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?

Source: Greenhouse gas reduction pathways in the UNFCCC process up to CNRS/LEPII-EPE (France) − RIVM/MNP (Netherlands) − ICCS-NTUA (Greece) − CES-KUL (Belgium), October

 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  Energy security ◦ The dilemma of energy mix ◦ The obvious of energy efficiency BUCZEEHULTLVPLROSKSINMSs GDP based 19,8 90,6 10,0 80,2 11,8 18,9 220,9 72,1 34,8 26,0 585,0 Emission based135,3281,440,5155,021,043,6771,1297,092,539,2 1876,7

General observations The numbers to anticipate Nuclear

BUCZEEHULVLTPLROSKSINMSs EU- 27 ETS/total emissions in %57%60%32%27%29%51%46%53%43%49%41% reduction ETS domestic-35% - 36% - 37% - 30%-9% - 34% - 17%-2%-1%-35%-21% with CER etc.-50% - 51% - 52% - 45% - 24% - 49% - 32% - 17% - 16%-50%-36% non-ETS target11%1%3%2%9%7%6%10%5%-3%5,5% 15,8 % cost efficient (domestic)-19%-7%-3%-6%24%-2% -1% 7%-4,5% 15,8 % total "target"-24% - 29% - 30% - 13%0%-9% - 14%-2%-6%-24%-15%-24% cost efficient (domestic)-28% - 24% - 14%15% - 11% - 10%-2%-1%-11%-13%-14% 4th NCtotal with e.m./BAU50% - 19% -16%56%36%30%52%43%0%27% with a.m.34% - 21% -8%29%9%20%45%36%-6%18%

 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...)