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EC to Speed up Carbon Market Security

EC to Speed up Carbon Market Security

Report claims move to 30 per cent target would yield GDP gains of $600bn and more than six million jobs

More demanding greenhouse gas emissions targets would help spur Europe's economic recovery, rather than damage the bloc's prospects as some critics have claimed.

That is the conclusion of a major new study released yesterday by Germany's Potsdam Institute for Climate Impact Research (PIK), which predicts upping the bloc's mandatory emission reduction target from 20 per cent to 30 per cent below 1990 levels by 2020 would increase European investment levels from 18 per cent to around 22 per cent of GDP.

The report claims that by 2020 the additional investment would help create up to six million extra jobs and increase GDP by up to €620bn, compared to the current target. It concludes that far from exacerbating the economic downturn, "post-crisis Europe can revitalise its economy by tackling the climate challenge".

The authors of the report, entitled A New Growth Path for Europe - Generating Growth and Jobs in the Low-Carbon Economy, point out that countries recovered from the 1929 economic crash by investing heavily in the military and public projects. They insist that today's governments can echo the success of their forebears by stepping up investment in innovative clean technologies.

"What we are showing here is that by credibly engaging in the transition to a low-carbon economy through the adoption of an ambitious target and adequate policies, Europe will find itself in a win-win situation of increasing economic growth while reducing greenhouse gases," said professor Carlo Jaeger, lead author of the report. "It is time for Europe to understand the opportunities and the challenges from the transition to a low-carbon economy."

The report was released on the same day as a major new study from the UN Environment Programme, which similarly argued that increased investment in the development of a "green economy" would create more jobs and faster GDP growth than business as usual.

A number of countries, including the UK, France and Germany, have been pushing for the EU to adopt more ambitious targets, but the bloc has long maintained that it will not move to tougher emission goals unless other large emitters like the US follow suit.

However, Connie Hedegaard, European commissioner for climate action, backed the latest findings, saying they showed that "economic growth and climate action are complementary and not each other's opposites".

Chris Huhne, the UK's energy and climate change secretary, added: "Until now, studies have worked on the basis that new resources to tackle carbon emissions would have to come from competing uses, and would therefore cost a small amount. This study is arguably more realistic in showing how green growth can create work for the unemployed and generate new income and prosperity."


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