The EU‘s post 2012 Climate Change strategy


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Towards a comprehensive climate change agreement in Copenhagen (Thomas Bernheim, DG Environment European Commission)

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  • The EU‘s post 2012 Climate Change strategy

    1. 1. The EU‘s post 2012 Climate Change strategy Towards a comprehensive climate change agreement in Copenhagen Thomas Bernheim, DG Environment European Commission <ul><ul><li>Mo-Magazine, 22 April 2009 Zuiderpershuis Antwerpen </li></ul></ul>
    2. 2. The global scientific consensus <ul><li>IPCC Fourth Assessment Report (2007): </li></ul><ul><li>Global temperature is rising: +0.76°C (1.37°F) since 1850 (+1°C in Europe) and the rate is accelerating </li></ul><ul><li>>90% certainty man-made GHG caused most of this rise </li></ul><ul><li>Rate of sea level rise has doubled in recent decades </li></ul><ul><li>If we take no action average global warming will increase further by between 1.1° and 6.4°C this century </li></ul><ul><ul><li>best estimate +1.8-4.0°C (3.2°-7.2°F) </li></ul></ul><ul><ul><li>regional rises could be much greater (e.g. Arctic +6°- 8°C) </li></ul></ul><ul><li>Good news! Deep cuts in global emissions can be achieved at relatively low cost using existing technologies and those in pipeline </li></ul>
    3. 3. A global pathway to stay below 2°C Global Peak by 2020 Global -50% by 2050 rel. 1990 Developed Countries to cut by 80-95% by 2050 rel. 1990 Recent Science ?
    4. 4. Why 2 ° C? Getting into the danger zone
    5. 5. Delay has serious impacts <ul><li>To achieve same long-term emission level requires steeper future reductions: 4% vs. 2.6%/yr in 2030-2050 </li></ul><ul><li>Adds to cumulative emissions  increased risk of surpassing critical thresholds </li></ul><ul><li>Leads to further carbon lock-in  more costly transition to low-carbon future </li></ul> Call on all developed countries to commit to ambitious cuts by 2020 to avoid unrealistic pathways <ul><li>To achieve the same stabilisation goal : reduction rate doubles for every 10 years of delay </li></ul>
    6. 6. DC need to participate over time ... If Annex I alone reduces emissions to zero ... Global emission path compatible with 2°C
    7. 7. EU vision for Copenhagen: targets and actions <ul><li>Targets and actions : </li></ul><ul><li>Leadership by all developed countries: </li></ul><ul><ul><li>-30% emissions by 2020 with comparable national efforts based on set of agreed criteria </li></ul></ul><ul><ul><li>Financial & technical support for mitigation and adaptation in DC </li></ul></ul><ul><li>For developing countries: </li></ul><ul><ul><li>Emissions growth 15-30% below business as usual by 2020 </li></ul></ul><ul><ul><li>Draw up low-carbon development strategies (LCDS) covering key sectors as vehicle to identify needs for support from Annex I </li></ul></ul><ul><ul><ul><li>Say what can be done autonomously </li></ul></ul></ul><ul><ul><ul><li>What actions require further support </li></ul></ul></ul><ul><ul><ul><li>What actions can be undertaken by he global carbon market </li></ul></ul></ul>
    8. 8. EU’s vision for Copenhagen: reductions are affordable but carbon markets key to cost-efficiency <ul><li>GDP effect for group in developed countries around 1% decrease in 2020 </li></ul><ul><li>Baseline GDP grows by more than 40% between 2005 and 2020 (incl. economic crisis) </li></ul>Source: European Commission 39 bn € 81 bn € 166 bn € Total incremental costs in developed countries in 2020 (2005 prices) 22 € 43 € 72 € Carbon price per tonne CO 2 in developed countries ETS, 2020 Perfect global carbon market Gradual global carbon market No global carbon market 30% Annex I reduction below 1990 by 2020
