Bloomberg New Energy Finance launched its new report yesterday in Brussels, analysing the costs of moving toward a 30% GHG cuts in the EU. The report lays out a number of different possible cost scenarios if the EU moved beyond the current 20% climate target. Unfortunately the report is far from thorough and falls short of presenting an adequate picture of the true costs and benefits. CAN-Europe notes for example that the Bloomberg report does not analyse the health or social benefits of enhanced climate action, such as improved air quality or a boost to the job market, which would of course have a direct effect on costs.
The report does not propose additional financial mechanisms to support emission reductions in Central and Eastern Europe (CEE) besides trading in allowances from non-ETS sectors such as agriculture and transport. CEE countries would still benefit from this situation while moving towards a 30% emissions reductions target.
CAN-Europe is especially concerned that the report assumes that only 21% out of 30% target will be achieved domestically. The remaining 9% is expected to be delivered through clean development mechanisms (CDM) offsets.
In the “simplest scenario” the annual costs of moving from 20 % to 30% are expected to reach 3.5 bn per year on average. These are additional costs, on top of the costs of existing climate and RES target implementation. Under this scenario the ETS price is assumed to reach 33 euro per tonne while the price of non-ETS allowances is assumed to reach 8 euro.
CAN-Europe welcomes the new analysis as an important contribution in the debate about increased climate ambition. At the same time we call on Bloomberg to further develop the new study, exploring costs and benefits of 30% domestic emissions reductions.