1.1. Regulators claim role in combating climate change
20 October 2009, EurActiv
The climate change imperative has radically changed the energy regulation environment, shooting up the priority list alongside energy security and fuel poverty, EurActiv heard yesterday (19 October) at the fourth World Forum on Energy Regulation in Athens.
While regulation was previously aimed at securing competitive markets, the challenge now is to cut emissions from the power sector cost-effectively in anticipation of climate legislation, participants in the three-day conference said.
"Originally, liberalised energy markets were seeking competition, efficiency and reliability. Now they have a very different focus, which is to lower carbon emissions with efficiency and energy security," said John Tamblyn, chair of the Australian Energy Market Commission.
The EU is the first region to set up a cap-and-trade system as the basis of its transition to a low-carbon future (see EurActiv LinksDossier on the EU’s emissions trading scheme). By obliging power utilities to buy pollution permits, it hopes to force the largest emitting sector into cutting greenhouse gases drastically by investing in efficiency and alternative sources of energy.
A similar scheme is now in the making in the US Congress, and several other countries are considering their options. The EU is eyeing a link-up of national schemes to form an OECD-wide carbon market by 2015.
However, a poorly-regulated transition could lead to an increase in consumer prices that is much greater than the actual cost of avoiding emissions, several participants warned. This would give rise to concerns that vulnerable consumers might fall into fuel poverty.
"When the cost of abatement is relatively small and customers are asked to pay a lot, we are entering a system which raises equity questions and it also raises serious political risks that the system is not sustainable," said Richard Cowart, director of the Regulatory Assistance Project (RAP) and former chair of the Vermont Public Service Board.
"So we need to design a system where the consumer cost is a lot closer to the cost of abatement," Cowart added.
Energy regulators see an important role for themselves in designing market rules that will make the transition as painless as possible.
"How the energy market adapts will significantly influence the total cost of reducing global emissions. Changes to the design of energy markets can help minimise transition costs – and this should be a key focus for energy market rulemakers and regulators," Tamblyn stated.
Energy efficiency in demand
Exactly how energy markets should be restructured remains a matter of debate. Many ideas where put on the table, but particular consensus formed around the idea of complementing cap-and trade schemes with efficiency and renewable energy standards.
Considering the great volatility of carbon prices in the past, many regulators pointed out that carbon prices have only triggered a limited amount of cost-effective investment in energy efficiency. They argued that this needs to be addressed with a portfolio of government measures to increase energy efficiency and promote renewable energies.
According to Cowart, the American experience of the Regional Greenhouse Gas Initiative (RGGI) shows that the cost of cutting emissions will be significantly higher if the efforts rely solely on carbon trading. He argued that the most cost-effective option would be to channel a sizeable share of carbon revenues towards efficiency and renewables programmes.
"National governments and regulators alike will need to coordinate that suit of policies and market mechanisms to advance those policies," he added.
The EU has adopted a binding target to increase the share of renewables in its energy mix to 20% by 2020, but its energy efficiency goal is merely aspirational. This might be changing now, however, as a Commission plan proposes to make this a binding obligation (EurActiv 13/10/09).
At the conference, world regulators pledged to step up cooperation on defining their role in responding to climate change. They announced the creation of the International Confederation of Energy Regulators (ICER), a voluntary forum for exchanging information and developing the role of energy regulation in addressing "a wide spectrum of socio-economic, environmental and market issues".

1.2. Poland blocks EU climate funding decision
21 October 2009, EurActiv
EU finance ministers yesterday (20 October) failed to agree on funding climate mitigation and adaptation in developing countries, due to Poland and Eastern European countries’ concerns that they would end up paying more than they can afford.
Instead, the ministers decided to defer decisions on concrete figures for the EU’s contribution to a post-Kyoto climate treaty until the European summit next week. This got the ‘climate super week’ – which was to see two ministerial meetings agree the EU’s position for the UN climate conference in Copenhagen – off to a bad start.
Swedish Finance Minister Andreas Borg described the outcome of the Council as "disappointing" and complained of "a lack of commitment by certain member states".
"However, the components of an agreement were on the table and with more pragmatism from certain capitals, we will resolve these issues and the EU will drive the climate process forward," he said.
The talks stalled on the issue of internal burden-sharing. Poland headed a coalition of Central and Eastern European countries that have argued over the past months that any decision on funding should come after the EU has decided how much each member state will have to pay.