    9. 9. EU’s vision for Copenhagen: Towards comparable QELROs <ul><li>30% below 1990 levels by 2020 by Annex I on average and including domestic and international efforts </li></ul>Country B <ul><li>Comparability of QELROs based on balanced set of criteria, such as: </li></ul><ul><li>Capability to pay (domestic and abroad) ‏ </li></ul><ul><li>Mitigation potential </li></ul><ul><li>Early action to reduce emissions </li></ul><ul><li>Population trends and total GHG emissions </li></ul><ul><li>Long-term: towards a gradual convergence of per capita emissions among developed and developing countries </li></ul>2020 Average Country A
    10. 10. Leading through example: The climate and energy package <ul><li>March 2007 EU summit </li></ul><ul><li>Commitments </li></ul><ul><li>Unconditional commitment to cut GHG emissions by at least 20% in any case and 20% of energy from renewable sources (8.5% today) </li></ul><ul><li>Conditional commitment to reduce GHG emissions to 30% below 1990 levels if other developed countries make comparable cuts </li></ul><ul><li>Further objectives </li></ul><ul><li>20% cut in projected energy use through energy efficiency improvements </li></ul><ul><li> 10% renewables share in transport fuels (1% today) </li></ul><ul><li>Deforestation: halt within two decades and then reverse </li></ul><ul><li>Good for the climate, energy security, innovation, jobs and competitiveness! </li></ul>
    11. 11. The climate and energy package at a glance large industrial installations & aviation Carbon capture and storage Directive CO2&cars Renewable Energy Directive Fuel Quality Directive -20% / 30% technology specific & product policies cross-sectoral targets & instruments “ small emitters” EU ETS Effort Sharing Decision
    12. 12. Climate and energy package: Approach <ul><li>Cost-effectiveness and fair distribution </li></ul><ul><li>Fairness : differentiate efforts for Member States according to GDP/capita </li></ul><ul><ul><li>national targets in sectors outside EU ETS </li></ul></ul><ul><ul><li>national renewables targets </li></ul></ul><ul><ul><li>redistribution of auctioning rights </li></ul></ul><ul><li>Cost-effectiveness: introduce flexibility </li></ul><ul><ul><li>EU ETS </li></ul></ul><ul><ul><li>Guarantee of Origin trading for renewable energy </li></ul></ul>
    13. 13. Overall architecture GHG Target by 2020: -20% compared to 1990 -14% compared to 2005 EU ETS -21% compared to 2005 Non ETS sectors -10% compared to 2005 27 Member State targets, stretching from -20% to +20%
    14. 14. EU Emissions Trading System (EU ETS) Some basics <ul><li>Cap-and-trade system – reduces emissions at least cost </li></ul><ul><li>Started in 2005 </li></ul><ul><li>World’s largest ‘cap-and-trade system’ </li></ul><ul><li>Large industrial emitters and power plants </li></ul><ul><li>Reduce or buy allowances </li></ul><ul><li>Cap gives environmental outcome </li></ul><ul><li>Trading periods: 2005-7, 2008-12, 2013-20, … </li></ul><ul><li>Annual compliance cycle with monitoring, reporting, verification, surrender </li></ul><ul><li>Penalties for non-compliance </li></ul><ul><li>Major source of demand for Clean Development Mechanism (CDM), thus channelling investment to DC </li></ul>
    15. 15. Strengthening EU ETS from 2013 (third phase) <ul><li>Limited expansion to further sectors and gases </li></ul><ul><ul><li>Aviation included as from 2012 </li></ul></ul><ul><li>Single EU-wide cap on emissions replaces national caps </li></ul><ul><ul><li>Cap cut in linear fashion annually (-1.74%) until at least 2025. This gives investors predictability </li></ul></ul><ul><ul><li>By 2020 cap will be 21% below 2005 </li></ul></ul><ul><li>Much greater harmonisation of rules creates ‘level playing field’ across EU </li></ul><ul><li>Auctioning becomes default allocation method for allowances: </li></ul><ul><ul><li>At least 50% auctioning from 2013, 100% by 2027 </li></ul></ul><ul><li>Offsets (JI/CDM) : </li></ul><ul><ul><li>Supplementarity maintained: 50% of reduction effort </li></ul></ul><ul><ul><li>Quality: comitology to provide a harmonised approach </li></ul></ul>
