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The biggest of Europe’s climate laws, the ESR caps transport, buildings and agriculture emissions. EU governments had agreed in principle to cut these emissions by 30% in 2030, down from -10% in 2020, using 2005 as a reference level. However, the Commission’s proposal provided numerous loopholes and flexibilities so that countries would have to reduce their emissions by less than the target.
Now MEPs have said countries should reduce their emissions based on a more realistic starting point – starting at 2018 real emission levels, or the 2020 national climate targets, whichever is lower. The amount of forestry credits that could be used to offset emissions in the ESR sector would be limited to 280Mt CO2e, in line with the Commission’s proposal. Forestry (LULUCF) credits are controversial due to the weak accounting rules currently being discussed.
T&E said that while the current proposal is far from meeting the aims of the Paris agreement, it is more ambitious than the text proposed by the Commission. Climate officer Cristina Mestre commented: ‘This is Europe’s most important climate law. Parliament’s position is the bare minimum that needs to be done to meet the Paris climate goals. EU governments were quick to rally to the Paris agreement, now it’s time for them to put their money where their mouth is and accept a robust 2030 climate deal.’
Under the parliament’s proposal, the emission savings would be 529Mt CO2e, T&E’s analysis shows. This is an improvement of 452Mt on the Commission’s proposal which, with member states making full use of all the flexibilities, would save only 77Mt in emissions by 2030.
Mestre concluded: ‘Parliament did well to close some of the loopholes the Commission proposed, but then introduced some of its own ‘flexibilities’. There must not be any further weakening of the law. After all, the 2030 targets are not just about carbon pollution but also about better insulated houses, lower oil imports, cleaner air and creating the jobs associated with a shift to a low-carbon economy.’
The ESR’s so-called ‘banking’ flexibility, which will prevent member states from building up large quantities of unused allocations and using them at the end of the period when targets are stricter, should also be limited, MEPs said. But the parliament also introduced a 90MT loophole in the form of an ‘early action reserve’, which rewards some member states for making emissions savings under easy targets before 2020.
Meanwhile, national governments are seeking to reach an agreement on the ESR in October. One of the sticky points is the creation of a so called “safety reserve” which would discourage emissions trading between member states and act as a disincentive to countries with below-average GDP from taking domestic measures to reduce their emissions. It will thus lead to a growing gap between modernised, cleaner economies and less efficient polluting ones.
T&E’s transport and energy analyst, Carlos Calvo Ambel, said: ‘If a country can choose between taking measures to reduce emissions, buying emissions rights from third countries or using free credits from a reserve, they will always choose the free emergency exit. The ESR safety reserve goes against the basics of climate policy: it acts as a disincentive to countries reducing emissions.’