200306 SUSPENS conference Samuel Buys€¦ · 75$16,7,2172:$5'6&/,0$7(1(875$/,7

20/04/2018

DIENST KLIMAATVERANDERINGFEDERALE OVERHEIDSDIENST VOLKSGEZONDHEID, VEILIGHEID VAN DE VOEDSELKETEN EN LEEFMILIEU

TRANSITION TOWARDS CLIMATE

NEUTRALITY – POLICY

PERSPECTIVES

SUSPENS FINAL CONFERENCE• BRUSSELS6/03/2020

TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020

7. Note the importance of a participatory and representative process of social dialogue involving all social partners, to promote human rights and international labour standards, as well as high employment rates, adequate social protection and wellbeing of workers and their communities, when developing nationally determined contributions, long-term low greenhouse gas emission and climate resilient development strategies and adaptation planning processes;

(Silesia Declaration)

7. Note the importance of a participatory and representative process of social dialogue involving all social partners, to promote human rights and international labour standards, as well as high employment rates, adequate social protection and wellbeing of workers and their communities, when developing nationally determined contributions, long-term low greenhouse gas emission and climate resilient development strategies and adaptation planning processes;

(Silesia Declaration)

“Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”

(Paris Agreement)

POLICY PERSPECTIVE: JUST TRANSITION 2

“Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”

(Paris Agreement)

United Nations Framework Convention on Climate Change (UNFCCC)


3

TheEuropean

Green Deal Industry

Ecosystems & biodiversity

Just Transition

‘Farm to Fork’

Building & renovating Mobility

Climate ambition

Energy

Financing

Toxic-free environment

A European Climate Pact

The EU as a global leader

Research & innovation

Transforming the EU economy

And leave No one behind

EU LONG TERM STRATEGYA EUROPEAN GREEN DEAL



Source: WRI

LONG TERM STRATEGY 4

Long Term Strategy !

(European Commission, 28.11.2018, COM(2018) 773)

Paris Agreement | Decision 1/CP.21Mid-century, long-term low GHG emission development strategiesBy 2020:


CLEAN PLANET FOR ALL 5

-94 % (~1990)

1,5 °C


6EU LONG TERM STRATEGYCLIMATE NEUTRALITY BY 2050

6

1. In the light of the latest available science and of the need to step up global climate action, the European Council endorses the objective of achieving a climate-neutral EU by 2050, in line with the objectives of the Paris Agreement.

1. In the light of the latest available science and of the need to step up global climate action, the European Council endorses the objective of achieving a climate-neutral EU by 2050, in line with the objectives of the Paris Agreement.…

1 One Member State, at this stage, cannot commit to implement this objective as far as it is concerned, and the European Council will come back to this in June 2020.

European Council, December 2019

1


EU LONG TERM STRATEGYCLIMATE NEUTRALITY BY 2050! BY LAW!

7

- Enshrine the 2050 climate-neutrality objective; - Create a system for monitoring progress and

take further action if needed; - Address the necessary steps to get to the 2050

target.


2050 CHALLENGE FOR BELGIUM 8

0

20

40

60

80

100

120

Emissions

Projection under existing measures

GHG emissions and projections in Belgium (1990 = 100)

1990 2050


BELGIAN LONG-TERM STRATEGY 9

Summarized in umbrella text and reproduced in Annex


ROLLING OUT THE STRATEGY / STRATEGIES 10

• Each region is committed to organize participative processes in the coming months/years to discuss with stakeholders, experts and the public about further developing the LTS.

• The vision document from the federal administration identifies a series of focused strategic workstreams.

