Jos Delbeke - EU Climate Change Policy

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Jos Delbeke's presentation at the Climate Action Conference in Brussels, 25-27 October 2010

Topic: An overview of the EU domestic action to combat climate change

Published in: News & Politics
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  • “Winning the Battle” & Stern Review: benefits of limiting Climate Change outweigh costs of action
    Costs of inaction: 5-20% of global GDP (Stern Review)
    Costs of global action (2030):
    Investment costs: 0.5% of global GDP / year
    Reduce global GDP growth by 0.19% / year
    (Expected global GDP growth of 2.8% / year)
    Co-benefits:
    Increased energy security
    Improved competitiveness through innovation
    Health benefits from reduced air pollution
  • Data from IEA 2007
  • Jos Delbeke - EU Climate Change Policy

    1. 1. EU Climate Change Policy Jos Delbeke Director General DG Climate Action European Commission Climate Action Conference, 26.10.2010
    2. 2. EU Environmental Policy: a new policy field • 1986/87: Single European Act: • Co-decision Council and EU Parliament • QMV (Qualified Majority Voting) • Today: • Comprehensive set of EU legislation covering air, water, nature, waste • Why European level? • Common problems • Pollution does not respect borders • Internal market (product standards and competitiveness issues)
    3. 3. Sustainability Imperative • POPULATION: today 6 billion, 9 billion until 2050 • ENERGY: IEA: 2030 – 40% increase in energy demand (3/4 fossil fuels) 2050 > 1000 ppm GHG concentration • WATER: OECD: 2030 – 4 bn people in water stress • FOOD: doubling of production in next 40 years • CITIES: UN: more than half population in cities 2050: 80% population in cities • TRANSPORT: 2050: 3 bn vehicles (850 m today)
    4. 4. Climate change: Science reveals serious problem CO2 today CO2 last 600.000 yrs CO2 in 2050 (BAU) Temp. last 600.000 yrs
    5. 5. Kilimanjaro then and now 1912 2000
    6. 6. EU global vision: global peak by 2020 and deep cuts by 2050
    7. 7. Climate change is a global problem… EU alone cannot stop it! % of global CO2 emissions EU 14% USA 20% Japan 4% China 20% India 4.5% Brazil 3.5%
    8. 8. EU emission reduction objectives for Copenhagen (COP15) • For 2020: • industrialized countries: 25-40% reductions • developing countries: 15-30% below BAU (business as usual forecasts) • For 2050: 50-85% reductions globally Comparability of efforts: income, efficiency, population trends, past efforts
    9. 9. Kyoto commitments: The EU is delivering • EU-15 target for 2008-2012: - 8% • EU-15 - 1990-2008:  GHG emissions: - 6.5%  GDP growth: +45% • EU-27 - 1990-2008:  GHG emissions: -11%  GDP growth: +46%
    10. 10. Kyoto commitments: The EU is delivering Actual and projected emissions for EU-15 3.600 3.800 4.000 4.200 4.400 4.600 4.800 1990 1995 2000 2005 2010 MtCO2eq. EU-15 emissions Kyoto mechanisms use by governments EU-15 existing measures Carbon sinks EU-15 Kyoto target Allowance and credit acquisition by EU ETS sectors Business as usual EU-15 additional measures
    11. 11. Kyoto commitments: The EU is delivering Energy Supply Energy Use Transport Industrial Processes Agriculture Waste Solvents & Other Past change in GHG emissions, 1990-2007 1% -15% 24% -11% -11% -39% -24% -50% -40% -30% -20% -10% 0% 10% 20% 30%
    12. 12. EU decides to reduce CO2 emissions in 2020 by 20% Greenhouse Gas Emissions: • today: -6.5%(compared to 1990/including aviation) • to do: 14% (compared to 2005) Renewable Energy: • today: 8.5% (mainly through large scale hydro and conventional biomass) • to do: 11.5%
    13. 13. Cost-effectiveness: market based-instruments (EU ETS) across EU Fairness: differentiate efforts among Member States according to GDP/capita • national targets in sectors outside EU ETS • national renewables targets (partially – half) • redistribution of auctioning rights (partially – 10%, -2%) EU strategy: cost-effectiveness and fairness
    14. 14. EU ETS as of 1.1.2005 • Emitting CO2 has a price (becomes a cost): incentive to use cleaner technology • Some 10,000 installations in power and industry face quantitative limits to CO2 emissions (allowances) • Covers ±45% of EU emissions • Overall cap: • 2005: 2.3 bn tonnes • 2008: 2.08 bn tonnes • 2020: 1.72 bn tonnes - 21% compared to 2005
    15. 15. -20% 2083 Mt/yr Gradient: -1.74% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 EU ETS: a predictable EU-wide cap beyond 2020 (gradual steps) Starting point: 1974 Mt in 2013 1720 Mt •Linear factor to be reviewed by 2025 •Aviation to be included; will change figures correspondingly, but cap not reduced •Disclaimer: all figures are provisional and do not account for new sectors in third period
    16. 16. 0 5 10 15 20 25 30 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 EUAprices€/t Source: Point Carbon EU ETS: price development
    17. 17. EU ETS: Harmonised Allocation Rules • Fully harmonised allocation rules • Auctioning is default allocation method – for power sector • Free allocation (partial or full) on basis of ex-ante benchmark (10% best) for energy- intensive manufacturing sectors