The Swedish EU Presidency had hoped that the Council would produce conclusions with concrete figures on upfront EU financing until 2013 as well as the yearly contributions necessary until 2020. It was supported by a number of countries including the UK, the Netherlands and Denmark.
But they failed to reassure Eastern member states, which are worried that they will end up paying a disproportionate share compared to their wealth.
In September, the European Commission said that the total climate aid needs would climb to €100 billion annually by 2020 (EurActiv 11/09/09). It suggested that the EU pay €2-15 billion of this, and earmark €5-7 billion to fast-track financing to pay for the transition period from the Kyoto Protocol, between 2010 and 2013.
EU leaders now have these crucial decisions on their hands as they meet next week in Brussels. Other aspects of the global deal are also being debated today by environment ministers.
Parliament calls for €30bn
In the meantime, MEPs called on EU heads of state and government to show leadership in the international negotiations by committing at least €30 billion annually by 2020 to help developing countries cut emissions and adapt to the inevitable consequences of climate change.
The European Parliament’s environment committee yesterday (20 October) voted overwhelmingly in favour of a draft resolution that urged the negotiators in Copenhagen to agree a collective emission-reduction target for developed countries at the high end of the 25-40% range by 2020 and at least 80% by 2050, compared to 1990 levels.
Developing countries, for their part, should limit emissions growth to 15-30% below business as usual, it said.
Moreover, these targets should be reviewed every five years against the latest scientific developments, MEPs said. This will be necessary to ensure that global warming does not exceed 2°C, considered to be the threshold after which climate change will be catastrophic.
Lawmakers argued that both financing and targets to slash emissions would have to be subject to a tougher compliance regime than under the Kyoto Protocol. This should include an early warning mechanism and penalties, they said.

1.3. Russian ‘hot air’ threatens UN climate deal
22 October 2009, EurActiv
The European Union is wondering what to do with billions of unused pollution credits accumulated by Russia, Ukraine and other former communist states of Eastern Europe under the Kyoto Protocol as lawmakers worry about the continuity of the carbon market beyond 2012.
Environment ministers from the 27-member bloc met in Luxembourg on Wednesday (21 October) to thrash out the that the European Union will take to UN climate talks in December.
But as an international agreement slowly takes shape, the question of what to do with the billions of unused pollution credits accumulated during the 2008-2012 period has become the "elephant in the room" for negotiators.
"There is a lot of money involved," said the European Commission’s environment spokesperson Barbara Helfferich. "We haven’t clarified our position on this in detail," she told EurActiv after the ministers’ meeting on Wednesday.
Kyoto legacy
Under the Kyoto Protocol, countries were granted a certain number of permits to release greenhouse gases in the atmosphere called Assigned Amount Units (AAUs), which are equivalent to one tonne of CO2.
Kyoto targets were decided based on 1990 emission levels. But in the wake of massive deindustrialisation that followed the fall of communism, Eastern European countries are now finding themselves sitting on a huge stockpile of unused pollution credits.
"The Russians have accumulated something like five billion units" during 2008-2012, said an EU diplomat from one of the large EU member states. "This is enormous," he added, saying the amount is equivalent to the effort expected from the entire EU during the upcoming 2013-2020 period.
"We have a big problem of hot air in the system," the diplomat said.
Stefan Singer, director of global energy policy at WWF, warned that the possibility for Russia and Ukraine to carry over their surplus credits after 2012 would probably "sink" international climate talks.
"This amount is more than the entire annual emissions of the EU 27 and may – if traded and sold – sink any environmental integrity of targets for developed countries," he told EurActiv.
Britain and Germany said they wanted to kill off the excess permits, arguing that they undermine the system.
Russia is not the only country to have hot air problems. Ukraine for instance is expected to hoard nearly 2.4 billion units over the 2008-2012 period, according to figures circulated in European chancelleries. And the ten Central European countries that joined the EU in 2004 are expected to collect 2.2 billion in total.
EU diplomats are now working on possible solutions to the problem. One "extreme" option would be to cancel surplus carbon units after Kyoto expires, an option favoured by environmentalists.
However, such a radical option is likely to meet with fierce resistance from Russia and Eastern European states, which can argue that the units were granted under a legally-binding international treaty. Moreover, it would be unfair to countries which have made genuine efforts to meet their Kyoto targets.
