““Expressions of pious wishes Expressions of pious wishes inserted in legal documents, inserted in legal documents, whether treaties or business whether treaties or business contracts, generally come back contracts, generally come back to plague their authors.”to plague their authors.”

Allen Dulles, Allen Dulles, Foreign AffairsForeign Affairs, July 1931, July 1931

The Truth – and The Truth – and Consequences – About Consequences – About EU Kyoto PerformanceEU Kyoto Performance

““The Gambler’s Dilemma”The Gambler’s Dilemma”

Christopher C. HornerChristopher C. Horner

Copenhagen, 28Copenhagen, 28thth July 2005 July 2005

SummarySummary

►EU, Japan and Canada all predict violating EU, Japan and Canada all predict violating Kyoto, barring massive new interventionsKyoto, barring massive new interventions

►Efforts to buy compliance also likely will Efforts to buy compliance also likely will fail – there won’t be enough GHG creditsfail – there won’t be enough GHG credits

►EU-demanded penalties EU-demanded penalties (Marrakech)(Marrakech) make make clear the EU can clear the EU can nevernever comply comply (post-2012),(post-2012), so long as climate agreement is tied to so long as climate agreement is tied to KyotoKyoto

►This leaves the principal question whether This leaves the principal question whether the EU will opt to play games the EU will opt to play games (more Kyoto (more Kyoto stalemate),stalemate), or accept a different path or accept a different path

EU and Kyoto:EU and Kyoto:The Gambler’s DilemmaThe Gambler’s Dilemma

The disconnect between EU Kyoto performance The disconnect between EU Kyoto performance and rhetoric = policy of “and rhetoric = policy of “Let’s Not and Say we Let’s Not and Say we Did”Did”

The Gambler’s Dilemma: Thinking one must either The Gambler’s Dilemma: Thinking one must either win or lose everything, the EU doubles the betwin or lose everything, the EU doubles the bet

Losing on the first draw, the EU insists climate Losing on the first draw, the EU insists climate talks presumptuously be of a deeper “second talks presumptuously be of a deeper “second compliance period”: an even grander promise compliance period”: an even grander promise that clearly, too, would be brokenthat clearly, too, would be broken

Planned emission reductions, Planned emission reductions, etcetc., ., will NOT bring EU into Kyoto will NOT bring EU into Kyoto

compliancecomplianceThe EU projects that under current measures it The EU projects that under current measures it

will fall short of its obligation of 8% below will fall short of its obligation of 8% below 1990 by …7.4% 1990 by …7.4% ((i.ei.e., will only reduce emissions 0.6%; ., will only reduce emissions 0.6%; disinterested parties predict actual EU emission increases)disinterested parties predict actual EU emission increases)

This is because 12 of the EU-15 project This is because 12 of the EU-15 project violating their (more forgiving) “Burden violating their (more forgiving) “Burden Sharing” promises, some spectacularly Sharing” promises, some spectacularly (actual (actual Kyoto performance is even worse)Kyoto performance is even worse)

5 of the EU-15 project violating even these 5 of the EU-15 project violating even these promises by 20% or more, up to 67%promises by 20% or more, up to 67%

Japan predicts exceedance by 34%, Canada by Japan predicts exceedance by 34%, Canada by 20% 20%

   ““Q: Q: So the EU is not a champion either So the EU is not a champion either in reducing emissions, is this what in reducing emissions, is this what you are saying?you are saying?

AA: : They are actually bringing emissions They are actually bringing emissions down but their targets were the down but their targets were the easiest...You could say that the US did a easiest...You could say that the US did a very bad job at negotiating [in Kyoto] while very bad job at negotiating [in Kyoto] while the EU did a good job.the EU did a good job.

...On the other hand, the EU, despite the ...On the other hand, the EU, despite the targets they have set, is not getting there targets they have set, is not getting there either.”either.”

http://http://www.euractiv.com/Article?tcmuriwww.euractiv.com/Article?tcmuri=tcm:29-140339-16&type=Interview=tcm:29-140339-16&type=Interview Egenhofer Euractive Interview 2 June 2005Egenhofer Euractive Interview 2 June 2005

Per EEA, the EU “Dirty Dozen” emission projections respectively expressed in relation to their 1990 baseline, the 8% < 1990 to which they are collectively (and,

in Kyoto, individually) committed, and the Burden Sharing Agreement (BSA).

