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Climate Action Regulation update: Parliament vote fails Paris pledge

This is the first in a series of two blog posts on key discussions in the Parliament and the Council on the Effort Sharing Regulation (ESR). You can get an update on the Council's negotiations here.

On 14 June 2017 the European Parliament voted on the revision of the 'Climate Action Regulation implementing the Paris Agreement' (the ESR), which covers emissions from transport, waste, buildings and agriculture for the coming decade.

The Parliament failed to translate its numerous recent statements reaffirming the EU’s commitment to the Paris Agreement into substantial emission cuts. You can read CAN Europe’s statement on the vote here and the final report from the Parliament here.

Here's our analysis of the key positive and negative outcomes of the vote in relation to the Commission’s proposal:

On the positive side...

  • A change in the starting point from beginning the trajectory in 2020 as suggested by the Commission, to beginning it in 2018. The Parliament has also agreed that Member States that will not meet their 2020 targets will have to start from their target for 2020, as this will be the lower value. This is the single most important amendment to the Commission's proposal next to changing the end target, which the Parliament did not do. The proposal could be further improved by changing the starting year trajectory to 2017, as presented in our infographic.

  • A full compliance check should be carried out every two years, rather than at five-year intervals as suggested by the Commission.

  • A limitation to how many allowances Member States can bank from one year to the next (10% of allowances may be banked in the years 2021-2025 and 5% in the years 2026-2029). Such a limitation will help limit surplus build-up and better ensure Member States will actually meet the end target.

  • A new article (11a) named "Climate Impact of Union funding" was introduced. This states that the Commission will carry out a study of the impact of climate change mitigation funding granted from the Union budget, and if appropriate it will put forward legislative proposals aimed at discontinuing any funding not compatible with the CO2 reduction targets or policies of the Union. Every new Union investment from 1 January 202 shall also be subject to an ex-ante climate compatibility check. 

On the negative side...

  • A new loophole in the form of an "early action reserve" has been introduced and set to 90 Mt CO2e. Under this proposal, some countries can use ‘hot air’ to reach their 2030 target (meaning they can carry over surplus allowances from this commitment period - when many countries are still allowed to increase their emissions - to the period 2021-2030).

Additional developments...

  • A reference to keep reducing emissions up until 2050 was made, which the Commission did not do, but the reference is to the old -80 to -95% reductions economy wide by 2050 and corresponding 80% by 2050 for the ESR sectors. No scientific consensus exists about what a Paris compatible ESR target for 2050 would be, but studies indicate it needs to be at least -94%.

  • Language was introduced with regards to review of the legislation, which now states that within six months of the facilitative dialogue under the UNFCCC in 2018 the Commission shall publish a communication assessing the consistency of the Union's climate and energy legislative acts with the goals of the Paris Agreement, and following the first global stocktake of the implementation of the Paris Agreement in 2023 and subsequent global stocktakes thereafter, legislative proposals to increase the emission reductions of Member States shall be put forward if appropriate. This is a step in the right direction but all comes too late: what we need is a review of targets in 2020 at the latest.

  • Other loopholes were not decreased nor increased (the ability to offset emissions via land use - LULUCF - remains at 280Mt and the ability to use ETS surplus for some countries to offset ESR emissions remains at 100Mt). The controversial LULUCF category "managed forest lands" can be included via a delegated act once the LULUCF regulation has been adopted.

All in all, the Parliament strengthened the Commission's proposal, but not enough to make the ESR fit for purpose or align it with the Paris Agreement. The lead rapporteur MEP Gerbrandy now has the mandate to start negotiating in trialogues with the Council and the Commission on the basis of this position.

By Caroline Westblom, EU Climate & Energy Policy Coordinator

 

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