Business Perspectives on the EU 2030 Emissions Reduction Target in the Green New Deal

The European Commission recently initiated a public consultation on options to strengthen the EU’s 2030 target, considering a potential increase in greenhouse gas emissions reductions from the current 40% below 1990 levels to either 50% or 55%. The proposed target, to be announced in September, will guide the Commission’s revisions of EU policies, including those related to the carbon market, renewable energy, and energy efficiency, as part of the “Green Deal” vision to achieve carbon neutrality by 2050. Valdis Dombrovskis, the EU Commission’s Executive Vice-President, emphasized the importance of the Renewed Sustainable Finance Strategy in mobilizing capital for a sustainable and resilient economy during the COVID-19 recovery phase.

To gauge the business community’s perspective on the potential impacts of the coronavirus on Brussels’ climate ambition, we posed the question, “What will the 2030 emissions reduction target be in the Green New Deal?” to attendees of last week’s Coronavirus and the EU ETS webinar. The results are presented above.

The responses from our participants were almost evenly distributed among the given options, indicating a lack of a clear consensus. However, the idea of a compromise target of a 50% emissions reduction received the most support, with 39% of respondents favouring this option.

Surprisingly, despite the looming recession expected to be the largest since the Great Depression, 27% of webinar participants believed that the EU would still aim for the most ambitious target of a 55% emissions reduction. This viewpoint suggests that even in the face of the current pandemic, there is a recognition that the scientific evidence calls for substantial action, regardless of the temptation to believe that the worst-case scenarios will not materialize.

Lastly, 34% of respondents predicted that there would be no change to the existing 40% emissions reduction target. This result is noteworthy, considering that 26 out of 27 member states voted to increase the EU’s ambition in December. It could be attributed to the majority of webinar participants believing that European economies will take 6-12 months to recover from the coronavirus pandemic, implying that the EU might be constrained in its ability to pursue a more ambitious emissions cut due to economic considerations.

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