Europe’s leading role in combating climate change Jos Delbeke Director, Climate Change & Air Environment Directorate General European Commission, Brussels

European Commission - Directorate General Environment – Climate change & air Directorate Outline 1.Leadership through credible action: achieving the EU’s Kyoto target in Leadership through thinking beyond 2012: The EU climate change policy proposal of 10 January Leadership through driving innovation towards a low GHG emission economy: the EU’s new industrial policy until 2020

Leadership through credible action: achieving the EU’s Kyoto target in

European Commission - Directorate General Environment – Climate change & air Directorate EU progress towards implementing Kyoto 2004: EU-15: -0.9% EU-25: -7.3%

European Commission - Directorate General Environment – Climate change & air Directorate ECCP I: progress so far (2001 European Climate Change Programme) Key ECCP measures Reduction potential (Mt CO2-eq. p.a.) EU-15, 2010 Entry into force Starting to deliver EU emission trading scheme ~ NAP Link JI/CDM to emission trading ~ NAP /2008 F-Gases Regulation and Directive on Mobile Air Conditioning Directive on the promotion of electricity from renewable energy sources Directive on the promotion of CHP Directive on energy performance of buildings Directive on the promotion of transport bio-fuels Directive on the promotion of energy efficiency and energy services ACEA voluntary agreement Energy labeling directives

European Commission - Directorate General Environment – Climate change & air Directorate The EU’s flagship – its Emissions Trading Scheme Worldwide largest emissions trading scheme started on 1 January 2005 with a learning phase from 2005 – 2007 in all 27 Member States Covers 40 – 50 % of EU CO 2 emissions > 10,500 installations covering CO 2 emissions from electricity generators, heat & steam production, mineral oil refineries, ferrous metals production & processing, cement, lime glass, bricks and ceramics, pulp & paper sector Annual monitoring, reporting & verification (15 May) Open scheme: links with emission reduction projects abroad (Clean Development Mechanism & Joint Implementation) Least cost solution - promoting energy efficiency, operational changes, take-up and improvement of clean technologies Currently: Assessment of National Allocation Plans for the Kyoto period (2008 – 2012)

European Commission - Directorate General Environment – Climate change & air Directorate Development of EU ETS allowance trading in Allowances prices for Phase I (blue line) and Phase II (red line) Volumes of allowances traded (in millions) Source: Point Carbon

European Commission - Directorate General Environment – Climate change & air Directorate > 540 Million tonnes of CO 2 eq ( ) ~ €2.7 billion excluding demand from companies in the EU-ETS Million tonnes of CO 2 eq. Austria45.00 Belgium37.70 Denmark21.00 Finland12.00 Ireland18.03 Italy95.00 Luxembourg23.65 Netherlands Portugal29.80 Spain Sweden1.10 Member States invest in emission reduction projects abroad, (in red: NAP2 decisions up to 31 January 2007)

European Commission - Directorate General Environment – Climate change & air Directorate Additional measures under ECCP II ECCP I review: integration of results in 10 January 2007 Communication “Limiting Global Climate Change to 2°C: The way ahead for 2020 and beyond” Aviation: Legislative proposal integrating aviation into EU ETS (December 2006) Fuel quality directive: Legislative proposal (January 2007) CO 2 and Cars: Communication (February 2007) and legislative proposal (end 2007) Impacts and Adaptation: Green Paper on Adaptation (May/June 2007) Carbon Capture and Geological Storage: Communication on carbon capture and geological sequestration (2 nd half 2007) EU ETS review: Legislative proposal (end 2007) if adopted timely, these proposals will deliver for reaching the EU’s Kyoto target Post 2012

European Commission - Directorate General Environment – Climate change & air Directorate Aviation & the EU emissions trading scheme Key elements of Dec 2006 legislative proposal: –2011: flights within the EU –2012: all arriving & departing flights –Aircraft operators responsible –Each operator administered by one Member State –Allocations mainly for free, benchmark –Some auctioning –Access to JI/CDM credits –Comparable treatment to other ETS sectors Next steps: –Adoption by Council and the European Parliament (1-3 years) –Pursue parallel action within ICAO

European Commission - Directorate General Environment – Climate change & air Directorate EU Energy Efficiency Action Plan (October 2006) Overall objective: Saving 20% energy by 2020, energy consumption reduced by more than €100 billion annually by 2020; around 780 millions tonnes of CO 2 avoided yearly Action Plan proposes numerous measures to make energy appliances, buildings, transport and energy generation more efficient Implementation in the next 6 years

Leadership through thinking beyond 2012: The EU climate change policy proposal of 10 January 2007

European Commission - Directorate General Environment – Climate change & air Directorate The EU’s 2 degrees Celsius objective 2°C Source: IPCC 2007

European Commission - Directorate General Environment – Climate change & air Directorate Global emissions until 2060 to remain within 2 °Celsius Source: Malte Meinshausen 2006

European Commission - Directorate General Environment – Climate change & air Directorate EU alone cannot solve the climate change problem... If Annex I alone reduces emissions to zero... Global emission path compatible with 2°C

