Title: Managing Global Climate Change European perspective and prognosis for the COP meeting in Copenhagen,
1Managing Global Climate Change - European
perspective and prognosis for the COP meeting in
Copenhagen, December 2009
- Frank J. Convery, Honorary President, European
Association of Environmental and Resource
Economists and Heritage Trust Professor of
Environmental Policy, University College Dublin
(frank.convery_at_ucd.ie) - At University of California Berkeley, 223 Moses
Hall - Center on Governance and Institutions. Institute
of Government Studies (IGS) - 1600 Tuesday, August 18, 2009
2Key References
- Part 1
- Available at http//ec.europa.eu/environment/clim
at/pdf/future_action/part2.pdf - Part 2.
- Available at http//ec.europa.eu/environment/clim
at/pdf/future_action/part1.pdf
3What Copenhagen is about
- The United Nations Climate Change Conference
(COP 15) meets December 7-18, 2009 in
Copenhagen to agree on what will follow the Kyoto
Protocol, which runs to 2012.
4Four Essentials - Yvo de Boer, executive
secretary of the United Nations Framework
Convention on Climate Change (UNFCCC)
- Industrialised countries how much reduction in
emissions? - 2. How much are major developing countries such
as China and India willing to do to limit the
growth of their emissions? - 3. How is the help needed by developing
countries to engage in reducing their emissions
and adapting to the impacts of climate change
going to be financed? 4. How is that money
going to be managed?
5Context
- Global greenhouse gas emissions have continued to
rise since the Kyoto Protocol was agreed in 1997,
and ratified in 2005, with most of the growth
arising in developing countries.
6Table 1. GDP and Tonnes of CO2 per capita, CO2
intensity by energy mix and GDP, and percentage
Change in Total GHG Emissions, 1990-2005.
7Scientific Context
- Emerging scientific view that
- Climate change is already underway, and may
happen sooner and more dramatically than was
anticipated earlier, mostly on the basis that
negative feedback warmer oceans absorbing less
CO2, shrinking ice caps reflecting less heat away
etc. has been underestimated. -
- The most negative effects will be experienced by
societies with limited or no resources to adapt
to the change, with water scarcity and flooding
being particularly notable impacts.
8US Context
- US did not ratify the Kyoto Protocol on the
basis that - Its implementation would damage the US economy
- It did not involve major action by developing
countries. - With the opting out of the US, the European Union
became the global leader in securing ratification
of the Kyoto Protocol. - But the Obama administration is now playing a
leading role in the evolution of global policy
post Kyoto, and in particular on engaging with
China.
9European Context 1
- Europe the incubator of the most horrific wars
and pogroms in human history, driven by hatreds - European Union - never again war
- But the impulse to global leadership and soft
power ways of doing so remains..
10Mutually beneficial interdependence a key idea
- Donne, John (1573-1631). .(Devotions upon
Emergent Occasions). - No man is an Island, intire of itself every man
is a piece of the Continent, a part of the maine
if Clod be washed away by the sea, Europe is the
less, as well as if a Promonorie were there, as
well as if a Mannor of thy friends or of thine
owne were any man's death diminishes me, because
I am involved in Mankinde And therefore never to
send to know for whom the bell tolls It tolls
for thee.
11Wislawa Szymborska
- See how efficient it still is,
- How it keeps itself in shape-
- Our centurys hatred.
- How easily it vaults the tallest obstacles.
- How rapidly it pounces, tracks us down.
- Since when does brotherhood
- draw crowds?
- Has compassion
- ever finished first?
- Does doubt ever really rouse the rabble?
- Only hatred has just what it takes.
12European Context 2
- 1. Supportive Popular sentiment
- Climate Change in happening
- That it can be very damaging
- Danube Floods
- Heat waves
- Abraham Lincoln With public sentiment, nothing
can fail without it, nothing can succeed. - 2. Farmers are special...
- Pliny the Elder in regard to their Roman
counterparts over 2000 years ago - The agricultural population, says Cato, produces
the bravest men, the most valiant soldiers, and a
class of citizens the least given of al to evil
designs.