    16. 16. Effort sharing outside EU ETS: Differentiated national targets for 2020 <ul><li>Principle of solidarity and growth </li></ul><ul><ul><li>National emission reduction targets determined as a function of GDP/capita </li></ul></ul><ul><ul><li>MS with high GDP/capita to reduce emissions (in relation to 2005 emissions) </li></ul></ul><ul><ul><li>MS with low GDP/capita may increase emissions </li></ul></ul><ul><li>But: </li></ul><ul><ul><li>No reduction of more than 20% </li></ul></ul><ul><ul><li>No increase of more than 20% </li></ul></ul>
    17. 17. Effort sharing outside EU ETS: National targets for 2020
    18. 18. Effort sharing outside EU ETS: Linear reduction pathway… with flexibility for compliance <ul><li>Binding linear reduction pathway for each Member State </li></ul><ul><li>Early overachievements in emission reductions can be banked </li></ul><ul><li>Up to 5% can be borrowed from the year ahead </li></ul><ul><li>Transfers of emission rights between MS </li></ul><ul><ul><li>ex post </li></ul></ul><ul><ul><li>ex ante : limited to 5% </li></ul></ul><ul><li>CDM credits </li></ul><ul><ul><li>3% of 2005 emissions each year (4% for 12 MS) </li></ul></ul><ul><ul><li>Credits not used can be banked </li></ul></ul>
    19. 19. What happens after Copenhagen agreement? <ul><li>Three months following Community signature, Commission will submit a report </li></ul><ul><li>If appropriate, proposal will be made covering among others </li></ul><ul><ul><li>Tightening of the targets </li></ul></ul><ul><ul><li>Increased access to offset credits, but: restricted to ratifying countries </li></ul></ul><ul><ul><li>Review of free allocation rules under EU ETS </li></ul></ul><ul><ul><li>… </li></ul></ul>
    20. 20. Final remarks <ul><li>Agreed EU legislation </li></ul><ul><ul><li>Will deliver on the objectives set by the European Council (-20/-30%) </li></ul></ul><ul><ul><li>Facilitates transition to the low-carbon economy of the future </li></ul></ul><ul><ul><li>Confirms EU leadership and dedication to fighting climate change </li></ul></ul><ul><li>Frame ambitious domestic and international climate policy as : </li></ul><ul><ul><li>Good economic policy , since it avoids catastrophic damages (Stern) </li></ul></ul><ul><ul><li>Good energy policy , since savings from fuel cost will pay back large part of necessary investment, increased energy security (IEA) </li></ul></ul><ul><ul><li>Good development policy since 2 degrees and adaptation are necessary to provide for poor developing countries to develop </li></ul></ul><ul><ul><li>Good security policy , since avoiding dangerous CC helps to avoid triggering of regional security implications </li></ul></ul>
    21. 21. Next steps <ul><li>Domestic : </li></ul><ul><li>Implement climate & energy package through comitology (e.g. auction design, setting benchmarks, determining sectors at risk of carbon leakage, etc…) </li></ul><ul><li>Internationally: </li></ul><ul><li>Aim for comparability of targets of developed countries </li></ul><ul><li>Aim for nationally appropriate mitigation action by DC </li></ul><ul><li>Agree on funding for DC , including technology and adaptation </li></ul><ul><li>Global Carbon Markets : develop linking + CDM reform </li></ul><ul><li>Submit to the UNFCCC secretariat additional texts as input to negotiating texts to be prepared by the Chairs </li></ul><ul><li>Outreach to key developed and developing countries to discuss and develop those proposals ahead of next Bonn meeting </li></ul>
    22. 22. More… <ul><li>… on the climate and energy package: </li></ul><ul><li> </li></ul><ul><li>… on the international negotiations: </li></ul><ul><li> </li></ul>