Three and a half years after the signing of the Paris Climate Agreement, the European elections on May 26 will give a political signal both on European citizens' expectations and on the potential for action to preserve the environment. As candidates decline their proposals to make Europe more sustainable,1 what issues will emerge on the European Union's energy and climate policy in the aftermath of the election? In this blogpost, IDDRI takes stock of the EU's progress on the energy-climate issue, identifies and proposes areas of work for the European institutions for the next five years2.

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EU climate-energy action: mixed results

At first sight, the European Union can boast satisfactory results in the fight against climate change. Despite significant differences between Member States, it is on track to meet its energy-climate targets by 2020, in particular its greenhouse gas (GHG) emission reduction target, as recently demonstrated by a European Environment Agency analysis3 and a recent Eurostat communication on 2018 emissions.4 The Union also adopted in the last legislature a new package of measures in its "clean energy package", including new targets for renewable energies and energy efficiency by 2030. These technically put the Union in a position to raise its climate target beyond the 40% it had proposed in its NDC when the Paris Agreement was signed in 2015; this would be a necessary positive signal to the other major emitting countries to also raise their ambition. Does this mean that the Union can rest on its laurels?

This should not be the case for several reasons. First of all, the good performance towards its 2020 objectives hides significant imbalances across economic sectors. Careful examination shows that the EU's progress is thus mainly the result of ongoing transformations in the energy sector, with the rise of renewable energies and a decline in coal production in some countries, and the sluggishness of industrial production in the EU countries affected by the economic crisis. However, in order to achieve the global objective of limiting global warming to 2°C and moving towards 1.5°C, all sectors must contribute to achieving carbon neutrality in Europe by 2050, i.e. significantly reduce GHG emissions and offset residual emissions through the sequestration of natural carbon sinks or sequestration technologies, which are today at an experimental stage. Therefore, progress in decarbonation should spread rapidly to other economic sectors such as buildings or transport, where emissions continue to rise.

What areas of action for the next five years?

To this end, the European Union should put the fight against climate change at the heart of its action for the next five years. IDDRI recently published proposals in this direction with five other think tanks.5 This means extending climate considerations to all European policies, from the Common Agricultural Policy to cohesion or trade policy. Two important issues for climate will be on the agenda just after the elections: the review of the EU's climate ambition for 2030 and 2050 and the finalisation of the EU budget for the period 2021-2027.

With regard to climate ambition, the current European Commission, the Parliament and nine EU Member States have already expressed their support for the EU's objective of climate neutrality by 2050. Early support from the Council in June would be a positive signal. The 2030 target should quickly incorporate the strengthening of renewable energy and energy efficiency targets to reach at least 45-46% reduction in GHG emissions (compared to 1990) compared to the current 40%. As for the EU budget, the share devoted to climate action should exceed 25%, and criteria should be introduced gradually to prevent EU funds (e.g. agricultural or cohesion policy funds) from being spent on projects that are not compatible with climate protection.

Once these two past steps are taken, the Strategic Vision for a Climate Neutral Economy6 and the new EU Governance Framework on Energy and Climate can lay the foundations for an informed dialogue with Member States to identify areas where EU policy could accelerate progress on decarbonation. First, some regulatory changes would be becessary to better guide the development of green or synthetic gas and their compatibility with competing sustainability objectives (biodiversity or soil quality); a revision of State aid rules could also strengthen the decarbonation of industrial sectors. IDDRI recently organised a fruitful dialogue in Paris on the ten proposals of the think tank Agora Energiewende on legislative initiatives for the European Commission on energy and climate.7

Secondly, as sectoral transformations progress and new sectors are involved (transport, agriculture), new challenges emerge and rely to a greater extent on Member States and local actors. Beyond regulatory changes, the European Union can then position itself to support Member States and local actors by providing them with access to technical assistance, sharing best practices in other regions of the Union and providing access to funding for their climate actions. The platform formed by the European Commission on the future of coal regions in transition8 is an example of sharing experiences that could be extended to other economic sectors affected by the low-carbon transition (car industry, agri-food industry, etc.) and reinforced by financial support for a reform of the European Globalisation Adjustment Fund. EU institutions could also facilitate and support coalitions of ambitious Member States on issues such as carbon pricing or aviation taxation and thus promote positive emulation between European countries.

Finally, during this term of office, the Union will need to tackle the question of the coherence between its trade policy and the implementation of its ambitious climate objectives: prevent the decarbonation of economic sectors in Europe from being caused by the relocation of carbon-intensive industries to countries from which imports originate, and thus reduce the carbon content of imports; this objective is already at the heart, for example, of the proposal for a French national strategy to combat imported deforestation,9 but whose articulation with trade policy remains complex to negotiate, both internally and with trading partners.

The European Union's challenge for the next five years will therefore be to implement its commitments, and in particular to accelerate transformations in all economic sectors and to find answers to the societal challenges raised by the transition. Further progress and concrete results in the development of new economic activities would enable the Union to exert its full influence in the future steps to strengthen ambition provided for in the Paris Agreement in 2020 and 2025. On the other hand, remaining on a level that satisfies real but limited progress so far would mean losing, once again, valuable years in the race against the clock that climate change represents. Let us bet that the recent rise in environmental concerns in public opinion and the greening of political programmes on all sides will not leave the European Union at crossroads for long.

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