Energy and climate issues are closely interconnected, but the challenges they pose are very different. The increasing use of fossil fuels accelerates climate change, with grave consequences for many parts of the world. At the same time, despite increasing competition for resources and rising commodity prices, governments must secure the energy supplies needed to keep their economies running.
Enhanced energy efficiency and the use of renewable sources of energy will enable us to reduce our consumption of coal, oil and gas. This will allow us to reduce our emissions of harmful greenhouse gases as well as our dependence on fossil fuel imports.
Modern economies need both reliable energy supplies and sustainable long-term growth. The only way to achieve this is for partners to cooperate internationally to promote greater energy efficiency, a balanced energy mix and technological progress. If we are to ensure uninterrupted supplies of fossil fuels, we also need to maintain an intensive dialogue between supplier, transit and major consumer countries. The global economic and financial crisis has not lessened the urgent need to find solutions to these problems. Proposals for a “green recovery” or a “global green New Deal” show that there are ways to protect the economy, the climate and the environment simultaneously.
European and international consultation on these issues was one of the priorities of Germany’s Presidency of the EU Council during the first half of 2007, meaning that concrete policy measures were initiated by the EU at an early stage compared to other regions of the world. During Germany’s 2007 Presidency, the European Council agreed on a European Energy Action Plan, underlining the need for global warming to be limited to a maximum of 2°C.
Specifically, EU Member States have committed themselves to achieving the following by 2020:
a cut in greenhouse gas emissions of at least 20% in comparison to 1990 levels (30% if other industrialized countries make comparable commitments and emerging economies, too, make appropriate contributions),
a 20% reduction of the total energy consumption projected for 2020
an increase in the share of renewable energies in the energy mix to 20%.
EU climate and energy policy has therefore long been designed to promote not only security of supply but also energy efficiency as well as climate and environmental compatibility. By the same token, it sends a clear message to the energy markets encouraging investment in sustainable and innovative energy technology.
The EU’s climate and energy package
In January 2008, the European Commission proposed a wide-ranging set of EU-level legislation. This four-part “climate and energy package” involved
a decision on the EU’s overall climate protection targets up to 2020, setting specific national targets for the reduction of greenhouse gas emissions
a directive revising the EU Emissions Trading System with tougher rules for the post 2012 period
a directive on increasing the share of renewable energy sources
a directive promoting carbon capture and storage (CCS) technology to reduce emissions of the greenhouse gas CO2 into the atmosphere.
Following intensive negotiations by the EU member states and the European Parliament, an agreement was reached in December 2008 which became binding in the spring of 2009.
With the climate protection measures it drafted in 2007 and specified in the climate and energy package, the EU has taken a leading role in the international negotiations on a post-2013 global climate protection regime.
International Carbon Action Partnership (ICAP)
The International Carbon Action Partnership (ICAP) is a group of countries and regions which are examining the potential to connect national and regional emissions trading systems. The long-term goal is to develop a global carbon market with mandatory caps on emissions.
ICAP was founded in Lisbon at the end of October 2007 on the German Government’s initiative. The Partnership’s objective is to develop a global carbon market in which emitters can trade emissions allowances when essential climate policies impose caps on their greenhouse gas emissions. In this way, emissions are reduced in the most cost-effective manner.
Within ICAP, its members investigate how to connect existing regional cap and trade systems (like the EU’s) with similar systems worldwide.
International ICAP conferences examine how new emissions trading systems should be constructed in order to enable their future connection to a global network.
Further information on ICAP is available at www.icapcarbonaction.com.
The G8 process and the Major Economies Forum (MEF)
As early as June 2007, at the G8 summit in Heiligendamm during Germany’s Presidency, the heads of state and government addressed the climate-policy aim of at least halving global CO2 emissions by 2050. They agreed to give that aim serious consideration and to pursue it within the framework of UN negotiations, thus also involving the major emerging economies. The G8 also agreed to support innovative funding instruments for climate protection projects in developing countries. Germany soon put this decision into practice, making part of the proceeds from public sales of emission allowances under the EU Emissions Trading Scheme available for climate protection measures. With its International Climate Initiative, financed from these proceeds, Germany has embarked on an innovative new route in providing financial assistance for international climate protection projects.
In 2009, climate protection was again the focus of the G8 meeting. The G8 summit in L’Aquila in Italy reaffirmed the need for swift agreement on a global post-2013 climate regime and for reducing global emissions by at least 50% by 2050, and agreed on an 80% or more reduction goal for developed countries by 2050.
In addition, the G8, together with the eight largest emerging and developing economies, discuss climate protection during meetings of the Major Economies Forum (MEF). As there are even greater differences of interest in this format than within the G8, the July 2009 MEF summit failed to bring about the rapprochement between the major global emitters necessary for successful international climate protection. For that reason, in spite of intensive efforts in the run-up to the summit, the MEF final declaration remained less specific on climate policy than that of the G8.
UN climate protection talks
During the UN Climate Change Conference in Bali in December 2007 (the 13th Conference of the Parties to the UN Framework Convention on Climate Change and the 3rd meeting of the Parties to the Kyoto Protocol), the countries agreed to initiate an intensive negotiating process on a global climate change agreement, which will be needed after 2012, when the current Kyoto Protocol commitments expire. The “Bali Road Map” defined the main areas to be addressed: reduction in greenhouse gas emissions, adaptation to climate change, technology cooperation and funding of climate protection activities. It also specified the Copenhagen Climate Change Conference in December 2009 as the deadline for negotiations.
Due to the states’ divergent interests, the goal of a comprehensive agreement was not reached in Copenhagen. There was some success in that a draft decision, the Copenhagen Accord, was adopted. However, the community of states is in agreement that negotiations for a comprehensive climate protection agreement must continue. Many states have made climate protection part of their national policy programmes since 2007. International awareness of the need for new and binding regulation has risen since the Copenhagen negotiations.
Previous negotiations have shown that it will take time to arrive at that aim. For the Climate Change Conference in Cancún, the focus has therefore initially been placed on adopting a balanced package of politically binding decisions which can provide the basis for a binding agreement. It seems possible that a compromise will be found to balance the themes focused on by industrialized countries (cutting CO2 emissions, MRV – measurement, reporting and verification – inclusion in the negotiation process of the aims agreed in the Copenhagen Accord) and the issues of concern to developing countries (adapting to climate change, technology transfer, protection of rainforests, short-term and long-term funding for climate protection). It can also be expected that issues like greenhouse gas emissions caused by the destruction of forests, particularly tropical rainforests, will be discussed further and included in the future climate regime. At around 18%, such emissions account for a considerable share of global emissions.