The planet's atmosphere is half-full of carbon, but the EU's recession-hit citizens have half-empty pockets: the result was a difficult compromise on emissions cuts and clean energy targets

Europe's new targets of a 40% carbon emissions cut by 2030 and a boost to renewable energy have been greeted with both acclaim and derision for their ambition, or lack of it. Both views are justifiable: it's a classic example of a glass being simultaneously half full and empty.

For those focusing on climate change – the atmosphere right now is half full of carbon dioxide – the European commission's plan is clearly inadequate to meet the EU's own target of limiting global warming to 2C. For those focusing on the economy of the bloc today – EU citizen's pocket are half empty after a crushing recession – the deal was the most ambitious possible.

Initially, EC president José Manuel Barroso spoke optimistically, talking of a "marriage" between climate action and economic competitiveness: a demonstration that environmental action does not have to cost the Earth. But he soon became exasperated at the criticism: "Let's have some realism, no member state, even the ambitious ones, wanted more than a 40% cut."

Commissioner for climate action, Connie Hedegaard, bristled too: "My message to the NGOs is be honest: 40% cut is a not a small thing, it is a big thing." The commisioners pointed out that the EU still remains well ahead of other major economies in its ambition to tackle global warming.

Both the green campaigners and the industrial vested interests were left equally unhappy. Such a fudge might be seen as a successful compromise in other circumstances, but here the stakes are just too high.

Climate change is, as Barroso put it, "the defining challenge of our time", while struggling economies are the defining challenge of today. This tension means the promise of the fast-growing green economy, in which Europe leads, looks to many more like a road to ruin than the path to prosperity it actually is.

The question, then, is how is Europe to move towards the clean, sustainable future that is essential to long-term wellbeing of us all and leave the dirty industries of the past behind? The commission made some progress: the target of at least 27% renewable energy by 2030 is an important political signal (and a defeat for the UK, which lobbied hard against it). The commission also pointed out that the biggest challenges for EU competitiveness is not in fact the cost of climate action.

But the commission also procrastinated on two of best ways to tackle the dual climate-economy problem: energy efficiency and the EU's trading scheme for carbon pollution permits. Furthermore, despite energy commissioner Günther Oettinger, more hawk than dove on climate, stating what every rational person knows - "shale gas not going to have same significance in the EU as in the US – the commission still failed to deliver binding safety regulation on fracking (as I reported, a victory for UK lobbying).

Two things need to happen next. First, the EU's member states, which now examine the commission's plan, must put in ways of ratcheting up the ambition in future to levels that match the seriousness of the climate change threat. Real world achievements are actually running ahead of the existing targets: the EU is already within 2% of its 2020 target of a 20% carbon cut.

Second, member states must get serious about tackling the foot-dragging of heavy industry, by easing the transition from the coal-black past to the bright future. Support, not hand outs, for business boosting energy efficiency will be important, for example, as will far more serious efforts to deliver carbon capture and storage.

Germany, with all its manufacturing might, may have opted for a fully renewable future, but Poland, 90% reliant on coal, will not. The UK, stupidly given its super-smart science base, is veering more to the Polish path than the German one.

Overall, the EC's plan is a long way short of delivering the sustainable climate and economy need for our future prosperity, but it is also a significant step towards it: the glass is both half full and half empty.