Europe must set a target to cut emissions by 40 percent in 2030 or risk delaying investments in much-needed energy infrastructure, a group of investors said.
The Institutional Investors Group on Climate Change, which represents pension funds and asset managers, said the goal is critical if they’re to back the electricity system upgrades Europe needs. With public finances strained, national governments need private investment for the task, it said.
The group with members including Aviva Plc and BlackRock Inc. is urging politicians ahead of proposals by the European Commission for future energy and climate policies, after current targets expire in 2020. Companies such as EON SE and nations including the U.K. and Germany have backed a 40 percent goal. The industry group Businesseurope wrote on Jan. 8 that the European Union should take into account 2015 talks in Paris aimed at negotiating a climate change accord before agreeing on a target.
“Setting out an ambitious 2030 emissions reduction target of 40 percent will be critical to give investors confidence that the EU remains committed to the low-carbon road map it has established,” IIGCC Chairman Donald MacDonald said in the statement. “Delaying an agreement as some have advocated is misguided and self-defeating.”
The IIGCC’s members manage assets worth 7.5 trillion euros ($10 trillion), it said.
The 28-nation EU started a debate last year about its future climate and energy policies. It will publish proposals this week for consideration by the bloc’s leaders in March, the IIGCC said. Policy makers are seeking to balance Europe’s climate change ambitions with efforts to aid economic recovery.
The commission is considering recommendations to set a binding target to reduce greenhouse gases by 35 percent or 40 percent in 2030, two people with knowledge of the matter said Jan. 13. It is also studying whether to adopt a goal for renewables, the people said. Businesseurope, which urges a single 2030 carbon reduction goal, said in its letter targets envisaged by the Commission place the EU as an “isolated frontrunner”.
As a part of its 2020 energy and climate strategy, the EU has legally binding targets to cut carbon emissions by 20 percent and increase the share of renewable energy by an average of 20 percent.
Europe needs investment to replace retiring coal-fired power stations and upgrade infrastructure, the IIGCC’s MacDonald said. This comes as clean energy investment declined for a second year to $254 billion as technology costs fell, unsettling investor confidence in fossil-fuel alternatives, according to Bloomberg New Energy Finance.