Portugal over 1990 by 53%, 66% over “Kyoto” (.92 of 1990), 21% over BSA

Spain over 1990 by 48%, 61% over Kyoto, 29% over BSA

Greece over 1990 by 38%, 51% over Kyoto, 11% over BSA

Ireland over 1990 by 29%, 41% over Kyoto, 15% over BSA

Luxembourg over 1990 by 20%, 31% over Kyoto, 67% over BSA

Finland over 1990 by 17%, 27% over Kyoto, 17% over BSA

Denmark over 1990 by 16%, 26% over Kyoto, 47% over BSA

Italy: over 1990 by 4-13%, 13-26% over Kyoto, 11-25% over BSA

France over 1990 by 9%, 19% over Kyoto, 9% over BSA

Austria over 1990 by 8.8%, 18% over Kyoto, 25% over BSA

Belgium over 1990 by 7%, 16% over Kyoto, 15% over BSA

Netherlands over 1990 by 3.3%, 12% over Kyoto, 10% over BSA

AU BE DK ES FN FR GR IT IT IR LU NE PT

25%

15%

47%

29%

17%

9%11%

25%

11%15%

67%

10%

21%18%

16%

26%

61%

27%

19%

51%

26%

13%

41%

31%

12%

66%

9% 7%

16%

48%

17%

9%

38%

13%

4%

29%

20%

3.30%

53%

0%

10%

20%

30%

40%

50%

60%

70%

% Violation over Promise

Country

Projected EU 2010 Kyoto Violations

Cf. 1990

Cf. Kyoto

Cf. BSA

Projected 2010 EU Kyoto Violations

0%

10%

20%

30%

40%

50%

60%

70%

80%

AU BE DK ES FN FR GR IT IT IR LU NE PT

Country

% V

iola

tion

over

Pro

mis

e

Cf. 1990

Cf. Kyoto

Cf. BSA

““Your credit is no good”Your credit is no good”

►““Have Nots” will need over 4,450 Million tons Have Nots” will need over 4,450 Million tons (Mmt)(Mmt) of GHG of GHG creditscredits over Kyoto’s 5-yearsover Kyoto’s 5-years

►The “Haves” might possess about 3,900 The “Haves” might possess about 3,900 MmtMmt

►This leaves them short about 500,000,000 This leaves them short about 500,000,000

►CDM and JI have proven largely dry holes, CDM and JI have proven largely dry holes, and can’t be viewed as major considerations and can’t be viewed as major considerations (even if they are proposed and approved (rare), projects yield 500k-1Mmt each)(even if they are proposed and approved (rare), projects yield 500k-1Mmt each)

If neither reductions nor credits, If neither reductions nor credits, how will the EU claim how will the EU claim

“compliance!”…?“compliance!”…?►The EU can either try negotiating The EU can either try negotiating

forgiveness in Montrealforgiveness in Montreal (COP-11, if over (COP-11, if over the likely objections of ve$ted intere$t$ Russia, the likely objections of ve$ted intere$t$ Russia, LDCs, and green NGOs);LDCs, and green NGOs);

►Accept a new approach, which need Accept a new approach, which need not be (but clearly is) seen mostly not be (but clearly is) seen mostly through a political lens, and as a loss; through a political lens, and as a loss; oror

►They might play games…They might play games…

What sort of games?What sort of games?

