EU Lays Groundwork for a European Green Deal
In an effort to meet the goals of the Paris Agreement, the European Union is pushing to phase out petrol and diesel car sales by 2035, and pursuing trade reforms which will likely raise carbon prices. The European Commission recently published these proposals in its "Fit for 55" package, a reference to the bloc’s legally binding target to cut emissions to 55% below 1990 levels by 2030. The package includes a whole slew of policy proposals:
- Electric vehicle charging stations must be available every 60 km (approximately 37 miles).
- The scope of the EU's cap-and-trade system will be expanded to cover emissions from shipping, buildings and road transport.
- A parallel EU Emissions Trading System (EU ETS) that is more aggressive and prohibitive than the current system will be set up.
Ditching Fossil-Fueled Transportation
Although emissions by cars and vehicles have long been scrutinized by the EU, planes and cargo ships will now face similar scrutiny. Both sectors will be compelled to increase the share of cleaner fuel in their portfolios, and shipping companies will enter the new carbon market.
While this is all promising, more aggressive steps will also be necessary to achieve the EU's goals. Transportation emissions -- including aviation and shipping -- must fall by 90%, and rising transportation emissions must be sharply curtailed.
While most transportation sectors are increasingly taxed and regulated, the EU's transportation package largely benefits trains, and for good reason. "Burning carbon in airplanes is more than three times worse for the environment than burning it at ground level," Jean-Pascal van Ypersele, a professor of environmental sciences at the Université catholique Louvain in Belgium, told DW. "Increasing taxes on kerosene for flying would be a good way to stop people flying when they could take a train."
A Greener Market
While the EU's current carbon market deals mostly with electricity generation and industry emissions, the shift to electric vehicles might be unaffordable for many individuals. To make sure the market doesn't punish people who cannot afford an electric car, the EU has set aside €72bn (more than $85 million) for a "social climate fund."
The EU's focus on the affordability of the shift away from diesel and petrol recognizes the unpopularity of unaffordable climate policies, particularly in the wake of France's gilet jaunes (yellow vest) protests against increasing diesel prices.
The lesson of the "gilet jaunes" crisis is not that carbon pricing is impossible, but that it has to be done with an awareness of the distributional effects … If you want to adjust energy prices you have to offset the higher costs with redistributive payments to those whose incomes are squeezed most severely.
euronews: Brussels plans overhaul of EU carbon market as part of green push, July 12, 2021.
Into Europe: The European Union's Green Deal, Explained, February 20, 2021.