On Thursday 4 March, the Greens/EFA group published a report assessing the economic impact of raising the EU’s target for reducing greenhouse gas emissions to 60% by 2030, compared to a target of 55%.
The report, which was carried out by Cambridge Econometrics, an organisation that specialises in data analysis, concludes that an emissions reduction target of 60% is economically feasible.
According to the authors, the measures that are considered necessary for a reduction of this size could result in GDP in the EU 1.8% higher than the baseline scenario by 2030, mainly due to the additional investment required, and could lead to an increase in employment of 0.5% (1.1 million jobs). With a 55% reduction in emissions, the difference in terms of GDP growth compared to the baseline scenario would only be slightly more than 0.5%, and the increase in employment only 0.2%.
The report also shows that this would also be true for each Member State individually, except for Poland where “GDP impacts are less positive in the 60% scenario than in the 55% scenario” (0.4% compared to 0.8%).
The authors estimate that the more ambitious target would require additional investment of €112 billion euros by 2030, i.e. 3% more than for a target of 55%.
They believe that the actions required would call for annual public expenditure of up to €87 billion in the first few years. They clarify this statement by stating: “In the later period, ETS and carbon tax (applied after 2025) revenues are large enough to pay for these costs”.
Finally, it should be noted that the report has its limitations. Cambridge Econometrics was, for example, unable to assess the impact of each individual policy measure or the key interactions between measures.
The report can be found at: https://bit.ly/3kJg3Bc (Original version in French by Damien Genicot)