25 March, 2008
The following article is a long guest post by Eberhard Rhein, Senior Analyst at the European Policy Centre. Eberhard looks at the challenges for the EU in the area of international cooperation on climate change. I will publish my own reaction to Eberhard’s interesting contribution tomorrow.
1. By 2020 the EU will account for only 10 percent of global greenhouse emissions. Whatever efforts it may undertake internally to reduce emissions, their impact on the global climate will be next to negligible.
2. It is naïve to believe that the EU may have an exemplary function for the rest of the world when it comes to concrete policy actions. The EU approach is too complex for the vast majority of countries, few of which have the political, legal and above all administrative means to adopt the EU toolbox.
3. Of course, it is politically essential for the EU to play a leading role in international climate policy. Without its drive the Kyoto Protocol would never have seen the day. But the Kyoto Protocol also shows the limits of EU action: its reductions of C02 emissions have been more than compensated by the ultra-rapid rise of emissions from emerging countries, in particular China, which did not have to take any commitments under Kyoto.
4. It is therefore vital for the EU to pursue a dual-track strategy:
· Approve its domestic framework for climate action, for which the corner stones have been laid out in March 2007 and January 2008.
· Prepare the outline of an effective global climate strategy.
The Commission should urgently form a task force for the second mission. It is strategically by far the more important one, on which the EU clearly needs much further thought. Of course, it is not up to the EU to play the saviour of humanity, but without a crystal-clear concept of where humanity should go in the coming 10-20 years, the EU runs the risk of ending in the maelstrom of UN bureaucracy and powerful forces trying to thwart necessary global action.
It is with a strategic global concept in mind that the EU should intensify its consultations with the major players during 2008 and 2009, even before the details of its own policy will be formally agreed in early 2009.
5. Time is terribly short for concluding the Bali talks. We are only 19 months away from early December 2009, when the international community is supposed to approve the main elements of the global climate policy for 2013-2020 and beyond.
Past experience in the EU and UN underscores the extreme difficulty of arriving at effective solutions without careful preparation among the main players. There is no hope for an effective outcome on global policy without the EU, US, China, Russia and Japan having reached a prior consensus on the main elements of a comprehensive solution.
6. So far, the substantive issues of the future global climate deal have hardly been discussed. The Bali Road map and action plan are nothing but a procedural note, in typical UN style.
There is no serious comprehensive issue paper on the table; everybody seems afraid of openly addressing the issues and their optimal solutions. The world can hardly wait until a few weeks before Copenhagen to address them.
7. The annex (hereunder) sets out a few unconventional ideas of how to arrive at a successful conclusion in Copenhagen. They have no other purpose but to stimulate thinking on alternative paths.
A five –point global climate strategy 2013-30
It will be next to impossible to agree on binding C02 emissions targets for the major emitter countries.
There is no point either losing much time on global climate targets for 2050, however useful they may be as political objectives.
In order to make practical advances the international community has to focus on concrete measures that can produce rapid and verifiable results.
To that end the international community should concentrate its efforts on the main sources of emissions and agree on five-point programme concerning:
- Power generation
- Automobile transport
- Fossil subsidies
- Gasoline/fuel taxes
1. Phase out C02 emissions from electricity generation by 2030
The main emitter countries should commit themselves to phasing out C02 emissions from power generation by 2030.
They should negotiate an appropriate protocol, which would become an integral part of the Legal Acts of the Copenhagen Climate Conference.
Participating countries would have to require new power plants to respect zero C02 emissions, say as of 2012, and set deadlines for retrofitting existing ones, latest by 2030.
It is possible to achieve C02-emission free power generation with presently available technologies, though at higher electricity rates than a present. Assuming electricity rates to rise by another 100 percent during the next 20 years, because of rising oil, gas and coal prices, the investments should still pay off.
Participants should be free to choose the most appropriate technologies and policy tools for phasing out their C02 emissions: hydro, geothermal, wind, solar, nuclear, carbon sequestration, waves or tides.
Emerging countries like China and India with huge capacities of coal-fired power plants might obtain an extension until 2035 for phasing out.
The impact of such a deal would be huge, essentially through anticipation.
- Power producers will have to revise their long-term planning;
- Research activity will get a big boost, everybody groping for the most efficient ways to generate C02-free power;
- Rising power prices will induce an investment wave into more energy-efficient appliances, machinery, cooling and heating equipment;
- The automobile industry will accelerate the development of electric engines that are bound to replace the combustion engine. This will pave the way to a “green” global automobile park.
Compliance will be easy to monitor.
Financing should not be a problem. There is plenty of international capital around to invest in cross-border power ventures.
