Category Archives: Europe

Doha climate talks could see measured progress toward new global agreement

International climate negotiations have begun in Doha, Qatar, where countries can make progress toward a new global agreement, climate finance and reducing deforestation emissions, among other technical issues. Photo credit: Flickr user UNclimatechange

The largest international climate negotiations of the year kicked off Monday in Doha, Qatar, drawing delegates from more than 190 countries in a grand effort to create a global treaty to reduce greenhouse gas emissions and halt climate change.

Worldwide attention is particularly focused on climate after a number of respected and typically conservative global institutions — including The World Bank, United Nations Environment Program, International Energy AgencyPwC – in reports released in the weeks leading up to Doha painted grim pictures of the risks of extreme climate change.

These talks in Doha could see measured progress toward a new global agreement in some areas — or, as The New York Times put it, "the agenda for the two-week Doha convention includes an array of highly technical matters but nothing that is likely to bring the process to a screaming halt."

Environmental Defense Fund anticipates three issue areas could see important progress in Doha:

1) Negotiating tracks

The countries now meeting in Doha are scheduled to finalize a second round of commitments under the Kyoto Protocol, the international agreement to cut greenhouse gases, and wrap up the Long-term Cooperative Action (LCA) negotiating track, which was launched in Bali in 2007 and led many countries to make voluntary emission reduction pledges but fell short of a comprehensive binding agreement.

Doha will also set the course for the “Durban Platform for Enhanced Action” track, whose goal is a new climate deal for all countries to be agreed to by 2015 and to take effect from 2020.

International Climate Program Director Jennifer Haverkamp said in EDF's opening statement:

Countries can make real progress in Doha by agreeing to the Kyoto Protocol’s second commitment period with minimal fuss and delay, and concluding the Long-term Cooperative Action track, so they can turn their full attention to bringing lessons learned and key policy tools from those agreements forward into the new negotiations.

Even the U.S. founding fathers didn’t get the Constitution right the first time – remember the Articles of Confederation? Countries, in constructing this new agreement, have a chance to incorporate the key elements of these tracks: Kyoto’s binding structure and accountability, and the LCA’s broadened participation among countries and new tools to fight climate change.

2) Climate finance

Countries in Doha should deliver clear signals of ambitious commitment to address climate change, a much-needed policy signal that will help unlock and target critical climate finance funds that exist right now in the stock and bond markets and in countries’ national public expenditures.

3) Deforestation emissions

For policies for Reducing Emissions from Deforestation and forest Degradation (REDD+), countries have the opportunity to agree that multiple sources of finance can be used to pay for REDD+ reductions, and thereby send another positive signal to tropical forest nations.

Climate & Forests Specialist Gustavo Silva-Chávez said last week in a blog post previewing the Doha REDD+ negotiations:

REDD+ is almost at the finish line. We need a decision with more direction about how it will be financed, and carbon markets must play a role.

Countries, states making major climate progress

Outside the UN negotiations, countries and states have been busy launching and benefiting from emissions reductions programs. Just since last year’s negotiations:

Here in the United States, California begins its state-wide cap-and-trade system on January 1, and the northeastern states’ regional cap-and-trade system (RGGI) is already cutting emissions while the regional per capita GDP is growing faster than that of the nation as a whole. And a new report shows that the U.S. is on track to reduce its emissions by more than 16 percent from 2005 levels by 2020, thanks in part to these states’ initiatives.

Haverkamp said these moves are all significant:

“A full quarter of the world’s economy – from California to China, Mexico to South Korea – has or is putting in place programs to reduce emission. The top-down UN process is still critical to stopping dangerous climate change, but more and more countries are deciding not to wait around for it to tell them what to do. We’re already in a bottom-up world.”

