Issues and challenges



Financial and economic crisis – the disclaimer
Boundary conditions
Implications
◦ The ten issues


Country level considerations
Conclusion
International process
Regime models/lessons
The EU setting

International negotiations
◦ Road behind
◦ Road ahead

Questions to answer:
 What is the appropriate scale of ambition?
 What are the most efficient mechanisms for achieving the
agreed objective?
 Which country-by-country commitments and actions
would represent a fair and equitable outcome?
2025
2050
Source: Greenhouse gas reduction pathways in the UNFCCC process up to 2025. CNRS/LEPII-EPE
(France) − RIVM/MNP (Netherlands) − ICCS-NTUA (Greece) − CES-KUL (Belgium), October 2003


The EU setting – the „without” package and the „with”
vision
„With”:
 Agreed commitment targets for Member States should be adjusted to be
consistent with the higher international target
 The proposed changes should allow for Member States to use CERs,
ERUs or other approved credits from projects in third countries
 Allows for transfer of unused quantity of carbon credits between
Member States
 Opens the possibility to use other, not specified future measures for
emission reduction, mechanisms, credit types created under the
international agreement
 The Commission will make proposal on the inclusion of LULUCF
activities in the EU emission reduction commitments
 The scenario will allow for operators to use addition credits from third
countries (CER, ERU etc) and additional types of project credits in the EU
emission trading system

Proposed building blocks by the European
Commission:
◦ Financing
◦ Emission reduction target
◦ Global carbon market
The ten issues

Emission reduction needs in the “with”
scenario
◦ EU bubble
◦ ETS sectors – Community „control”, but MS
implications
◦ Non-ETS sector – national policies

Scenario for 30 % reduction
◦ NMSs usually overestimate emission growth
◦ Details later

Managing the long term transition
◦ Two phases of transition
◦ Whene will phase 2 come?
◦ Naive advise

Modalities of long-impact technologies
◦ Carbon capture and storage
◦ Nuclear power generation

Usage of carbon credits from developing
countries
◦ Getting late to the game
◦ What does the Ministry of Finance thinks?

AAU surplus/banking
◦ What will be the rules of the game?
 AAU levy?
 Banking for what? – implications for GIS now

Carry forward policy
◦ Carbon budgeting, systematic carbon policy

Energy poverty
◦ Measures to avoid

Financing climate activities in developing
countries
BU
GDP
based
Emission
based

CZ
EE
HU
LT
LV
PL
RO
SK
SI
NMSs
19,8
90,6
10,0
80,2
11,8
18,9
220,9
72,1
34,8
26,0
585,0
135,3
281,4
40,5
155,0
21,0
43,6
771,1
297,0
92,5
39,2
1876,7
Energy security
◦ The dilemma of energy mix
◦ The obvious of energy efficiency
General observations
The numbers to anticipate
Nuclear
Energy intensity (EU-15=100%)
800%
700%
Energy intensity (toe/MEuro'05)
Iron and steel
600%
Non ferrous metals
Chemicals
500%
Non metallic minerals
400%
Paper and pulp
Food, drink and tobacco
300%
Engineering
Textiles
200%
Other industries
100%
0%
NM-12
BG
CZ
EE
HU
LV
LT
PL
RO
SK
SI
Carbon intensity indicators (EU-15=100%)
250%
Electricity and Steam production (t of
CO2/MWh)
200%
Final energy demand (t of CO2/toe)
150%
Industry
100%
Residential
Tertiary
50%
Transport
0%
NM-12
BG
CZ
EE
HU
LV
LT
PL
RO
SK
SI
ETS/total emissions in 2005
ETS
reduction
non-ETS
total
4th NC
total
domestic
with CER
etc.
target
cost
efficient
(domestic)
"target"
cost
efficient
(domestic)
with
e.m./BAU
with a.m.
BU
CZ
58% 57%
-35% 36%
-50% 51%
11%
1%
EE
60%
37%
52%
3%
HU LV
LT
PL
32% 27% 29% 51%
30% -9% 34% 17%
45% 24% 49% 32%
2%
9%
7%
RO SK
46% 53%
EUSI NMSs 27
43% 49% 41%
-2% -1% -35% -21% -21%
17% 16% -50% -36% -36%
15,8
6% 10% 5% -3% 5,5%
%
15,8
%
-19% -7% -3% -6% 24% -2% -2% -1% -1%
7% -4,5%
-24% 29% 30% 13% 0% -9% 14% -2% -6% -24% -15% -24%
-28% 24% 24% 14% 15% 11% 10% -2% -1% -11% -13% -14%
50% 19% 16% 56% 36% 30% 52% 43%
0% 27%
34% 21% 8% 29% 9% 20% 45% 36% -6% 18%
Bulgaria GHG emissions
(in Mt CO2eq)
ETS covered by
credits
140
120
ETS covered by EUA
100
80
Non-ETS target
60
40
Non-ETS additional
mitigation potential
20
2020
KP
KP
KP
KP
KP
2005
2004
2003
Slovenia GHG emissions
(in Mt CO2eq)
ETS covered by
credits
25
ETS covered by EUA
20
Non-ETS target
15
10
Non-ETS additional
emission mitigation
potential
5
2020
KP
KP
KP
KP
KP
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
base
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-20
base
0

Plans in most of the NMSs to have future use
of nuclear
◦ Life time extension plans
◦ New nuclear units planned

Social consensus?

Long term pathway for low carbon society?
(i.e. well founded and practical climate and energy policy...)