Agnieszka Janowska

1
EU Climate Policy -latest developments

• Agnieszka Janowska
• European Commission, DG Environment

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Context of EU action

• Multilateral negotiations
• GHG Monitoring
• European Climate Change Programme
• EU Emissions Trading Scheme
• Long-term targets for EU climate policy
• Integration in other Policy Areas, e.g.
• New industrial Policy
• Energy Security
• Research and Innovation

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Objectives agreed for 2020

• 20 GHG reduction compared to 1990
• Independent commitment
• 30 GHG reduction compared to 1990
• In context of international agreement
• 20 renewables share of final energy consumption
• 10 biofuels in transport, with
• production being sustainable
• second generation biofuels commercially available

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Where do we stand today?

• In 2005
• -6.5 GHG emissions compared to 1990
• including outbound aviation
• 8.5 renewable energy
• mainly through large scale hydro and conventional
  biomass
• Targets are ambitious
• -14 GHG compared to 2005
• 11.5 renewable energy share

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The climate and energy package

• Overall Communication
• Revision of EU Emissions Trading System (the ETS)
• Effort sharing in non ETS sectors
• Directive on promotion of renewable energy,
  report on renewable energy support schemes
• Directive on carbon capture and storage, and
  Communication on demonstration plants
• Revised environmental state aid guidelines
• Accompanying integrated impact assessment

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Ambitious timetable

• Package introduced 23 January 2008
• Deliberations in Council and Parliament
  Committees since
• Votes in EP ENVI ctte
• 8-10 Sept Car emissions
• 25 Sept CCS
• 7 Oct Effort sharing and ETS
• Council (ENV) 20 Oct
• EP plenary 1 Dec (?)
• Council (ENV) 4-5 Dec
• Possibly European Council 10-12 Dec

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Approach

• Cost-effectiveness Fair distribution
• Solution
• Fairness differentiate efforts according to
  GDP/capita
• national targets in sectors outside EU ETS
• national renewables targets (partially half)
• redistribution of auctioning rights (partially
  10)
• Cost-effectiveness introduce flexibility and use
  market based-instruments (EU ETS, transferability
  of Guarantee of Origin for renewables)

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Objectives of EU ETS review

• Cost-effective contribution to -20 GHG target
  for 2020, or to stricter target under
  international climate agreement
• Improvement of the EU ETS based on experience
• A clear long-term carbon price
• Therefore, changes in
• Scope
• Cap setting
• Allocation rules

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Non ETS targets compared to 2005

• Need to take into account the wide divergence of
  wealth in the EU-27
• GDP/capita as criterion for differentiation
  (ability to pay)
• Limitation between -20 and 20
• Consequences
• poorer Member States can continue to grow in
  sectors such as transport
• overall cost increases marginally compared to
  cost-effectiveness
• but significant equalisation of overall effort
  between Member States ensured

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Renewable energy

• 20 mandatory renewable energy share in 2020
  across EU
• 11,5 increase compared to 2005
• Effort sharing
• Half of the increase needed (5,5) for all MS
• Rest weighted by GDP/cap
• Early action after 2001 accounted for
• Giving total efforts between 6,2 - 13,7 per MS
• Cap on max 50 share
• National action plans required, staking out
  indicative trajectory 2013 2020, sectoral
  targets, and measures
• Provides policy stability for investments
• Reduction of administrative and regulatory
  barriers
• Flexibility through trade in Guaranties of
  Origin

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Carbon Capture and Storage

• While energy efficiency and renewable energy are
  shorter-term solutions, other options are needed
  in longer term if we are to reach 50 GHG
  reduction globally in 2050
• CCS to capture CO2, transport and store it in
  geological formations is crucial from a global
  perspective given fossil fuel abundance in key
  countries
• CCS has been demonstrated as functioning, but not
  yet as an integrated process or at reasonable
  costs
• Provisions for ensuring environmental integrity
  through the life-cycle of the plant (site
  selection up to post closure)
• CO2 captured and stored will be considered not
  emitted under the ETS
• CCS can be opted in for Phase II (2008-2012)
• CCS explicitly included for Phase III (2013-2020)
• Communication on promotion of demonstration
  plants

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What are the benefits of the package?

• The ultimate goal avoid the cost of climate
  change impacts 5-20 of global GDP (Stern)
• Large scale innovation in the energy sector
• First mover advantage, aiming for technological
  leadership in low carbon technology
• Significant energy efficiency improvements
• Energy security reduction of oil and gas import
  of 50 billion per year (at 61 per barrel
  of oil)
• Reduced air pollution giving significant health
  benefits
• Reduced need for air pollution control measures
  11 billion per year in 2020

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Package - summary

• EU showing leadership in climate change
• EU on a path towards a low-carbon economy
• Cost-efficiency and fairness at the heart of the
  package
• A significant effort, but future benefits far
  outweigh the costs
• Will deliver important economic, energy security
  and environmental co-benefits, also in the short
  term
• A blueprint for international negotiations
  (common and differentiated responsibilities)

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International contextBuilding on the Bali
Action Plan

• Shared vision of long-term cooperative action,
  incl. a long-term goal for emission reduction,
  but taking into account development objectives
• Mitigation action both for developed countries
  outside the KP (i.e. US commitments comparable to
  those of Kyoto Parties) and developing countries
  measurable, reportable and verifiable action
  address deforestation, sectoral approaches,
  response measures
• Adaptation support action for most vulnerable,
  risk management, disaster reduction, catalytic
  role of the Convention
• Technology Transfer, accelerate deployment and
  diffusion, RD cooperation
• Finance and Investment Adequate, predictable and
  sustainable financial resources and technical
  support positive incentives for DC mitigation
  strategies and adaptation action mobilising
  private and public investment capacity building

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International context The future - some key
principles

• Copenhagen agreement must set the world on the
  right track toward the development of a low
  carbon society, even if we have to update our
  actions based on further development of the
  climate and the science.
• We must build upon the Kyoto Protocol, adding
  more ambitious actions by all according to the
  principle of common but differentiated
  responsibilities.
• It is also clear that the nature of the global
  carbon market needs to be changed.
• It is equally clear that the carbon market alone
  is not sufficient to drive the move to a low
  carbon economy. Additional flows of finance and
  technology will be necessary.

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