Countries in Europe could be more ambitious about reducing carbon dioxide emissions between now and 2020 while suffering minimal costs. This is according to research from Bloomberg New Energy Finance, which claims the extra cost would equate to “a few cups of coffee per person per year”.
The research, which was undertaken on behalf of DECC, asserts the European economy would not be affected negatively by increasing the Union’s carbon targets and could actually benefit some member states initially as well as accelerate the uptake of clean energy investment.
One of the countries set to pay more is the UK, although support for the increase was evident last week when Ed Davey said: “A Europe-wide agreement to a 30% reduction in emissions by 2020 will drive up investment – and the ETS carbon price. Moving to 30% is a key commitment in the coalition’s programme.”
Countries facing the highest additional costs would be France, Germany, Italy and the UK, with between €1.1bn and €2.5bn per year of cost each. These costs would however represent a maximum of 0.05% of GDP.
Guy Turner, head of carbon and power research at Bloomberg New Energy Finance said: “Our analysis shows that increasing the 2020 target to 30% from the current 20% would result in an additional cost of €3.5bn on average per year for the EU as a whole, from 2011 to 2020. This is equivalent to 0.03-0.04% of EU GDP, or €7 to €9 per inhabitant per year. Clearly, a more ambitious policy would not be nearly as painful as some countries fear.”
The research estimates that if a 30% target were imposed in Europe actual greenhouse gas emissions in the EU in 2020 would fall by 21% from 1990 levels, compared to a reduction of 13% under the 20% target.