Four policies to shift the needle to net-zero emissions

(EurActiv, 13 Jun 2019) In order to achieve the EU’s goal of net-zero carbon emissions by 2050, bolder strategies are needed to drive sufficient change, writes Måns Nilsson.

Måns Nilsson is the executive director of the Stockholm Environment Institute. This opinion article is based on a panel intervention delivered at the annual McKinsey Global Sustainability Summit.

Grassroots demonstrations, extreme weather conditions and the IPCC special report on 1.5°C have contributed to growing political momentum across Europe for net-zero greenhouse gas emissions.

But such ambitious goals are not even close to being met, and the main European climate policy tool, the carbon pricing mechanism known as the EU-ETS, is not driving sufficient change.

Much of the policy debate has become a form of displacement activity revolving around individual behavior and morality. This is a dead end. We need instead bold policies that mobilise and scale solutions to rapidly decarbonise economic sectors. The EU’s Strategic Agenda must enable Member States to shift the needle to net zero.

What policy tools are available for the transition to a net zero emissions economy? The carbon price under the EU-ETS has recently climbed from a dismal 4-5 Euros per tonne to a more reasonable 25-30 Euros per tonne. But at this rate, it is still not able to drive change at the scale needed.

The decline in coal-fired power production in Europe represents almost the entirety of greenhouse gas emission reductions (falling by 9% in 2018, compared to 2017). In contrast, industrial emissions have remained flat since 2012.

The free allocation to industrial sectors has not incentivised reductions in emissions, and 90% of industrial emissions are emitted without any cost to the companies.  Even with the revised EU-ETS, there is too little market incentive.

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EurActiv, 13 Jun 2019: Four policies to shift the needle to net-zero emissions