 

See related post: REDD+ almost at the finish line: Doha preview

Also posted in Deforestation, Doha (COP-18), Forestry, Indigenous peoples, Mexico, News, REDD, UN negotiations |: | 1 Response

U.S. House passes superfluous bill, EDF calls on airlines to help find global approach to reduce aviation emissions

The U.S. House of Representatives tonight passed a bill that authorizes the Secretary of Transportation to prohibit airlines from participating in the European Union's anti-pollution law. EDF called the bill superfluous — the EU yesterday paused its carbon pollution law that was the target of the U.S. bill — and warned it sets a bad precedent for U.S. foreign relations.

The European Union Emissions Trading Scheme Prohibition Act of 2011 at best is superfluous, and at worst undermines respect nations need to have for each other's laws, EDF's Annie Petsonk said after the House passed the bill. Photo credit

The EU paused its law following the International Civil Aviation Organization's (ICAO) setting in motion a high-level political process aimed at agreeing on a global program for cutting aviation carbon pollution by October 2013.

EDF’s International Counsel Annie Petsonk said in EDF's statement in the House:

Now that ICAO has moved into high gear its effort to get a global system for limiting aviation’s carbon pollution, and the EU has stopped its clock pending the ICAO outcome, at best this bill is simply superfluous. At worst, it undermines the respect that nations need to have for each other’s laws in a globalizing world.

President Obama signaled in his reelection acceptance speech that there is an opportunity for revitalized executive branch leadership on the challenge of climate change.

The aviation question, one of the first climate issues after the elections, puts the spotlight on the White House, which will need to put significant political muscle into helping ICAO reach agreement on a worldwide approach to address aircraft emissions.

The airlines who lobbied so hard for enactment of this bill should join with environmentalists in agreeing on that global approach.

The European Union Emissions Trading Scheme Prohibition Act of 2011 gives the Secretary of Transportation authority to prohibit U.S. airlines from complying with a European law requiring airplanes that land or take off from European airports to account for and limit their flights’ global warming pollution through an emissions trading system.

The bill also requires the Secretary of Transportation to hold the airlines "harmless" of any costs, including both the costs of complying with the European law, estimated to be trivial, and the costs of not complying. The “hold harmless” provisions could launch a wholly unnecessary trade war and stick U.S. taxpayers with up to $22 billion in non-compliance costs.

Before the bill came to the House floor tonight, Petsonk talked to POLITICO, which reported:

Petsonk has long been predicting ICAO would be confronted with the decision, likening the process to past global environmental law cases that began with bilateral bickering but eventually spawned a global dialogue. That means the U.S. should not yet be patting itself on the back about forcing the EU’s hand.

“The EU didn’t say, ‘We’re ending the system.’ They said, ‘We’re giving the ICAO process time’” to work on the issue, Petsonk said.

That means congressional action on a bill that has been in a recess-induced lull for weeks is likely to pass Congress just days after the real progress was made internationally. “It’s like a Fifth of July firecracker,” Petsonk said of the bill.

Aviation is already the world's seventh largest polluter, and if emissions from the industry are left unregulated, they're expected to quadruple by 2050.

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The EU Considers Additional Steps to Improve the EU Emissions Trading System

EDF recently published a report examining the results and lessons learned from the world’s first and largest multinational cap-and-trade program to limit carbon pollution: the European Union Emissions Trading System (EU ETS). The report was designed to assist those jurisdictions like California, China, Australia, the Republic of Korea, and others implementing – or considering adopting – carbon cap-and-trade systems, and to highlight what can be learned from the pathbreaking experience of the EU ETS.

The EU ETS continues to evolve, with current debates in the EU focused on how to improve the system as it transitions to a new trading period next year. The EU is considering several reform proposals, including a short-term reform that would delay the auction of new emissions trading allowances until later in the trading period (“backloading”).

