EU Climate Policy-latest

developments

Agnieszka Janowska

European Commission, DG Environment

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

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

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

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

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

GHG Target:

-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%

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)

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

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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20%: BG19%:RO

17%: LV

14%: PL

13%: SK

11%: EE10%: HU

9%: CZ

5%: MA

1%: PT

-5%: CY

-10%: ES

-13%: IT-14%: DE, FR

-14%: BE-16%: AT, FI, UK, NL

-17%: SE

-20%: DK, IE, LU

15%: LT

3%: SL

-4%: EL

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20%: BG19%:RO

17%: LV

14%: PL

13%: SK

11%: EE10%: HU

9%: CZ

5%: MA

1%: PT

-5%: CY

-10%: ES

-13%: IT-14%: DE, FR

-14%: BE-16%: AT, FI, UK, NL

-17%: SE

-20%: DK, IE, LU

15%: LT

3%: SL

-4%: EL

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”

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

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

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’)

International context:Building 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, R&D 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

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.