Terms
Terms
Terminology
Building blocks are the economic sectors, such as energy, transport or industry, and cross-cutting areas, such as finance, innovation, and lifestyles, in which transformation is needed to achieve a climate neutral society by 2050, and across which ECNO tracks progress.
Building block assessment
Acceleration factor
Or the ‘required change in speed’ is the ratio of the required change versus the past change on a given indicator. This results in the example formulation: ‘We need to increase our annual emission reductions to at least 4.9 Mt CO2e per year – or 2.6 times faster than the 1.9 MtCO2e per year achieved in the past’.
Benchmarks
Future reference points against which progress for each indicator is compared. ECNO derives benchmarks from official EU sources, such as directives, regulations, strategies, and action plans, including their related impact assessments. Benchmarks often come in the form of quantified policy goals or targets.
Climate neutrality
Stands for the objective of achieving net zero greenhouse gas (GHG) emissions. This means that emissions are brought down as close to zero as possible, with remaining, difficult to abate emissions balanced by GHG removals within a given country or region.
Enablers
The supporting conditions and underlying changes needed to meet the objectives in a given building block. They are the opposite of barriers or inhibitors.
Historical data
Includes, but is not limited to, statistics from Member States harmonised and provided by Eurostat or the European Environment Agency (EEA) as well as from international organisations such as the OECD, FAO, or World Bank.
Indicators
Track the historical development and status of enablers and objectives based on quantitative data. An assessment of indicator progress compares the trend against the required development to meet a future reference point, where data and relevant benchmarks are available.
Objectives
Describe what needs to be achieved in each building block to reach climate neutrality.
Required change
The change that underlies a pathway that meets the identified benchmark or target. Where benchmarks are missing, the required change indicates a direction and speed of change.
Trend
The development of an indicator over time based on historical data. ECNO’s trendline is a straight, best-fit line that smooths out the variation in historical developments based on all data points, providing a sense of the general progress over time.
External Action
To support global climate neutrality, the EU must consider the extraterritorial impacts of its actions, engage in climate diplomacy, and support other countries in decarbonisation.
OVERVIEW:
Progress on external action has been far too slow
Although the European Green Deal emphasises the role of the EU in a global context, the implementation of actions to align external action with the 1.5°C temperature limit do not always support this narrative. Some areas, such as mobilising international climate finance and enhancing coordination in climate diplomacy, show promising but insufficient progress. Efforts to align international public funds and trade agreements with the Paris Agreement goals are moving in the right direction, but at an inadequate pace. Trends in imported emissions and climate-related allocation of official development assistance are moving in the wrong direction.
INSIGHT TWO
Investment in fossil fuels still too high
Although the European Investment Bank (EIB) has shown a longer-term positive trend in its investments in clean projects outside the EU, these investments dropped nearly half between 2019 and 2021. Simultaneously, the EID invested approximately EUR 66 million in fossil fuel projects outside the EU in 2021.
OBJECTIVES
Objectives describe what needs to be achieved in each building block to reach climate neutrality.
Objective 1
Be a champion in the global response to climate change
Contributions by the EU and its Member States have doubled since 2013 and accounted for 0.16% of EU GDP in 2021, making the EU and its Member States the largest net contributors to international public climate finance with over EUR 23 billion in 2021. However, despite steady average annual increases between 2016 and 2021, progress has been too slow.
International climate finance
This indicator shows past development of EU and EU Member State contributions to international public climate finance.
The data show an annual increase of 3.3% between 2016 and 2021. This development was going in the right direction but should be accelerated in the future.
Under the UNFCCC, international climate finance is defined as financial flows from developed to developing countries to support the implementation of climate change mitigation and adaptation actions.
Objective 2
Reduce ecological footprint abroad
In 2019, the EU was a net importer of embodied carbon emissions, meaning that the emissions produced from the goods and services imported into the EU were greater than those from the EU's exports.
Imported CO2 emissions
This indicator shows past development in imported CO2 emissions.
The data show an annual increase of 2.1% between 2014 and 2019. This development was heading in the wrong direction.
Imported CO2 emissions are generated in the production of goods and services that are consumed in one country, but which are produced in another country.
ENABLERS
Enablers are the supporting conditions and underlying changes needed to meet the objectives in a given building block. They are the opposite of barriers or inhibitors.
Enabler 1
Ensure alignment of all international public and private finance with the Paris Agreement
Public finance for international fossil fuel projects (by EIB)
This indicator shows past development in public finance for international fossil fuel projects by the European Investment Bank (EIB) in comparison to its target to bring all its financial activities in line with the goals of the Paris Agreement by 2020.
The data show an average annual decrease of EUR 6.3 million between 2016 and 2021. To meet the target, originally formulated for 2020, there must be a decrease of EUR 66.3 million between 2021 and 2022, which is more than 10 times faster than the current progress.
Public finance of the EIB including grants, loans, etc. by year and energy category (focus on fossil fuel projects)
Public finance for international clean energy projects (by EIB)
This indicator shows past development in public finance for international clean energy projects by the European Investment Bank (EIB).
The data show an annual increase of 1.3% between 2016 and 2021. This development was heading in the right direction but should accelerate in the future.
Public finance of the EIB including grants, loans, etc. by year and energy category (focus on clean projects)
Enabler 2
Use all foreign policy channels to support the global transition
Paris Agreement references in trade agreements
This indicator shows past development in the share of trade agreements that reference the Paris Agreement. This is compared against the announcement made by the EU in 2022 to include Trade and Sustainable Development chapters, which require effective implementation of the Paris Agreement, in all modern EU trade agreements.
The data show an annual increase of 11.5 %-points between 2016 and 2018. To meet the target, the required annual change between 2021 and 2022 needs to be 16.8 %-points, which is 1.5 times faster than the current rate of progress.
The indicator covers the share of all trade agreements that reference the Paris Agreement on climate change.
ODA related to climate action
This indicator shows past development in Official Development Assistance (ODA) that is provided to support climate mitigation, adaptation, and other related activities in developing countries.
The data show an annual decrease of 3.7% between 2016 and 2020. This development was heading wrong direction.
All ODA that is provided to support climate change mitigation, adaptation, and other related activities in developing countries.
Enabler 3
Integrate climate in foreign policy
Climate-relevant capacities
This indicator shows past development in climate-related capacities available to EU institutions engaged in foreign policy. Although the available data is limited, analysis indicates that several EU institutions responsible for climate-related matters face substantial deficits in terms of resources and capacity.
The indicator covers the capacities available to EU institutions engaged in foreign policy to implement their mandate related to climate change.
Prioritisation of climate diplomacy
This indicator shows past development in the share of EU GHG emissions that are covered by the ‘Group of Friends for Ambitious EU Climate Diplomacy’, launched in 2022.
In 2022, 55% of EU GHG emissions were covered by Member States that were members of this group, underscoring the need for an accelerated effort to encourage additional Member States to join.
Formed in October 2022, the 'Group of Friends (GoF) for Ambitious EU Climate Diplomacy’ is a coalition of EU Member States with the goal of promoting the coordination and the integration of climate considerations into foreign policy.
report
State of EU progress to climate neutrality
The assessment of progress towards climate neutrality shows that the EU is moving in the right direction, but the pace is too slow. The transition to climate neutrality is essential for ensuring a liveable future.
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