Global Warming Policy Forum | 22 Oct 2014
Eastern Europe Attacks EU’s Unilateral CO2 Plans
As EU heads of state prepare to thrash out an agreement on the bloc’s 2030 energy and climate change goals at a summit opening in Brussels tomorrow (23 October), energy-intensive industries in Germany have reiterated warnings that a European “solo effort” would come with billions in losses. “If Europe chooses a solo effort through a one-sided climate protection target of 40% less emissions, it would mean billions in losses for us that our global competitors would not otherwise have gained. The damage done to competitiveness among energy-intensive companies in the EU would be considerable,” said Utz Tillmann, a spokesman for the Energy Intensive Industries of Germany (EID). —EurActiv, 22 October 2014
The EU’s plan to slash greenhouse gas emissions by 2030 has come under heavy assault as an increasing number of eastern European nations rally behind Poland’s threat to scupper a landmark climate deal this week. “I do not think that we can go with this current deal. If there is no change then we will walk away,” said Tomáš Prouza, the Czech Republic’s state secretary for European affairs. “The numbers just do not add up.” One ambassador predicted the most difficult summit since the height of the eurozone crisis. “Both sides are in their trenches, shelling each other,” he said. —Henry Foy and Christian Oliver, Financial Times, 20 October 2014
The leaders of the 28 members of the European Union are set to meet here on Thursday to reassert their global leadership in climate protection, but they will first need to finesse deep divisions over how to generate and distribute energy. Reaching a deal this week would give the union bragging rights before a United Nations climate conference in Paris scheduled for late 2015, by making it the first major global emitter to put forward its position. Polish leaders, however, have hinted that they may veto any agreement. And the German chancellor, Angela Merkel, has already warned that the summit meeting may end in deadlock, requiring further discussions. Analysts have warned that if a deal is reached, it will most likely be a messy compromise. –James Kanter, The New York Times, 21 October 2014
The UK Government’s enthusiasm for domestic and EU-wide green policies is not shared by countries in central and eastern Europe, many of whom are extremely reluctant to sign up to the EC’s targets. In 2011, George Osborne announced that the UK would go no faster than the rest of Europe with regards CO2 emissions targets. If agreement on emissions reductions cannot be reached at a European and a global level, the Government would come under growing pressure to suspend unilateral targets post 2020. —Global Warming Policy Forum, 22 October 2014
Our power stations are ageing fast. We have eked out their lifespan for longer than expected, but replacements are urgently needed. Yet for years, our politicians have failed to act, promoting costly and over-subsidised renewables rather than building new gas or nuclear plants. To make matters worse, much of our capacity has been scrapped, in compliance with environmental restrictions set in Brussels. If things continue as they are, the prospect has been raised of Seventies-style restrictions on energy use, even rolling blackouts. That is a grim prospect for a 21st-century economy. –Editorial, The Daily Telegraph, 21 October 2014
1) German Industry Issues Stark Warning Ahead Of EU Climate Summit – EurActiv, 22 October 2014
2) Eastern Europe Attacks EU’s Unilateral CO2 Plans – Financial Times, 20 October 2014
3) For EU Climate Meeting, Deep Divisions and High Stakes – The New York Times, 21 October 2014
4) GWPF-Briefing: EU Climate & Energy Summit, Brussels 23-24 October – Global Warming Policy Forum, 22 October 2014
5) Editorial: Fantasy Policies Will Not Solve Our Energy Crisis – The Daily Telegraph, 21 October 2014
1) German Industry Issues Stark Warning Ahead Of EU Climate Summit
EurActiv, 22 October 2014
As EU heads of state prepare to thrash out an agreement on the bloc’s 2030 energy and climate change goals at a summit opening in Brussels tomorrow (23 October), energy-intensive industries in Germany have reiterated warnings that a European “solo effort” would come with billions in losses.
German companies are concerned about the extra burden they fear will come with a new, higher climate protection target for 2030.
Utz Tillmann, a spokesman for the Energy Intensive Industries of Germany (EID) – which includes chemicals, steelmaking, cement and others – said he supported an ambitious agreement at the Paris UN climate summit in December next year.
But these goals should include strong and comparable commitments for both industrialised and newly industrialised countries, he stressed.