►For example, play with the baselines:For example, play with the baselines: For some reason, EU emissions data from For some reason, EU emissions data from

15 years ago keep changing15 years ago keep changing The EU has published 4 different sets of The EU has published 4 different sets of

numbers since 2001numbers since 2001 These include individual member state These include individual member state

variations ranging from 0.8% (ironically, variations ranging from 0.8% (ironically, Denmark) to 12.4% (Portugal)Denmark) to 12.4% (Portugal)

If allowed to cherry-pick, the EU can claim If allowed to cherry-pick, the EU can claim it is nearly halfway (3.5%) to its 8% Kyoto it is nearly halfway (3.5%) to its 8% Kyoto promise even without one ton actually promise even without one ton actually being reducedbeing reduced

Speaking of forgiveness…Speaking of forgiveness…

► Given EEA’s reports, one might be forgiven for Given EEA’s reports, one might be forgiven for thinking that the EU might claim compliance thinking that the EU might claim compliance that ultimately proves less than true – too late that ultimately proves less than true – too late for the designed “second round” penaltiesfor the designed “second round” penalties

► After all, it does already crow about merely After all, it does already crow about merely possiblepossible reductions, and even compliance, reductions, and even compliance, based upon a speculation based upon a speculation (“with additional (“with additional measures”) measures”) built on an unlikely hypothesis built on an unlikely hypothesis (“over-(“over-compliance”)compliance”)

► Once violation looms near, the major financial Once violation looms near, the major financial costs and loss of the claim of political face costs and loss of the claim of political face (“world climate leader”) are not insignificant (“world climate leader”) are not insignificant motivatorsmotivators

For some reason, EU never For some reason, EU never mentions the 2001 Marrakech mentions the 2001 Marrakech

Accord…Accord…►Ensures that each violating country Ensures that each violating country

bears a bears a 130% penalty130% penalty for each ton by for each ton by which it exceeds “8%-below-1990”which it exceeds “8%-below-1990”

►As such, each EU-15 country will receive As such, each EU-15 country will receive not only a) a lower allowance post-2012 not only a) a lower allowance post-2012 than it presently has than it presently has ((e.ge.g., “15-30% cut”),., “15-30% cut”), but but b) that allowance will be reduced by each b) that allowance will be reduced by each ton by which the country exceeds its first ton by which the country exceeds its first commitment, commitment, plusplus c) a 30% penalty. c) a 30% penalty.

So, even with no new So, even with no new promises:promises:

►At present, Denmark projects being At present, Denmark projects being overover its 1990 emissions by 16% its 1990 emissions by 16% (vs. Kyoto promise of 8% (vs. Kyoto promise of 8% belowbelow))

►However, due to a wild “Burden Sharing” However, due to a wild “Burden Sharing” promise, this places Denmark over its 1st promise, this places Denmark over its 1st compliance period allowance by 47% compliance period allowance by 47% (> (> U.S.!)U.S.!)

►Then, with its Marrakech penalties, Then, with its Marrakech penalties, Denmark’s Denmark’s effectiveeffective “round one” projected “round one” projected Kyoto violation becomes a staggering 61%Kyoto violation becomes a staggering 61%

What about the “centerpiece” What about the “centerpiece” ETS?ETS?

►Upon Upon EUEU insistence: insistence: ““Legal entities Legal entities may not transfer and/or may not transfer and/or

acquireacquire under Article 17 under Article 17 [NB: emissions trading][NB: emissions trading] during any period of time in which the during any period of time in which the authorizing Party does not meet the authorizing Party does not meet the eligibility requirements”eligibility requirements” (Marrakech, 2001; Annex: (Marrakech, 2001; Annex:

Modalities, rules and guidelines for emissions trading, Para. 5)Modalities, rules and guidelines for emissions trading, Para. 5)

►That is, under Marrakech the ETS will not That is, under Marrakech the ETS will not be be expandedexpanded, as the EU promises, but , as the EU promises, but disalloweddisallowed for any Kyoto purposes post- for any Kyoto purposes post-20122012

Now, back to those games…Now, back to those games…“Rules a problem? Erase “Rules a problem? Erase

them!”them!”►The ban on violators buying credits post-The ban on violators buying credits post-

2012 is inarguably ruinous to Kyoto2012 is inarguably ruinous to Kyoto►As such, As such, violaviola!, according to the UNFCCC !, according to the UNFCCC

“acquire and/or transfer” helpfully -- if “acquire and/or transfer” helpfully -- if inexplicably -- means only “transfer”:inexplicably -- means only “transfer”: ““If, at the end of this [2008-2012] period, a If, at the end of this [2008-2012] period, a

Party’s emissions are still greater than its Party’s emissions are still greater than its assigned amount, it must make up the assigned amount, it must make up the difference in the second commitment period, difference in the second commitment period, plus a penalty of 30%. It will also be barred plus a penalty of 30%. It will also be barred from from sellingselling under emissions trading…” under emissions trading…” [[HUHHUH?]?]

