By Christopher Hopson in London
Tuesday, January 21 2014
The Institutional Investors Group on Climate Change (IIGCC), which represents pension funds and asset managers, says the goal is critical if they’re to back the electricity system upgrades Europe needs.
With public finances strained, national governments in Europe need private investment for the task, claims the group, whose members include Aviva and BlackRock.
The European Union will on Wednesday publish a new 2030 framework for climate change and energy policies, marking the start of a long process to fix them into EU law.
The investors group, whose members manage assets worth €7.5tn ($10 trillion), is urging politicians to act ahead of proposals by the European Commission for future policies, after current targets expire in 2020.
Companies such as E.ON and nations including the UK and Germany have backed a 40% goal.
Apart from providing guidance for EU member states and their industries, the targets are significant in the context of global climate change talks, which Europe has sought to lead.
The targets will be debated by European leaders at summits in March and June. Firm legislative proposals are not expected before 2015 following European parliamentary elections and a change of Commissioners this year.
Even after that, it would take roughly two years for them to become EU law.
A source close to the EU negotiations says if the CO2 reduction target is set at 40%, then renewables might be fixed at 27%. However, if the CO2 target is cut to 35%, then the renewables target could be pared back to 25%.
“Renewables have become a bargaining chip,” the source said, with many countries opposed to their being made a binding target.
Sigmar Gabriel, German vice chancellor who also heads up the new economy and energy superministry, has shown no signs of being prepared to compromise.
Germany is switching into renewables as it closes down its nuclear power plants. “For this reason, Germany wants 28 binding national targets for renewables.
“However the UK, France, Spain, Poland and most East European countries will not accept having their energy mix dictated to them by Brussels,” says the source.
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