Rhein on Energy and Climate

On June 1st, the preparations for the Copenhagen Climate Conference have entered into their final phase, with 182 negotiation parties and some 4000 delegates assembling in Bonn and finally starting to discuss legal texts.

A 53 page option-paper submitted by the UN Climate Secretariat serves as the basis. But it lacks focus and realism.

· It deals more with adjusting to future climate changes (adaptation), finance, technology and institution building than with the overriding challenge of reducing fossil energy consumption today (mitigation).

· It disseminates the illusion that an agreed text at Copenhagen will change policies by major emitter countries and thus help stabilise climate conditions by 2020.

International diplomacy can do more than produce texts. The draft that is on the table in Bonn is not what is needed: a long-term strategy for phasing out fossil fuels in the next five decades, including specific action plans for the major emitter countries until 2020-30.

It is a patchwork of proposals and formulas trying to satisfy the main negotiating parties in view of reaching a compromise among conflicting interests.

· Developing countries, supported by China (!), trying to extract new financial resources from the developed countries for the damage they have to done to them.

· The USA seeking to preserve its autonomy on energy and climate policy.

· The EU as the most advanced group of countries on climate policy wanting to obtain a substantive compromise while keeping a lid on excessive financial commitments for adaptation funding and new financial institutions.

· The UN Climate Secretariat seeing a chance for increasing its influence by channelling potentially huge climate adaptation funds through a new UN financial institution under its auspices rather than through the World Bank.

There will probably be a new agreement in December in Copenhagen. No major country can afford to walk away and bear the responsibility for formal failure. But it is unlikely to contain sufficient substance. Global green house gas emissions will most likely continue rising beyond 2020 because:

· The time-lags between policy decisions and their full-scale implementation exceed easily 10-20 years.

· The reductions that developed countries might implement, say 15 percent over the 1990 baseline, will not be enough to offset increasing emissions from emerging countries.

Climate policy must be brought back to where it belongs: energy policy. There is no point for governments taking ambitious commitments for the reduction of C02 emissions while shying away from making gasoline, fuel, gas and coal much more expensive.

· Governments must have the courage to phase out all subsidies on fossil fuels and to increase excise taxes. The USA should raise the federal fuel tax; and the EU should raise excise taxes on fuel used by the agricultural and building sectors.

· Governments should realise that emission “cap and trade” will only reduce C02 emissions if they go together with a tough schedule for cutting emissions. Both the envisaged US legislation and that adopted by the EU leave be desired on this score

· Too many people believe that trading emissions is a recipe for reducing them. That is an illusion. What matters are tough caps, which will reduce fossil energy use and generate a price for C02. But C02 prices in the range of € 10-20/ton are far too low to constitute an incentive for business to reduce their fossil fuel inputs and replace them by renewables. To be effective we need C02 prices beyond € 50. Hopefully the EU reduction scheme after 2012 will substantially raise C02 prices.

· Governments must impose stricter energy-relevant standards, in particular for buildings, transport and appliances/machinery, jointly responsible for two thirds of global C02 emissions and monitor compliance. This is particularly valid in the building sector. Here action has been falling short almost everywhere. including in the EU.

In the negotiations leading up to the final show-down in Copenhagen none of these nitty-gritty issues will be discussed. They are far too banal for “climate diplomats”.

The outcome of Copenhagen will there be most likely nothing else but an updated Kyoto Protocol with revised long-term global targets, amendments concerning mitigation, adaptation and commitments to financing such measures including appropriate coordinating mechanisms.

Copenhagen can therefore only be the beginning for a dramatic wake-up by the major emitter countries. If they want to take their responsibility for future generations seriously, they have to take effective action.

They must trace a long term path for phasing out fossil energy and thus give the right long-term signals to industry, utilities, house and car owners, etc.

The US Climate and Energy Security Bill shows the way by stipulating a reduction of green house gas emissions of 42 percent by 2030 provided the Law will extend the annual steps to be accomplished beyond 2020.

The EU should follow suit and also extend its reduction schedules etc. until 2030.

Developed countries have a special responsibility for addressing climate change. They are responsible for more than half of global emissions. They dispose of the technological and financial means to do so. After Copenhagen they should therefore go ahead, beyond the commitments they may have agreed to in Copenhagen, pursuing a dual objective that serves their long-term interests.

· Securing energy security,

· Becoming technological leaders in alternative energy systems.

They should do so whatever engagements China, the biggest single emitter country, will take. Most likely China will follow suit. If it fails to do so, there remains always the possibility of resorting to protective measures against exports of energy-intensive products like steel, aluminium, and other metals.

Such a course of action calls for political leadership. Europe should take the lead and make the deliberate fight against climate change its overriding challenge for the future. The new Commission should drive the message home to everybody in the EU, from the simple citizen to the European Parliament and all national governments.

Brussels, 02.06.09 Eberhard Rhein

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