    18. 18. EU ETS: International offsets • Certainty and predictability: credits to be used up to 2020 • Quantity restriction (supplementarity: 50% of reduction effort): • minimum 11% of NAP2 allocation • corresponding to roughly 6% of phase 2 and 3 caps • resulting in 1.6 to 1.7 Bt over 2008-20 • Quality: comitology (harmonised approach) to ensure that credits represent real emission reductions • no nuclear and forestry allowed
    19. 19. EU ETS: Aviation included as from 2012 • Cap: • 2012: 97% of 2004-06 emissions • From 2013 onwards: 95% • Auctioning: 15% as from 2012 • Scope: internal, outbound and inbound aviation • A third country can take equivalent measures
    20. 20. Incentivising CCS and RES projects • Carbon price is main incentive for CCS/RES • In addition, up to 300 million allowances available until end 2015 for CCS and innovative renewable energy technology demonstration projects (± 4/5 bn €) • Projects selected on the basis of objective and transparent criteria, ensuring geographical balance • Operators receive support only after demonstrated performance
    21. 21. Renewable Energy Directive • Sets mandatory targets per MS for renewable energy shares in 2020 - 2009: 8,5% of EU’s energy consumption renewable - 2020: 20% • Reduction of administrative barriers, regulatory stability, and improved access to the electricity grid • Creates a sustainability regime for biofuels  By 2020 every kwh of power out of 3 produced will be from renewable origin
    22. 22. 49% 13% 16% 13% 30% 18% 25% 16% 18% 20% 23% 17% 13% 42% 23% 11% 13% 14% 34% 15% 31% 24% 25% 14% 38% 15% 10% RES share in 2020 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK Renewable Energy Directive: MS targets
    23. 23. CO2 from cars • Reduction of CO2 from new passenger cars (fleet- wide average): 2015: 130 g/km (48mpg) 2020: 95 g/km (65mpg) 2009: 146g/km (1995: 186g/km) • Taxation of motor fuels: a major driver towards energy-efficient cars (± 50% of price at pump) • Importance of scrappage schemes and CO2 modulation of registration taxes • Being extended to light duty vehicles (VANs)
    24. 24. CO2 from cars
    25. 25. Fuel Quality Directive • 6% reduction by 2020 of life cycle green house gas emissions per unit of energy from fuel and energy • saves 60 million tonnes CO2eq by 2020 • How? • substitution of fossil fuels by other fuels such as sustainable biofuels (~50% of the target) • LPG and CNG (~5% of the target) • electric cars (~10% of the target) • reducing upstream emissions in and outside of the EU (could be 50% or more of the target)
    26. 26. EU F-gas Regulations • F-Gas Regulation & MAC Directive adopted in 2006 • Promoting both containment and innovative low GWP substitutes • Driving global innovation • Draft estimates indicate • Expected to deliver GHG reductions (vs. BAU) of 30 Mt CO2-eq pa by 2020 and 70 Mt CO2-eq pa by 2050 • EU F-Gas emissions still growing but at much lower rates • Regulation subject to review in 2011 Expected EU F-Gas emissions with current measures compared to the counter-factual scenario (draft estimates)
    27. 27. The Effort Sharing Decision • Covers ±55% of EU emissions • "small emitters", not covered by EU ETS • A diverse set of sectors: transport, heating in buildings, services & SME’s, agriculture (N20, CH4), waste (CH4), HFC’s • Major differences in cost-effective emission reduction potential (eg. high for some non CO2 emissions and buildings, low in transport) • National, regional and local action very important
    28. 28. 28 A "Conditional" target of 30% • Other developed countries commit to comparable reductions in line with IPCC range of -25% to -40% • Developing countries contribute adequately according to their responsibilities and respective capabilities (on average between -15% to -30% compared to baseline) • An agreement that is international, comprehensive and ensures environmental integrity • EU is ready to act, but at present, conditions are not met
    29. 29. Cost of -20%/30% revisited
    30. 30. Cost of 20-30% revisited • Costs of -20% lower due to: - economic recession - higher energy prices - higher energy efficiency (new baseline for 2020 includes ETS, CO2 from cars, eco-design measures) • Carbon price lower, weaker incentive for innovation: - now: 13-15 € - 2020: less than 20 € (unused allowances) • Costs of -30% remain substantial: - ETS: target from -21% to -34% - Effort Sharing: target from -10% to -16%
    31. 31. Towards Cancun • EU has an offer on the table for 2020 • Independent reduction -20% • Ready to accept 30% as part of a global • Agreement (comparable effort by others) • EU recognises need for developing countries: • Through carbon market (CDM) • Bilateral and multilateral public support • R&D • For adaptation and mitigation • Performance based financial support • Moving towards a global carbon market 2015/2020 (New-Zealand, Australia, China, Korea, Japan)

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