Opposition to unilateral 40% GHG target
Energy-intensive industries are committed to climate protection, said Tillmann, who is chief managing director at the German Chemical Industry Association (VCI).
“But we can only produce more competitively if there are comparable burdens overseas,” he stressed.
“If Europe chooses a solo effort through a one-sided climate protection target of 40% less emissions, it would mean billions in losses for us that our global competitors would not otherwise have gained. The damage done to competitiveness among energy-intensive companies in the EU would be considerable.”
According to Tillman, existing compensation measures in the EU’s Emissions Trading Scheme (ETS) for carbon dioxide are insufficient to cover future additional burdens, and risk weakening Europe’s position against foreign competitors.
EU heads of state intend to come to a conclusion on a proposed 2030 framework for energy and climate change at an EU summit on Thursday and Friday (23-24 October).
Their discussion will be based on a January proposal by the European Commission, which set out an EU-wide greenhouse gas reduction goal of 40% below 1990 levels by 2030, deepening the current 2020 target of a 20% cut. The 2030 package also contained proposals to expand renewables to 27% of the EU’s energy mix and reducing energy consumption by 30%.
2) Eastern Europe Attacks EU’s Unilateral CO2 Plans
Financial Times, 20 October 2014
Henry Foy and Christian Oliver
The EU’s plan to slash greenhouse gas emissions by 2030 has come under heavy assault as an increasing number of eastern European nations rally behind Poland’s threat to scupper a landmark climate deal this week.
Failure to agree an emissions target at a summit on October 23-24 would damage the EU’s status as a leader on climate change and sap momentum for a global deal in Paris next year.
The EU is proposing that nations should cut emissions by 40 per cent from 1990 levels but eastern European nations fear the proposed deal does not sufficiently compensate them for the expense of modernising their industries.
“I do not think that we can go with this current deal. If there is no change then we will walk away,” said Tomáš Prouza, the Czech Republic’s state secretary for European affairs. “The numbers just do not add up.”
As recently as 2009, the EU was at the vanguard of advocating binding emissions caps, implementing the world’s largest emission-trading system and urging the UN climate conference in Copenhagen to follow its example of forcing members to cut greenhouse gasses.
But the collapse of the Copenhagen deal followed by five years of economic crisis and stagnation has undermined EU unity on the issue ahead of the next round of UN talks in Paris, and European diplomats fear a failure to agree the 40 per cent target at this week’s summit could do permanent damage to the EU’s ability to negotiate a global deal.
Rising objections from within the EU last week helped forge an increasingly united opposition between Poland, Hungary, the Czech Republic, Slovakia, Romania, Bulgaria, Latvia and Lithuania. Officials from the eight holdout countries held regular video conferences, and their EU envoys will meet on Tuesday.
One ambassador predicted the most difficult summit since the height of the eurozone crisis. “Both sides are in their trenches, shelling each other,” he said.
While all states largely accept the 40 per cent reduction in emissions, the fight centres on how to achieve the target. Eastern EU countries believe they will suffer disproportionately from increased energy prices and a sag in industrial competitiveness.
Mr Prouza added: “The commission has not been very good at understanding our positions . . . They have tried to go with a one-size-fits-all approach.
“If the commission wants to set the target and prescribe to us how we have to go about it, then forget it.”
3) For EU Climate Meeting, Deep Divisions and High Stakes
The New York Times, 21 October 2014
James Kanter
The leaders of the 28 members of the European Union are set to meet here on Thursday to reassert their global leadership in climate protection, but they will first need to finesse deep divisions over how to generate and distribute energy.
Curbing the emissions that contribute to climate change has long been a popular cause in Europe, where policy makers frequently highlight how their industries and citizens emit fewer greenhouse gases like carbon dioxide than do the United States and other industrialized countries.
The two-day summit meeting this week is intended to strengthen and expand the region’s efforts to cut emissions, bolster renewable sources, improve energy efficiency and connect power markets separated by national borders.
But the long economic downturn in Europe has badly pinched spending on green-energy projects, and the advent of technologies to extract cheap shale gas — despite its uncertain prospects in Europe — has reduced the attractiveness of some renewable alternatives.
Adding to the complexity of the fight against emissions is the fallout from the disaster in Fukushima, Japan, where an earthquake and tsunami in 2011 led to multiple meltdowns at a nuclear power plant. This prompted questions about the future of nuclear energy even though nuclear facilities emit almost no gases linked to global warming. Germany, for one, has announced plans to shut all of its nuclear power plants by 2022.
