20/04/2018 DIENST KLIMAATVERANDERING FEDERALE OVERHEIDSDIENST VOLKSGEZONDHEID, VEILIGHEID VAN DE VOEDSELKETEN EN LEEFMILIEU TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES SUSPENS FINAL CONFERENCE • BRUSSELS 6/03/2020
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)
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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:
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
CLEAN PLANET FOR ALL 5
-94 % (~1990)
1,5 °C
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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.
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
BELGIAN LONG-TERM STRATEGY 9
Summarized in umbrella text and reproduced in Annex
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
For each GHG emitting sector:
• State of play• Levers• Vision• Strategic workstreams
11FEDERAL INPUT
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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)
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
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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
14STRATEGIC WORK STREAMS
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
15STRATEGIC WORK STREAMS
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
16STRATEGIC WORK STREAMS
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
JOB CREATION 18
Source: Eurofound, 2019
Impact of the low carbon transition on employment by country in 2030 (percentage difference from baseline)
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
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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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
ENERGY POVERTY 21
… but it represents a larger share of their income Average total annual energy bill (in %/income) per income decile in 2016
Source: HBS 2016 – Thesis ‘Decarbonization of the Belgian residential buildings sector: how to deal with energy poverty?’, Louise Aeby
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
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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
Source: HBS 2016 – Thesis ‘Decarbonization of the Belgian residential buildings sector: how to deal with energy poverty?’, Louise Aeby
Before 1980
After 1980
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
Source: HBS 2016 – Thesis ‘Decarbonization of the Belgian residential buildings sector: how to deal with energy poverty?’, Louise Aeby
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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.»
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
CARBON PRICING 27
Carbon pricing is developing worldwide
Source: I4CE, 2019
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
CARBON PRICING 28
Carbon pricing in Belgium
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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)
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
CARBON PRICING REVENUE FOR TACKLING ENERGY POVERTY
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
CARBON PRICING REVENUE FOR TACKLING ENERGY POVERTY
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
TRANSITION TOWARDS CLIMATE NEUTRALITY – POLICY PERSPECTIVES • 06/03/2020
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