Another "extreme" solution – allowing Russia and other countries to carry over the full amount of surplus credits after 2012 – would have dramatic consequences for the EU as such a huge injection of unused credits would send the fledgling carbon market crashing down.
To prevent such an outcome, the EU diplomat said developed countries would have to tighten their objectives in order to match the transferred surpluses. "So for example, instead of reducing greenhouse gases by 35 to 40%, we would need to do 38 to 53% cuts to absorb the surplus," he said.
East West EU-divide over ‘hot air’
The "hot air" issue is also creating headaches inside the European Union. This is because Eastern member states stand to lose the most from a possible decision to outlaw credit ‘banking’ after Kyoto. "For example, within the European Union, the Hungarians, which have a surplus, are saying that the EU should buy up the surplus from the Community budget," the EU diplomat said.
"In the end, we will find a solution," the diplomat assured, saying that "several options" are being examined.
A middle ground could be found by requesting that a ‘discount factor’ be applied to surplus credits that are carried over beyond 2012. The discount factor could amount to 80, 50 or 30%, the diplomat said. Another solution would be to have the ‘compensation effort’ created by surplus banking borne out only by certain countries.
Overall, Europe is within its Kyoto targets but there are wide disparities internally between member states that are meeting their objectives and those that are not. The UK, which has switched from coal to gas, is on course to meet its target but – like France – only has a small surplus. Germany is expected to fall close to its Kyoto target and so is expected to be left with virtually no surplus or deficit.
"On one side you have the Mediterranean countries – Italy, Spain, Greece – which are outside their [Kyoto] target and on the other the new member states which have had de-industrialisation since the 1990s and are well within their objective," the EU diplomat said.
Positions: Stefan Singer , director of global energy policy at WWF said any new climate treaty "must eliminate all loopholes contained in the Kyoto Protocol".
"Unless there are no much stronger target proposals on the table by developed countries such as in the range of 30% domestic reduction by 2020, WWF urges that ‘hot air’ is not allowed to be banked but rather used in ‘Green Investment Schemes’ where the credits generated from hot air are being discounted and the revenues become fully re-invested in additional emissions reductions in these countries."
In a March 2009 interview with EurActiv, Singer had already expressed concerns about Russia’s position for the UN talks. "Experience tells us that Russia always comes in at the eleventh hour with some kind of ridiculous demand. And not just on climate, on all issues, because Russia has the understanding of the UN as a self-service shop."
In order to "deal with Russia," Singer said the global community should think about making trade offs. The trouble, he said, is that "no-one knows what is to be traded off against what with Russia, because Russia is very often a black box".

1.4. Barroso hopes for EU summit deal on climate funds
23 October 2009, EurActiv
The head of the European Commission expressed hope on Thursday (22 October) that European Union leaders will agree on funding for a global climate change deal at a summit next week, despite deadlock at talks.
EU finance ministers were this week unable to reach agreement on how much funding should be provided for poor countries as part of a deal to tackle climate change which world leaders hope to clinch in Copenhagen in December.
It is now up to EU heads of government to try to break the impasse at an 29-30 October summit.
"I hope we will be able to finalise this when we meet in the European Council next week in Brussels, in a firm proposal for Copenhagen," European Commission President José Manuel Barroso told a development aid conference in Stockholm.
Some EU diplomats are much less optimistic, saying EU leaders have huge obstacles to overcome.
Finance for developing countries is proving a sticking point in the run-up to the climate talks in December on finding a replacement to the Kyoto Protocol, the United Nations’ main tool against climate change. It expires in 2012.
The European Commission suggested last month the 27-country bloc should provide up to 15 billion euros a year by 2020.
To prove they are sincere in their efforts, rich nations should also provide five to seven billion euros a year of "fast-track funding" in the three years before the Copenhagen deal takes effect, the Commission said.
But nine Eastern EU countries, which are among the bloc’s poorer member states, want those early funds for developing nations allocated on a voluntary basis, saying they do not want to pay a disproportionately high amount.

1.5. Four agreements essential for successful Copenhagen treaty: UN climate chief
22 October 2009, Thaindian news
With just five days of formal negotiations left before a crucial climate summit in Copenhagen, “clear and ambitious emissions reduction targets from industrialised countries” was the first of four musts for a comprehensive result, the UN climate chief said here Thursday.
The second was “clarity on what major developing countries (read India and China) will do to limit the growth of their emissions”, UN Framework Convention on Climate Change (UNFCCC) Executive Secretary Yvo de Boer said.
