This is a guest blog post written by Thomas Adlam and Danilo Gattullo of FiscalNote.
Before the COVID-19 pandemic upended our lives and political agenda, the world’s leading climate scientists released an alarming global call for action. The message from the UN’s Intergovernmental Panel on Climate Change (IPCC) to national leaders was direct and clear: rapid, far-reaching and unprecedented changes throughout society are needed if humanity is to mitigate catastrophic climate change.
The European Union was quick to answer this call to action. First, it set out its vision for achieving a climate neutrality target by 2050 in the European Green Deal. Now, it has followed this beachhead legislation with a decisive proposal aiming to enshrine into law the proposed target of 2050 net zero greenhouse gas emissions.
The proposed EU Climate law is unique because it makes climate neutrality by 2050 a legally binding target. When adopted, the European Union and its member states will be required by law to comply and take the necessary measures to achieve it. In effect, climate neutrality will become central to European policy.
But it is not that simple. When the European Commission presented its proposal, two key points generated discussion:
- The climate law sets the objective for 2050 but did not amend the 2030 target, something campaigners make clear is integral to achieving 2050 goals.
- For post-2030 intermediate targets, the proposed law says that the Commission can set new targets every five years through delegated legislation, which has raised questions of accountability and transparency.
These points are both significant and very decisive.
2030 Climate Target: COVID-19 complicates matters
When the legislative proposal was presented, most stakeholders welcomed its 2050 climate objective; industry and NGOs are aligned on the ultimate goal of the proposal. However, how we get to the end point is a big point of fierce debate. This is exacerbated by the fact that the most important target (2030) is still undecided.
NGOs and climate activists are still very unhappy with the proposed law, especially regarding the way it fails to deal with the upcoming 2030 target. They demand more ambition, arguing that the current Commission is not taking the IPCC’s warnings seriously enough.
Industry stakeholders face a more complex landscape, as different sectors will face different challenges, which is not helped by an existing investment shortfall. Indeed, according to BusinessEurope (the leading voice of EU businesses), investment is already behind for current 2030 goals to the tune of between €260 and €270 billion a year. If the 2030 target is made more ambitious, then where will this extra investment come from? How can a more demanding target possibly be met without more money on the table?
The European Environment Agency’s (EEA) latest ‘State of the Environment’ report showcases an unpalatable truth: Europe will not achieve its 2030 goals without urgent action in the next ten years to address the alarming rate of biodiversity loss, which will increase impacts of climate change and the overconsumption of natural resources. Progress is slowing down in areas such as reducing greenhouse gas emissions, industrial emissions and waste generation.
How can Europe reach a more ambitious target if it lacks the resources to achieve lower current commitments? This is even more relevant now with the current COVID-19 pandemic and consequent shut down of whole sectors of the world’s economy.
Post-2030 Targets: The Commission Alone?
Article 3 of the Commission’s proposal says the following: “The Commission is empowered to adopt delegated acts to supplement [the Climate Law] by setting out a trajectory at Union level to achieve the climate-neutrality objective […] until 2050”.
The European Commission will reserve the power to raise emissions targets every five years from 2030 onwards using a legal instrument where member states and the European Parliament have a very limited say on the outcome. Delegated acts are a form of legislative acts, which are adopted exclusively by the Commission. The European Parliament and the Council of the EU (the member states) can usually object to such acts within two months of adoption. The two institutions cannot, however, propose any type of amendments to such acts, and have to decide between rejecting them entirely and starting from scratch, or accepting as is.
This shifts the power balance significantly. Member states and MEPs will undoubtedly need to face the decision of whether to swallow the pill and accept the proposed legislation as it is, or strike it down completely jeopardizing the timeline of the EU’s climate legislation.
The Council is unlikely to simply hand over power to the Commission. Historically, member states have always used “implementing acts,” another legal instrument, to retain power over shaping legislation. As controversial as it is, the European Parliament is also very likely to be divided over this provision.
While the Commission’s text is still a proposal, it will have a significant impact across all economic sectors if passed. Member states will be required to comply with the new targets and set stringent standards across their economies. Strict EU climate legislation will also inevitably spill over into both ongoing and future trade negotiations. The European Union will make sure that environmental laws become part of trade negotiations to guarantee a level playing field internationally for EU businesses; we can already see this happening today with both environmental and human rights policies.
The European Parliament and the Council will undoubtedly amend the proposal during the legislative process. Once the Commission presents the proposal for a 2030 target in late 2020 (most likely in September), negotiations on both proposals will likely run in parallel. When it comes to environmental legislation, there is a clear divide between the richest and more supportive EU countries in the North/West and the poorer and more cautious countries in the South/East. This divide will ensure that the draft legislation will be subject of heated discussion at the national level for a while. Despite all this, it’s not a matter of if but when this becomes law, and industry sectors will need to be prepared.
Tom Adlam has worked in the research and consulting space for several years, building on his experience in the private sector in the UK with policy focused work for FiscalNote, leading the build out of the Professional Services Team in Europe following FN’s 2017 acquisition of EU Issue Tracker.
Danilo Gattullo is Senior Analyst at FiscalNote’s Professional Service division. He has several years of experience tracking EU policy developments as Environmental analyst for EU Issue Tracker. Before joining FiscalNote, he worked in EU public affairs in Brussels in both a consultancy and trade associations.