• The federal administration is finetuning national net-zero scenarios


For each GHG emitting sector:

• State of play• Levers• Vision• Strategic workstreams

11FEDERAL INPUT


Sector

1990 GHGs

(MtCO2e)

2017 GHGs

(MtCO2e)

2050 orientation 2050 vs 1990 (2017)

2050 GHGs (MtCO2e)

Buildings 21,1 20,8 Complete decarbonisation 100% (100%) 0

Transport 25,1 25,9 Complete decarbonisation 100% (100%) 0

Industry 57,2 38,7 Almost complete decarbonisation with remaining emissions compensated by negative emissions ≥ 90% (85%) ** Max 5,7 **

Power 22,9 13,1 Complete decarbonization ≥ 100% (100%) ** Max 0 **

Agriculture 15,3 12,4Complete decarbonisation of energy-related emissions and very large reduction of non-CO2 emissions

≥ 70% (63%) Max 4,6

Waste 5,0 3,6 Almost complete decarbonisation and very large reduction of non-CO2 emissions ≥90% (86%) Max 0,5

LULUCF and carbon removal technologies*

-3,3 -0,3Remaining emissions compensated by natural sinks (LULUCF) and carbon removal technologies (e.g. BECCS in industry and power)

LULUCF: about 3% (4%) ***

LULUCF:-4 to -5

Total 143,3 114,3 Net zero GHGs 100% 0

12VISION

Indicative 2050 GHG levels for Belgium in the context of a climate-neutral European Union (MtCO2e and %)

* Carbon removal technologies such as BECCS (Bioenergy with carbon capture and sequestration) and DAC (Direct Air Capture) with sequestration.** Without BECCS.*** Ratio ‘sinks and removals in 2050’/’Total GHG emissions in 1990 (2017)’

-20

0

20

40

60

80

100

120

140

160

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

industry

oil refineries

buildings

districtheatingpower

transport

-94 % (~1990)


BuildingsB1 Alignment of economic instruments with the long term objectivesB2 Energy poverty and housingB3 Alignment of labour market policies and support of business models for renovationB4 Framework for a circular economy in construction and renovationB5 Investment plans and financing strategy for publicly owned buildings

TransportT1 Long-term vision on mobilityT2 Investment plans and financing strategy for public and active transport modesT3 Alignment of economic instruments with the long term objectivesT4 Framework for the development of new transport modelsT5 Promoting freight transport technological developments

IndustryI1 Industrial roadmaps for competitive, innovative and climate-friendly industriesI2 Mapping and scaling-up of circular economy strategies and plansI3 Electrification: challenges and opportunities for electro-intensive industriesI4 Vision and framework for the use of biomass, hydrogen, e-fuels and carbon captureI5 National industrial strategy for a bio-economyA4 Land use and biodiversity

13STRATEGIC WORK STREAMS


Energy productionP1 Long-term vision on electricity supplyP2 Green hydrogen and e-fuels production and infrastructureP3 Long-term framework for the integration of intermittent sources by all actorsP4 Support to the active role of citizens

LULUCFA1 Vision for a sustainable agricultureA2 Role of the carbon sinks in reaching negative emissions in BelgiumA3 Strategy for a bio-economy : supply sideA4 Land use and biodiversity

TransversalO1 Governance frameworkO2 Green finance strategyO3 Just transitionO4 Negative emissions O5 In-depth risks and vulnerability assessment of the consequences of climate change in Belgium



BuildingsB1 Alignment of economic instruments with the long term objectivesB2 Energy poverty and housingB3 Alignment of labour market policies and support of business models for renovationB4 Framework for a circular economy in construction and renovationB5 Investment plans and financing strategy for publicly owned buildings

TransportT1 Long-term vision on mobilityT2 Investment plans and financing strategy for public and active transport modesT3 Alignment of economic instruments with the long term objectivesT4 Framework for the development of new transport modelsT5 Promoting freight transport technological developments

IndustryI1 Industrial roadmaps for competitive, innovative and climate-friendly industriesI2 Mapping and scaling-up of circular economy strategies and plansI3 Electrification: challenges and opportunities for electro-intensive industriesI4 Vision and framework for the use of biomass, hydrogen, e-fuels and carbon captureI5 National industrial strategy for a bio-economyA4 Land use and biodiversity



Energy productionP1 Long-term vision on electricity supplyP2 Green hydrogen and e-fuels production and infrastructureP3 Long-term framework for the integration of intermittent sources by all actorsP4 Support to the active role of citizens

