Exclusive interview with Miguel Arias Cañete, EU Climate Action and Energy Commissioner

What are you most satisfied with so far during your period as a climate commissioner?
- During the mandate of this Commission, climate and energy issues have been a top political priority and positive agenda of the Juncker Commission. It has been quite a ride – and we have achieved a lot!

- The EU has now in place the world's most ambitious and advanced climate and energy framework, and we have built it in record time, tackling one of the greatest challenges of our time: the gradual transition away from fossil fuels towards a climate-neutral economy.

- We have now completed the actions outlined in the Energy Union strategy launched back in October 2014, helping to ensure our energy supply is secure, viable and affordable to all and contributing to the fight against climate change in Europe and at global level.

- On climate issues, a highlight is of course the Paris Agreement adopted at COP21 in 2015. The EU played an important role in brokering this first-ever universal climate deal, ensuring its quick entry into force and agreeing on the rulebook for its implementation last year at COP24 in Katowice.

- We have also been a frontrunner in turning our commitments into action. We are on track to reach our climate and energy targets for 2020, and since Paris have worked tirelessly to put in place the legislative framework which puts us on track to reach the 2030 target we committed ourselves to – cutting EU greenhouse gas emissions by at least 40%, compared to 1990 levels.

- We have also agreed on higher targets for renewable energy (32% by 2030) and energy efficiency (32.5% by 2030), which would in fact allow the EU to reduce emissions by 2030 beyond this 40% target – by around 45%. And we have continued to mainstream climate action across EU policies, programmes and budget, in order to help us reach our climate goals and create an enabling framework for industry to innovate and for clean investments to flow.

- And last but not least, we have proposed a long-term view, by setting out our strategic long-term vision for a prosperous, modern and climate neutral economy by 2050.

- Getting all this done required hard work and hundreds of hours of negotiations, but I am proud of how far we have come. Climate change is one of the most serious challenges our world is facing today and an important concern for citizens. The foundations we have helped put in place will help the EU do its part to tackle this challenge in the years and decades to come.

Do you think that the EU's current climate goals are sufficient to meet EU commitments under the Paris Agreement?
- The goal of the Paris Agreement is to keep global warming well below 2°C above pre-industrial levels and pursue efforts to limit the increase to 1.5°C. The EU has submitted its 1st nationally determined contribution (NDC) covering action to be taken up to 2030. Not only do we have an ambitious NDC target, we are also one of very few countries to have put in place the policies and measures necessary to achieve it. More recently, the Commission published its long-term vision for 2050, which lays the foundations for the EU’s long-term Paris contributions.

- The EU’s nationally determined contribution to the Paris Agreement is our target to reduce our economy-wide domestic greenhouse gas emissions by at least 40% by 2030, compared to 1990 levels. This is an ambitious target which is in line with a path towards the Paris Agreement goals, going well beyond what we would achieve by continuing existing policies.

- We have demonstrated that we take our target seriously by putting in place all the EU-level legislation to ensure we meet it. As some of the key elements, we have strengthened the EU emissions trading system to trigger a stronger carbon price signal to encourage low carbon investment decisions in our power sector and industry. Under the Effort Sharing Regulation, we have agreed on national targets to ensure that Member States take action on climate change across the remaining sectors of the economy, such as transport, buildings and agriculture. The land use and forestry regulation (LULUCF) creates an incentive to maintain and improve the EU carbon sink, while the new CO2 emission standards for cars, vans and trucks will help cut transport emissions and support the transition towards clean mobility. Finally, our energy efficiency, renewable energy and governance legislation will radically change the EU energy system and pave the way for its long-term full decarbonisation.

- But we know we need to do more and we have to be a leader in the global transition. Last October, the report by the Intergovernmental Panel on Climate Change (IPCC) on the impacts of global warming of 1.5°C warned us of the serious and partly irreversible consequences on our environment and societies. Human-induced warming has already reached around 1°C and is projected to rise further, with increasingly intense effects in Europe and globally. The report also made clear that climate neutrality (net zero greenhouse gas emissions) is an essential ingredient for stopping global warming in line with the Paris Agreement goals.

- The current EU targets and policies put us on the right path. Going further, to reach net zero GHG emissions by 2050, would be a true sign of EU leadership. The IPCC report made clear that the world has to reach net zero around 2070 in order to keep global warming at 1.5°C above pre-industrial levels. We are proposing that the EU goes first, showing the way for others to follow.

- Delivering on the transition to climate neutrality is an opportunity for the EU to do our part in the global fight against climate change, while modernising our economy and bringing prosperity to our citizens.

What minimum level of binding targets for emission reductions do you see as necessary for the EU to fulfill its commitments in the Paris Agreement?
- We all know there is a major gap between the collective global ambition the Parties subscribed to in the Paris Agreement and the current level of efforts. The sum of the existing nationally determined contributions (NDCs) – when fully implemented – will take us to between 2.7–3.4 °C above pre-industrial temperature levels by the end of this century. This is well past what levels where risks to ecosystems and humanity become severe and irreversible, so it is a matter of extreme urgency to strengthen the global response.

- The Paris Agreement already recognised the need to accelerate global ambition. This means that between now and 2020, Parties need to work on domestic policies for the full implementation of their NDCs, prepare for the communication or update of the NDCs taking into account the existing ambition gap and the latest scientific conclusions, prepare long-term strategies coherent with the overall objectives of the Paris Agreement, and give consumers, investors and businesses the necessary signals to accelerate the transformation towards a climate-neutral and resilient future.

- The EU is determined to help raise global ambition and lead the way on accelerated action on all fronts. As agreed in Paris, Parties will communicate or update their NDCs by 2020, taking into account the collective effort needed by all Parties. At home, the EU has put in place the measures necessary to meet, and indeed go beyond, our NDC target. Internationally, we will use all the means at our disposal, from political and scientific dialogue, to technical assistance, capacity building and development aid, to work with all our partners on the collective achievement of the Paris goals.

What will the EU member states win on more ambitious climate goals?
- The Commission’s strategic vision for a climate-neutral EU by 2050 – an economy with net zero greenhouse gas emissions – outlines a tremendous opportunity to channel the EU’s response to the challenges of the 21st century in a strategic manner. Indeed, it is an investment strategy for our future: investment in a more prosperous, competitive and cleaner economy and society.

- It is clear that achieving this will require an ambitious combination of technological innovation and investment and significant changes in all sectors of the economy. But getting this right will allow us to generate new growth and jobs and modernise our economy to be ready to compete in a world that will gradually become more and more carbon-constrained – alongside other significant benefits like improving our energy security and reducing air pollution.

- Going climate neutral is the right choice for Europe: tt will give businesses and investors a clear sense of direction; it will help stimulate new thinking, a competitive spirit and innovative, creative solutions and it will create new economic sectors and employment opportunities.

- It will also spur investments in European clean energy solutions. Today, around 2% of GDP is invested in our energy system. This would have to increase to 2.8% in order to achieve climate neutrality – in other words additional investments in the range of 175 to 290 billion € annually.

- And overall, a trajectory towards climate neutrality is expected to have a positive impact on Europe's GDP, with benefits of up to 2% by 2050 compared to business-as-usual.

- Let me put it differently. Today, Europe pays € 266 billion a year in energy imports. In a climate neutral Europe, energy imports will fall by over 70%. So the money we save (€ 2-3 trillion up to 2050) could be invested into the modernisation of our economy instead.

- Going climate neutral will also deliver what Europeans want most of all: meaningful improvements to their daily lives. Energy-efficient homes will become the norm in a climate neutral Europe. Transport will be clean and adapted to a modern sustainable lifestyle. Today, air pollution in the EU causes severe diseases and almost half a million pre-mature deaths annually. Achieving a net-zero greenhouse gas emissions economy on top of existing air pollution measures will reduce pre-mature deaths caused by fine particulate matter by more than 40% and health damage by around € 200 billion per annum.

How should the EU's climate policy be designed in the future, in order to benefit the companies that take the climate issue seriously?
- It is important to recognise that through the ETS, we have introduced a system that benefits those companies within specific sectors that innovate, cut their emissions and work more efficiently. Moreover, the revenues generated go towards stimulating wider innovation to help more companies and more sectors be able to become more sustainable. Furthermore, the newly created Innovation Fund, which may amount to €10 billion, will provide additional investment for demonstration of innovative low-carbon technologies.

- Outside of the ETS, the European Fund for Strategic Investments (EFSI) and other instruments have been mobilised to stimulate innovation and support those businesses which demonstrate commitment to our climate and energy targets.

- I think as we look towards the pathways laid out in the 2050 strategic vision, circular economy approaches are going to take central stage, alongside continued efficiency improvements. Businesses which choose to adapt quickly to these new approaches to supply chains, focusing more on recovery, recycling and reuse of materials, will find themselves gaining competitive advantages. These advantages will be particularly significant on global markets where we already see pressures on supplies of raw materials.

Have you seen a change in business attitudes, during your years as a climate commissioner?
- In the past few years, we have witnessed a growing wave of climate commitments and action by a wide range of stakeholders including cities and regions, businesses and civil society groups. These initiatives play an essential role in maintaining the momentum and accelerating climate action on the ground. Many of the solutions needed for the transition to climate neutrality will come from businesses, so it is encouraging to see that more and more companies are putting the challenge of solving global challenges at the core of their business – and seeing that this makes good business sense in terms of their innovation power, market opportunities and long-term strategic strength.

- We know that the contribution of businesses to climate action is large and growing. By 2017, over 6000 companies and investors from 120 countries, representing at least $36 trillion in revenue had signed up to some kind of climate pledge. Studies show that the emissions reduction potential of non-state initiatives is enormous. However, it is difficult to make precise estimates because non-state action and national targets inevitably overlap.

Miguel Arias Cañete

EU Climate Action and Energy Commissioner

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