On 28 January, the European Commission adopted a Communication entitled “Towards a comprehensive climate change agreement in Copenhagen”, unveiling its proposals for an international agreement to replace the Kyoto Protocol on climate change. Last December the EU adopted the Climate and Energy package and it has committed to reduce its greenhouse gas (GHG) emissions to 20% below 1990 levels by 2020 and it is expecting to persuade third countries to take the same steps.
The Commission has reiterated the EU’s target of keeping global warming to no more than 2°C by 2020.
According to the Commission developed countries must take the lead and cut their collective emissions however significant contribution from developing countries, is also necessary. It should be recalled that the EU is willing to sign up to a 30% reduction target in the context of an international agreement if there are similar commitments from other developed countries. The Commission is therefore urging development countries to commit to cut greenhouse gas emissions by 30 percent by 2020.
The Commission has made recommendations on how to distribute the developed countries’ overall target. It has proposed to use four parameters to calculate national efforts: national targets defined on the basis of GDP per capita, GHG emissions per unit of GDP, demographic pressure and efforts accomplished from 1990 to 2005.
According to the Commission the Copenhagen agreement should not set binding emission reduction commitments solely to the countries that have targets under the Kyoto Protocol but it should include all OECD member countries and all current EU future and potential member states.
The Commission has stressed that developing countries, except least developed countries, “should limit growth in their collective emissions to 15-30% below business as usual levels by 2020.” It is very unlikely developing countries will accept such ambitious binding targets which will limit their economic development. In the other hand, developed countries are concerned that their industry will be put at an economic disadvantage.
The Commission has also pointed out that the Copenhagen agreement should set targets for reducing the climate impact of international aviation and maritime transport below 2005 levels by 2020, and considerably below 1990 levels by 2050. It should be recalled that the EU has already included CO2 emissions from aviation in its emissions trading system. Such measure will have terrible consequences for the aviation industry which is likely to pass its costs to the consumer.
In order to reach an international agreement, according to the Commission, the industrialised countries should offer developing countries substantial funding to help them cut their emissions. The Commission has stressed that the Copenhagen agreement must be strengthen by adequate financial resources to facilitate its implementation. The Commission has estimated that an additional €175 billion in annual investments by 2020 are needed to reduce CO2 emissions, more than half of which will have to be invested in the developing countries. The world is struggling to cope with the global financial crisis and the Commission is expecting that world leaders will commit to spend money on global warming’s solutions.
According to the Commission "All developed countries will need to contribute to mobilising financial resources for adaptation and mitigation in developing countries via public funding and the use of carbon-crediting mechanisms.” Such aid should come from public funds and international carbon crediting mechanisms. The Commission has identified two options to “generate innovative funding." According to the Commission the developed nations annual contribution could be determine on the basis of a formula based on a combination of the polluter pays principle (total amount of allowed emissions) and its ability to pay (GDP/capita). The second option would entail setting aside a certain percentage of the allowed emissions from each developed country.
The Commission has mentioned that the EU’s public revenue will be generated by auctioning allowances in the EU ETS. According to the Commission the EU’s member states could use part of their future revenues from auctioning under the ETS to help the developing countries. But Brussels cannot decide how the member states will spend their money. It should be recalled that the European Council has stressed that “Member States will determine, in accordance with their respective constitutional and budgetary requirements, the use of revenues generated from the auctioning of allowances in the EU emissions trading system.”
The European Commission has welcomed President Obama’s intention to create an emission trading scheme. According to Stavros Dimas, Commissioner for Environment, “If the United States moves forward, other countries, some of which are already advanced, among them Australia and New Zealand, will follow.” The Commission calls on all OECD members to establish their own ETS by 2013. The Commission has recommended the creation of an OECD-wide carbon market by linking the EU ETS with other developed countries schemes by 2015 in order to mitigate and to raise funds to fight climate change. Then gradually extended to major emerging economies, such as China, India and Brazil, by 2020.
The Kyoto Protocol’s Clean Development Mechanism (CDM) allows industrialised countries, with a commitment to reduce greenhouse gas emissions, to invest in projects that reduce emissions in developing countries. Developing countries may sell credits that represent emission reductions achieved by a specific project, which are then bought by a developed country in order to comply with its national reduction target. The Commission has stressed that developed countries should achieve their reduction targets mainly through domestic action. Hence, the Commission believes that the Clean Development Mechanism (CDM) should be reformed. The Commission has stressed that solely projects “that deliver real additional reductions and go beyond low cost options” should be rewarded. Moreover, it has proposed that the project based CDM should be phased out for advanced developing countries and highly competitive economic sectors such as China, India and Brazil.
