Coping with Climate Change (1) – EU Policy

Source: EU


Source: European Environment Agency

Source: European Environment Agency


Over the past centuries and especially in recent decades, the global temperature has increased significantly. According to the United Nations Intergovernmental Panel on Climate Change’s report, if the global temperature rises further by 2°C, the earth will most likely suffer from an irreversibly destructive ecological change. Experts warn that our current measures are far from enough to prevent the 2°C temperature rise. At the end of this century, the earth may even become 4°C to 6°C warmer.

Coping with climate change effectively needs the involvement of all countries around the world. In Europe where dozens of small and large countries are scattered over, the EU as a supranational organization with 28 member states plays an important role of coordination. Below we will give an outline of the EU policy concerning climate change. Concrete examples can be found in (2) and (3) of this series.

(Europe 2020 Strategy)

“Europe 2020” is the EU’s growth strategic plan from 2010 up to 2020. The EU has defined growth in terms of three criterion:

  • Smart growth: knowledge and innovation based economy
  • Sustainable growth: development without neglecting the environment
  • Inclusive growth: fair distribution of development benefits; narrow the wealth gap

In regard to climate change, the EU has set three targets to be achieved by 2020:  

  1. Greenhouse gas emissions should be 20% lower than 1990 level
  2. 20% of energy should come from renewables
  3. Energy efficiency should be increased by 20%

The first two targets are law-binding. But targets can vary according to each country’s situation. In technologically advanced countries like Sweden, for example, the target for renewables is set at 49% whereas in Malta only 10% of renewable energy sources are required. Overall, all EU member states are heading to the same direction to achieve targets (1) and (2).

In the long run, the EU aims to reduce 80% to 95% of its greenhouse gas emissions (compared to the 1990 level) and generate electricity without emitting carbon dioxide.

EU Emissions Trading System (ETS)

Launched in 2005, the EU Emissions Trading System is the first and still by far the largest international system for trading greenhouse gas emission allowances. Participants include all EU member states, Iceland, Liechtenstein and Norway. The rationale behind the ETS is to use government regulations with the help of the market’s invisible hand to seek the most cost-effective means to reduce greenhouse gas emissions. So how does it work?

  1. The ETS concerns energy intensive industries that have facilities like power plants, oil refineries and steel works. The overall volume of greenhouse gases emitted by these facilities are limited by a cap set by the EU after consulting with the industries.
  2. Within the cap, each unit of emissions is termed as an allowance. Each allowance gives its holder the right to emit one tonne of carbon dioxide. At the beginning of each ETS year, companies of the given industry will receive a number of allowances (usually fewer than needed) from the government. Some of the allowances are distributed through government auctions. At the end of the ETS year, these companies should hold enough allowances that can cover their volume of emissions. Otherwise, they have to pay heavy fines.
  3. Companies whose allowances fall short of the volume that they require for emissions can buy extra allowances from other companies. Or they are motivated to upgrade their facilities so as to reduce their greenhouse gas emissions.
  4. Companies that have extra allowances can either sell them or save them for next year.

European Climate Adaptation Platform

Even if we can stop emitting greenhouse gases right now, we still have bear the consequences of our previous unlimited emissions. Experts warn that the weather is becoming more unstable and extreme. Because of that, the EU has set up the European Climate Adaptation Platform to study what measures can be carried out to minimize the impact of climate change and how one can make the best of it.

Other EU’s greenhouse gas reduction measures 

While the ETS concerns only energy intensive industries which make up of 45% of total greenhouse gas emissions in the EU, other measures are needed to combat the other 55% attributed mainly to transport, construction and agriculture sectors. Here are some of the measures:

  • Limit vehicles’ emissions by law: manufacturers of automobiles are obliged to reduce the average CO2 emissions of their new cars from the present 159 grams of CO2/km to no more than 130g of CO2/km by 2015 and 95g CO2/km by 2021. For vans, the mandatory target is to reduce from the present average of 203g of CO2/km to no more than 175g CO2/km by 2017 and 147g CO2/km by 2020.
  • Encourage zero-energy building
  • Invest in renewables and carbon capture & storage
  • Provide assistance to developing countries in mitigating climate change