He was addressing a press conference on the sidelines of the Delhi conference on development and transfer of green technologies.
Adequate financing from industrialised countries to help developing nations adapt to climate change and mitigate their greenhouse gas (GHG) emissions was the third essential requirement for a successful deal at Copenhagen, according to de Boer.
The fourth was “clarity on the the institutional mechanism” that will govern the finances. Developing countries must have more control over this, he said.
If any of these “inter-related” issues did not work out, the Copenhagen summit should be “considered a failure”, de Boer said.
But, he added, “there is very high probability that all four parameters will be met”, though the most crucial player, the US, was still busy with its healthcare reform bill. GHG emission reduction targets put forward by industrialised countries so far were “not ambitious enough” and there was still no money on the table, though de Boer hoped G20 finance ministers would show the way on that soon.
GHG emissions — mainly carbon dioxide from fossil fuel use — is already affecting farm output, making droughts, floods and storms more frequent and more severe and raising the sea level, with India among countries bearing the brunt of the effects.
While countries are haggling over the extent to which they will mitigate their GHG emissions in future, UNFCCC figures released Wednesday showed their emissions had actually increased from 2000 to 2007. The Kyoto Protocol obliges them to reduce their emissions.
Asked about this, de Boer said: “Countries are meeting their Kyoto Protocol commitments, but not to the extent necessary. It is important that commitments be kept.”
The UN climate chief made it clear that he was not seeking any GHG emission reduction from any developing country. Pointing out that 400 million Indians did not have access to grid electricity, he said: “You cannot reduce something you don’t have.” He was seeking a reduction in emissions from the business-as-usual scenario, a reduction he estimated at 15 percent by 2020.

1.6. Europe continues to block fair climate agreement
21 October 2009, FOEE
A just and fair international agreement on combating climate change is no nearer after europe’s environment ministers today failed to show Europe is willing to live up to its historical responsibilities for causing the climate crisis.
Environment ministers reached an agreement on the EU’s position for the international climate negotiations in December. The position, which ministers claim readies Europe to reach agreement in Copenhagen, fails
to commit Europe to make the cuts in emissions needed to avoid dangerous climate change. It commits the EU to make only 20% cuts in emissions by 2020 compared to 1990 levels, with a conditional shift to 30% subject to
comparable reductions by other countries.
Ministers still failed to guarantee the funding needed to help poor countries deal with the impacts of a changing climate.
Sonja Meister, climate campaign coordinator for Friends of the Earth Europe, said: “The level of ambition demonstrated by environment ministers will not deliver a fair and just global climate agreement in Copenhagen. Europe must go much further than this and live up to its historical responsibilities by committing to cut emissions by 40% domestically by 2020 and to provide its fair share of the funding for adaptation and mitigation in developing countries. Committing to only 20% emissions cuts with huge amounts of offsetting allowed falls far short of what science tells us is needed and will lead the world straight toward dangerous climate change.”

1.7. Europe reaches climate crossroads on route to Copenhagen
19 October 2009, FOEE
European politicians will this week make critical decisions about what role Europe is prepared to play in the fight against climate change and Friends of the Earth Europe is urging them to commit Europe to fulfil its historical responsibility for causing the climate crisis.
European finance and environment ministers and heads of state meeting this month [1] will agree the position which the European Union will take to the UN climate talks, including targets for cutting emissions and funding to help poor countries deal with the impacts of a changing climate. The pressure is on them to make ambitious commitments and get the currently stalling international talks on track to deliver a fair and just agreement.
Sonja Meister, climate campaign coordinator for Friends of the Earth Europe, said: "This is an incredibly crucial moment. Europe is at a crossroads on the way to Copenhagen and ministers must choose the route away from devastating climate change and towards a fair and just global climate agreement. To keep hopes alive of a fair outcome in Copenhagen Europe must commit to cut emissions by at least 40% by 2020 within Europe and also provide its fair share of the finances needed to enable developing countries to tackle climate change."
Friends of the Earth Europe believes the EU, like other industrialised countries, must live up to its historical responsibility for causing climate change, which means:
– cutting greenhouse gas emissions domestically by at least 40% by 2020 compared to 1990 levels, without offsetting. The Clean Development Mechanism (CDM) should be abolished as it deters the structural changes necessary in Europe to green the economy and deliver emission reductions. The majority of CDM projects do not deliver real emission cuts and many projects have devastating social and environmental consequences in the global South.