Barack Obama has raised hopes to the EU that it will have the US on board. It is very unlikely that the EU will be able to persuade other countries to assume such ambitious binding commitments. Yvo de Boer, United Nations Climate Chief, has said that Barack Obama is not likely to follow the EU pledge to cut greenhouse-gas emissions by 30 percent.
The European Council will discuss the Commission’s proposal for the EU’s position in the international climate negotiations at the next spring summit in March. The EU will negotiate on behalf of all its member states and it is very keen in taking the lead on the international climate change negotiations at Copenhagen.
In the meantime, the European Parliament, on 4 February 2009, adopted the Temporary Committee on Climate Change's final report which recommends detailed measures to be taken in key economic sectors to achieve a future EU integrated policy on climate change. Such report which recommends even more ambitious targets has provided the European Parliament's position on the international climate negotiations.
According to the European Parliament the Commission should monitor, "whether the EU 2°C target would still achieve the aim of avoiding dangerous climate change.” Moreover, the MEPs have suggested that the EU and the other industrialised countries should set a medium-term target of a 25-40% reduction in greenhouse gas emissions by 2020 and a long-term reduction target of at least 80% by 2050, compared to 1990 levels. The European Parliament has called upon the Commission to propose a binding goal of 20% improvement in energy efficiency by 2020 as well as specific interim reduction targets. According to the MEPs Member States should provide free energy audits to enable citizens to reduce their energy consumption and their emissions. The MEPs called on the Commission to set reduction targets for GHG emissions from the agricultural sector. The European Parliament also recommended the creation of a European Climate Fund to finance climate policies and it also called for increased funding to help developing countries combat climate change. The MEPs believe that the next EU financial framework highest priority must be climate change and measures to combat it.
On 2 March, the Environment Council has discussed the EU’s position ahead of international climate negotiations for the period after 2012. No agreement has been reached on how much the EU should contribute to developing countries adaptation to climate change. Moreover, the environment ministers could not agree on how to calculate industrialised countries’ emission-reduction targets. Several Member States have doubts about the Commission’s four criteria.
The Ecofin Council also failed to clearly define the financial structure that the EU will propose to its international partners in the climate change negotiations. It has left to the European Council to decide the position to be defended by the EU in the international climate talks.
Obviously, Member states have been unwilling to make precise financial commitments at this stage of the negotiations.
In the meantime, the European Parliament adopted a resolution on the EU strategy for a comprehensive climate change agreement in Copenhagen stressing the importance of the EU speaking with one voice in order to maintain its credibility.
According to the European Parliament the EU contribution towards developing country mitigation efforts and adaptation needs should not be below
€30 000 million/year by 2020.
On 19 March, the European Council has reiterated the EU commitment to play a leading role in bringing about a global climate agreement in Copenhagen intended to limit global warming to below 2ºC.
The EU leaders recalled the EU’s commitment to a 30% emission reduction providing that other developed countries commit themselves to similar emission reductions.
The EU leaders stressed “the importance of building a global carbon market, including a reformed Clean Development Mechanism.”
They pointed out that considerable domestic and external sources of finance, both private and public, will be necessary for funding mitigation and adaptation actions in developing countries.
The EU leaders have stated “The European Union will take on its fair share of financing such actions in developing countries” but they postponed the discussion of these issues until their June meeting.
The EU’s leaders decided to postpone to the June European Council any decision on the financing of climate change adaptation measures for the developing countries.
José Manuel Barroso has stated that “before adopting a final decision, the EU will wait to see the proposals tabled by the other key international partners, such as the United States and Japan.”
The European Council stressed the need to discuss in more detail international financing mechanisms. The EU leaders will decide “well in advance of the Copenhagen Conference” the EU positions on financing approaches, the specific EU’s contribution as well as “principles of burden sharing among Member States.”
Poland has been opposed to put a figure on aid for developing nations to cut greenhouse gases since the economic crisis undercuts the ability to make climate finance commitments. Poland is not willing to sign off to concrete figures without an agreement on sharing the burden of the funding among member states.