EU leadership in climate change policy ?

EU leadership in climate EU leadership in climate change policychange policy ? ?

Rob Bradley, Rob Bradley, Climate Action Network EuropeClimate Action Network Europe

Rob Bradley, Climate Action Network Europe

Who is Climate Action Network Europe?

• We focus on climate change• 85 European member organisations• More than 300 members of the Climate

Action Network (CAN)• Global perspective• CAN a major player in the Kyoto

process


What is climate leadership?

• International dimension – ratification, coalition building, engagement with developing countries

• Meet own target with strong and credible policies and measures

• Show that technology forcing and creative PAMs achieve real emission cuts without economic disaster


Climate policy in the EU

Perverse subsidies

Liberalisation increases energy demand

Security of supply => more coal

Export and trade policies

Climate Policy


Competitiveness worries

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EU Japan UnitedStates

UNFCC targetKyoto targetCurrent target


Energy market liberalisation

• Slow and halting progress towards total market opening

• Market still badly distorted by subsidies and strong incumbents

• Lower prices and supply-focused reform make demand management very difficult


Security of supply

• Issue raised to provide cover for coal and nuclear subsidies

• Main threat in oil, but most action proposed in electricity

• 15% rule explicitly allows market protection for favoured technologies


Domestic politics

• Coal industry restructuring

• Lobbying weight of the energy sector

• Concerns over fuel poverty

• Reluctance to tackle transport


So how are we doing?

• Nice coherent package on paper

• ECCP, ET, Kyoto mechanisms, member state actions balanced

EU world champion at saying the right thing!


Emission trading: the proposal

• Absolute cap to cover large point emitters

• Target setting and allocation to be done by member states

• Unrestricted trading within this cap

• Compliance penalty €100/tonne (or 2x permit price) plus restitution


Emission trading: the debate

• How does this sit with pre-existing climate policies?

• Mandatory or voluntary?

• Links with other mechanisms

• Sector and gas coverage


Emission trading: the prospects

• Germany opposed, UK going solo, many uninterested

• Majority voting makes blocking hard

• Growing enthusiasm among (non-German) industry

• NGOs gradually warming to the idea


ECCP initiatives

• Energy efficiency in buildings

• Energy services/ DSM

• Biofuels

• Fluorinated gases

• Cogeneration


Energy efficiency in buildings

• Non-prescriptive approach – based on auditing requirements and some reporting

• Was supposed to save 45 million tonnes CO2

• Timelines postponed too late to help with Kyoto


Energy services/ DSM

• Energy services are the “magic bullet” of climate and liberalisation

• DSM aspects of liberalisation legislation mostly rejected

• Everyone seems unsure what this directive should even contain


Biofuels

• Proposed Directive makes no attempt to ensure environmental advantages from biofuels

• Commission estimates 100-150 Euro per tonne CO2 abatement cost

• “Environmental” measure has become another agribusiness subsidy plan


Fluorinated gases

• Commission proposing to amend reg. 20/37 on O3 depleting substances

• Risks concentrating on containment (the “consensus”)

• Needs to move much further in encouraging adoption of alternatives


Cogeneration Directive

• Need for Directive as CHP often treated poorly in market liberalisation

• Targets abandoned

• Talk bogged down on definitions

• Commission went slowly, now with Parliament


Fiscal measures

• Many countries have electricity and/or carbon taxes

• Proposal for harmonisation since 1992 – going nowhere slowly

• Concerns include fuel poverty (UK), inflation (Spain) and competitiveness (everybody)

• Tackling subsidies is even harder, but possibly more important


And against that…

• Continuing subsidies to coal, nuclear and even to natural gas

• Structural funds skewed in favour of road transport

• Export credits, IFIs, bilateral aid…


The need for coherence

• ECCP was a package for a reason

• Perverse effects from unbalanced policy implementation – e.g. emission trading and trains

• Many parts of government still have to realise that climate policy exists

• EU policy famously multidirectional – this will not be temporary! (fishing, tobacco)

EU leadership in climate change policy ?

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