Also hanging over the summit meeting is the standoff between the West and Russia over its annexation of Crimea in March and its involvement in fighting in Ukraine.
For countries like Poland that border Russia, reliance on coal, which is highly polluting, is seen as preferable to switching to natural gas. Russia, a major supplier of gas, has been known to cut off supplies to countries during political disputes.
The Polish stance, which is also aimed at protecting jobs in its powerful mining industry, has put it at loggerheads with countries like Sweden and Germany that are seeking more ambitious targets for the use of renewable sources and to improve energy efficiency.
The British government vehemently opposes targets on energy efficiency because it fears that such limits would provide new arguments to opponents of Prime Minister David Cameron; some of them contend that he has surrendered sovereignty to Brussels and want Britain to leave the European Union.
France has been resisting demands to expand electricity connections across the Pyrenees that would transport large amounts of wind and solar energy from Spain and Portugal but and could reduce demand for French nuclear power.
The main item on the agenda at this week’s meeting is expected to be the so-called 2030 climate and energy package that was proposed in January by the European Commission, the executive arm of the European Union. The commission’s goal is to reduce greenhouse gas emissions by 80 percent to 95 percent below 1990 levels, by 2050.
On Thursday, the leaders are expected to discuss cutting emissions by 40 percent compared with the 1990 level, by 2030. Also under consideration are a target to generate 27 percent of energy in the bloc from renewable sources; improving energy efficiency by 30 percent; and increasing the number of so-called interconnectors between nations.
The European Union is on target to meet goals, set in 2008, to cut emissions by 20 percent by the end of this decade. But its members have not yet agreed on a course of action for after 2020. Reaching a deal this week would give the union bragging rights before a United Nations climate conference in Paris scheduled for late 2015, by making it the first major global emitter to put forward its position.
Polish leaders, however, have hinted that they may veto any agreement. And the German chancellor, Angela Merkel, has already warned that the summit meeting may end in deadlock, requiring further discussions. Analysts have warned that if a deal is reached, it will most likely be a messy compromise.
4) GWPF-Briefing: EU Climate & Energy Summit, Brussels 23-24 October
Global Warming Policy Forum, 22 October 2014
Disagreement Amongst EU Member States
UK and Parts of Western Europe
Many EU member states are fully supportive of the EC’s proposals, with some even advocating even more stringent targets. The UK Government, for example, had been pushing for the EU to reduce emissions by 50% by 2030 [link].
Eastern and Central Europe
The UK Government’s enthusiasm for domestic and EU-wide green policies is not shared by countries in central and eastern Europe, many of whom are extremely reluctant to sign up to the EC’s targets. There are strong indications from Poland, for example, that the 40% emissions proposal might be an unacceptable burden [link]. Furthermore, there has been increasing opposition to the targets from Hungary, the Czech Republic, Slovakia, Romania, Bulgaria, Latvia and Lithuania [link].
Key Concerns from Eastern Block
(a) Energy Mix: Poland’s current energy mix would mean that stringent emissions targets could be very financially costly – around 90% of its electricity originates from coal-fired power stations [link].
(b) Russian Gas: Many former soviet states continue to be reliant on Russian gas imports for their energy needs, with the EU as a whole still importing around 30% of its gas from Russia [link]. Many fear that ambitious emissions targets could lead to a greater gas import dependence on Russia at a time of considerable geopolitical uncertainty.
(c) Expensive Renewable Energy: The prospect of increasing renewable energy sources is also an unappealing prospect. Governments in Eastern Europe look at Germany where, as a result of huge subsidies for green energy, domestic consumers pay the highest amount for electricity in the EU [link].
Challenges For A Global Deal
Even if EU member states agree on emissions and renewables targets, they will be contingent on whether a legally binding global agreement can be achieved next year. The challenges of establishing a legally-binding global deal on climate change remain very large. The disagreements include:
The Rich Vs Poor Distinction
Previous Agreements: Under the 1992 UN Climate Convention and the 1997 Kyoto Protocol, rich and poor countries were treated in distinct categories. Only developed countries were required to cut emissions, whereas no such commitments were placed on developing countries.
