1. The EU’s Climate Change & Energy Strategy: Opportunities and Challenges
EU-Russia Seminar
“Post-2012 action to abate climate change”
18 April 2007, Moscow
Artur Runge-Metzger
European Commission
Head of Unit ‘Climate strategy, international negotiation and monitoring of EU action’

2. Outline
The EU’s international ambition: Limiting climate change to 2 degrees Celsius
Leadership starts at home: EU domestic proposals to make the EU fit for the 21st century

3. The EU’s international ambition: Limiting global average temperature increase to 2 degrees Celsius compared to pre-industrial levels

4. EU Climate change & energy package
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EU Climate change & energy package
10 January 2007: European Commission has put forward a fully integrated policy package covering both climate change and energy policies:
“Limiting Global Climate Change to 2°C: The way ahead for the EU and the World for 2020 and beyond”
“An Energy Policy for Europe”
15 February 2007: Energy Council conclusions
20 February 2007: Environment Council conclusions
8/9 March 2007: EU Heads of State, Spring Council conclusions

5. The EU’s 2 degrees Celsius objective
Source: IPCC 2007

6. TAR Reasons For Concern
Why 2° Celsius?
AR4 Reasons For Concern
TAR Reasons For Concern
EU 2º C
objective

7. EU 2° objective

8. Why 2 degrees Celsius? Getting into the red danger zone

9. Why 2 degrees Celsius? “Millions at risk”

10. Water determines the pattern of the global economy and societies
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Water determines the pattern of the global economy and societies

11. Global emissions until 2060 to remain within 2 degrees Celsius
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Global emissions until 2060 to remain within 2 degrees Celsius
Source: Malte Meinshausen 2006

12. Source: Malte Meinshausen 2006
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“Delaying action for a decade, or even just years, is not a serious option” Sir David King (Science, 9 January 2004)
Source: Malte Meinshausen 2006

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Neither the EU alone nor offsetting alone can solve the climate change problem
... If Annex I alone reduces emissions to zero
... Global emission path compatible with 2°C
Red line indicates what emissions would be if Annex I stops emitting by 2050

14. The key players

15. The EU’s vision (1): Global emission development
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The EU’s vision (1): Global emission development

16. The EU’s vision (2): Action by developed countries
Common but differentiated responsibility: take the lead and make most of the effort
Reduction efforts:
30% by 2020
60-80% by 2050
Emissions trading, linking domestic schemes and global carbon market
Binding and effective rules for monitoring and enforcing commitments

17. The EU’s vision (3): Action in developing countries
Reduce growth of emissions asap
Absolute reductions after 2020
Toolbox:
Sustainable development policies
New approach to CDM
Improved access to finance
Sectoral approaches
Quantified emission limits
No commitments for least developed countries

18. The EU’s vision (3): Further elements
International research and technology cooperation
Large-scale technology demonstration
Quantification of regional and local impacts and adaptation and mitigation strategies
Action to halt deforestation within 2-3 decades and reverse afterwards
Large-scale pilot schemes
Adaptation measures
Integrate in public and private investment decisions
Enhanced alliance building with developing countries building on EU action plan on climate change and development
International agreement on energy efficiency standards

19. The EU vision is technically feasible: e.g. the energy sector

20. The EU vision is economically affordable
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The EU vision is economically affordable
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Make clear that this is a rather conservative estimate at the upper end of recent analysis
A range of studies that include induced technological change show mitigation cost of between 1%-2% by 2050 for comparable stabilisation levels

21. Benefits and Costs of the EU vision
“Winning the Battle” & Stern Review: benefits of limiting Climate Change outweigh costs of action
Costs of inaction: 5-20% of global GDP (Stern Review)
Costs of global action (2030):
Investment costs: 0.5% of global GDP / year
Reduce global GDP growth by 0.19% / year
(Expected global GDP growth of 2.8% / year)
Co-benefits:
Increased energy security
Improved competitiveness through innovation
Health benefits from reduced air pollution

22. Leadership starts at home: domestic proposals to make the EU fit for the 21st Century

23. The EU‘s three domestic challenges
Competitiveness
“LISBON”
Internal Market
Interconnections (Trans-European networks)
European electricity and gas network
Research and innovation
Clean coal
Carbon sequestration
Alternative fuels
Energy efficiency
Nuclear
FULLY
BALANCED
INTEGRATED
AND
MUTUALLY REINFORCED
Climate security
“POST-2012”
Security of supply
Emissions trading
European Climate Change Program
Renewable energy
Energy efficiency
CCS
Research and innovation
Nuclear
International Dialogue
European stock management (oil/gas)
Refining capacity and energy storage
Diversification 23

