European climate commissioner says stronger target would help push up the price of carbon and kick-start green investment
David Adam, environment correspondent
guardian.co.uk, Tuesday 11 May 2010 17.46 BST
The European commission is to formally propose stricter carbon cuts across Europe over the next decade in an effort to kick-start investment in clean technologies such as renewable energy.
The costs and benefits of increasing to 30% the EU target of a 20% cut in carbon emissions by 2020 on 1990 levels, will be discussed in a paper to be published later this month.
Connie Hedegaard, the European commissioner for climate change, told a meeting in London today that a move to strengthen the target could be the only way to boost Europe's carbon price to levels high enough to drive green investment.
"With business as usual and the 20% target we will not see a substantially higher price of carbon. That is a challenge because we need innovation," she said. "Around €30 [per tonne of carbon] people would start to do things differently." The carbon price currently sits at €15 per tonne, and is unlikely to rise without the 30% target, Hedegaard said. The EU has previously said it would only move to 30% if other countries followed suit as part of a new climate deal.
Hedegaard said the recent recession made both the 20% and 30% targets cheaper to achieve than original calculations in 2008 suggested. A European analysis leaked to the Financial Times last month claimed that the cost of cutting emissions 20% by 2020 had fallen from €70bn to €48bn. Toughening the target to 30% by 2020 would cost €81bn, a cost that would be partially offset by savings such as from improved air quality, of between €6.5bn-€10bn.
The commission's analysis comes ahead of a meeting of EU environment ministers next month. Hedegaard said it would not recommend whether or not to adopt the stricter target. "This is an invitation to have a more fact-based discussion, not an invitation to make a fast decision."
The EU is split about strengthening the target, with countries such as the UK in favour, but others such as Italy set against. Hedegaard acknowledged that economic strife in Europe could make a change more difficult. "Of course, it's not an easy time to discuss money that comes out of the public purse right now."
Hedegaard said the US Senate's delay in passing an energy bill "has been a real disappointment". EU negotiators resisted "bashing the Americans too much" last year, believing it might be counterproductive, she said. "Now the US needs to bring in the law."