The approach does not raise the issue of international competitiveness.
Electricity is not traded internationally, and all major power companies, being subject to identical constraints, will easily be able to pass their rising power costs on to manufacturing industries, services and households.
Higher power prices are not an argument for emerging countries to refuse participation in such an agreement. Power accounts only for a small percentage of manufacturing costs and everybody will gain from the higher energy- efficiency resulting from of higher power rates.
2. Set Stricter global fuel – efficiency standards for 2025
For the automobile industry a similar approach is conceivable.
The major countries with a sizeable automobile industry should undertake a concerted effort to adopt increasingly stricter C02 emission/fuel-efficiency standards.
All major producer countries are involved in such an effort. Some like the USA and China have passed appropriate legislation. What is required is to make these standards progressively more stringent. Thus the recent US legislation provides for mild standards compared to current EU proposals, and which would only be applicable as of 2018 (EU 2012).
The participating countries should negotiate a binding protocol that sets ambitious standards at the horizon of 2025, say of 80 g C02 emission/km, in view of providing the industry with energy – efficiency objective that would guide its R&D efforts.
The impact of fuel efficiency standards is bound to be slow, as it only affects new cars. It will take at least 10 years before new standards will become universally applicable.
That is why long term guidance to the industry is necessary. Companies need a long adjustment time.
Such a Protocol should also become an integral part of the Legal Acts of the Copenhagen Climate Conference.
3. Stop Deforestation by 2012
Deforestation of tropical forests accounts for about 25 percent of C02 emissions. It is therefore essential to stop deforestation at the earliest date possible.
In the past, national efforts to contain illegal logging and clearing of forest areas have failed for a series of reasons: lack of monitoring and effective policing, corruption, and criminal forest fires etc.
It is therefore essential to tackle the causes for deforestation and provide strong incentives to abstain from additional clearing of tropical forest areas.
To that end the international community should envisage the following measures, which should form part of a binding protocol to be negotiated between the interested parties:
- The main tropical forest countries – Brazil, Indonesia, Congo etc. – should commit themselves to put a ban on clearing of forest areas;
- The international community should fight illegal trade with tropical timber, as it has successfully done with ivory;
- The international community should compensate tropical forest countries for their preservation efforts. Compensation should be calculated in terms of “saved C02 emissions”. Depending on the future market prices of C02 emissions, the compensation is likely to run into several billion USD per year;
- The main importing countries – China, USA and EU – should suspend the import of all tropical timber, until the protocol will be fully effective.
This will be a hard nut to crack! The UN has tried to tackle it, but got lost in details and failed to establish the financial link with the “saved C02 emissions”.
It is essential to come up with courageous and effective measures.
4. Phase out consumer subsidies on fossil fuels by 2015
Subsidies on fossil fuels are still very common, especially in oil/gas producing countries. By keeping the domestic prices below world market prices governments encourage energy waste and boost C02 emissions. Russia, Iran, Saudi Arabia have unduly high levels of per capita emissions, due to heavy consumer subsidies.
It is therefore urgent to put an end to this practice, which might account for up to 3 percent of global C02 emissions.
To that end, the UN should undertake the following actions:
- Establish a comprehensive list of all direct and indirect consumer subsidies of fossil energy;
- Estimate their impact on global C02 emissions;
- Propose a rapid time frame for phasing them out as part of the future climate policy framework;
- Negotiate an appropriate legal instrument with the countries concerned;Establish an effective monitoring mechanism.
5. Impose minimum excise taxes on fossil fuels
Per capita C02 emissions in the EU are less than half of those in the USA, essentially because the EU imposes high taxes on fossil fuels, in particular gasoline and diesel.
Excise taxes constitute an effective tool for fighting energy waste and high green house gas emissions. They should therefore be part of the Copenhagen agenda.
All countries should tax gasoline, diesel and kerosene by at least 25-30% of retail prices. In the EU the share of taxes is around 65%!
The EU should propose an international protocol –as part of the Copenhagen package – under which governments commit themselves to introduce appropriate legislation before 2015. The UN should monitor the implementation, publish an annual survey of these taxes and convene an annual meeting of “peer review”.
The inclusion of kerosene in this package would constitute a major contribution to reduction of C02 emissions by air traffic, without requiring the negotiation of a separate international protocol.
This 5-point climate action plan offers an optimal guarantee for a substantial reduction of global C02 emissions by 2030, say 40 percent compared to 2010, through its inclusion of the main emitter countries and its focus on the main sources of global C02 emissions.
It has the advantage of being easily to monitor.
Of course, this draft action plan will have to be fine-tuned to take into account objections from different corners.Author : Willy De Backer