Europe must set an ambitious target to cut carbon emissions by 40% by 2030 or run the risk of slowing investment into much-needed energy infrastructure, warns a leading group of investors.
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
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
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
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
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.