Cost of Cutting E.U. Emissions Falls

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The possibility that Europe might be planning to raise its CO2 emissions target to 30% is back in the spotlight following the publication of a report that says it would be much cheaper than originally thought.

A new study from the European Commission shows that the cost of raising the current target from a 20% reduction in CO2 emissions by 2020 to 30% has fallen 'considerably' since its original report in 2008. It credits the falling price to recession, better climate change policies and lower demand. The last cost analysis report in 2010 stated that the costs of meeting the 20% target dropped from €70 billion ($92 billion) to €48 billion ($62 billion) per year by 2020, in turn reducing the cost of raising the target to 30%. Raising the target will most likely mean stricter regulations for industrial and energy companies. For related information, see May 30, 2010, article - European Commission Wants to Raise Carbon-Emissions Target to 30%.

"The fact that the 20% emissions reduction target is now less costly in monetary terms than was assumed in 2008, means that the 30% reduction scenario has become considerably less costly too", the report stated. " Achieving 25% out of 30% reductions domestically by 2020 is estimated now to cost around €70 billion. For the E.U. as a whole, moving to a 25% domestic reduction in 2020 would save an average of €20 billion in fuel costs each year over the period 2016-2020."

The E.C. is not calling for the targets to be raised but the report makes it clear that it sees an increase in the target from 20% to at least 25% as economically viable.

Increasing the CO2 emissions target, however, is a very divisive issue among E.U. Member States. The biggest nations like the U.K., France and Germany, have been pushing to raise the target to 30% for some time, arguing that not doing so puts Europe in the 'slow lane' of low carbon investment. For related information, see July 18, 2010, article - Europe's 'Big 3' Want Higher Emissions Target.

In February last year, the European Union (E.U.) announced that it would not be increasing its 2020 target for reduced carbon emissions from 20% to 30%. For related information, see February 16, 2011, article - Europe Says 'No' to 30% Carbon Cuts.

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