The EU’s backloading proposal is a justifiable short-term step that would give the EU time to consider additional structural reforms needed to build on the EU ETS’s success in reducing Europe’s carbon emissions. For instance, the EU’s success thus far in laying the foundation for achieving its 20% emissions reduction target by 2020 has prompted persistent calls among stakeholders in Europe to tighten the EU’s economy-wide target even further: to 30% below 1990 levels by 2020*, or to set an ambitious target beyond 2020 that would provide additional confidence to market actors to make long term investments in low-carbon innovation. The EU plans to publish by November 14 a carbon market report that examines options to increase the long-term ambition of the EU ETS.

A tighter EU ETS target for 2020 and beyond would not only help the EU achieve its aspirational emission reduction target of 80-95% below 2005 levels by 2050, but – according to one study – could create millions of jobs while bolstering investment and GDP growth.

Doing so would also send an important message about EU climate leadership, providing another lesson to the world on how to chart a path forward to tackle the climate challenge.

*Note: The EU has both economy-wide reduction targets and targets under the EU ETS, which includes the power and industrial sectors, among others. At present, emissions under the EU ETS account for approximately 40% of the EU’s total greenhouse gas emissions.

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The EU Emissions Trading System is reducing emissions, sparking low-carbon innovation, and growing up. Really.

With 2012 shaping up to be the hottest La Niña year on record and global greenhouse gas emissions continuing to rise, initiatives to reduce global warming pollution are ever more critical. A new EDF report presents important lessons from the experience of the world’s first multinational carbon emissions trading system: the European Union Emissions Trading System (EU ETS).

Jurisdictions as diverse as California, China, the Republic of Korea, Kazakhstan, and Australia are implementing, or are in the process of adopting, cap-and-trade policies to reduce greenhouse gas emissions, and all stand to learn important lessons from Europe.

Why the EU Emissions Trading System matters

The EU’s program is the first and largest cap-and-trade system with enforceable limits on carbon pollution, which gives it a unique position on the world stage. The EU ETS:

Results from the first two trading periods of Europe's Emissions Trading System offer lessons for other jurisdictions on the road to a low-carbon economy. (Photo source: iStockphoto)

  • Began its pilot phase (Phase I) in 2005; the pilot phase transitioned in 2008 into the fully operational Phase II, which will end this year; Phase III will begin in 2013, and last through 2020 (though EU law already provides that emissions will continue to decline beyond 2020).
  • Places strict caps on carbon dioxide emissions from power stations and industrial plants.
  • Applies to about 40% of the EU’s total greenhouse gas emissions, rising to 43% as the ETS expands its coverage to include other industrial sectors and global warming pollutants.
  • Aims to lower the total carbon emissions of covered sectors in the EU to 21% below 2005 emissions by 2020.
  • Includes 30 participating countries, which account for 20% of global gross domestic product (GDP) and 17% of world energy-related CO2 emissions.

As the EU ETS’s first full trading period (Phase II) comes to a close at the end of 2012, our report examines the results thus far of the world’s first carbon cap-and-trade experiment, and looks ahead to its future.

The report, The EU Emissions Trading System: Results and Lessons Learned, reviews the performance of the EU ETS from 2005 until present, and addresses three central points: the EU ETS’s efficacy, efficiency, and market security. (Note: This report focuses on the overall structure and performance of the EU ETS since its inception in 2005, and thus does not discuss the 2012 expansion of the system to include aviation emissions.)

Results and recommendations

Based on our analysis of the EU Emissions Trading System, EDF has identified six major results from the EU ETS's experience, and developed corresponding policy recommendations. The report’s Executive Summary includes additional details on each of the following lessons learned.

1) The EU ETS has achieved significant emission reductions at minimal cost.

As shown below and on page 8 of the full report, the data suggest that the ETS has succeeded in reducing emissions beyond what would be expected from the recession alone, even assuming an emissions growth rate 1% less than the growth in GDP (represented by the dotted business-as-usual line).  ETS sector emissions declined a further 1.8% in 2011, according to recent estimates, while GDP increased approximately 1.4%. However, verified 2011 emissions data will not be available until mid-2013, and thus the graph does not depict the likely drop in 2011 emissions. The EU has achieved this emissions-cutting success at much lower-than-expected cost: according to some estimates, just 0.01% of Europe’s GDP, and that’s without considering the economic benefits of emissions reductions.