Disagreements: Developing nations, including India and China, are seeking the same approach going forward. However, the US and other developed nations stress that a deal which rigidly differentiates between the obligations of developed and developing countries would be unacceptable. All developing nations, they argue, should have individual, legally binding mitigation targets – albeit more modest commitments than those of developed countries.
Climate Finance
Previous Agreements: At the Copenhagen agreement in 2009, developed countries promised a climate finance package of $100 billion a year by 2020 to the Green Climate Fund [link], which would be used as a global fund to help poorer nations cope with climate change. Furthermore, the G77 and China have called for at least $15 billion dollars of initial capital for the fund.
Disagreements: Only Germany, France and a handful of other countries have pledged a substantial commitment to the Green Climate Fund, leaving considerable uncertainty as to how much will be pledged. Delegations from the emerging economies and the developing world are demanding that rich nations deliver on their commitments to capitalise the Green Climate Fund, both in relation to the initial capital and the target by 2020.
Ambition of Targets
Disagreements: Many developed countries want all nations to indicate their pledges for emissions reductions post-2020. However, many nations are yet to make these pledges.
How Sustainable Are Britain’s Unilateral Policies?
George Osborne’s Commitment: In 2011, George Osborne announced that the UK would go no faster than the rest of Europe with regards CO2 emissions targets [link].
UK’s Unilateral Policies: The UK is currently signed up to a number of unilateral climate targets, including a 2050 emissions reductions target, the fourth carbon budget (which commits the UK to a 50% reduction in emissions by 2027) and the Carbon Price Floor. If agreement on emissions reductions cannot be reached at a European and a global level, the Government would come under growing pressure to suspend unilateral targets post 2020.
Oil and Gas Price Forecasts: Recent forecasts of oil and gas price projections from independent forecasters such as Aurora Energy and Rating’s Agency Fitch now project that gas prices will either remain flat or fall over the coming decades [link] [link]. This makes the economic case for unilateral climate policies even more costly to the British economy, adding further pressure on policy-makers.
see also: 2030 EU Climate Targets: Implications for Britain
5) Editorial: Fantasy Policies Will Not Solve Our Energy Crisis
The Daily Telegraph, 21 October 2014
The fire at Didcot B power station is not going to bring the National Grid to its knees. But in combination with other fires at Ironbridge and Ferrybridge power stations, and problems with the Heysham and Hartlepool nuclear reactors, it will chip away at our surplus generating capacity, to the point where blackouts will become, if not likely, then far more likely than they should be.
The underlying problem, as Brian Wilson spells out on the opposite page, is simple. Our power stations are ageing fast. We have eked out their lifespan for longer than expected, but replacements are urgently needed. Yet for years, our politicians have failed to act, promoting costly and over-subsidised renewables rather than building new gas or nuclear plants. To make matters worse, much of our capacity has been scrapped, in compliance with environmental restrictions set in Brussels.
If things continue as they are, the prospect has been raised of Seventies-style restrictions on energy use, even rolling blackouts. That is a grim prospect for a 21st-century economy. To avoid it, we first need to get serious about energy efficiency. Even if they do not help to save the planet, measures such as better insulation, or more watchful monitoring of the electricity meter, would make sound financial sense. Unfortunately, it seems to go against the spirit of the times to put on a jumper to cope with the chill; it is far easier simply to turn up the thermostat.
Beyond that, there is an obvious need for more generating capacity. New nuclear plants are at last being approved, but they are expensive to build and take years to construct. There is also a case for suspending the provisions of the Climate Change Act, to buy Britain some time to get itself out of this mess: given the amount of CO2 emitted worldwide, it will hardly doom the planet if we take off our hair shirt for a spell. We should also consider the proposal by Owen Paterson, the former environment secretary, that we build small-scale nuclear reactors rather than pointless offshore wind farms.
The Didcot episode also raises extremely serious questions for Labour. Ed Miliband, who lumbered us with the Climate Change Act in the first place, has repeatedly promised that Labour will decarbonise the electricity supply by 2030. As the Didcot accident makes clear, it will already cost tens of billions just to keep the lights on – so where on earth would Mr Miliband find the tens of billions more to replace our coal and gas capacity completely? And what source of power would he use instead?
This is fantasy policy, on an issue that could not be more important to Britain’s citizens, or Britain’s future.