European Commission - Directorate General Environment – Climate change & air Directorate Action by developed countries Common but differentiated responsibility: developed countries to make most of the effort Reduction efforts: –30% by 2020 –60-80% by 2050 Emissions trading, linking domestic schemes and global carbon market Binding and effective rules for monitoring and enforcing commitments

European Commission - Directorate General Environment – Climate change & air Directorate Action in developing countries Reduce emissions growth Absolute reductions after 2020 Toolbox: –Sustainable development policies –New approach to CDM –Improved access to finance –Sectoral approaches –Quantified emission limits –No commitments for least developed countries

European Commission - Directorate General Environment – Climate change & air Directorate Further elements International research and technology cooperation –Large-scale technology demonstration –Quantification of regional and local impacts and adaptation and mitigation strategies Action to halt deforestation within two decades and reverse afterwards –Large-scale pilot schemes Adaptation measures –Integrate in public and private investment decisions –Enhanced alliance building with developing countries building on EU action plan on climate change and development International agreement on energy efficiency standards

European Commission - Directorate General Environment – Climate change & air Directorate It is technically feasible: e.g. the energy sector

European Commission - Directorate General Environment – Climate change & air Directorate It is economically affordable

European Commission - Directorate General Environment – Climate change & air Directorate Benefits and Costs “Winning the Battle” & Stern Review: benefits of limiting Climate Change outweigh costs of action Costs of inaction: 5-20% of global GDP (Stern Review) Costs of global action (2030): –Investment costs: 0.5% of global GDP / year –Reduce global GDP growth by 0.19% / year (Expected global GDP growth of 2.8% / year) Co-benefits: –Increased energy security –Improved competitiveness through innovation –Health benefits from reduced air pollution

European Commission - Directorate General Environment – Climate change & air Directorate EU leadership –Current international negotiations are stuck: “US pointing to China, China pointing to the US” –Therefore, firm independent EU commitment to achieve at least 20% GHG emission reductions by 2020, compared to 1990 levels –Cost of unilateral action: up to 0.09 % of annual GDP w/o calculating co-benefits → New industrial policy

Leadership through driving innovation towards a low GHG emission economy: the EU’s new industrial policy until 2020

European Commission - Directorate General Environment – Climate change & air Directorate Making the EU economy most energy efficient & clean “An Energy Policy for Europe” Internal Energy Market Solidarity between Member States securing the supply for oil, gas and electricity Energy efficiency (20% by 2020) Renewable energy (20% by 2020) Biofuels (10% by 2020) Low CO 2 fossil fuels –12 demonstration plants by 2015 –CCS obligatory for coal fired power from 2020? European Strategic Energy Technology Plan External energy policy Nuclear

European Commission - Directorate General Environment – Climate change & air Directorate Making the EU the most innovative economy 7 th Framework Programme for Research and Technology Development (2007 – 2013): –Total FP-7 budget: €32.37 billion –Energy: €2.30 billion –Environment (incl. climate change): €1.90 billion –Transport: €4.18 billion EU Technology Platforms European Institute of Technology Third country participation encouraged

European Commission - Directorate General Environment – Climate change & air Directorate EU Technology Platform on Zero Emission Fossil Fuel Power Plants (ZEP) “To enable European fossil fuel power plants to have zero emission of CO 2 by 2020” 25 Members, balance between regional and sectoral origins (Utilities, Energy Companies, Equipment Suppliers, Researchers, Authorities, ENGOs) 5 working groups (Capture, Storage, Infrastructure, Market & Regulation, Communication & Public Acceptance) Producing Strategic Research Agenda and Deployment Document (adoption mid-2006) 1 st Call for Proposals under 7 th Framework Programme (beginning 2007) Penetration of ZEP in the energy sector,

European Commission - Directorate General Environment – Climate change & air Directorate Creating a global carbon market: EU ETS Review Improve EU ETS using implementation experience Streamline current design: –More harmonised approach to cap-setting and allocation –More predictability and certainty –More harmonised approach to new entrants and closures –Harmonisation of accreditation and verification Expand coverage: –further sectors & gases Link with other emissions trading schemes

European Commission - Directorate General Environment – Climate change & air Directorate Co-operating with 3 rd countries e.g. EU-India Initiative on Clean Development and Climate Change (Sept 2005) EU-China Partnership on Climate Change (Sept 2005) EU-US High level dialogue EU-Russia Partnership in the field of energy and Kyoto implementation Global Energy Efficiency and Renewable Energy Fund Carbon Sequestration Leadership Forum (CSLF) and International Partnership for a Hydrogen Economy (IPHE)

European Commission - Directorate General Environment – Climate change & air Directorate Three essential elements of EU leadership Leadership starts at home. EU is determined to reach its Kyoto target demonstrating to the rest of the world that an economy of more than 490 million citizens can flourish while, at the same time, reduce its greenhouse gas emissions. Kyoto is only a first insufficient step. Further global action needs to be taken urgently. EU Heads of State have made a feasible proposal. EU is ready to negotiate and to take on new commitments for deep long-term emission cuts. EU is determined turn the climate change challenge into an opportunity for EU energy security, innovation, its international competitiveness and the renaissance of its industry and economy.

European Commission - Directorate General Environment – Climate change & air Directorate All documents in the climate and energy package: