One of the most common ice-breakers in any conversation is to talk about the weather! In the last week, whoever you interacted with in any part of the world would have something to say about one or other of a drastic weather event that was quite unusual.
Wealthy Western Germany, at the heart of Europe was ravaged by devastating floods leaving hundreds homeless. Similar heavy rainfall patterns were observed in Switzerland, Belgium and in parts of Japan and China. The UK, parts of California and Oregon in the US
witnessed tall plumes of smoke owing to extreme heat leading to forest fires. Closer home, the monsoon in Maharashtra has hit harder than ever and our very own Chennai is facing record rains for the month of July. African countries on the other hand are facing severe drought. Each of these events has proved that climate change is indeed real and there is a need for climate action.
Fit for 55 Package
Released in mid-July, the EU’s climate proposal continues to hinge on reducing emissions and reaching the carbon neutral goal it has set for itself by 2030. The entire package is named ‘Fit for 55’ in line with EU’s target of reducing carbon emissions by 55 per cent by 2030 (since 1990).
To ensure that road and transport emissions are reduced, a new Emissions Trading System is to be created and to be operational from 2026. An ambitious target is a potential ban on petrol and diesel powered vehicles in 14 years! The pandemic has shown that nearly 50 million Europeans (Source: Friends of the Earth Europe) do not have access to sufficient heat, lighting and cooling systems in their households with only 7 out of 10 houses energy inefficient. 40 per cent of energy consumption and 36 per cent of greenhouse gas emissions arise from households in Europe and energy efficient targets need to be set to bring the country out of potential energy poverty. Higher taxes on fuel would directly impact individual households through increased fuel rates, heating bills and cost of travel. The EU has planned a Social Climate Fund to support low income families.
Aside from these changes, the proposal includes increased import duty on products from industries that are carbon-intense such as steel, fertilizers and cement, a tax on aviation fuel, targets for shifting to renewable energy and upgrading building energy efficient infrastructure.
Europe: leaders in green policy
European nations can be considered pioneers in creating climate change policies and do have a first-mover advantage as they are home to one of the most ambitious targets of being climate neutral by 2030. To achieve this, they require a sustainable investment from public and private sectors to an estimated tune of 1 trillion euro. There is still much negotiation ongoing on what constitutes environmentally sustainable and investable activities. There is a grading system of activities – low carbon, enabling and transition.
Climate Finance: here to stay
The time has indeed come to translate the goal of climate neutrality to action. The European Green Deal makes it a legal obligation for the EU and its member states to adhere to. Nevertheless, what steps are taken just by the EU are not sufficient as EU contributes to just 8 percent of global emissions. China and the US remain the largest polluters of the world and global collaborative action and targets must be achieved to control rising global temperatures. Some of the largest green bonds in the world are sold by the US, France and China. We are awaiting China’s national carbon market plan which would provide companies quotas for carbon emissions each year that they could then trade.
India and the EU are already collaborating on several fronts – renewable energy, promotion of energy efficiency, collaboration on smart cities, smart grids, storage… There is also increased availability of climate finance from European Investment Bank and EU state banks to advance climate financing in developing countries including India. The world is watching Europe set the stage for combatting climate change top down.
