1. Agnieszka Janowska European Commission, DG Environment
EU Climate Policy
-latest developments
Agnieszka Janowska
European Commission, DG Environment

2. Context of EU action
Multilateral negotiations
GHG Monitoring
European Climate Change Programme
EU Emissions Trading Scheme
Long-term targets for EU climate policy
Integration in other Policy Areas, e.g.
New industrial Policy
Energy Security
Research and Innovation

3. Objectives agreed for 2020
20% GHG reduction compared to 1990
Independent commitment
30% GHG reduction compared to 1990
In context of international agreement
20% renewables share of final energy consumption
10% biofuels in transport, with
production being sustainable
second generation biofuels commercially available

4. Targets are ambitious:
Where do we stand today?
In 2005:
-6.5% GHG emissions compared to 1990
including outbound aviation
8.5% renewable energy
mainly through large scale hydro and conventional biomass
Targets are ambitious:
-14% GHG compared to 2005
+11.5% renewable energy share

5. The climate and energy package
Overall Communication
Revision of EU Emissions Trading System (the ETS)
Effort sharing in non ETS sectors
Directive on promotion of renewable energy, report on renewable energy support schemes
Directive on carbon capture and storage, and Communication on demonstration plants
Revised environmental state aid guidelines
Accompanying integrated impact assessment

6. Package introduced 23 January 2008
Ambitious timetable
Package introduced 23 January 2008
Deliberations in Council and Parliament Committees since
Votes in EP ENVI ctte:
8-10 Sept: Car emissions
25 Sept: CCS
7 Oct: Effort sharing and ETS
Council (ENV): 20 Oct
EP plenary: 1 Dec (?)
Council (ENV): 4-5 Dec
Possibly European Council: Dec

7. GHG Target: -20% compared to 1990 -14% compared to 2005 EU ETS
Non ETS sectors
-10% compared to 2005
27 Member State targets, stretching from -20% to +20%

8. Cost-effectiveness Fair distribution Solution:
Approach
Cost-effectiveness Fair distribution
Solution:
Fairness: differentiate efforts according to GDP/capita
national targets in sectors outside EU ETS
national renewables targets (partially – half)
redistribution of auctioning rights (partially – 10%)
Cost-effectiveness: introduce flexibility and use market based-instruments (EU ETS, transferability of Guarantee of Origin for renewables)

9. Objectives of EU ETS review
Cost-effective contribution to -20% GHG target for 2020, or to stricter target under international climate agreement
Improvement of the EU ETS based on experience
A clear long-term carbon price
Therefore, changes in:
Scope
Cap setting
Allocation rules

10. Non ETS targets compared to 2005
Need to take into account the wide divergence of wealth in the EU-27
GDP/capita as criterion for differentiation (ability to pay)
Limitation: between -20 and +20%
Consequences :
poorer Member States can continue to grow in sectors such as transport
overall cost increases marginally compared to cost-effectiveness
but significant equalisation of overall effort between Member States ensured

11. Renewable energy
20% mandatory renewable energy share in 2020 across EU
11,5% increase compared to 2005
Effort sharing:
Half of the increase needed (5,5%) for all MS
Rest weighted by GDP/cap
Early action after 2001 accounted for
Giving total efforts between 6,2% - 13,7% per MS
Cap on max 50% share
National action plans required, staking out indicative trajectory 2013 – 2020, sectoral targets, and measures
Provides policy stability for investments
Reduction of administrative and regulatory barriers
Flexibility through trade in “Guaranties of Origin”

12. Carbon Capture and Storage
While energy efficiency and renewable energy are shorter-term solutions, other options are needed in longer term if we are to reach 50% GHG reduction globally in 2050
CCS – to capture CO2, transport and store it in geological formations – is crucial from a global perspective given fossil fuel abundance in key countries
CCS has been demonstrated as functioning, but not yet as an integrated process or at reasonable costs
Provisions for ensuring environmental integrity through the life-cycle of the plant (site selection up to post closure)
CO2 captured and stored will be considered not emitted under the ETS:
CCS can be opted in for Phase II ( )
CCS explicitly included for Phase III ( )
Communication on promotion of demonstration plants

13. What are the benefits of the package?
The ultimate goal: avoid the cost of climate change impacts: 5-20% of global GDP (Stern)
Large scale innovation in the energy sector
First mover advantage, aiming for technological leadership in low carbon technology
Significant energy efficiency improvements
Energy security: reduction of oil and gas import of €50 billion per year (at $61 per barrel of oil)
Reduced air pollution giving significant health benefits
Reduced need for air pollution control measures: €11 billion per year in 2020

14. EU showing leadership in climate change
Package - summary
EU showing leadership in climate change
EU on a path towards a low-carbon economy
Cost-efficiency and fairness at the heart of the package
A significant effort, but future benefits far outweigh the costs
Will deliver important economic, energy security and environmental co-benefits, also in the short term
A blueprint for international negotiations (‘common and differentiated responsibilities’)

15. International context: Building on the Bali Action Plan
Shared vision of long-term cooperative action, incl. a long-term goal for emission reduction, but taking into account development objectives
Mitigation action: both for developed countries outside the KP (i.e. US commitments comparable to those of Kyoto Parties) and developing countries: “measurable, reportable and verifiable action”; address deforestation, sectoral approaches, response measures
Adaptation: support action for most vulnerable, risk management, disaster reduction, catalytic role of the Convention
Technology: Transfer, accelerate deployment and diffusion, R&D cooperation
Finance and Investment: Adequate, predictable and sustainable financial resources and technical support; positive incentives for DC mitigation strategies and adaptation action; mobilising private and public investment; capacity building

16. International context: The future - some key principles
Copenhagen agreement must set the world on the right track toward the development of a low carbon society, even if we have to update our actions based on further development of the climate and the science.
We must build upon the Kyoto Protocol, adding more ambitious actions by all according to the principle of common but differentiated responsibilities.
It is also clear that the nature of the global carbon market needs to be changed.
It is equally clear that the carbon market alone is not sufficient to drive the move to a low carbon economy. Additional flows of finance and technology will be necessary.