Rhein on Energy and Climate

1. The EU is likely to approve its second climate package by March 2009. This will constitute a huge step forward for the EU and for the world. It will be the most comprehensive piece of climate policy ever adopted so far, whatever its shortcomings may be. The EU will have the legal and administrative means for implementing its courageous 20/20/20 targets for 2020. The world will realise that it is possible for any country to substantially reduce C02 emissions if there is political will behind and a sufficient adjustment period for the companies directly concerned.

2. But whatever praise the EU may deserve for being at the vanguard of humanity in taking effective measures against climate change, it is far too small to make a dent on the global climate. Today, it is only responsible for some 14 percent of global GHG emissions. In the future, this share is bound to decline as other regions of the earth witness soaring GHG emissions while European emissions have started their descent (- 8% until 2012 and -20 until 2020).

3. In order to become globally effective the EU has to reach out to those few big players in the climate battle that really matter – USA, China, Russia, India, Japan, Brazil, Canada, GCC, Australia.

4. It has to convince each of these countries of the necessity of reaching an effective climate agreement at the forthcoming international conference in Copenhagen early December 2009. To get there will require cooperation and adequate policy measures by the main countries responsible for the accelerating climate change.

5. An effective climate agreement will have to set ambitious targets for Green House Gas reductions in the medium and long term. Humanity will have to halve overall emissions by 2050 from present unsustainable levels, if it wants to prevent a cataclysm. It will have to start acting now, without further delay. And the developed countries will have to shoulder the major burden, at least for the coming 20 years. But emerging countries must come on board because of the sheer volume of their emissions and the potential distortions of competition between energy intensive industries across the globe. They should, however, not be asked to cut emissions at the high rate at which Europe, America and Japan will have to proceed and urgently.

6. An effective international agreement must not limit itself to setting targets. It has to provide for an effective monitoring mechanism. Countries must be held responsible by the international community for taking effective measures for cutting their emissions. To that end, they should be obliged to elaborate 5-10 year strategies, open to peer-review, and to submit annual progress reports.

7. For effective international climate diplomacy the EU will need to formulate its views about the desirable content of the Copenhagen outcome. It has not so far been able to do so, being absorbed with reaching an agreement on the Commission climate proposals. The Commission should rapidly present its views on an optimal international package, which should focus on a few essentials rather than getting lost in a myriad of secondary actions. On that basis, the EU should prepare an “EU Memorandum on the results to be achieved at the Copenhagen Climate Conference” and serve as guidelines for the diplomatic campaign the EU should engage throughout 2009.

8. The first target of EU climate policy needs to be Washington. There will be no effective climate policy if the USA continues to block all international efforts. The EU should therefore convince the new US Administration to cut its emissions by at least 20 percent until 2020, and explore the possibility of jointly shooting at a more ambitious reduction goal of 30 percent by 2020 or 2025. The USA is still the biggest single emitter country. Its per capita emissions are exorbitant, 20 tons annually per citizen, five times more than those of China, more than twice the EU per capita emission. It has the technological and financial means to act fast, e.g. in areas like wind and solar energy, where the country has huge potentials. It only has to take the courage to set the right incentives and mandatory standards where required to shift from fossil to renewable sources and to radically cut the horrifying waste of energy.
President Barroso personally should make this the priority of priorities. He has the charm and conviction to convince his American counterpart to make effective action against climate change the overriding policy objective of his Presidency. That should be easier with a Democratic President. Despite the stubborn opposition of President Bush the USA has recently moved substantially in pushing alternative energy technologies. The time has therefore come for the USA to join hands with Europe and convince the other key actions to also go along. That should be their joint priority for 2009.

3. Tokyo should be the second stop-over for EU climate diplomacy. As the country that gave the Kyoto Protocol its name, it has a reputation to lose; lately powerful business interests have put a brake on the government’s zeal to seriously tackle climate change. It is therefore timely to press the new government to align the country more firmly with the EU and others determined to act speedily. Japan has as much to gain as the EU from a vigorous push of energy efficiency and alternative energy technologies.

4. China and India will be even more difficult to bring on board. For both countries the answers will have to be found in

  • the rapid development of carbon capture and storage technology that would allow them to continue exploiting their vast coal reserves,
  • massive European and US investment in alternative energies in China and India to be counted as C02 credits (“clean development mechanism” under Kyoto Protocol) in EU and USA,
  • practical assistance in shaping appropriate policy incentives (phasing out of all fossil energy subsidies, phasing in feed-in tariffs for wind and solar power etc.),
  • assigning them modest targets for C02 emissions, say zero increase by 2020.

In any case, neither of the two countries will move ahead without a clear signal from the USA that it is prepared to take rapid action to effectively reduce its C02 emissions. This also goes for all other emerging countries like Russia, South Africa, Brazil, Korea, GCC and Mexico.

5. An effective diplomatic action by the EU during 2009 will require a special team composed of Commission officials and representatives from member states and possibly the UN Climate Secretariat. It should be headed by an experienced hand with a global vision of climate issues and the necessary political answers. Sir Nicholas Stern, the author of the 2006 Stern Report, would be well suited to head such a team and to assure continuity during the missions stretching over several months. It will, indeed, a highly be a delicate and time-consuming mission that needs the full-time involvement of a few top people fully versed with the EU approach and knowledgeable about the specific challenges and opportunities of the key countries to be contacted.

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  1. There might actually be some pretty good chances of getting the US more involved in climate issues, presuming Obama wins. He may not be influential enough to end the crises in Iraq and Afghanistan, but he can definitely do a bit more with climate change. Also, EU officials should keep in mind that emissions trading has become a very profitable economic activity and that it’s economic agents, not governments involved in the business. I believe there should be both more regulation and a more intensive dialogue with private actors (multinational companies mainly).

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