Introduction

Excellencies, distinguished guests, ladies and gentlemen, it is a real privilege and honour to speak to you all on the invitation of my esteemed colleague Mr. Xie Zhenhua.

Your university, Tsinghua is renowned around the world as a centre of academic excellence. This was really clear again on 12 October, when your Institute of Climate Change and Sustainable Development presented the most significant decarbonisation pathway study for China so far. So it is really an honour for me to be able to join.

Under normal circumstances, I would have loved to join you in person. I had been looking forward to visiting Beijing ever since I took office as the Executive Vice-President for the European Green Deal in the European Commission and still hope to be able to speak to you in person soon enough because the EU and China should be able to work together very intensively on this topic

The Covid-19 pandemic has ravaged every continent, taken well over a million lives globally, and put unprecedented strain on our economies.

Yet, while we continue to focus on fighting Covid-19 and its consequences for the global economy, the clock has not stopped ticking on the other global crises: the climate crisis, the biodiversity crisis, pollution and the over-exploitation of resources.

These crises are interrelated. Climate change accelerates the destruction of the natural world through droughts, flooding and wildfires. Biodiversity loss and unsustainable use of nature are in turn key drivers of climate change.

Logically the solutions must also be interrelated. Healthy ecosystems help us mitigating climate change and adapting to climate change.

The EU Green Deal

About one year ago, when the world still looked very different from today, we presented the European Green Deal. It was conceived as Europe's new growth strategy. A strategy to bring together environmental, economic and social sustainability.

And with the impact of the current crisis, the green transition that we had already planned for with the European Green Deal became also our roadmap for recovery in Europe.

It will focus on sustainable infrastructure, renewable energy and energy efficiency, on greening our cities and countryside, on green products and services, on sustainable agriculture and food, on clean transport and on innovation in clean tech and it will put us on the right path to a sustainable future.

We are leaving behind the slash-and-burn carbon economy, and moving to a clean, innovative, inclusive, and circular economy that allows us to restore biodiversity and cut pollution while creating growth, jobs, prosperity and health.

Green growth

I passionately believe that we now all have a once-in-a-generation opportunity to embrace a green transition to build back better. This is our collective road to recovery, for the people and the planet. And while we are unlocking huge amounts of money, we can only spend it once.

I’m often met with the criticism that the path we’ve chosen will only hurt us, that acting for climate and the environment will mean our economies are going to suffer – and that especially now, in the deepest economic recession in generations, we should hold off. I refuse to accept this trade-off.

The transition to climate neutrality will require sometimes difficult action from all of us. But the most important thing we are seeing right now is: it can be done.

Since 1990, the EU’s combined GDP has grown by over 60% while net greenhouse gas emissions have fallen by a quarter. Moving ahead on climate action does not mean a return to the past, as some will have you believe. It is in every sense of the word a leap to the future.

In fact, it would be an economic disaster NOT to act on climate and environment. Over half of global GDP depends on nature and the services it provides. When we look at the costs of non-action, it becomes clear we cannot afford NOT to invest in a green transition.

Key policies

The Green Deal will soon turn one, and its first year has definitely not been an easy one. And yet, it is already a comprehensive plan, consisting of a just transition mechanism, a climate law, a farm to fork strategy, a biodiversity strategy, a hydrogen strategy, an offshore wind strategy, and a circular economy action plan, and more is to come.

Our policies and strategies are led by the EU ambitious goal of becoming the first climate neutral continent by 2050. We are in the process of enshrining this target into law and we have submitted our long-term strategy on how to reach it to the UNFCCC. But, at the same time we challenge everyone to beat us to it, because in a race to zero we are all winners at the end.

We have also have just proposed a new intermediate target to step up our ambition for 2030. This means we now aim to reduce net GHG emissions by at least 55% in 2030.

Setting an ambitious target in time is important. It gives industry adequate time to adapt – especially now that they are so in need of certainty. It will avoid that we lock ourselves into carbon-intensive industries now, causing stranded assets down the line and only spurring further damage to our climate while we wait and don’t act.

How to get there

Ladies and gentlemen, and everyone who’s listening today,

By this time, you may start to wonder how we hope to achieve all these objectives. Ambitions are nice and announcements are important to provide clarity about the long-term direction of travel. But at some point, you have to start paving the way as well.