– delivering its fair share of the finance and technology needed to support developing countries mitigate climate change and adapt to its consequences. This new and additional finance needs to come from public money, be additional to development aid commitments and be administered through the United Nations. Any funding outside of the UN, including the World Bank’s climate investment funds, and any financial transfers made as part of offsetting schemes should not count as fulfilment of developed country commitments.
– the EU needs to support a second commitment period of the Kyoto Protocol which obliges developed countries to make further commitments on cutting emissions and provide finance and technology to developing countries. Attempts to derail the Kyoto Protocol must be stopped.
– forests must be kept out of carbon markets. Existing forests should be protected by halting deforestation, forest degradation and the conversion of forests into plantations. Any agreement on deforestation should be a rights-based approach and should not include carbon markets nor plantations.
– the next commitment period of the Kyoto Protocol needs a strong compliance regime that ensures that emissions in industrialised countries go down year by year. Too many parties, including a series of EU member states, have so far failed to deliver their commitments under the Kyoto Protocol. The urgency of climate change requires emission cuts to be delivered within short timeframes.
To help developing countries mitigate their emissions and adapt to the consequences of climate change the EU needs to contribute a minimum of 35 billion Euros per year by 2020. Global costs for supporting mitigation and adaptation in developing countries are estimated to be well in excess of 110 billion Euros, based on data from the European Commission [2], though recent studies suggest this could rise to the region of 340 billion Euros [3]. The EU’s fair share based on responsibility and capacity to pay would be about 30% of this amount.
Sonja Meister added: "If Europe doesn’t decide adequate emission reduction targets and funds for developing countries now the international negotiations could remain in deadlock. The world needs a fair and just climate agreement in Copenhagen – our ministers must now do their part to make this happen."


2.1. EU ministers set emissions targets for ships, planes
22 October 2009, EurActiv
EU environment ministers yesterday (21 October) said the new climate agreement to be reached in Copenhagen should correct an important omission in the Kyoto Protocol by tackling continuously rising emissions from planes and ships.
The Environment Council prepared the ground for next week’s European summit, which is to settle the major outstanding issue of financing climate efforts in developing countries after finance ministers were unable to reach agreement earlier this week (EurActiv 21/10/09).
The conclusions set as a basis for negotiations with international partners a 10% emissions reduction target for the aviation sector by 2020 compared to 2005. The maritime sector would have to cut emissions by 20%.
The reductions would be achieved by global market-based instruments that should be dealt with by the respective UN regulatory agencies, the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO).
Frustrated with inaction by the ICAOs, the EU moved to restrict emissions from the aviation sector last year by obliging all airlines flying to and from its airports to participate in the EU’s emissions trading scheme (EurActiv 27/10/08). The EU’s unilateral action was rebuked by the US, and the Union is therefore hoping to find a universal solution under the new treaty.
By linking the two significant polluting sectors to market mechanisms like emissions trading in a future global carbon market, the EU hopes to tap into funding for further emissions cuts.
The ministers said the EU would ask developed countries to adopt a collective long-term target to cut emissions by at least 80-95% below 1990 levels by 2050. They also confirmed the EU’s ambition to raise its 2020 emissions reduction target from 20% to 30%.
But environmentalists pointed out that compared to the overall EU emissions reduction target, aviation and shipping got off lightly.
"We question why aviation and shipping are still being given special treatment with targets for emissions more than one third above 1990 levels compared to 30% below for all other sectors," said Bill Hemmings of Transport & Environment.


3.1. Economist, WWF European Policy Office, Brussels, Belgium
WWF, the global conservation organisation, is looking to fill a full-time position in its Brussels European Policy Office (WWF-EPO) to work as an Economist.
The post holder, working closely with the WWF European network of national organisations, will shape and lead the EU budget review project. This will seek to influence the financial frameworks 2014-2020 with the aim of reforming expenditure areas which have a large environmental impact, including agriculture, regional policy, energy investments, development assistance and subsidy reform.
The successful candidate will have a university degree in economics and at least seven years of professional experience. He/she will have a proven track record as an effective public spokesperson and successful advocacy and policy analysis skills. Knowledge of the workings of the European institutions is required. Fluency in English and preferably another major European language.
The post will be offered under a Belgian contract.
Application letter and CV should reach WWF-EPO no later than 26 October 2009 and be sent to : [email protected]
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