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EU executive proposes emissions cuts, climate bonds for green Europe

The European Commission on Wednesday proposed significantly toughening the EU's emissions target, aiming to achieve at least a 55-percent cut in greenhouse gases by 2030.

Brussels, 16 September 2020 (dpa/MIA) — The European Commission on Wednesday proposed significantly toughening the EU’s emissions target, aiming to achieve at least a 55-percent cut in greenhouse gases by 2030.

“While much of the world’s activity froze during lockdowns and shutdowns, the planet continued to get dangerously hotter,” European Commission President Ursula von der Leyen said in a speech to EU lawmakers in Brussels.

“We see it all around us: from homes evacuated due to glacier collapse on the Mont Blanc, to fires burning through Oregon, to crops destroyed in Romania by the most severe drought in decades,” she said, appealing for a more climate-friendly European Union.

“I recognize that this increase from 40 to 55 is too much for some, and not enough for others,” she said. “But our impact assessment clearly shows that our economy and industry can manage this.”

The European Parliament and EU leaders still have to agree to the 2030 plan.

With this new proposal, the German center-right politician hopes to speed up progress towards climate neutrality, one of the European Union’s declared goals for the continent by 2050.

Discussions are highly charged, with some countries claiming they cannot manage bigger cuts because of their economic reliance on high-polluting sectors such as the coal industry.

Environmentalists, in contrast, claim that a 55-percent cut compared to 1990 levels is not enough to achieve the climate neutrality goals.

So far, emissions have only dropped by 25 percent, according to commission figures.

Skeptics argue that the EU targets are not realistic, or that it should be left to companies to introduce voluntary measures to reduce emissions.

Wednesday’s proposal from von der Leyen could have far-reaching consequences for several European industries.

According to a summary of an impact assessment by the commission seen by dpa, car emissions would have to be reduced by 50 percent if the 55 percent overall goal is to be achieved. Current legislation only prescribes a 37.5-percent drop by 2030.

While voices in the automobile industry have expressed their reservations towards the new policy, 150 business leaders urged European leaders on Tuesday to agree to a target of at least 55 percent of greenhouse gas reductions.

These include the CEOs of Philip Morris International, Coca-Cola European Partners and Deutsche Bank.

Von der Leyen also proposed that NextGenerationEU — the EU’s recovery package that still needs to be adopted by EU institutions — should be financed by 30 percent so-called green bonds.

Green bonds are financial instruments that are tied to environmentally-friendly causes.

Much of the debate surrounding the EU’s multi-billion recovery package and long-term budget has centered on how to fund them.

EU Trade Commissioner Valdis Dombrovskis welcomed his chief’s announcement. “Delighted that 30 percent of the 750 billion euros of NextGenerationEU will be raised through green bonds, making the EU the biggest issuer of green bonds in the world,” he wrote on Twitter.

Another way of raising money would be through a carbon tax for imports into the EU.

“Carbon must have its price – because nature cannot pay the price anymore,” von der Leyen said in her speech.

This would, she said, ensure a level-playing field between foreign and EU producers.

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