We are in the final stages of negotiations on the next EU budget for 2021-2027 and a financial package to jump-start the recovery from Covid-19 called – Next Generation EU.

The combined package of a record €1.8 trillion will put us in a strong position to tackle today's realities and tomorrow's challenges.

Within this budget, climate action is an integral part of how we spend every single euro. Across the board, 30% of EU funds will be dedicated to fighting climate change - the highest share ever. And none of the other funds should go against it. So we have the ‘do-no-harm-principle’ as a key element in everything we do.  

Within the recovery, specific ‘flagship’ projects will boost investment in clean technologies such as hydrogen, renewable energy, buildings renovation, accelerate the rollout of sustainable green transport and infrastructure, and speed up our transition to a circular economy transition.

We are backing up this financial firepower with important regulatory changes.

We are now preparing a raft of legislative proposals for next year to create the necessary legal framework.

The ETS

One of the most powerful tools we have in bringing down emissions in Europe is our Emissions Trading System.

Right now, the EU ETS is helping us surpass our targets. The system currently covers for 45% of all EU emissions. The latest data show a drop in emissions there of 30% compared to 2005.

We will come forward with a proposal next year to expand the ETS to cover also other sectors such as buildings, transport and potentially shipping.

At its inception, the ETS had many doubters and critics, but it has proven to be effective and very resilient, and has been successfully replicated beyond the EU’s borders.

Just Transition

Ladies and gentlemen,

Let me pause a brief moment to consider the effects this massive transition will have on our societies. Europeans will have heard me say it time and again: the transition must be just, or there just will be no transition.

The social effects of an unmanaged transition can be huge. Coming from a mining region myself, I know the devastation that can follow a sudden change quite intimately.

So in the European Green Deal, the Just Transition Mechanism is crucial. It will support regions in Europe that face a particularly difficult transition, and help ensure that no one is left behind along the way.

The mechanism will mobilise over €100 billion of public and private investment to support for example the re-skilling of workers, help SMEs to create new economic opportunities, and foster diversification of economic activity.

International cooperation and Carbon Border Adjustment Mechanism

While we are convinced that the Green Deal is the right path to a sustainable future, there is no sense in us Europeans going this road alone. Working together with international partners is an absolute must, if we all are to emerge from this crisis stronger.

Tackling climate change is a collective responsibility of all. I do think that Europe and China have a special responsibility to shoulder, just like other powers such as the US, and India, to name a few.

As I said before: I would be thrilled if the ambitious path we have set in Europe unleashes a global race to the top. Because this is a race in which we all win.

Another reason we should all take action is that we want to avoid the risk of carbon leakage. The actions we take inside the EU to reduce emissions should not just lead to emissions ticking up elsewhere.

We want to avoid this and we will do so, first, by calling for ambitious climate action.

If differences in levels of ambition persist and there is a risk of carbon leakage, the Commission will propose a carbon border adjustment mechanism, for selected sectors, to reduce this risk.

We will assess the risk of carbon leakage as part of the impact assessment for the design of the measure. And that risk of course depends on the respective climate ambition of third countries.

If we all move in the same direction there is no need for adjustment at the border. But if we do not and some do apply the rules of Paris Agreement in their national measures and others don’t, then adjustment at the border might become necessary. I will also reiterate that the EU is a staunch defender of rules-based trade order and that our mechanism will comply with international obligations and the rules of the World Trade Organisation in particular.

For now, I see a lot of promising signs that global climate ambition is on the way up. China took the lead in this – as it was mentioned before – at the announcement at the UN General Assembly on carbon neutrality in 2060. Japan followed with climate neutrality in 2050, then South Korea, and South Africa. And I am also looking forward to cooperating with the incoming United States Administration on global climate action. I am looking forward to work with my friend John Kerry on that.

Cooperation with China

Ladies and gentlemen,

Before I reach my conclusion, allow me to look in more detail at China and the potential for cooperation, joint progress, and global leadership.

On biodiversity, we need to grasp the opportunity to put nature on a path to recovery at the COP15 in Kunming next year. This is a must – for human health and wellbeing, food security, economic development and societal stability. A global agreement with the right level of ambition in Kunming would be a great success for China and show the world the necessary leadership.

