EU climate policy: The new borderlines?

The race to net-zero by 2050 has fundamentally shifted. What was once a distant goal is now a pressing mandate, and the landscape of climate change policy is being redrawn as we speak. Achieving more than 50% reduction in greenhouse gas emissions compared to 1990 levels within the next decade requires radical economic and policy transformations across every Member State.

  1. Electrifying at a strong pace is crucial

First, the scale of electrification required to meet these targets will test our regulatory frameworks and infrastructure capabilities to their limits. Traditional approaches won’t suffice; instead, we will need innovative regulatory sandboxes allowing for fast-paced experimentation and adaptation, alongside more robust planning for grids and multi-day energy storage infrastructure. This approach will enable a quicker integration of renewable energy sources, avoid negative pricing (i.e. Spain), and afford the necessary unprecedented expansion of transmission and distribution power grids.

  1. Rethinking agricultural ecosystems (and emissions)

Furthermore, to move beyond the typical emissions reductions from power generation, industry, and transportation, a complete rethinking of our agricultural systems is imperative. Agriculture, a significant emitter of methane and other GHGs, must undergo substantial changes to its practices and outputs to achieve the reduction in emissions needed for a sustainable future. This process would be lengthy and painful for politicians to move forward.

  1. Boosting the role of voluntary carbon markets

On the global stage, if mandatory carbon pricing fails to deliver globally, then international voluntary carbon markets (VCMs) could become a viable alternative. The upcoming COP29 in Baku bears significant responsibility to define an operational Article 6, thereby enhancing the functionality and impact of the international voluntary carbon market. This could catalyse further cooperation among regions (needed between the Global North and Global South) and promote more sustainable practices across borders.

  1. Making sustainable fuels the story to decarbonise shipping and aviation

Where electrification alone won’t be viable, we will need sustainable fuels. Decarbonising shipping, aviation and maritime activities also demands immediate attention. Ammonia is emerging as a promising short-term solution for cleaner fuels. However, scaling up production and distribution quickly enough to meet rising demand requires concerted global efforts and innovation.

  1. Revising international trade rules

As we dive deeper into this new era of climate policy, international trade rules governed by the World Trade Organisation (WTO) must also evolve. The concept of climate clubs—groups of countries agreeing on mutual standards for carbon pricing and emission reductions—,while appealing, faces practical implementation challenges. Harmonising these efforts with existing frameworks like carbon taxes and the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM) will be crucial.

  1. Understanding the increasing societal awareness of climate policies

The evolution from climate policies of past decades, which operated under lower societal awareness, to today’s high-stakes environment reflects a dramatic shift in both public engagement and political ramifications. With increased awareness comes greater scrutiny and more potential for political conflict, as different groups would attempt to protect their interests in the face of sweeping reforms.

As the climate agenda accelerates, the complexity and divisiveness of required policies will only increase. Governments around the world are facing a new array of challenges that will make addressing climate change more contentious—and more critical—than ever before. The path to net zero by 2050 is not just a matter of climate necessity, but also of navigating the intricate interplay of global politics, economics, and societal expectations. In this evolving landscape, every step forward will require unprecedented levels of collaboration between governments and corporates, breakthrough innovation, and individual commitment.

  • Maximo Miccinilli

    As a public affairs and communications expert, Máximo supports clients on energy, climate and transport policy, leading the office’s Energy, Climate and Mobility team. With more than 18 years of experience, he also provides expertise in industrial and competitiveness policy and leads sustainability programmes. Before...

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