LULUCFA1 Vision for a sustainable agricultureA2 Role of the carbon sinks in reaching negative emissions in BelgiumA3 Strategy for a bio-economy : supply sideA4 Land use and biodiversity

TransversalO1 Governance frameworkO2 Green finance strategyO3 Just transitionO4 Negative emissions O5 In-depth risks and vulnerability assessment of the consequences of climate change in Belgium



JOB CREATION 17

Source: Federal Planning Bureau, Climact

Macroeconomic impacts of the low carbon transition in Belgium

1970 1980 1990 2000 2010 2020 2030

CO2

GDP

1970 1980 1990 2000 2010 2020 2030

-46%

1970 1980 1990 2000 2010 2020 2030

+2%

BBP: + 2 %Jobs: + 80.000


JOB CREATION 18

Source: Eurofound, 2019

Impact of the low carbon transition on employment by country in 2030 (percentage difference from baseline)


JOB CREATION 19

Towards net employment growth of 80 000 jobs in 2030, with mixed impacts at sectoral level

• The sectors of construction and marketservices are the ones in which most jobswould be created

• Low-carbon measures and actions couldnegatively impact the energy sector with anoverall loss of jobs

• It is crucial to rethink the education andtraining system in order to meet the newknowledge and skills needs generated bythe low-carbon transition

Job creation by sector in 2030 in Belgium, thousands of jobs, CORE LOW CARBON wrt

REFERENCE scenario, HERMES

Source: Macroeconomic impacts of the low carbon transition in Belgium


ENERGY POVERTY 20

Lower average total annual energy bill in the first deciles… Average total annual energy bill (in €/HH) per income decile in 2016

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

1 2 3 4 5 6 7 8 9 10

Source: HBS 2016 – Thesis ‘Decarbonization of the Belgian residential buildings sector: how to deal with energy poverty?’, Louise Aeby


ENERGY POVERTY 21

… but it represents a larger share of their income Average total annual energy bill (in %/income) per income decile in 2016


0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

9,00%

1 2 3 4 5 6 7 8 9 10


139

111

30

2010 REF 95%

BUILDINGS

Increase in the share of renovated domestic building stock, %

Level of renovationkWh of final consumption/heated m²

-73%

• The renovation rate of existing buildings must increase

Source: Belgium OPEERA model (Climact, VITO)

95%: 2.6%/yr.

REF (=current): 1%/yr. -

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

2010 2015 2020 2025 2030 2035 2040 2045 2050

22


ENERGY POVERTY 23

The building stock is old, in particular in the first deciles

Age of housing per income decile in 2016

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10


Before 1980

After 1980


ENERGY POVERTY 24

Less owners, more tenants among the first deciles

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10

Owners Tenants at market price Social housing

Share of tenants (in social housing or not) and owners per income decile in 2016



ENERGY POVERTY

Two key drivers of distributive impacts:

1. Invesments in buildings renovation – enveloppe and heating technologies

• Owners targeting support for energy-poor HH

• Tenants split-incentive issue; specific attention for energy-poor HH?

• Social housing public investments

2. Energy price changes, including fiscal component (e.g. carbon tax)

• Use of revenues from carbon taxation: lump-sum transfer

– Per household instead of per person;

– Differentiating according to heating technology?

• Electricity price evolution

• Social tariffs: reinforcement and reform?

25


POLICIES ADDRESSING ENERGY POVERTY 26

Belgian Interfederal Energy Pact & NECP

« Pour lutter contre la précarité énergétique, il faut s’attaquer à l’origine du problème. Développer des

instruments visant à rendre les maisons efficaces sur le plan énergétique permet d’alléger la pression sur la facture

énergétique. Un plan de lutte contre la précarité énergétiquesera élaboré au sein de chaque entité.»

« Une tarification carbone sera étudiée et mise en place pour les secteurs non-ETS. Les moyens dégagés par cette tarification financeront la transition et en particulier celle

des personnes les plus vulnérables.»

