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Effort sharing after Paris: what implications for the ESD & flexibility mechanisms
The current EU climate ambition is to reach a reduction in GHG emissions of at least 40% by 2030 (compared to 1990). Sectors not covered by the EU ETS (non-ETS sectors) should contribute with reductions of 30% compared to 2005. This ambition was set by the European Council in October 2014 and was based on pathways set out in the 2030 Framework and 2050 low-carbon roadmap communications.
These pathways, however, are also based on a logic of trying to limit the global temperature increase to 2C. With the adoption of the Paris Agreement last December, a new long-term ambition has materialised, which speaks of “well below 2C” and “to pursue efforts to limit [the increase] to 1.5C”.
A future Effort-Sharing Decision (ESD) would be accompanied by a list of national reduction targets for each Member States, as is the case now. The EUCO proposed that such targets would range from 0 to -40%, which together would help the EU to reach the 30% reduction target for non-ETS sectors.
Higher EU ambition before 2030 may not be improbable given the 5 year review cycles in the Paris Agreement: after a facilitative dialogue in 2018 and a global stocktake in 2023, the EU is expected to present an updated Nationally Determined Contribution (NDC) by 2025. This raises the questions of how the governance of the ESD and non-ETS targets may be reconciled with the international processes in the context of the UNFCCC to which the EU has acquiesced.
Ostensibly, the range of targets in the ESD could simply be adjusted should the EU decide on a higher level of ambition. There may, however, be implications for functioning and demand of flexibility mechanisms in the ESD.