The Prosperity and Security of Europe Depend on Climate Action
Copenhagen – More than a year has passed since the European Commission proposed the next phase in the EU’s journey towards climate neutrality: reducing greenhouse gas emissions by 90% by 2040. However, we are still waiting for this proposal to become law, raising concerns that the bloc is focusing on more pressing priorities—namely, rebuilding defenses and revitalizing competitiveness.
In reality, building a clean economy would help address productivity, innovation, and security gaps within the EU. For this reason, despite our diverse backgrounds in industry, politics, and research, we call on European policymakers to commit to the ambitious goal of reducing emissions domestically by 2040 and to support strategic climate investments and initiatives that will enhance Europe’s energy security and competitiveness.
As emphasized by the EU’s "Clean Industrial Agreement," climate action is a powerful economic driver that should be harnessed to boost Europe’s competitiveness now and in the future. Without improving energy security, mobility options, and industrial flexibility, the EU cannot hope to compete with the United States and China in the coming decades.
The EU has already committed significant funding to secure energy sources and modernize industry, but major obstacles remain—something Mario Draghi warned about in his 2024 report on the future of European competitiveness. To overcome these challenges, the EU must reassess its investment priorities, provide a predictable legislative framework, and send clear signals to private sector investors to build confidence in the path towards a low-carbon economy. The first step is to implement existing climate legislation, such as the "Fit for 55" package.
Relying on local clean energy sources instead of costly and volatile fossil fuel imports will enhance the Union’s energy security, independence, and economic stability, benefiting governments, companies, and households through cost reductions. According to the European Commission’s impact assessment of the 2040 targets, the Union could save €160 billion ($179 billion) annually by electrifying its economy and halving its energy imports by 2040. To put this in perspective, the annual EU investment in electricity and renewable energy networks will increase by approximately €40 billion and €30 billion, respectively.
A new report from the OECD and the UN Development Programme confirms that ambitious climate action, in addition to being an environmental necessity, also offers economic gains. Recent research supports this assertion, concluding that previous economic models underestimated the impact of global warming. A temperature rise of 4 degrees Celsius could make the average person 40% poorer, significantly higher than previous estimates. Even a rise of just 2 degrees Celsius could lead to a 16% decrease in global per capita GDP. These findings underscore the urgent need for climate action to avoid severe economic consequences.
The massive risks posed by climate change will only increase while our ability to manage them declines with each passing year of inaction. Of course, policymakers have previously issued similar calls for action, while skeptics have blamed ambitious decarbonization targets for the challenges currently facing the bloc, demanding a reduction in aspirations in the name of competitiveness. Yet the strategic vulnerabilities of the Union arise from its failure to pursue sufficiently ambitious goals.
Achieving the 2040 target is essential because it represents a milestone that will shape European climate efforts until mid-century. It will also help clarify our commitments under the Paris Climate Agreement of 2015. So far, the EU has not submitted its updated Nationally Determined Contribution, including the 2035 emissions reduction target, despite the official deadline having passed. The Union’s contribution must follow a linear trajectory from 2030 to 2040 to ensure that Europe remains a global leader in combating climate change.
As major economies, including the United States, have scaled back their climate commitments, Europe must remain steadfast in its green transition and work towards successful outcomes at this year’s UN Climate Change Conference (COP30) in Belém, Brazil. Amid current geopolitical upheavals, this issue serves as a crucial test for the European Union, which can demonstrate its support for the rules-based international order through climate action—an approach that serves both its interests and those of others.
By committing to bold climate policies, and more importantly, implementing them effectively, the EU can address its economic challenges and over-reliance on insecure sources while securing its position as a global leader in sustainable development. If Europe does not set global standards, it is unclear who will—certainly not the United States under its current leadership. Thus, the 2040 target represents an opportunity that Europe must seize to guarantee its competitiveness, prosperity, and security in the future.