24. EU climate action up to 2020: mitigating climate change
EU independent commitment: Reduce EU GHG emissions by at least 20% in 2020 compared to 1990
Energy Package:
Energy efficiency: 20% improvement by 2020
Renewable energy: 20% mandatory objective by 2020
differentiation of targets between countries
flexibility in target setting within a country between sectors
Biofuels target of 10% by 2020
Sustainable power generation from fossil fuels: 12 large scale CCS demonstration plants by 2015; aiming at near-zero emissions by 2020
Strategic energy technology plan
Internal market-options unbundling & regulatory powers:
Important for functioning EU ETS
Overcome hurdles for renewables
Nuclear: member states’ choice
Climate Strategy:
EU ETS (Review, aviation)
Other policies (e.g. fuel quality)
Global carbon market (incl. CDM)
At least -20 % CO2
Up to - 5% of GHG emissions

25. Synergy with future energy policy
Reduces energy dependency
By 2030, EU will have to import 80% of gas and 90% of oil.
Attaining the objectives of the energy package will decrease imports of oil and gas by more than 15% by 2020 compared to baseline.
Costs depend on energy prices, e.g. 20% renewables:
At $ 48/barrel estimated cost is € 18 billion annually
At $ 78/barrel estimated cost is € 10,6 billion annually
Prepares our economy for a low carbon future, e.g.:
An oil price of $ 78/barrel plus a carbon price of more than € 20, will make renewables competitive with “traditional” fossil energy sources

26. Improve competitiveness through innovation
Climate change policies are an opportunity, e.g. wind sector employs already more than 100,000 people in Germany, Denmark and Spain. EU companies have 60% of the global market.
Companies ask for a long term investment horizon to develop and deploy new technologies, e.g. demand for a harmonized regulatory framework for CCS.
Additional investment costs for new technology are recycled inside our economy, higher expenses for imports are not.
Preliminary results of a study of the European Trade Union Confederation show that climate change policies in total can increase employment.

27. Health benefits from reduced air pollution (1)
Costs of air pollution policies in the EU would decrease significantly due to climate policies.

28. Health benefits from reduced air pollution (2)
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Health benefits from reduced air pollution (2)

29. EU climate action up to 2020: living with the effects of inevitable climate change
identify vulnerabilities
implement measures to increase resilience

30. Need for adaptation in the EU (1)

31. Need for adaptation in the EU (2)

32. Need for adaptation in the EU (3)

33. Co-operating with Third countries
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Co-operating with Third countries
e.g.
EU-India Initiative on Clean Development and Climate Change (Sept 2005)
EU-China Partnership on Climate Change (Sept 2005)
EU-US High level dialogue
EU-Russia Partnership in the field of energy, climate change and Kyoto implementation
Global Energy Efficiency and Renewable Energy Fund
Carbon Sequestration Leadership Forum (CSLF) and International Partnership for a Hydrogen Economy (IPHE)
Asia Pro Eco is a five-year multi-country European Union initiative, launched in 2002, and is designed to strengthen the environmental dialogue between Asia and Europe through the exchange of policies, technologies and best practices that promote more resource-efficient, market driven, and sustainable solutions to environmental problems in Asia. The programme aims to support a series of preventive and corrective actions, which materialise in technical solutions that contribute to both quality of life and economic prosperity in Asia. The implementation of the programme concentrates on specific projects under the Call for Proposals mechanism accessible to public or non profit organisations in Asia and EU. The Programme provides support through grants.
Examples of recent Asia Pro Eco projects:
CURB AIR: €300K, synergies between improving air quality in mega cities while contributing to climate change mitigation (India, Indonesia, China, Thailand), 24 months, start in Feb 2006
Capacity Building CDM in China: €180K, focus on private sector, 20 months, start in Dec 2005
EU-India Sustainable Energy Efficiency Initiative (EISEEI): €441K, Partnering effort to strengthen selected state agencies in implementing the Indian Energy Conservation Act, 36 months, start in Jan 2006
JREC --Johannesburg Renewable Energy Coalition (2002-)
Ca. 90 member Governments (China and Japan considering joining)
Exchange of best practice in policies (IEA renewable energy database)
Innovative financing options
In-depth energy scenario analysis to identify joint actions

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Conclusions
Kyoto is only a first insufficient step. Further global action needs to be taken urgently.
EU Heads of State have made a feasible proposal. EU is ready to negotiate and to take on new commitments for deep long-term emission cuts.
EU is determined turn the climate change challenge into an opportunity for EU energy security, innovation, its international competitiveness and the renaissance of its industry and economy.
NB: these are overall figures for FP-7 spending, there are no specific budgets set aside for 3rd country participation, this is included in the budget under each heading, where there’s again no specific figure for 3rd country spending

35. More information on how to…
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More information on how to…