13European Context 3
- European Union has
- Small budget which goes mainly to farmers and
for regional development. - Very restricted capacity to raise taxes
unanimous agreement of 27 Member States required
carbon tax initiative (1992-97) failed. - Strong regulatory powers, and ability to create
domestic emissions trading schemes - Single Market free movement of people, goods,
finance, investment etc.
14European Achievements if you build it they will
come
- Philosophy
- Developing countries will only come on board if
rich countries move and are seen to move
effectively. - Policy evolves step by step.
- Quantified reduction Targets to be achieved by
specified Dates - Limit rise to 2C
- 1990 base line
- medium target for developed countries 30
reduction - 2050 Long term target for developed countries
80 reduction - Carbon price to reflect scarcity essential
- Carbon tax - failed
- European Union Emissions Trading Scheme (EU ETS)
succeeded.
15European Achievements 2
- 1. Kyoto ratification in 2005
- 2. Creation of carbon price via European
emissions trading scheme (2005 indefinite) - 3. Free allocation to 2012, then auctioning of
allowances. - 4. Animation of emission reduction projects in
developing countries via CDM and use of ensuing
credits to comply with trading obligations - 5. By 2020 Legally binding reductions
(20-30)in emissions in the non trading sectors
(agriculture, residential and commercial,
transport, light industry), renewables (16),
energy efficiency (-20), carbon capture and
storage (demonstration projects)
16Three categories of country
- Responsiblity intensifies as income grows
- Developed OECD
- Developing 1 rapidly growing
- Developing 2 very poor mainly Africa, parts
of Asia
17Developed Countries - Targets for Selected
Jurisdictions, by 2020, using weighting factors
18Appropriate Mitigation Action by Developing
Countries
- Reductions below business as usual of 15-30 are
needed by 2020 -
- National Low Carbon Development Plans to 2050,
with milestones for 2020 are the heart of the EU
proposals.
19National Low carbon development Plans - features
- Reductions below business as usual of 15-30 are
needed by 2020 - Plans should identify
- Win-win opportunities need capacity building,
policy assistance, awareness heightening - Further measures if targeted support financial
and technical were made available - Expected emission reductions
20Registry, and Monitoring, Reporting and
Verification (MRV)
- Enter actions in an international registry - show
the mitigation benefits, using transparent and
robust measurement, reporting and verification
methods. - Assessed by independent panel which will focus
on - Feasibility
- Proposals for further action and needs.
21Strong Support for Sectoral Approaches steel,
cement, transport, power generation etc.
- The following three options are identified, with
the costs of mitigation and financial capability
a part of all three options - Baseline and credit reductions below a
specified baseline rewarded to value of reduction
achieved. - National governments agree certain measures, and
financial, technical and logistical support is
provided to deliver these measures. - Bottom up approach for target setting determine
technical potential of GHG reductions in each
sector on the basis of high performance
benchmarks (Japanese the main proponent of this
approach)
22Focus particular attention on achieving actions
and technologies for energy efficiency
- Seen as the most effective means of achieving
substantial reductions at relatively low cost in
both developed and developing countries. - Power generation (combined cycle gas turbines,
supercritical coal plants), and architecture of
generation, transmission and distribution (smart
grids, super conducting electric lines, power
storage. Big co-benefits in terms of reduced air
pollution and improved health. - Industry shift to secondary iron and steel,
reduce clinker content of cement, use more
recycled paper and glass, more sustainable
building materials and insulation. - Final energy demand huge gains in heating and
lighting, generalised use of low temperature
solar thermal (domestic hot water) - Transport improvement in power train
efficiency, lower weight, change in fuel mix
23Research and development are essential
- International Energy Agency
- Over the last two decades, public energy RD
spending in developed countries has dropped
dramatically, on average to below half of 1984
levels in 2004 - Current levels of investment are very unlikely to
achieve the sort of step change in technology
that is needed to deliver the sought outcomes.
Even a doubling of current levels of investment
may not be enough. It concludes in its executive
summary of the "2008 Energy Technology
Perspectives" that 'While details are difficult
to establish, independent studies have suggested
that public sector RDD needs to increase by
between two and ten times its current level.'