« Concernant la précarité énergétique, l’ensemble des mesures fédérales et régionales existantes veilleront dans les prochaines années à concentrer les efforts en vue de traiter la problématique à la source, conformément aux

directives de l'UE, avec des mesures ciblées visant à réduire la consommation d'énergie»

« Un plan de lutte contre la pauvreté énergétique sera élaboré au sein de chaque entité. Ce plan proposera des

mesures visant à réduire la consommation.»


CARBON PRICING 27

Carbon pricing is developing worldwide

Source: I4CE, 2019


CARBON PRICING 28

Carbon pricing in Belgium


CARBON PRICING 29

3 principles for a successful implementation of carbon pricing

1. Long-term orientation• Long-term signal for investment decision• Increasing price, trajectory

2. Package of policies• Carbon pricing alone does not suffice• Substitution possibilities needed

3. Budget neutrality• Various options available• Compensation for vulnerable households


CARBON PRICING 30

Carbon price trajectories

Historical and projected carbon prices ; potential carbon price trajectories for Belgium (nominal prices)

10 €2020

40 €2020

70 €2020

100 €2020


31Indicative impact on fossil fuel prices• In the short-term (2020), price changes by 2 to 4%• In the mid-term (2030), price changes by about 10 to 25% (trajectory B, 70€/tCO2e)

CARBON PRICING 31

Source: Own calculations on the basis of IPCC emission factors and Weekly Oil Bulletin

1,40 1,40

0,70

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

1,80 In €/l

+0,03+0,11

+0,19+0,27

+0,02+0,09

+0,16+0,22

+0,03+0,11

+0,18+0,26

0,06

0,00

0,01

0,02

0,03

0,04

0,05

0,06

0,07

0,08

0,09 In €/kWh

+0,00+0,01

+0,01+0,02

Final 2018 prices 10 €/tCO2e 40 €/tCO2e 70 €/tCO2e 100 €/tCO2e

Diesel Petrol Heating oil Heating gas

In €/lIn €/l


CARBON PRICING 32

The decrease in energy demand results in a decreasing total average energy bill

Average annual energy bill for residential heating(1)

(1) in the low-carbon scenario under Option B (in €/household/year)


CARBON PRICING 33

Distributive issues of carbon pricing

• Although absolute carbon contributionsare significantly larger for higher incomesthan for lower ones, these are much largerfor lower income households whenexpressed as a percentage of their income

• Increases in energy costs as aconsequence of carbon pricing could havea negative impact on the capacity of low-income to access adequate energyservices in their home and could thusincrease energy poverty

• Without compensation measures, carbonpricing is therefore potentially regressive

Average carbon contribution for heating by decile of income with a carbon price of 10 €/tCO2e

Source: Belgian national debate on carbon pricing


CARBON PRICING REVENUE FOR TACKLING ENERGY POVERTY

34

Several non-exclusive possibilities• Energy vouchers for buildings (France)• Support renovation poorest households (Ireland)• Targeted transfers transport (France)• Lump-sum transfers (Switzerland)• Transfers to poor households (British Columbia)• …

Swiss carbon tax: lump-sum distribution of proceeds to every citizen



35

Redistribution is key - A lump-sum redistribution would on average be profitable for low income households

Average carbon contribution for heating by decile of income with a 10€/tCO2 carbon priceand illustration of the impact of an equal redistribution of the dividend (Belgium)

39

26

33 3236

3941 42 43

47

53

-20

-10

0

10

20

30

40

50

60

Average 1 2 3 4 5 6 7 8 9 10

Carbon payment Carbon dividend Net gain



36

Still, targeted policies are required due to significant heterogeneity within income classes

Source: HBS, 2016

0

2.000

4.000

6.000

8.000

10.000

12.000

0 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000

Total annual energy bill / Monthly equivalized disposable income


THANK YOU !

[email protected]

www.klimaat.be

200306 SUSPENS conference Samuel Buys€¦ · 75$16,7,2172:$5'6&/,0$7(1(875$/,7

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