EC welcomed the provisional agreement between the co-legislators (that is negotiators of European Council and European Parliament) on the European Climate Law. As one of the key elements of the European Green Deal, the European Climate Law enshrines the EU's commitment to reaching climate neutrality by 2050 and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to the 1990 levels. This agreement on the European Climate Law is a key milestone for the von der Leyen Commission, delivering on one of the commitments announced in the President's Political Guidelines in July 2019.
In addition to the 2050 climate-neutrality target, the provisional agreement strengthens the European framework for climate action by introducing the following elements:
- An ambitious 2030 climate target of at least 55% reduction of net emissions as compared to 1990, with clarity on the contribution of emission reductions and removals
- Recognition of the need to enhance the EU's carbon sink through a more ambitious land use, land use change and forestry (LULUCF) regulation, for which EC will make proposals in June 2021
- A process for setting a 2040 climate target, taking into account an indicative greenhouse gas budget for 2030-2050 to be published by EC
- A commitment to negative emissions after 2050
- Establishment of European Scientific Advisory Board on Climate Change, that will provide independent scientific advice
- Stronger provisions on adaptation to climate change
- Strong coherence across Union policies with the climate-neutrality objective
- Commitment to engage with sectors to prepare sector-specific roadmaps charting the path to climate-neutrality in different areas of the economy
EC tabled its proposal for a European Climate Law on March 04, 2020. The provisional political agreement is subject to approval by the Council and Parliament, before going through the formal steps of the adoption procedure. After approval, the European Climate Law will be published in the Official Journal of the Union and will enter into force.
Keywords: Europe, EU, Banking, Insurance, Securities, European Climate Law, European Green Deal, Climate Change Risk, ESG, Low-Carbon Economy, European Council, European Parliament, EC
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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