What a 90% emissions cut could mean for EU citizens

Euractiv

2 days ago

The EU's 2040 climate goal is likely to affect Europeans' wallets – and those of the companies they work for.
Whether a 90% reduction in Europe's greenhouse gas emissions compared to 1990 levels will bring net costs or benefits for workers, households, and industry depends on how EU leaders choose to implement the target – if they agree to it at all.
That decision comes as the European Commission shifts its focus increasingly toward competitiveness and lowering energy prices.
In recent months, calls have mounted to roll back landmark policies like the 2035 phase-out of petrol and diesel cars, or to weaken key measures by outsourcing climate action through international carbon credits, or by capping the price polluters must pay for emitting CO2.
This is despite mounting evidence that failing to act on climate could ultimately cost more – and undermine crucial price signals meant to steer companies toward cleaner technologies like electrification, sustainable fuels, and carbon capture and storage. Rising costs Transport remains the only EU sector where emissions have increased since the 1990s. It is also where the public is most likely to feel the cost of the green transition first-hand – even as more affordable electric cars enter the market.
Business travellers and tourists, for instance, could see airfares rise as airlines begin passing on the cost of sustainable jet fuel mandates to consumers. Fully decarbonising European aviation by 2050 is expected to cost €2.4 trillion in investment, according to the lobby group Airlines for Europe.
The NGO umbrella group Transport and Environment (T&E) warns that by 2030, the transport sector could account for up to 45% of the EU's total emissions – making its transformation critical to meeting climate targets.
Likewise, renovating Europe's poorly insulated homes and replacing gas boilers with efficient heat pumps will bring significant upfront costs for many households, even as these measures aim to reduce emissions and long-term energy bills. The other side of the balance sheet Still, the EU's push to decarbonise energy through renewables is expected to lower energy bills over time and reduce the bloc's reliance on imported fossil fuels – potentially freeing up billions for strategic investments.
According to T&E, the European Commission's own modelling suggests a 90% reduction pathway would cut the EU's oil bill by $75-100 billion a year.
Failing to act, on the other hand, carries indirect but massive economic risks amid rising global temperatures.
'Over the period 2031-2050, the cumulative additional GDP cost of a pathway leading to worse global warming could amount to €2.4 trillion in the EU, compared to the costs under a pathway compatible with the 1.5°C objective of the Paris Agreement,' the European Commission said last year.
And EU citizens are already paying the price for 'extreme weather events that are accelerated by climate change', consumer organisation BEUC told Euractiv.
Making it happen
How the costs and benefits of the 2040 target will be distributed depends largely on how Brussels acts – and how national governments respond.
Some core legislation is already in place, including a new carbon price on heating and transport fuels. To cushion the impact, especially for low-income households and small businesses, the law includes a Social Climate Fund to recycle revenues back to vulnerable groups
But this week, 26 out of 27 national governments missed the deadline to submit the national plans needed to activate the fund.
More broadly, any backtracking on climate policies could derail the price signals these mechanisms are designed to send to the private sector – frustrating many businesses that see the green transition as a strategic opportunity, not a burden.
The risk of being too flexible
The European Commission is expected to allow the use of international carbon credits to meet the yet-to-be-confirmed 90% target. This means investing in climate-friendly projects abroad – like tree planting in developing countries – and counting the resulting emissions savings toward Europe's target.
Proponents argue this could cut the costs of the green transition. Critics – including some promoters of carbon capture and storage technology as well as highly sceptical environmental campaigners – say it would undermine incentives to cut emissions in Europe and delay the development of clean technologies more generally.
'The EU's cleantech industry experiences the greatest benefits when EU climate investments are made in Europe – not abroad. Why should we outsource the benefits that the energy transition provides to countries outside of the EU,' the socialist lawmaker Mohammed Chahim asked.
Greenpeace's Thomas Gelin echoed this message: 'With an effectively lower domestic target, there will be less impetus for businesses and communities in Europe to implement the solutions we need.'
(de)