EU Leaders Needs to Create Right Climate for 2030

22/10/2014 10:52 BST | Updated 21/12/2014 10:59 GMT

On Thursday and Friday of this week, Prime Minister, David Cameron, will join his counterparts from across Europe at the EU Energy Council. Their task - to decide upon the level of ambition Europe will set itself for reducing carbon emissions by 2030.

The EU's current 'Climate and Energy Package' was agreed on a cold December day in Brussels in 2008, and set the ambition for Europe's contribution to tackling climate change for 2020. Known as the '20-20-20' package, it set targets for the EU to achieve a 20% reduction in greenhouse gas emissions, to raise the level of renewable energy produced in the EU to 20% of the total, and to achieve a 20% increase in energy efficiency. Coming a year before the 2009 Copenhagen climate conference, it was seen as a key building block for the global climate deal - with leadership and an ambitious package of commitments from Europe on the table, it was hoped that other countries would similarly step up their levels of commitment.

But when the numbers were analysed and picked apart, it was clear - especially to the other countries who were expected to react positively to Europe's ambition - that the EU climate and energy package for 2020 was not going to deliver what it was supposed to

It wasn't seen as leadership. It didn't sufficiently raise ambition. For those reasons - and many others - Copenhagen didn't deliver the global climate deal that had been hoped.

And so here we are again. One year away from a climate summit which needs to agree how the countries of the world will divide up responsibility for tackling climate change. The EU, again, deciding what it's going to bring to the table in Paris next December. So, what chance of the EU getting it right this time? At the moment, it's not looking good enough.

The good news is that our own government is - generally speaking when it comes to climate change - one of the more ambitious within the 28 countries of the EU. At the UN Climate Summit [ ]called by UN Secretary General Ban Ki-moon last month, David Cameron participated and talked of Europe needing to set itself a target to reduce greenhouse gas emissions by "at least 40%" by 2030. But the current text being put forward to the European Energy Ministers' Council to approve - to be signed off in due course by Mr Cameron and his peers - makes no reference to "at least" and would only set a 40% target if there is a similar level of ambition from other countries. For now, the target is for a 30% reduction, even though the IPCC suggests that richer countries like those in the EU should be aiming for at least 40%, and probably more, if we want to stand the best chance of averting dangerous climate change.

As for the energy efficiency target, there's a chance there won't even be one for the EU for 2030. And on this point, our government seems to be in the strange position of arguing against energy efficiency, claiming that it is not necessary and that it would be too expensive for industry to deliver.

A target for energy efficiency is absolutely necessary to ensuring that - in a sector which we know is subject to market failure - the transition to a low carbon energy sector is achieved in the most cost-effective way possible. The market alone doesn't deliver energy efficiency on the scale and pace we need, so incentives and some regulation are required to drive the market towards greater efficiency. The UK has previously had experience of driving that market (Energy Efficiency Commitment & Carbon Emissions Reduction Target) and has the foundations in the form of a developed supply chain and expertise to be so again. These supply chains and services are something the UK could export with a binding, EU-wide energy efficiency target.

In terms of the costs of achieving energy efficiency, the European Commission's own analysis

over-estimated the costs of delivering a 2030 target on energy efficiency by between EUR160 billion and EUR590 billion. In addition to costs being over estimated, there are many other benefits to energy efficiency:

• Jobs - employment in the construction sector alone would increase by 4% if a 30% target for energy efficiency is adopted rising to 20% if a 40% target were adopted.

• Economy - for every EUR1 invested in energy efficiency in Germany's bank for reconstruction and development programme EUR4 was returned to public funds, and EUR15 invested in the construction sector

• Competitiveness - industry in Europe will become more competitive with lower production-related energy costs.

• Reduced dependence on imports - the EU is the largest importer of energy in the world. 2011 imports stood at 54% equating to 6.2% of EU GDP. Without a strong push on energy efficiency, it has been estimated that EU gas imports will increase by 5% and energy import dependency will remain as high today (at 54%) for the next 40 years

• Reduced energy bills - improving the energy efficiency of homes and businesses can reduce energy bills through reduced consumption as well as off-setting future energy price rises

So, far from energy efficiency being unnecessary, or that we can't afford to do it, we can't afford not to do it; indeed, it would seem an obvious and financially attractive way to ease the transition to an efficient and affordable low-carbon economy - in the UK and across the EU.

But, as for the 2020 package, what Europe decides for its own national and market-wide economy also matters for the rest of the world. For, again, we need the EU to show leadership and ambition that will inject greater momentum into the process towards the much-needed deal in Paris next year. In that sense, none of us can afford for Europe to falter.