropping by 9.1% (roughly 152 million tonnes carbon dioxide) compared to 2018.
- Verified emissions from aviation (only covering flights within the EEA) continued to grow modestly, increasing by 1% (roughly 0.7 million tonnes carbon dioxide equivalent) compared to 2018.
- The total auction revenue generated by the EU ETS exceeded €14.1 billion, 77% of which will be used for climate and energy purposes.
The Report found that the EU remains on track to achieve its target under the UN Framework Convention on Climate Change of reducing greenhouse gas emissions by 20% by 2020. This finding appears to be consistent with the Climate Action Tracker’s conclusions. The newly published Global Update by Climate Action Tracker shows that “the recent wave of net zero targets has put the Paris Agreement’s 1.5°C within striking distance”. Notable net-zero commitments include the EU, Canada, the UK, Japan, and South Korea aiming to achieve the target by 2050, and China seeking to achieve the target by 2060.
However, the EC notes that, as previous experience demonstrates, “a swift economic recovery [following the COVID-19 pandemic] may lead to a strong and rapid rebound in emissions, unless policy gears stimulus measures toward the green transition”. Similar concerns are echoed by the Climate Action Tracker, which cautions that “governments must now adopt stronger 2030 targets (nationally determined contributions, or NDCs) to deliver on their net zero goals”. Governments worldwide are taking limited steps to increase their NDCs, with current policies putting them on a warming trajectory of 0.8°C higher than the optimistic net-zero target assessment, as the Global Update shows. While considerable progress has been made, the Report ultimately cautions that Member States must continue to remain vigilant and committed to furthering environmental objectives. At a minimum, Member States will need to “fully implement the planned measures” under the Effort Sharing Regulation if they are to achieve the more ambitious climate reduction target set by the EU.
Latham & Watkins will continue to monitor developments in this area.
This post was written with the assistance of Sabina Aionesei in the London office of Latham & Watkins.