Representing the European electricity industry at expert, strategic and policymaking levels'

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Representing the European electricity industry at
expert, strategic and policymaking levels.
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General Principles Governing a post-2012 Climate
Policy Participation - based on the GETS4
analysis
Stakeholder Conference Post-2012 Climate Policy
for the EU
Brussels, 22 November 2004
Dr Bill KYTE, OBE
Chairman
Environment and
Sustainable Development
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Principles for a Future post-2012 Regime

• A genuine global approach
• Longer timelines
• Emissions reduction goals
• Market-oriented policies
• Participation of all sectors
• Increased RD and technology transfer
  dissemination
• Encourage changes in consumer behaviour

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GETS4 Aims
To assess the impacts of future world GHG
emissions reduction schemes to 2012 and beyond -
In a quantitative manner ( and tCO2eq) - To
2022 gt Kyoto Commitment Period 1 10
years - Using a wide range of scenarios
sensitivities - Within a single analytical
framework gt results from all scenarios
sensitivities directly comparable
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Principles for a Future post-2012 Regime

• A Genuine Global Approach the key issue!
• EU emits only 14 of global emissions
• Common objectives for the environment, but also
  for competitive reasons
• Developing countries need to play an increasing
  role

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• GETS4 conclusions
• Impacts are dominated by the positions of Russia
  and US
• If Russia does not participate, compliance costs
  and market traded prices would double
• If US enacted McCain-Liebermann, it would
  increase world system compliance costs by 3-6
  times

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Principles for a Future post-2012 Regime

• 2. Longer Timelines
• Absence of certainty creates excessive commercial
  risk
• Clarity is needed on long-term aim (2050) and on
  goals and instruments over a long-period of time
• 3. Emissions Reduction Goals

• Reduction goals must be based on sound scientific
  and

economic analyses
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• GETS4 conclusions
• Compliance costs increase exponentially with
  severity of targets

- Increasing all targets in all schemes by 50
leads to system compliance costs 3-5 times higher
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• GETS4 conclusions
• A 2ºC target has a dramatic effect
• GETS4 has simulated targets based on
• - Stabilising atmospheric GHG concentration
• - Equal world per capita emissions
  (contraction convergence)
• If the EU-25 alone transfers to its share of a
  550 ppm CO2eq target in the period 2013-22,
  EU-25 compliance costs treble
• - Leading to a doubling of world compliance
  costs
• - The potential costs of going it alone are
  very high

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Principles for a Future post-2012 Regime
4. Market-Oriented Policies

• Market-based instruments ensure compliance at the
  lowest cost. They should be the preferred tool to
  achieve emissions reductions worldwide.
• Kyotos flexible mechanisms must be available
  under simplified procedures
• - Global emissions trading will be an important
  policy instrument to achieve emissions
  reductions.

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• GETS4 conclusions
• Linking significantly reduces costs for
  participants
• Highest benefits accrue when linked schemes all
  have significant targets
• 6-17 reductions in system compliance costs are
  projected from linking the Kyoto scheme to the
  relatively minor Other schemes modelled

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Principles for a Future post-2012 Regime
5. Participation of all sectors - Specific
sectors should not be exempted from
contributing to emissions reduction goals

• GETS4 conclusions
• - A number of factors greatly alter costs of
  meeting a given set of absolute commitments
• Supplementarity (minimum domestic action) is a
  costly constraint as it restrains trading
• High GDP projection increases system compliance
  costs 2-4 times

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Principles for a Future post-2012 Regime
6. Increased RD and technology transfer
dissemination

• - Accelerated and increased funding, and
  international coordination are needed
• Increase the use of energy end-use efficient
  technologies and non- or low-emitting generation
  technologies, such as
• - Renewables
• - Nuclear power
• - Combined heat and power (CHP)
• - High-efficiency natural gas
• - Advanced clean coal (including CO2 capture and
  storage).

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Principles for a Future post-2012 Regime
7. Encourage changes in consumer behaviour
- Consumers and their choices make markets -
Policies and measures should be designed to
influence consumers to adopt a more
climate-friendly behaviour - Promotion of
education and training on more efficient use of
resources and environmental awareness
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