EU ETS sector emissions (million metric tons CO2), emissions caps, and EU gross domestic product (GDP), 1990–2015.

 

Recommendation: Emulate the successful design of – and improvements to – the EU ETS, including its focus on the environmental integrity and enforceability of the emissions cap, to unleash the proven effectiveness of cap-and-trade in stimulating low-carbon innovation.

Recommendation: Stimulate long-term emission reduction investments by maintaining a predictably declining, enforceable, science-based cap on carbon.

2) Although over-allocation of allowances and a sharp drop in their prices occurred during the program’s pilot phase in 2005-2007, the policy stability created by longer-term targets subsequently led to durable investments in reducing emissions and deploying low carbon strategies.

Recommendation: Base emissions caps and resulting allowance allocations on measured and verified historical emissions, rather than on estimated or projected emissions.

Recommendation: Provide a predictable long-term policy environment that allows banking of allowances between trading periods.

3) Windfall profits occurred in some member states but can be avoided using a variety of policy tools.

Recommendation: Establish appropriate regulatory oversight of public utilities, and auction some or all allowances.

4) Reforms have improved the elements of the EU ETS that allow emitters to tender credits earned from projects reducing emissions in developing countries (“offsets”), but further reforms would be useful.

Recommendation: Ensure offset programs have rigorous monitoring and accounting methodologies to clarify that emission reductions are “additional” (i.e., below a credible baseline)

Recommendation: Adopt reforms that allow international offset credits only from jurisdictions that have capped some portion of their emissions, or only from least-developed countries.

Recommendation: If linking to other nations’ emissions trading programs, do so preferentially with nations that adopt caps or limits on major emitting sectors.

5) The EU ETS has made significant progress in preventing any recurrence of the tax fraud and theft of allowances that occurred during the program's earlier years.

Recommendation: Establish effective governance and regulatory bodies, as well as preventive electronic security systems, to adapt to evolving cyber attacks and other market security threats.

6) Companies and entrepreneurs have responded to the ETS and its complementary policies with a diverse range of profitable investments in low-carbon solutions.

Recommendation: Institute an ambitious cap-and-trade system to encourage business to think creatively about reducing greenhouse gas emissions.

What’s next for the EU ETS, and why the world should care

The EU will further expand the coverage of the EU ETS in 2013 to include additional greenhouse gases and additional industrial sectors, including the aluminum and chemical industries.

Regions, nations, states and local jurisdictions that are considering capping carbon pollution can learn from the experience and build on the success of the EU ETS, the world’s first large-scale CO2 cap-and-trade system. (Photo courtesy of German Wind Energy Association/© BWE / Thorsten Paulsen)

Additionally, even though the EU ETS’s Phase III ends in 2020, the cap on emissions will continue to decline after that – by 1.74% per year – which provides the critical longer-term certainty needed to spur investment in emissions reductions now.

Nonetheless, a suitable set of complementary policies and measures is essential if the EU is to achieve its aspirational emission reduction target of 80% below 2005 levels by 2050. A more ambitious EU ETS target for 2020 or 2030 would help achieve the EU’s long-term reduction goal. Current discussions in Europe include proposals to tighten the EU ETS cap further, not only to strengthen emission reductions, but also to stimulate economic growth.

Perhaps the most important lesson the EU ETS experience provides is that regions, countries and states can benefit from a learning-by-doing approach to cap-and-trade. Any design flaws and weaknesses of various policy tools are often difficult to anticipate, but can be corrected over time as experience warrants.

With its success and durability now attracting the attention of other nations and jurisdictions that seek to link their carbon trading systems to the EU’s, the EU ETS offers a unique opportunity for other regions, nations, states, and even local jurisdictions that are considering such systems to learn from its experience and continue to build on its success.

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