Something’s gotta giveSomething’s gotta give

► Now obvious that aNow obvious that actualctual EU emission reductions EU emission reductions and purchases will not yield compliance with Kyoto and purchases will not yield compliance with Kyoto

► The US (and China, India…indeed those producing The US (and China, India…indeed those producing the majority of anthropogenic emissions) could not the majority of anthropogenic emissions) could not be more clear in rejecting Kyoto’s scheme of caps be more clear in rejecting Kyoto’s scheme of caps

► The EU insists that the US is indispensable to any The EU insists that the US is indispensable to any “second round” of Kyoto, and others must join“second round” of Kyoto, and others must join

► So the EU proposes...So the EU proposes...a deeper “second round” of a deeper “second round” of the same failed-and-flatly-rejected capsthe same failed-and-flatly-rejected caps

► So be it, but so long as an agreement is tied to So be it, but so long as an agreement is tied to Kyoto, be it “round two” or otherwise, the EU is Kyoto, be it “round two” or otherwise, the EU is bound by its penalties for “first period” violationsbound by its penalties for “first period” violations

The Four Stages of EUThe Four Stages of EUKyoto Policy RehabilitationKyoto Policy Rehabilitation

►AngerAnger►DenialDenial

““You are here”, between Denial and You are here”, between Denial and BargainingBargaining

►BargainingBargaining►AcceptanceAcceptance

Summary – Pride and Summary – Pride and PrejudicePrejudice

►Emission reductions will not yield Kyoto Emission reductions will not yield Kyoto compliance for Japan, Canada…or EUcompliance for Japan, Canada…or EU

► Insufficient GHG credits also unavailableInsufficient GHG credits also unavailable►New pact shows Kyoto parties – even a New pact shows Kyoto parties – even a

covered party Japan – accept realitycovered party Japan – accept reality►Europe remains legally bound by Kyoto’s Europe remains legally bound by Kyoto’s

penalties until it says it no longer ispenalties until it says it no longer is►Kyoto process can die a peaceful death, or Kyoto process can die a peaceful death, or

tricks and stubbornness can drag out a tricks and stubbornness can drag out a noisy and unproductive onenoisy and unproductive one

2828thth July: 1 July: 1stst day of “Post- day of “Post-Kyoto”Kyoto”

► Either the EU joins a new course or it, not anyone Either the EU joins a new course or it, not anyone else, is responsible for no “global” agreementelse, is responsible for no “global” agreement

► Gleneagles confirmed Kyoto as yesterday’s solution Gleneagles confirmed Kyoto as yesterday’s solution to yesterday’s assessment of tomorrow’s problemto yesterday’s assessment of tomorrow’s problem

► With 27With 27thth July announcement, EU isolation is clear July announcement, EU isolation is clear (so, how badly does it want to hang on to those Kyoto penalties?)(so, how badly does it want to hang on to those Kyoto penalties?)

► 2-3 tracks of climate pact talks will proceed. Kyoto, 2-3 tracks of climate pact talks will proceed. Kyoto, once the engine and now the caboose, will be let goonce the engine and now the caboose, will be let go

Instead of games, a reality Instead of games, a reality check:check:

““I think we all have to go back I think we all have to go back to the drawing board and to the drawing board and understand better where we understand better where we want to go.”want to go.”

Christian Egenhofer, CEPS, 2d June 2005 Christian Egenhofer, CEPS, 2d June 2005 http://http://www.euractiv.com/Article?tcmuriwww.euractiv.com/Article?tcmuri=tcm:29-140339-16&type=Interview=tcm:29-140339-16&type=Interview

““Do as I say, not as I do”Do as I say, not as I do”

Europe projects it will miss its collective Kyoto Europe projects it will miss its collective Kyoto commitment of 8% below 1990 by…7.4%.commitment of 8% below 1990 by…7.4%.

