Post2012 Climate Policy and the EU 2oC Target

1
Post-2012 Climate Policy and the EU 2oC Target

• Bill Hare
• Greenpeace International/ClimateAction Network
  Europe
• 2004

2
Outline

• Implications of EU 2oC target for post 2012
  architecture
• EU response to the present US stance Stop,
  suspend or go ahead?
• What are the options for differentiating
  commitments and actions?
• South-North Proposal
• Key issues
• Expanding international emission trading
• Conclusions

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Meeting 2oC Target
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Emission pathways to 2oC target
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Global emissions

• If global emission reduction rates are to be
  below 6/yr in the 2020s then the peak needs
  to occur no later than 2020.
• If global emission reduction rates are to be
  below 4/yr in the 2020s then global peak needs
  to occur around 2015.
• Little timing flexibility remains

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Annex I Pathways
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Effects of Delay
Delaying action for a decade, or even just
years, is not a serious option Sir David King
(Science, 9 January 2004)
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USA

• US according to reference scenario
• No emissions left for rest of Annex I after
  2025.

• US emissions according to Lieberman-McCain
  (S.139)
• Rest of Annex I needs to reduce to -55 by 2020,
  instead of -30.

• US reductions below reference 1.5x
  Lieberman-McCain (S.139)
• Rest of Annex I needs to reduce to -45 by 2020,
  instead of -30.

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Implications of 2oC target for regime

• Legally binding targets and trading system
• Need for early and rapid decarbonization in the
  large emitters of the developing world.
• Need for complex regime architecture
• Need for very rapid technological change

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EU strategy in face of uncertainty

• EU leadership necessary for regime development
• Most fundamental question appears to be whether
  the EU should move ahead absent clear commitments
  from the USA
• Scale and rate of action post 2012 hinges on
  strength of risk assessment how strongly does
  the EU feel about 2oC target?
• If 2oC target is seen as hard then there would
  be economic advantages to the EU from moving
  ahead.
• creates substantial pressure to take economic
  risks in pressing ahead with the next stage of
  emission reductions in the EU and elsewhere. The
  question is however to what level?

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The USA

• Unlikely that there will be a US cap and trade
  system before 2009.
• Key question is what will US do in the future,
  beyond the Bush Presidency?
• It seems likely that the US political system will
  move towards action within the next decade and
  seems almost certain is that US action will lag
  that taken by Europe and the other Annex II Kyoto
  ratifiers over the decade from 2013-2022.
• The USA has significant catch up potential

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Implications for EU Post 2012

• Moving ahead without USA is seen as ineffective
  in most conventional economic models of climate
  policy
• But, models are not able to deal fully with the
  dilemmas of climate policy
• Pressure of 2oC target
• Irreversibility of the climate system
• Long time scale of the response of climate and
  socio-economic systems
• Positive technological spillover effects
• Several factors point to the viability and
  necessity of the EU moving forward in the absence
  of the USA at this stage.
• Likelihood of positive technological spillovers
  arising from action by the EU (and others) would
  enhance the effectiveness of such action.

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Acting without USA at present

• If it is assumed that world will deal with the
  threat of climate from a similar perspective as
  the EU then substantial economic competitiveness
  benefits would accrue to those who have moved
  first.
• Costs for stringent abatement likely at most
  amount to 0.05/year.
• Overall costs should thus not be a major concern.
  
• How to capture these benefits both
  technological and economic and in a way that
  benefits both Europe, Japan and the large
  emitters in the developing world?
• Question is whether or not the European Union can
  afford the side payments to large emitters
  India, China, Brazil, South Africa, taking into
  account technological spill over effects?

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Options for differentiating commitments and action

• South North Proposal
• Allocation of countries to groups according to
  index
• potential to mitigate based on GHG emissions per
  capita, CO2 emissions/GDP), cumulative CO2
  emissions per capita and the Human Development
  Index
• Newly Industrialized countries (NIC), Rapidly
  Industrialized countries (RIC), Other developing
  countries (Other DC) and the Least Developed
  Countries(LDC).
• Agreed graduation rules
• Set of different actions to be taken according to
  status
• Problematic
• Linkage to US action
• Direct finance

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South North Proposal Country Groups
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South North Proposal Country Groups
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Expanding international emission trading

• NICS eg South Korea, Saudi Arabia, Israel and
  Kazakhstan wealthy enough to join with national
  caps
• RIDCs eg Argentina, Brazil, China and South
  Africa are capable but assistance needed ie
  technology and financial resources to enable
  participation
• Open question as to whether caps would cover
  whole economy or large sectors eg power sector
• Other DCs eg India need much more assistance and
  focus could be on power sector caps

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Financing instrument needed

• Large direct transfers not politically feasible,
  but large additional investments do seem
  feasible.
• Financial instruments needed that would provide
  additional loans at cheap or soft terms to enable
  investments required to meet caps taking into
  account trading revenue
• Focus on leveraging acceleration of sustainable
  development.
• Would need government backing but could mobilize
  large private sectors involvement.
• Participation by RIDCs and others linked to
  finance facility.

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Conclusions

• Strength of commitment to 2oC target and hence
  risk judgement is critical to post 2012 strategy
  in absence of clear view of US response.
• Legally binding architecture is central and needs
  to be expanded to large emitters.
• Finance facility is needed to guarantee
  additional investments but does not need to very
  expensive and should bring benefits to both
  parties.

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Sea Level Rise by 2300 Assuming stabilisation at
3 ºC warming This is 2xCO2-equivalent, i.e. 450
ppm CO2
3-5 m sea level rise dangerous interference
Source Rahmstorf, S., C. Jaeger (2004)