24Technology the ultimate reality check
- Richard Feynman, (Nobel Prize winning physicist)
For a successful technology, reality must take
precedence over public relations, for nature
cannot be fooled. - And emissions trading guarantees a payoff..
- Edison Anything that won't sell, I don't want to
invent
25European view on RD
- A major boost to research, development and
demonstration of low-carbon and adaptation
technologies in all economic sectors and
activities. - Build on the needs identified in national
low-carbon development strategies and
assessments. - Fund capacity building, science and
technology-oriented cooperation, reducing market
access barriers on environmental goods and
services and improved global research
coordination. - At least double energy-related RDD by 2012 and
increase it to four times its current level by
2020, with a significant shift in emphasis
towards low-carbon technologies, especially
renewable energy sources - Research on impacts, adaptation and other
mitigation options to climate change need to be
strengthened at the international level.
26European Action on R, DD
- Implementing the European Strategic Energy
Technology Plan (SET-Plan). - Create one of its first Knowledge and Innovation
Communities on climate mitigation and adaptation
as part of the European Institute on Innovation
and Technology (EIT), in line with the broader
RDD policy objectives of the EU - Under the revised EU ETS, 300 million allowances
are set aside to help stimulate the construction
of carbon capture and geological storage
demonstration plants as well as innovative
renewable energy technologies.
27Developing and linking Cap and trade Emissions
Schemes Developed countries
- Adam Smith Man is the only animal that makes
bargains one dog does not change bones with
another dog. - A global carbon market can and should be built by
linking comparable domestic emissions trading
systems. This will promote cost-effective
emission reductions. - EU should reach out to other countries to ensure
an OECD-wide market by 2015 and an even broader
market by 2020.
28Trading and Developing Countries Sectoral
trading as a bridge
- The Commission aims for the development of a new
carbon market mechanism at sectoral level as an
intermediate step towards the introduction of cap
and trade systems. Such a new mechanism and a
reformed CDM allows countries to participate in
the global carbon market according to their
different responsibilities and capabilities...A
sectoral carbon market mechanism could be focused
on key sectors where emissions are increasing
most rapidly or that are part of competitive
world markets and where data collection is
relatively simple and straightforward.
29Aviation and Maritime Transport
- The EU has included CO2 emissions from aviation
in its emissions trading system from 2012. - If at the end of 2010 there is no agreement in
ICAO and IMO, emissions from international
aviation and maritime transport will be counted
towards national totals under the Copenhagen
agreement which will ensure comparable action by
all developed countries.
30Project based Clean Development Mechanisms (CDM)
- In the medium term CDM should only be continued
for countries without a national low carbon
development plan. - i.e. Confine to Least Developed Countries (LDCs)
- A priority will be increasing energy efficiency
in the electricity sector. - Sectoral Agreements a bridge for more developed
countries.
31Financing the reduction of emissions - needs
- Requirement Net global incremental annual
investments of 175 billion by 2020 required. - More than half will have to be invested in
developing countries, including the forestry
sector. - Investment in areas such as energy efficiency
and low-carbon technologies will spur innovation
and growth and enhance energy savings and
security. - Investments in reduced deforestation will
safeguard global biodiversity and ensure local
long-term sustainable development. - National low-carbon development strategies will
have to provide - Estimate of additional net investment costs for
mitigation - Viable financing and mitigation policy options to
leverage such investments.
32Finance - sources
- Public funding and the Use of carbon crediting
mechanisms. - Options
- 1. Offsets from sectoral agreements linked to
trading schemes - 2. Agreed amounts based on polluter pays
principle (emissions) and ability to pay (GDP) -
emission rights could be withheld for those
countries that do not provide the agreed amount. - 3. Certain percentage of the allowed emissions
would be set aside from each developed country.
These emissions are then auctioned to governments
at the international level. This percentage could
increase progressively in line with the per
capita income - 4. Global instrument to address international
aviation and maritime transport (e.g. the
proceeds from auctioning allowances under a
global cap and trade system applying to those
sectors). - 5. Additional public revenue that will be
generated by auctioning allowances in the EU ETS.