That is, EU on track to reduce emissions by 0.6%.That is, EU on track to reduce emissions by 0.6%. http://reports.eea.eu.int/technical_report_2004_7/en/Analysis_of_GHG_trends_and_projectiohttp://reports.eea.eu.int/technical_report_2004_7/en/Analysis_of_GHG_trends_and_projections_in_Europe.pdfns_in_Europe.pdf

Disinterested projections are less optimistic, Disinterested projections are less optimistic, predicting overall predicting overall increaseincrease from 3-7.5%. from 3-7.5%.

Further, all of the EU-15’s reduction would come from the “one off” political decisions of two actors – the UK and Germany(the “dash to gas”, and shuttering East German production, respectively)

What’s the What’s the realreal EU projection? EU projection?Or, “I’m sure there are reductions under the sofa cushions…”Or, “I’m sure there are reductions under the sofa cushions…”

In December, after regularly projecting failure and upon Italy In December, after regularly projecting failure and upon Italy pledging “no second commitments” at COP-10, the EEA suddenly pledging “no second commitments” at COP-10, the EEA suddenly projected compliance, with a projected compliance, with a (possible)(possible) 7.7% reduction from 1990, 7.7% reduction from 1990, or even 8.8%!or even 8.8%!

FINE PRINTFINE PRINT: “However, this relies on several Member States cutting : “However, this relies on several Member States cutting emissions by more than is required to meet their national emissions by more than is required to meet their national targets, which cannot be taken for granted.” targets, which cannot be taken for granted.” Just see the UK and German Just see the UK and German legal challenges.legal challenges.

[“If no over-delivery by these Member States is included, the EU-15 will [sic] [“If no over-delivery by these Member States is included, the EU-15 will [sic] achieve a 5.4 % reduction achieve a 5.4 % reduction with additional policies and measureswith additional policies and measures.”] .”] http://reports.eea.eu.int/eea_report_2004_5/enhttp://reports.eea.eu.int/eea_report_2004_5/en

Yes, this sudden reversal is “with additional Yes, this sudden reversal is “with additional [NB: hypothetical][NB: hypothetical] measures”.measures”.

In the real world, under real policies:In the real world, under real policies: “ “If Sweden and the United Kingdom do no more than meet their If Sweden and the United Kingdom do no more than meet their

agreed targets, the EU-15 reduction will be just 0.6 %.”agreed targets, the EU-15 reduction will be just 0.6 %.” http://reports.eea.eu.int/eea_report_2004_5/enhttp://reports.eea.eu.int/eea_report_2004_5/en

In fact, scrutiny reveals no change in the projection of a 1%In fact, scrutiny reveals no change in the projection of a 1%°° reduction.reduction. There is no support for the 7-8% reductions. They There is no support for the 7-8% reductions. They are fantasized.are fantasized.

Did you know?Did you know?

While the prevailing interpretation is that While the prevailing interpretation is that Kyoto’s first commitments Kyoto’s first commitments continuecontinue in in perpetuity post-2012, the flexible perpetuity post-2012, the flexible mechanisms mechanisms expireexpire upon violation of the upon violation of the same commitment?same commitment?

(So, will the pressure groups let the EU change the rule in the middle of the (So, will the pressure groups let the EU change the rule in the middle of the game…?)game…?)

Also a result of these realities, the EU-15 is not Also a result of these realities, the EU-15 is not only on target to violate Kyoto’s “first only on target to violate Kyoto’s “first commitment period”, but also a second commitment period”, but also a second commitment period if any, each getting commitment period if any, each getting increasingly more costly yet unattainable? increasingly more costly yet unattainable?

That was then…That was then…

'‘[The day the EU submitted its ratification, '‘[The day the EU submitted its ratification, 3131stst May 2002] is a great day for climate May 2002] is a great day for climate and a great day for sustainable and a great day for sustainable development,'' said the EU's Environment development,'' said the EU's Environment Commissioner Margot Wallström.Commissioner Margot Wallström.'It allows us to maintain our credibility and 'It allows us to maintain our credibility and keep taking the lead in climate change keep taking the lead in climate change policy. Of course all countries have to act, policy. Of course all countries have to act, but we in the EU have a certain but we in the EU have a certain responsibility and have to take the lead on responsibility and have to take the lead on this.'‘this.'‘

EU: Activists Cheer Kyoto Ratification, Inter Press Service, 4EU: Activists Cheer Kyoto Ratification, Inter Press Service, 4 thth March March 20022002 http://www.corpwatch.org/article.php?id=1954http://www.corpwatch.org/article.php?id=1954

This is now…This is now…

"I understand, another key sticking point on "I understand, another key sticking point on that wish-list from Britain for the G8 was that wish-list from Britain for the G8 was that there would be some kind of process that there would be some kind of process agreed to whereby any action in the process agreed to whereby any action in the process would be followed-up. We [would] see would be followed-up. We [would] see whether countries were doing what they whether countries were doing what they said they would do. It now seems even said they would do. It now seems even some European countries are finding it hard some European countries are finding it hard to agree to that." to agree to that."

BBC Science Editor Susan Watts, Newsnight, Transcript of 8th BBC Science Editor Susan Watts, Newsnight, Transcript of 8th June 2005 broadcast June 2005 broadcast http://news.bbc.co.uk/1/hi/programmes/newsnight/4074654.stmhttp://news.bbc.co.uk/1/hi/programmes/newsnight/4074654.stm

Did you know?Did you know?

► Even were the EU to try and buy its way out of Even were the EU to try and buy its way out of noncompliance:noncompliance: The wealth transfer to the EU-10 and Russia, at €20 The wealth transfer to the EU-10 and Russia, at €20

per ton – assuming no cost increase as the deadline per ton – assuming no cost increase as the deadline looms — would be nearly looms — would be nearly €6,000,000,000€6,000,000,000 …per year? …per year?

With many or most tons likely closer to the With many or most tons likely closer to the €€ 40 40 penalty price, yearly “trading” should cost nearly penalty price, yearly “trading” should cost nearly € € 11 billion11 billion

Regardless, under no projection will the tons exist for Regardless, under no projection will the tons exist for such a purchase such a purchase (Japan, Canada and the EU project requiring (Japan, Canada and the EU project requiring approximately 850 Mmt; Russia projects it will have 500-600 Mmt, approximately 850 Mmt; Russia projects it will have 500-600 Mmt, and Eastern Europe offers no hope of making up the difference)and Eastern Europe offers no hope of making up the difference)

If the US ratified as the EU insists – which it will not – If the US ratified as the EU insists – which it will not – this scenario becomes even more far-fetched.this scenario becomes even more far-fetched.

BrusselsBrussels Knows, But… Knows, But…

► Despite all of this, Brussels refuses to address these realities of Despite all of this, Brussels refuses to address these realities of penalties, individual burdens, and disallowance of the ETS.penalties, individual burdens, and disallowance of the ETS.

► Brussels will only use sectoral econometric models, ignoring Brussels will only use sectoral econometric models, ignoring the true economic impact, the true economic impact, whateverwhatever baseline they use baseline they use

► Brussels insists on modeling only the irrelevant Burden Sharing Brussels insists on modeling only the irrelevant Burden Sharing baseline.baseline.

► The EU-CEPS “Task Force” paper only vaguely references The EU-CEPS “Task Force” paper only vaguely references “difficulties”, premising its entire discussion on expanding ETS “difficulties”, premising its entire discussion on expanding ETS post-2012 as the “critical… centrepiece” of EU climate policy…post-2012 as the “critical… centrepiece” of EU climate policy…which in Marrakech the EU ensured will be disallowed.which in Marrakech the EU ensured will be disallowed.

► In talks, the EU now pretends all is well and seeks to simply In talks, the EU now pretends all is well and seeks to simply compound a failed regime, adding more fantastic promises.compound a failed regime, adding more fantastic promises.

““As the world leader As the world leader [sic][sic] in climate, Europe can change the rules” in the in climate, Europe can change the rules” in the middle of the game: Typical Brussels response when pressed.middle of the game: Typical Brussels response when pressed.

The Russians, EU-10, LDCs, and green pressure groups have The Russians, EU-10, LDCs, and green pressure groups have enormous financial incentives to not let that trick slide.enormous financial incentives to not let that trick slide.

Given the players, “face”, and money at stake, however, such a ploy is Given the players, “face”, and money at stake, however, such a ploy is not out of the question.not out of the question.

With one principal impediment:With one principal impediment:

The US is “indispensable” to any “post-2012” agreement.The US is “indispensable” to any “post-2012” agreement.

No US President would join up should the EU and/or IPCC attempt that No US President would join up should the EU and/or IPCC attempt that kind of stunt, in Montreal or thereafter. kind of stunt, in Montreal or thereafter.

Even Clinton-Gore walked the last time Europe tried this, at COP-6 in Even Clinton-Gore walked the last time Europe tried this, at COP-6 in The Hague in November 2000.The Hague in November 2000.

Time to Get RealTime to Get Real

► Instead of pretending these realities do Instead of pretending these realities do not exist, Brussels must openly not exist, Brussels must openly acknowledge and address them, acknowledge and address them, willingly or through 3d party pressures.willingly or through 3d party pressures.

►Kyoto must be rethought, not Kyoto must be rethought, not compounded.compounded.

How to Get RealHow to Get Real

► The EU business community must rethink its method of The EU business community must rethink its method of approaching – rather, ignoring – the painful issues.approaching – rather, ignoring – the painful issues.

► The US is not coming to the Eurocracy’s rescue. Period.The US is not coming to the Eurocracy’s rescue. Period.

► The politicians face strong pressures only to compound The politicians face strong pressures only to compound the situation. The trade groups continue to value “a the situation. The trade groups continue to value “a seat at the table” (seat at the table” (i.ei.e., comity), over realistic member ., comity), over realistic member protection.protection.

► Individual companies must step forward, however Individual companies must step forward, however publicly they choose, to discuss the naked climate publicly they choose, to discuss the naked climate Emperor and demand sanity and realism in this debate. Emperor and demand sanity and realism in this debate.

Progress…and in the Right Progress…and in the Right DirectionDirection

““I think we all have to go back to the drawing I think we all have to go back to the drawing board and understand better where we want to board and understand better where we want to go.”go.”

Christian Egenhofer, CEPS, 2d June 2005Christian Egenhofer, CEPS, 2d June 2005 http://www.euractiv.com/Article?tcmuri=tcm:29-140339-16&type=Interviewhttp://www.euractiv.com/Article?tcmuri=tcm:29-140339-16&type=Interview

Think tanks, membership organizations Think tanks, membership organizations ((e.ge.g., taxpayer ., taxpayer

groups)groups) and the like with platforms in Brussels and the like with platforms in Brussels andand key Member States must be engaged and key Member States must be engaged and supported to continue their progress in building supported to continue their progress in building on such admissions and exposing and educating on such admissions and exposing and educating on Kyoto’s problems and the EU’s realities.on Kyoto’s problems and the EU’s realities.

No More Navel GazingNo More Navel Gazing

► Given these realities that the political and Given these realities that the political and climate establishments seem unwilling or climate establishments seem unwilling or unable to openly acknowledge, the regulated unable to openly acknowledge, the regulated community must consider:community must consider: What is the cost to your shareholders of the first What is the cost to your shareholders of the first

commitment period, and the discussed second commitment period, and the discussed second commitment period (15-30% below 1990, with commitment period (15-30% below 1990, with 130% penalty and without JI or ETS)?130% penalty and without JI or ETS)?

What are the increased costs to consumers?What are the increased costs to consumers? What are you willing to do to ensure that the What are you willing to do to ensure that the

Member States and Brussels openly acknowledge Member States and Brussels openly acknowledge this, and cease the navel gazing papers and talks?this, and cease the navel gazing papers and talks?

What can you and Third Party experts do to help?What can you and Third Party experts do to help?