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In March 2023, the EU together with the International Energy Agency has formulated a sort of “global movement” that would help Europe and participating states to stay within 1.5 degrees Celsius and push the clean energy transition forward. The proposed “global targets” also included the EU-wide efforts to triple renewables and double energy savings by 2030.
Background
Already at COP28 last year in Dubai, the global community has rallied behind the necessary efforts to tackle climate and energy challenges: i.e. a coalition of 135 countries with the leadership of a core group of motivated partners paved the way to optimal implementation. The EU assisted the world actors in successful turning the idea into a commonly approaching goal; it was one of these rare moments when the world felt united as one, commented the Commission President. The process has been called “the beginning of the end of the fossil fuel era”; however, to reach the goals and targets the EU-27 must double down on implementation and collective efforts.
In the coming COP29 in Azerbaijan, Baku this November, the summit Presidency’s plan includes two mutually reinforcing pillars: a) to “enhance ambition”, i.e. by combining key elements to ensure all participating states commit to ambitious national plans and transparency; and b) to “enable actions”, i.e. reflecting the critical role of finance as a key tool to turn ambition into action and reduce emissions, adapt to climate change and address loss and damage. There are now 198 Parties (197 countries plus the European Union) to the Paris Convention on climate change, which constitutes almost universal membership.
Source: https://cop29.az/en/action-framework
New European energy governance
At the recent Global Renewables Summit, Commission President von der Leyen in an opening speech revealed four areas of actions for the EU and the member states.
= The first is planning: the member states’ governments should now integrate the EU-wide global ambition in their national climate policies, showing how they intend to contribute to the global targets in the current decade. With this in mind, the European Commission has raised the renewable energy target for 2030 to more than 42% of the EU-wide energy mix. Already at present, the EU proceeding at a good pace: in the first half of 2024, about half of European electricity generation has come from renewables, and the work is going on…
= Second is improving the business environment; the member states have to create the most optimal incentives and conditions for clean energy technologies to thrive, which are needed both for Europe and globally. In order to make the “improvement” work, three conditions must be met: first, a solid regulatory framework, so that investments are safe and secure; second, state of the art infrastructure and faster permitting procedures; third, creating the “lead markets” that create demand for sustainable products, services and technologies; and finally, the right skills to match the demand. The EU institutions and the member states must work on all these priorities at once, as they have been set in the new Commission priorities for 2024-2029 together with the EU’s international partners.
= Third area of actions is towards access and supply of critical raw materials. Working towards accepted targets will increase the demand for these minerals and the EU must make sure that sourcing and mining are done in a way that benefits the business. This all will be coordinated by the UN Secretary-General’s Panel on Critical Energy Transition Minerals; as the co-chairs of the panels, the EU will continue working for robust supply chains, which will be both transparent and fair.
= Fourth area of actions deals with investments: the clean energy transition requires massive investments all over the world; this is especially true for countries and regions where there is a lack of affordable capital and where costs are so high that it is an obstacle to electrification. Specifically, public finance will play a critical role in pushing the clean energy transition forward.
Already in n 2022, within the EU Global Gateway investment strategy, the Team Europe managed to mobilize €28 bn in public funding to support emerging countries in reducing emissions and adapt to climate change; this includes not only grants: the EU used public funds to de-risk investments and to have a multiplier effect.
However, it is clear that public funding will not be enough to achieve established global goals; there is a need for aligning all global financial flows with the Paris Agreement goals, which also means mobilizing private capital too. As governments and/or international organisations set global targets for renewables, it opens a perspective course for businesses as well. For example, when the EU develops de-risking instruments, the efforts strengthen the business case for clean investments. Besides, when the EU gives public support to breakthrough innovation, it facilitates their uptake in the market.
Sources and citations from: https://ec.europa.eu/commission/presscorner/detail/en/speech_24_4844