From 2013. Member States could use some of this
revenue to honour their international financial
obligation under the future climate change
agreement
33Governance of international financial flows for
climate change
- Sources of funding for adaptation and mitigation
are likely to be multiple, coordination and
cooperation will need to be improved. - A high-level forum on international climate
finance should bring together key decision makers
from the public and private sectors and
international financial institutions. It would
regularly review funding availability and
expenditure and provide recommendations for
improvements. - This forum should cooperate closely with the
Facilitative Mechanisms for Mitigation Support.
34Adaptation
- Support to the most vulnerable and the poorest
(LDCs) - All countries - comprehensive national adaptation
strategies. - Improving the tools to define and implement
adaptation strategies including - methodologies and technologies for adaptation,
capacity building - strengthened role for the UNFCCC process by
mobilising stakeholders, including international
organisations - ensuring a more coordinated approach to risk
management/disaster risk reduction.
35Funding the Costs of Adaptation
- Adaptation costs in all developing countries
23-54 billion per year in 2030. - Early measures will generate a net benefit to the
economy, e.g. measures to improve water use
efficiency in areas that will suffer from water
shortages. - Multilateral insurance pool to cover disaster
losses should be explored to complement existing
funding mechanisms - Based on the issuance of bonds, the proposed
Global Climate Financing Mechanism (GCFM) would
allow early spending on priority climate-related
actions. These funds would in particular allow
for an immediate reaction to urgent adaptation
needs with a high return such as disaster risk
reduction.
36Land Use Land Use Change and Forestry (LULUCF)
- Key mechanism
- Global Forest Carbon Mechanism (GFCM) to achieve
REDD (Reduced Emissions from Deforestation and
forest degradation) - Funded by Developed countries would have to
contribute a fair share of finance to the Global
Forest Carbon Mechanism (GFCM). - Operating Principles
- Eligiblity - Developing countries that ratify
the post-2012 climate agreement - Focus GFCM - REDD and support
capacity-building activities - Financial support from GFCM provided on the
basis of a countrys performance towards REDD - Beneficiary countries need to have effective
forest governance structures in place and to
respect the rights of forest-dependent people - Nationwide implementation involving the entire
forestry sector will be required - GFCM will aim to secure the highest co-benefits
possible (e.g. by protecting biodiversity and
combating poverty) - Emission cuts must be assessed, monitored and
accounted for at national level, with independent
verification of the reductions achieved.
37Funding for the GFCM
- A major portion of EU funding for GFCM from
proceeds from the auctioning of emission
allowances under the EU Emissions Trading System
(EU ETS). - Estimated that if 5 of auctioning revenue were
made available to GFCM, this would raise 1.5 to
2.5 billion in 2020
38The Great Recession and Copenhagen history is
always a surprise....
- And all economic and emission projections
wrong.... - An economic forecaster is like a cross-eyed
javelin thrower. He doesnt win many accuracy
contests, but he does keep the crowds attention.
39Short term impacts
- Will meet Kyoto obligation by 2012 (-8) and 2020
obligations (-20 or -30) much easier. - Carbon price in EU ETS has fallen, but extent
buffered by fact that allowances can be banked up
to 2020.
40Medium term impacts and Actions
- Reduced investment in existing low carbon
technologies more difficult to fund everything,
including, e.g. Wind power - Reduced revenues available to governments
revenues from EU ETS action likely to be used to
make up growing public sector deficits . - Reduced support for transfers to LDCs, research
and development etc.
41The US and Europe
- European Pride that we have led in spite of the
truth of Edward Mortimers somewhat jaded view
that A nation is a group of people united by a
common dislike of their neighbours, and a shared
misconception about their ethnic origins - Relief and angst in equal measure as US moves to
centre stage.... - Quiet nostalgia for Bush regime......
- Cavafy (Waiting for the Barbarians)
- And now, whats going to happen to us without
barbarians? - They were, those people, a kind of solution.
-
-
42Europe and California
- Some key interfaces
- Focus on energy efficiency
- Low carbon development Plans as fulcrum for
identifying and financing priorities - Independent monitoring, reporting and
verification (MRV) as central requirement - Innovation and enterprise and RDD.
43Thanks for your attention
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