More Aggressive Climate Policies Could Save Europe Money

We have seen time and again that the European Union should push for a more aggressive policy on climate and energy. It is highly feasible and we have seen that the current Danish presidency would be the perfect moment to do so.

Now, here is more: According to Bloomberg New Energy Finance : “Raising Europe’s carbon reduction target for 2020 from 20% to 30% will cost EU countries under 0.04% of GDP, with some member states getting a net benefit. “

You read that right: pursuing 30 percent reductions of greenhouse gases emissions would allow some state members to make money. What are we waiting for?

These policies would benefit countries such as Belgium, Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania, Slovakia and Slovenia as they would benefit to up to 0.5 percent of their annual GDP.

Other nations would be able to sell surplus carbon allowances to other country members. Other countries would pursue more aggressive energy efficiency improvements.

France, Germany, Italy and the United Kingdom would however have to pay to slash their emissions. But costs would be minimal as they would be of €1.1bn and €2.5bn per year of cost each. This would represent only 0.05 percent of GDP.

If such policies were implemented, actual greenhouse gas emissions in the EU27 in 2020 would fall by 21% from 1990 levels, compared to an actual reduction of 13% under the 20% target.

Raising the emission-reduction target to 30% would require additional emission cuts from sectors covered by the Emissions Trading System, including heavy industry and electricity generation and from those outside the Trading Scheme, including agriculture, transport and buildings.

This report was carried out by Bloomberg New Energy Finance, and commissioned by the UK Department of Energy and Climate Change (DECC).

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