Climate of Cooperation
Why countries need to cooperate to cut ESR emissions cost-effectively
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Sandbag’s new report shows that agreed reform of the Effort Sharing Regulation would only require very limited emissions cuts beyond current efforts, and lets the EU miss its 2030 climate change target.
However, cooperation between EU countries could rescue the target, and reduce costs for all involved.
The report is summarised below, and available to download for free.
Note: The Effort Sharing Regulation (ESR) is the European climate policy governing greenhouse gas emissions from agriculture, buildings and transport (other than shipping and aviation).
Executive summary
The agreed ESR reform lets the EU miss its 2030 climate change target
Cooperation between member states could put the EU back on track and reduce their costs.
- Member States who face a challenge in meeting their ESR targets domestically should make use of the possibility for project-based transfers for achieving compliance. This is the only flexibility that guarantees additional reductions in the non-ETS sectors and helps to set these sectors on a cost-effective trajectory towards our long-term objectives under the Paris Agreement. By helping lower income Member States to reduce their emissions, this approach also reduces the need for differentiation in future Effort Sharing discussions
- Member States with a surplus of AEAs should link the transfer of these AEAs to reduction projects within their borders, or at least use the revenues to support further climate action. This will help them prepare for more stringent reduction targets after 2030, and can bring several co-benefits in terms of job creation, technology transfers, reduced energy poverty, etc. It could also help them to achieve compliance with other, sectoral EU policies such as the Energy Efficiency Directive, the Energy Performance of Buildings Directive, the Renewable Energy Directive, the F-Gas Regulation, the Landfill Directive, etc.
- Member States should not make use of the external flexibilities which are provided under the ESR, as these do not guarantee additional reductions and delay the necessary transition in the non-ETS sectors
- Member States should start discussing the potential for project-based cooperation as soon as possible. The sooner reduction projects are implemented, the more reductions they can achieve and the more AEAs will be freed up in the period 2021-2030. With the negotiations on the ESR concluded and National Climate and Energy Plans currently in development, Member States can already at this stage get a clear view on the potential for additional reductions and the need for flexibilities.
- The current targets under the Effort Sharing Regulation are insufficient in light of the EU’s long-term objectives and will have to be increased. A target of at least 40% reductions (compared to 2005 emissions) is a minimum to put the non-ETS sectors on a linear trajectory towards the upper end of the 80% to 95% reduction target. The invitation for parties to update their Nationally Determined Contributions (NDC’s) by 2020 in response to the ongoing Talanoa Dialogue provides a first opportunity to do so. The Commission should come forth with its updated mid-century strategy as soon as possible and by Spring 2019 the latest.
