Europe's strategy on climate change and energy policy is at a critical juncture, as political crisis in Ukraine coincides with the introduction of significant new clean energy policies in the US and China.

Observers have long recognised the pivotal role that a strong, ambitious and united Europe must play in any successful global negotiation. It is Europe that demonstrated to the world that greener growth is possible, and that a heavily polluting energy system is not a prerequisite for prosperity.

Renewed leadership from Europe on climate change could help to leverage greater effort on the part of other major economies, and make a successful outcome at the UN summit in Paris in December 2015 more likely.
Given the entire continent's significant dependence on imported fossil fuels from Russia, recent ructions in Ukraine have caused energy security to rise to the top of the European agenda. On the positive side, however, the new clean energy policies agreed in the US and China mean that an international climate change agreement could be reached at next year's crucial talks. The grave security risks posed by global temperatures rising by more than 2??C mean that strong action on climate change is in our common interest. A key test of the new European strategy will be whether it is does what is necessary to manage climate risks.

At the same time, Europe must act to protect its 'first-mover' advantage in green industries, and take full advantage of the economic opportunities available from the transition to a low-carbon economy. Specifically, enormous savings are available by moving away from an energy system based on expensive fossil fuel imports, and towards one that is cleaner, more efficient and home-grown. Avoiding fossil fuel import costs and maximising the positive impact of clean investments within Europe will bring significant economic benefits, not least in helping to secure reliable, affordable supply in the face of global tensions.

This report sets out:

  • why strong and binding new 2030 targets are needed to provide investors and the international community with clarity over the direction of European climate and energy strategy, and what these targets should be
  • options for addressing Europe's energy security, and why energy efficiency should be at the heart of EU efforts to reduce its dependence on gas imports from Russia
  • a credible plan for urgent reforms to the Emissions Trading Scheme, Europe's flagship programme for cutting greenhouse gas emissions
  • our proposal for a 'clean energy super-fund', pooled from existing budgets for achieving the low-carbon transition, that could be more closely and clearly aligned with Europes overarching energy strategy.