Does the EU really lead the US on climate ambition?

23 March 2015

Assessing countries’ relative level of ambition or effort will be a critical political issue this year.  So how does the US target of a 26-28% reduction on 2005 levels compare with the EU’s target of a 40% reduction on 1990 levels?  Jonathan Grant and Rob Milnes looked at the numbers and were surprised to find that the US appears to be as ambitious as the EU.

Although carbon intensity in the US is significantly higher than in the EU, it has fallen faster since 2000: by 2.3% per year on average.  The EU’s carbon intensity has fallen by 2% per year on average over that period.  The US economy is expected to grow by close to 3% over the next five years and then at 2.2% each year in the 2020’s according to our latest ‘World in 2050’ report.  So the US’s GDP will be 84% higher in 2030 compared to 2000 (the EU’s will grow by 62%).

This rate of GDP growth means that if the US continues on its current decarbonisation path, emissions will be only 8% below 2005 levels by 2025.  The US will need to nearly double its current rate of decarbonisation to achieve the 26-28% reduction target announced by President Obama in November last year.  This is compared with our business as usual emissions scenario for the US, which combines our GDP growth projections with its historical average decarbonisation rate.

  US target

Both the EU and US will have to decarbonise at approximately 4% each year (assuming their economies grow as expected) to hit their Paris targets.  In other words, the US target appears to be as ambitious as the EU one.  And both will need a step change to the levels of incentives and penalties to shift businesses and consumers down the low carbon pathway.

  EU vs US target

 

 It is striking that both the EU and US fall far short of their own long term targets which are more closely aligned with a 2 degrees pathway.  Decarbonisation of 7% and 6% respectively is required by the EU and US to achieve their 2050 goals.

While goalless draws are acceptable in the Premier League, they are less popular across the pond.  Carbon intensity in the US is 326 tCO2 / $ million GDP compared with 209 in the EU which also has a stronger track record of greenhouse gas legislation.  We suspect that there are more lower cost reduction opportunities in the US, so perhaps the EU 2030 target is slightly more ambitious as it may have to work harder to achieve it.

  US BAU