The EU's 2040 climate targets: the start of the new climate race

Author:

Chai Qimin is a researcher and director of the Strategic Planning Department of the National Center for Climate Strategy

Liu Bohan is an assistant researcher in the Strategic Planning Department of the National Center for Climate Strategy

As countries have set new global climate action targets to welcome the COP29 meeting, the European Commission recently released a report proposing a plan for the 2040 medium-term climate goals. However, there are many obstacles to achieving this ambitious goal: the crisis in Ukraine has diverted funding from climate action in Europe, EU member states have different attitudes towards climate change, and the EU's internal decision-making mechanisms have determined that their ultimate climate targets remain uncertain.

The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) will be held in Baku, the capital of Azerbaijan, at the end of 2024. New global climate action targets are currently being developed. According to the Paris Agreement reached in 2015, parties need to set a new round of climate change action targets before COP30 in Belém, Brazil, in 2025.

The EU is trying to demonstrate its leadership in the fight against climate change. A few days ago, the European Commission released a report entitled "Europe's 2040 Climate Goals and the Pathway to Climate Neutrality by 2050 - Building a Sustainable, Just and Prosperous Society", proposing to "reduce net greenhouse gas emissions by 90% by 2040 compared to 1990" as a medium-term climate goal. This is slightly higher than the "linear" requirement of the EU's plan to achieve climate neutrality, but the EU can clearly do better.

In December 2023, COP28 took stock of the implementation of the Paris Agreement. According to the European Climate Law, adopted in 2021, the EU should set climate action targets for 2040 within six months of the adoption of this global stocktake and incorporate them into the European Climate Law. At the same time, the proposed 2040 climate target is also the basis for the development of a 2035 NDC target, which will be presented to the UNFCCC Secretariat in advance of COP30.

Previously, the European Scientific Advisory Committee on Climate Change had recommended that the EU "aim to reduce net greenhouse gas emissions by 90 to 95 per cent by 2040 compared to 1990 levels".

According to the European Commission, achieving the 2030 climate target, ensuring a just transition, adapting the EU's energy mix, reducing greenhouse gas emissions from the industrial and transport sectors, developing green agriculture and the bioeconomy, and leveraging the power of policy and innovation are the main ways to achieve the 2040 climate target.

Needless to say, however, the EU's climate action has been hampered. Both assessment reports released by the European Court of Auditors and the European Commission in 2023 show that it will be more difficult for the EU to meet the "FIT 55" target of reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.

From a geopolitical perspective, the Ukraine crisis has dragged down the EU's green transition. Today, funding has become a dilemma, with the EU allocating funds to support the Ukraine crisis, thus having to reduce financial support for the green transition.

Political considerations are another factor that should not be overlooked. Given the EU's decision-making process, the setting of its 2040 climate target remains uncertain. On the one hand, the proposed target is only a suggestion from the current European Commission President Ursula von der Leyen, and the formal proposal will be submitted by the next European Commission President after the European Parliament elections in June this year, while it remains to be seen whether the next European Commission President will see the Green New Deal as a priority for development. On the other hand, the proposed targets must be considered and negotiated by the European Council and the Council of the European Union in order to reach a consensus, and finally approved by the European Parliament before they can enter into force. In the process, EU climate targets are still likely to change.

There is not unity within the EU, with Hungary, for example, taking a negative view of the EU's climate targets, and some right-wing and nationalist parties making opposition to climate targets a policy proposition in this year's elections. In addition, some stakeholders, including farmers, have resisted climate targets. As an early contributor to medium-term climate targets, the EU has also put pressure on other countries, similar to the situation when the EU proposed its "climate neutrality" targets in 2019. When it comes to climate, the United States is once again facing partisan divisions. This year's U.S. presidential election will affect the future process of global climate governance, and ambitious climate goals may become a major support factor for Biden's re-election.

Clearly, the EU will continue to use unilateral trade measures to protect its domestic industries and supply chains. The EU argues that China and the United States have gained a dominant position in the supply chain of a variety of key raw materials, electric vehicles and clean energy through "unfair trade" through fiscal incentives, public subsidies and corporate mergers and acquisitions.

Although the EU's 2040 climate target has not yet been finalized, its assessment of medium- and long-term international trends, technological innovation, and industrial competition still provides valuable reference for other economies. In addition, the EU has taken full advantage of modelling research and think tanks.

At present, China is setting 2035 climate targets in accordance with the requirements of the Paris Agreement. As the world's largest developing country, China is expected to basically achieve modernization and build a beautiful China by 2035, and the next round of new nationally determined contributions will be an important driving force for achieving comprehensive green and low-carbon economic and social transformation, developing new quality productivity and building an ecological civilization.