Member countries of the European Union should adopt plans for their own ‘Green Investment Bank (GIB)’ in order to benefit from 30% emissions reductions, according to the independent think-tank E3G. Recommendations from the report – “Building a sustainable and low carbon European recovery” – suggest creation of institutions similar to the GIB and the German national bank KfW, to provide much needed low carbon investment. These measures would function alongside a strong policy portfolio to include the development of a European smart energy grid. Improvements in European domestic energy efficiency, innovation and low carbon infrastructure – which would be funded by the GIB (or an equivalent body) -are essential to ensuring energy security, claims E3G.

E3G state that: “the most economically sensible shift to 30 per cent would prioritise investment in domestic European energy efficiency, and in the infrastructure and innovation needed to sustain reductions beyond 2020 and maintain European companies’ lead in the low carbon race,”, rather than proposals to meet the 30% targets via cheap emissions reductions credits. However, the changes have been opposed by those that claim the costs of meeting such ambitious targets are beyond the capability of many firms current economic recession. They suggest that a lower target of 20% is more realistic and economically beneficial given the current financial crisis, a point strongly denied in the report.

Whilst the final decisions on EU emisisons reductions will not be made until early 2011, it is likely that the package of measures will be influenced by outcomes at the next UN climate change summit (COP16), in which European nations will be voting as a ‘bloc’.