A guide to achieving climate neutrality
In February 2024, the European Commission made an ambitious recommendation: Europe should achieve a 90 % reduction of emissions compared to 1990 levels by 2040. A new policy brief building on work done as part of the EU-funded PRISMA project now examines Europe’s emissions reduction strategy, discusses four risks that could impede progress towards the 2040 target and suggests ways to tackle each one. There are reasons to believe that achieving our climate targets is not merely a pipe dream. The EU has already set out on the path to climate neutrality thanks to strong policies and substantial investments in renewable energy and sustainable technologies. “Most technologies required to achieve the emissions-reduction targets are market-proven, and in many cases are cost-competitive with or cheaper than fossil alternatives,” report the policy brief’s authors. “After decades of successful innovation, clean-technology deployment is accelerating, with costs of key clean technologies continuing to drop rapidly.”
Stumbling blocks to decarbonisation
However, as noted in the policy brief, Europe’s 2040 targets are threatened by economic, social and political risks. These risks are grouped into four main categories: geoeconomic instability, technological progress, exacerbated inequality and policy credibility. The geoeconomic context is less certain today, with the EU having to deal with geostrategic conflicts directly affecting its security, an energy crisis and the aftermath of the COVID-19 pandemic. Europe’s energy transition could therefore be derailed through the disruption of clean technology supply chains and broader economic shocks that drive up interest rates or limit government spending flexibility. As regards technological progress, all pathways to a net-zero economy rely to some degree on new or evolving technologies that have yet to be proven on a large scale. As the brief informs, this engenders risks for decarbonisation. For example, the significant role foreseen for direct air capture with carbon storage (DACCS) could be problematic, as this technology has so far only been deployed at kilotonne scale globally. “At the same time, there is uncertainty about whether this technology has the appropriate characteristics to rapidly reduce costs or effectively scale-up,” the authors report. If not carefully designed, climate policies such as carbon pricing can increase economic disparities. If redistribution mechanisms are not put in place, such policies “may disproportionately burden lower-income house-holds, increasing inequality.” Last, to keep the 2040 target within reach, the 2030 target of a 55 % emissions reduction must be met – an achievement that requires policy credibility and commitment. Economic, technological and social risks could not only impede progress before 2030, they could also exacerbate current political disputes about climate policy. “Incipient trade wars, security concerns and persistent inflation might push climate policy down the priority list, while weak technological progress could increase the cost of the transition. Climate policies that lead to regressive distributional outcomes would face even stronger pushback.” The solution proposed by the PRISMA (NET ZERO PATHWAY RESEARCH THROUGH INTEGRATED ASSESSMENT MODEL ADVANCEMENTS) policy brief is a 2040 climate and energy policy framework designed to be resilient to such risks: “The EU should put distributional issues at the heart of its climate policy, develop an emissions-reduction strategy that monitors geoeconomic and technological risk factors, and put in place contingency plans to manage the impact of negative outcomes and to maximise the societal, economic and environmental co-benefits of the energy transition.” For more information, please see: PRISMA project website
Keywords
PRISMA, climate, emissions, policy brief, climate policy, climate target, 2040, energy, energy transition
