The declaration, which was sent to EU ministers ahead of climate talks in Brussels yesterday, was signed by 29 companies including Alstom, Asda, BNP Paribas, BSkyB, Capgemini, Centrica, GE Energy, Kingfisher, Google, Marks and Spencer, Nike, Philips Lighting, Sony Europe, Swiss Re, Thames Water and Vodafone.
Its draft was organised by The Climate Group, the Cambridge Programme for Sustainability Leadership and WWF Climate Savers Programme.
Revising emissions targets could lead to 20 million new green jobs
The EU has already pledged a 20 per cent emissions reduction compared to 1990 levels over the next 10 years, but environmental groups say that is not enough.
Sandrine Dixson-Declève, director of the EU Office for the Cambridge Programme for Sustainability Leadership, said raising the percentage will give companies a better incentive to invest in clean technologies and efficiency measures. She added these efforts could potentially create more than 20 million new green jobs between now and 2020.
Dixson-Declève said analysis shows that 20 per cent by 2020 is no longer an ambitious target because the EU has already achieved a 17 per cent reduction in emissions compared to 1990 levels. She admitted this has been helped in large part by the recession.
‘Many of these companies believe we need a stronger trigger mechanism to actually get us to a low-carbon economy,’ she added. ‘If we’re already at 17 per cent and 20 per cent is our target for 2020 that is going to be a business as usual scenario.’
This could make it more challenging for Europe to achieve greater goals of up to 95 per cent emissions reduction by 2050.
Hopes and fears
Some pro-business groups have argued against raising targets in Europe for fear of losing competitiveness with companies in energy-intensive industries outside the EU.
But The Climate Group says its research suggests there is no clear evidence that this economic phenomenon known as ‘carbon leakage’ should be a concern. Its survey of nine energy-intensive companies, accounting for five per cent of emissions under the Emissions Trading Scheme (ETS), reported they have not relocated operations, reduced their workforce or decreased their market share.
While there have been suggestions within Europe to tax imports from outside the EU based on their carbon content, Dixson-Declève said this kind of ‘fiddling with the market’ could create massive disruption.
A better way, she added, is to consider whether companies most vulnerable to carbon leakage should be given a deadline extension to reduce pollution or additional emission allowances bestowed through the European Union Emissions Trading Scheme (EU ETS).
The EU ETS is a major concern outlined in the business declaration, stating the current price of carbon is too low to inspire companies to reduce their emissions. The price of carbon in the EU ETS broke through the €14 (£12) a tonne mark back in April, but historically it has gone as low as zero.
A new 30 per cent emissions-reduction goal will likely signal the carbon price to go up.
While some, namely energy giant EDF, have called for a carbon floor price, Dixson-Declève said this policy has pluses and minuses. A high floor price could stimulate the market, she added, but its long-term effects are relatively unknown.
As the United Nations Framework Convention on Climate Change (UNFCCC) prepares for its next round of climate change talks in Cancun at the end of November, European ministers are hopeful to encourage China and the US towards stricter emissions reduction targets.
Luc Bas, director of European programmes for The Climate Group, said the EU could lead by good example with a pledge of 30 per cent emissions reductions.
‘We don’t think there will be a huge shift in the Chinese position but even a minor shift from the Chinese in Cancun would be a major step forward,’ he added. ‘The leadership the EU somehow lost at Copenhagen could be regained.’
Yet despite the EU’s failure to push the rest of the world towards a stricter emissions cap, some point out that Europe is falling behind countries such as China and the US, which led the world in new clean energy technology and infrastructure in 2009.
According to The Climate Group, out of $119bn (£74bn) invested worldwide by the financial sector in clean energy companies and utility-scale projects, $33.7bn took place in China, up 53 per cent from 2008.
Together the US and China accounted for the top five clean tech Initial Public Offerings in 2009.
Bruce Haase, acting head of the Climate Business Engagement Unit at WWF International, explained that while the US has dragged its feet on implementing stringent national emissions targets, individual states such as California are leading the way in clean technology investments and pollution control.
Haase added that China’s green investment can be partially attributed to the central government’s power to execute policies quickly without dispute. He referred to China’s decision this August to shut down more than 2,000 of the country’s factories deemed to be energy inefficient.
Stressing such ‘draconian’ actions would ’not fly in Europe’, Haase said mechanisms such as stronger climate policies and higher emissions targets have the best chance at stimulating investment in clean technology and efficiency measures across the EU.
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