Transcript Economic Analysis of EU-wide Emissions Trading of CO2

EU efforts towards Kyoto
Marianne Wenning
DG ENV, Climate Change unit
28 November 2002
Basis for EU Action

The “Bonn Agreement” (07/2001) & COP-7
decisions in Marrakech (11/2001) provide a good
basis for starting implementation

EU Ratification May 2002
EC greenhouse gas emissions compared with
targets for 2000 and 2008-2012 (excl. LUCF)
120
Index
110
100.0
100
99.5
96.5
90
92.0
80
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Greenhouse gas emissions
Target path 2010
GHG target 2010
CO2 emissions
CO2 target 2000
2010
2012
Distance-to-target indicators (in index points =
percent) for the Kyoto Protocol and burden
sharing targets of EU Member States
Spain
26.2
Ireland
17.5
Portugal
16.6
Belgium
10.0
Austria
9.2
Denmark
8.8
Greece
8.7
Italy
7.2
Netherlands
5.6
-1.7
France
-3.9
Sweden
-4.1
Finland
United Kingdom
-6.7
Germany
Luxembourg
-8.6
-31.1
0.5
EU-15
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
Project Progress in 2012

Current and additional measures
projected by MS indicate that EU Kyoto
target can be met
But

The majority of MS projections also
indicate that national Burden Sharing
targets will not be met
ECCP : principles and organisation
Principles
Approach
•integration
•transparency
•stakeholder consultation
•group expertise
•build consensus
•reduction potential
•cost-effective (20€/tCO2eq.)
•equity
•time frame &ancillary effects
Working groups
- ET/flexible mechanisms
- Transport
- Agriculture….
ECCP steering
committee
WG Report /conclusions / proposed measures
Reduction potential of GHG under costeffectiveness aspects for sectors in EU until 2010
(including full implementation of the ACEA
Agreement)
1422
Baseline
emissions for
2010 with
existing
measures
-6%
Cost-effective
potential beyond
baseline
projection for
2010
-13%
757
753
447
176
417
166
4138
-9%
31%
0%
14%
-5%
-18%
1%
-12%
-4%
-6%
-15%
-4%
-13%
-9%
Marginal cost
€20/tCO2 eq
Emissions
1990 or 95
Mt CO2
equivalent
Energy sector
Industry
Transport
Households
Services
Agriculture
Waste
Total
ECCP Results 1st phase


Some 40 cost-effective policies and measures
with an emission reduction potential of
some 664 - 765 Mt CO2 eq (± twice EU
target)
Overall costs for EU target in 2010:
3.7 € bn / 0.06 % of GDP
hypothesis : maximum cost - effectiveness
(EU/MS)
Communication 1st phase ECCP
Package of priority measures to be implemented in 2002/2003

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


Emissions Trading
IPPC
JI/CDM link to ET
revision monitoring
mechanism
minimum EE for end use
products
energy demand
management







CHP
EE public procurement
EE: campaign for take-off
shifting the balance between
modes of transport
infrastructure use and
charging
promotion bio-fuels
fluorinated gases
Key elements of the ET proposal




Pre-Kyoto phase (2005-07)
and Kyoto phase (2008-12)
Harmonised coverage of 5
major sectors across the
internal market
Initial focus on CO2
Harmonised allocation
method (free of charge in
pre-Kyoto phase)



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Allocated quantities
determined by MS ...
… and laid down in
national allocation plans
Stringent financial
penalties of at least € 50 / €
100 per tonne + automatic
offset
Linking to other ET
schemes and Kyoto
mechanisms foreseen
Crunch issues in the negotiations
Agreement in principle, debate on details
Temporal exclusion (up to 2007)
 Unilateral extension
 Pooling concept
 Allocation method for 2008-12

ECCP 2nd phase
Support and follow-up implementation of
the measures identified in the first phase
 new and continuation of working groups

 JI/CDM
- link with ET
 Agriculture
 Forest related sinks
 sinks in agricultural soils
 fluorinated gases
ECCP second phase
4 working groups will deliver by Dec. 2002
/Jan. 2003
 first half 2003 : ECCP progress report

 activities
of working groups
 stock taking on implementation of the 1st phase
 forward looking (“plan of action”) :
new policy proposals
new initiatives?

ECCP seminar in Green Week (June 2003)
Coalition of the like Minded Countries
The way forward on RE
Confirming and highlighting role of RES
in SD
 Setting ambitious RES targets and
timetables
 Milestones

 2003
Green Week
 2004 German World Conference on RE
 Regional Workshops (?)