As its host, China has a key role in getting other countries on board for ambitious, measurable and time-bound targets, with much stronger monitoring and review. The EU is ready and willing to support an ambitious outcome.

I am also encouraged by China’s intention to reach an emissions peak before 2030 and President’s Xi’s commitment to reaching carbon neutrality before 2060.

This puts China among the net-zero global leaders in climate action and would revolutionise the Chinese economy.

You can already see the potential - the promotion of green vehicles and the rapid development of green transport infrastructure in China is really impressive. Just like the rapid development of renewable energy over the last years.

We look forward to discussing the detail of the 2060 ambition in the newly established EU-China High level Environment and Climate Dialogue and working together to ensure the success of COP26 by submitting improved Nationally-Determined Contributions and Long Term Strategies in line with the Paris Agreement.

I am also excited to see China advance its plans for a national ETS. Do not expect it to be perfect from the beginning. It will improve over time, that’s our experience, and launching it now will make the most of the potential to support your transition. Of course, in the EU we are more than willing to provide China with any support, expertise or experience we have. Whatever China would like us to share we are ready to share.

Launching a Chinese ETS will be essential for China’s credibility as a global climate leader. It sends an important signal to all in China and to the outside world that China is serious about climate action. And, like the European ETS has done for us, it will equip China with a strong tool to monitor and manage its emissions in the future.

However, I also have to note here that China is by far the world’s biggest emitter of greenhouse gases and that emissions keep increasing. As such there is a particularly steep path to climb towards climate neutrality. In my view, achieving an emissions peak as soon as possible would be the best way for a balanced trajectory towards zero emissions.

I have huge respect for China’s capabilities and determination. We have seen so much happening, also in the past. And in this context I will also say that the increase in the licensing of new coal power plants-projects over the past year is very worrisome to many Parties of the UNFCCC, including to the EU. It runs against economic sense, and makes all our work more difficult, also that of China.

Many economists, including in China, agree that those investments are the stranded assets of tomorrow. To invest in the future we should shift our investments toward renewable energies and clean industries. This is also what we are trying to achieve in the EU. You should see the remarkable change we have seen in some of the countries in Europe where coal still play a huge role. All those countries are exiting from coal. And there is also the example of South Africa, a remarkable change in terms of where they see their energy mix in the future. I think the world is really turning a corner here.  

Financing overseas coal power plants and unsustainable infrastructure is however worrisome, as it risks bringing developing countries on a high-emissions pathway which is incompatible with the Paris Agreement. We need to help them leapfrog some of these developments, increase their energy supply, increase their energy potential. But let’s try to do that as much as possible on the basis of sustainable and renewable energies.

Moving forward, I hope that we can embrace the opportunity for a greener future and work together. There is huge potential for us to cooperate, to innovate, to share experiences and ideas, and scale up our ambitions to drive an inclusive global green recovery.

Additional benefits of the green transition

A green transition brings with it many other benefits beyond merely bringing down emissions.

Biodiversity loss puts food security and nutrition at risk. Restoring biodiversity will ensure healthy and nutritious diets, keep jobs in rural areas and increase agricultural productivity.

Tackling air pollution will help prevent premature deaths and improve our overall health and living conditions, especially in cities. In the European Union alone, air pollution is responsible for around 400,000 premature deaths every year.

And, most importantly, tackling climate change will ensure that we ourselves, our children and grandchildren, can be sure of a healthy, sustainable future on this planet. Because the planet itself will do fine without us.

It is with these goals in sight that the European Union will continue to push for global ambition on climate change. As we prepare for COP26 next year, I hope to find China at our side. And I think I will find China at our side.

In thanking you I want to address in my final word directly the students. You are the leaders of tomorrow. It is our task, for my generation, to prepare the world for your leadership. To make sure that what we do in the years we still have this responsibility, me at the Commission, others in leadership positions in China and in other places, that we do everything we can do, to make sure that you have a liveable future. A prosperous future. A future where international relations are based on friendship and mutual cooperation, where we do have a clean planet, a planet that is sustainable with a circular economy.

We need to prepare this. But you will have to make sure it continues. And it is in your hands to finish it. I will not be working, if I am at all living, in 2050 or in 2060. You will be. And you will see this future. It is in your hands, and I trust you because you are a generation that keeps amazing me.

Ladies and gentlemen, thank you very much.