Improve predictability of investments
The need for low carbon investments during the next decades increases considerably. Industrial and energy-related investments typically have an economic lifecycle of 40-60 years. It will be even more important to get a predictable and market-based climate policy framework in place.
Before 2050 there will be nearly 200 parliamentary elections held in the EU member states.
It will be difficult to anticipate and plan for changes in the national regulatory environment, since country-based climate policies tend to vary after national elections depending on the parties in power.
An EU-wide, predictable and market-based framework with a high enough carbon price would be give strong enough incentive to develop clean and climate-friendly solutions in scale needed.
Systemic climate solution
In September 11, 2019 Climate Leadership Coalition called in its statement for a more ambitious and predictable EU-wide systemic solution for achieving climate goals.
The current EU Climate Policy is based on three pillars: Emissions Trading System (ETS) covering 45% of emissions, sectors under the Effort Sharing Decision (ESD) and land use sector (LULUCF). In the subsectors to which the ESD and LULUCF apply, each EU Member State defines and implements national policies and measures based on the national targets agreed at EU level.
The current set-up of the pillars in particular the national parts creates uncertainty. Country-based climate policies tend to vary after national elections depending on the parties in power.
To improve the investment environment and effectiveness of the climate policy CLC proposes:
- Widening the use of the EU emission trading (ETS) system as a cornerstone policy instrument to develop the competitiveness of companies and sectors, and to expand ETS gradually also to other sectors in the future
- Absorbing carbon from the atmosphere by factoring in measurable, verifiable carbon sinks and storing carbon via carbon capture and utilisation solutions, as well as substituting high carbon footprint materials with low carbon footprint materials
- Developing enhanced mechanisms to address carbon leakage;
- Enabling international integration between compatible emission trading systems and verifiable development projects.
The planning for this more systemic solution should begin as soon as possible. The solution for the time period after 2030 should be agreed in synchronisation with ETS revisions and the COP Global Stocktake in 2023. The widening of ETS and bringing new sectors under the ETS umbrella must be planned carefully and take into account how to not dilute the existing policies in a harmful way.
Utilize carbon budget
CLC supports the EU Commission’s proposal to set a climate neutrality target for 2050.
However, CLC proposes that the target will be further clarified by setting a binding carbon budget for the remaining GHG emissions until 2050, including emission reductions and carbon sinks. The aim of the long term carbon budget would be to increase the predictability of the investment environment to meet the investments needed during the next decades.
The use of carbon budget would not change the current climate policy framework based on ETS, non-ETS and LULUCF sectors. The cap for EU ETS, as well as the national targets for the non-ETS sectors can be calculated out from the budget.
The 2030 and 2040 targets should be aligned with the long term net-zero target.
Land use and bioeconomy
Land use and bioeconomy will have a major role in climate mitigation in the longer term. During this century about one fifth of the total reduction of emissions today and three quarters in between 2050-2100.
Land use and bioeconomy will have a special role in carbon capture for absorbing carbon from the atmosphere and storing it in the soil or forestry products or substituting higher carbon footprint materials.
Land use will be affected by major changes to weather and biological conditions and food production needs and methods and there will be an increasing need to enhance biodiversity and other ecosystem-based services. Land use is impacted by biological adaptation to changing climate conditions. Bioeconomy consists of a whole ecosystem of old and new industries, land owners and economic agents. New innovative technologies are rapidly emerging.
To build-up significant carbon sinks via land changes, like the afforestation, needs typically tens of years. If EU wants to have a major increase on land use based carbon sinks and bioeconomy products storing carbon by 2050, the targets and actions should be started well before 2030.
A holistic view is needed regarding the climate impact, innovation potential and job creation of the bio-economy. CLC proposes an assessment – a synthesis of the full land-use and bio-economy potential – to be done before the beyond 2030 climate strategies and policies are decided.
Grow carbon handprint and lower carbon footprint
Companies and organisations are looking for ways to decrease their burden on climate. The demand for low-carbon action is coming from consumers, financial institutions and political decision makers alike. There is high and increasing demand for solutions that have a verifiable positive climate impact.
Carbon handprint refers to the positive climate impact that using a product or service has compared to other products or services in the same category. On the other hand carbon footprint is the amount of greenhouse gases released into the atmosphere by a particular activity. Both carbon footprint and handprint can be applied to the actions of an individual, organization or even a nation.
CLC views that carbon footprint should be utilized in public and private procurement and in enabling sustainable choices by citizens much wider than they are currently used. CLC supports the carbon handprint concept developed by its members VTT Technical Research Centre and LUT university and endorses its wider use in the EU area.
Expand the network
CLC aims to expand its member network steadily in order to maintain CLC’s position as the largest non-profit climate business network in Europe. CLC’s 13 theme groups will remain active in increasing awaress on climate change mitigation and provide members with opportunities to network, create ideas and new initiatives and hear of latest national and international developments.