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New far-reaching climate targets point the way for ambitious climate policy

Parul Kumar


The last few weeks have been extremely important, because we have witnessed the setting of historic milestones, which will set the course for climate protection in the coming decades.

On April 21, 2021, after fourteen hours of negotiations, the representatives of the European Council and the European Parliament reached a provisional agreement setting the goal of a climate-neutral EU by 2050 and a collective net greenhouse gas reduction target (emissions net of removals) of at least 55% by 2030 compared to 1990. This is an increase in ambition from the previous target of 40% to the new target of 55% by 2030. This agreement at the EU level is historic as it will put the stated goals of the Green Deal into a binding legislative format. It will also pave the way for future binding targets after the EU Commission presents proposals later this year as part of its Fit for 55 Package.

Shortly afterwards, on April 29, the Federal Constitutional Court published a historic decision that obliges politicians to amend the Climate Protection Act: "The legislature must, however, regulate in more detail the updating of the reduction targets for periods after 2030 by 31 December 2022, taking into account the requirements of this decision." The Federal Cabinet has already approved an amendment to the Climate Protection Act of 2019 (the Klimaschutzgesetz) during the current legislative period, on 12 May 2021. The revised targets in the draft law include the reduction of greenhouse gases (compared to 1990) by at least 65% by 2030, by at least 88% by 2040, climate neutrality by 2045 and negative emissions after 2050.

The setting of the higher climate target at the EU level and the even more ambitious target at the German level in quick succession have shown that Germany is willing to increase its ambition and speed on the path to climate neutrality and to shoulder the responsibility for very far-reaching emission reductions. In this context, Section 3 (3) of the Climate Protection Act is also of great importance. This stipulates: "Should higher national climate protection targets become necessary to meet European or international climate protection targets, the Federal Government shall initiate the steps necessary to increase the target values pursuant to paragraph 1. Climate protection targets may be increased but not lowered."

In addition, the new amendment proposal provides for a procedure to review and further legislate on the annual emission levels of Annex 2 of the Climate Protection Act with regard to amendments to the European Climate Change Regulation and the European Emissions Trading Directive for an increased climate target for the year 2030.

The Climate Protection Act in Germany has previously set the targets of greenhouse gas neutrality by 2050 (§ 1) and of a minimum reduction rate of greenhouse gas emissions of 55% by 2030 compared to 1990 (§ 3(1)). According to the report of the Expert Panel on Climate Change published on 15 April 2021, the national target of at least 55% reduction by 2030 in Germany is consistent with a 40% reduction at the EU level, and the new German climate target for 2030 in line with a more ambitious EU climate target was estimated to be between 62 and 68%.

Although the agreement still needs to receive final approval from the European Council and Parliament, the press release from the EU Council already indicates that elements of the agreement include the establishment of a European Climate Change Scientific Advisory Board and indicative roadmaps from each economic sector to achieve the goal of climate neutrality by 2050.

Further objective

The draft amendment to the European framework for achieving climate neutrality published in December 2020 sets a binding target of net neutrality by 2050 and an interim target of reducing net greenhouse gas emissions (emissions net of removals) by at least 55% in 2030 (compared to 1990). These targets will now be enshrined in law, following the agreement in April. The bill also provides for a proposal for the European Union's 2040 climate target within 6 months of the first global stocktake under the Paris Agreement (Article 14) in 2023.

However, the draft does not include explicit interim targets (e.g. between 2021 and 2030), sectoral targets or the specific contributions of individual Member States. Article 2 sets out the principles underlying the objective achievement of climate neutrality at Union and Member State level as follows: "The relevant Union institutions and the Member States shall take the necessary measures at Union and national level respectively, to enable the collective achievement of the climate-neutrality objective set out in paragraph 1, taking into account the importance of promoting both fairness and solidarity among Member States and cost-effectiveness in achieving this objective [...]" Therefore, further legislation of climate targets at Member State level will also be of great importance.

In contrast, the proposed amendment to the Klimaschutzgesetz in Germany prescribes timeframes for further target setting. The permissible annual emissions for the period from 2031 onwards must be set by the end of December 2024, and the permissible annual emissions for the years 2041 to 2045 must also be set by 2034 at the latest.

The extent to which the legal framework for further substantive climate-compatible measures at EU and German level would need to be adapted to the new climate targets will depend on how the scope and coverage of the Emissions Trading Scheme (EU ETS) and the Effort Sharing Regulation (ESR) develop at EU level. This is where the upcoming Fit for 55 Package will play an important role. Important priority issues in the EU's upcoming Fit-for-55 package include the revision of the carbon pricing system (EU-ETS), the design of the Carbon Border Adjustment Mechanism (CBAM), the Effort Sharing Regulation, the revision of the Energy Efficiency Directive and the Energy Tax Directive, as well as the Regulation setting CO2 emission standards for new passenger cars and new light commercial vehicles.

Furthermore, it is important to keep in mind the wider international context of climate change mitigation and global cooperation. The conclusions of the special meeting of the European Council held on May 24-25 also highlight the international nature of the EU's commitments, notably with the following statement: "The EU underlines its readiness to seize the global momentum and calls on its international partners - in particular the members of the G20 - to raise their level of ambition in the run-up to COP 26 in Glasgow. "

Policy-making and need for action in Germany and the EU

One of the points agreed in the EU negotiations, the establishment of a European Scientific Advisory Board on Climate Change, a body composed of 15 scientific experts from different nationalities, signals an emphasis on science-based policy-making to achieve the goals of the European Climate Act and the Paris Agreement. Future climate change legislation must be evidence-based, innovative and underpinned by political certainty.

The ambitious greenhouse gas reduction targets must now be supported by accelerated policy-making in several areas in Germany. In the German Climate Package, which was published together with the draft amendment to the Climate Protection Act on 12 May 2021, the Ministry for the Environment, Nature Conservation and Nuclear Safety identified the following priorities for supporting measures: (1) investment pact with industry for "climate-friendly production in Germany", (2) accelerated ramp-up of the hydrogen economy, (3) climate-friendly mobility, (4) further measures in the field of agriculture, (5) expansion of renewable energy and refurbishment in the building sector, and (6) the review of climate-damaging subsidies.

The first half of the year 2021 has undoubtedly been exceptional: historic milestones in both the EU and Germany have been set in the form of more robust climate targets. There is no turning back from these ambitious targets. The next phase of policy-making, which must focus on innovative solutions for implementation for consistent climate protection in all sectors, is equally exceptional and must provide ambitious and well thought-out instruments to achieve the targets within a short time frame.