Thursday, March 08, 2007

European and International Climate Policy

The standing of climate change as an issue of international political significance is increasing. With a range of cap and trade systems in the pipeline within the US and talk of 20-30% targets by 2020 in Europe a breakthrough is possible.

If the EU can come to an agreement on a realistic range of measures to meet there putative 2020 target then they might stand a chance, along with the US, of getting a global agreement on climate change. The key two conditions being the agreement of both India and China to such a scheme.

European and US progress on climate change may not be as divergent as many would like to believe. There are two emissions trading schemes in the US and one other regional system likely to be on the way. Some states have strong targets, others don't have any. In Europe a 20% reduction target for 2020 was agreed upon, 30% if the rest of the world come to an agreement, but just how practical is shifting to a 30% target in 2009? Another 10% over 11 years, it's a significant challenge. Also, policies and measures to reach even the 20% target are few and far between. At the moment the one sector where rely significant gains can be made quickly, power, is trying to shake free from the shackles of a 20% reduction target! Largely powered by the former soviet countries, this resistance threatens to seriously undermine European leadership.

Another important plank of EU climate policy is the EU ETS. According to economists this is the cheapest way to achieve a given level of emissions cuts but according to what we have seen it is also the easiest way to focus business minds on one action to lobby against! The ambition of submissions to the EU ETS has been, well...unambitious, pathetic, insane!

Many people are looking at how to make a well functioning ETS
and the lessons are clear, make the scheme broad. Use a range of complementary policies, such as appliance/building/transport standards. Make the targets stringent. Don't grandfather. I repeat, don't grandfather! Auction emissions rights. However governments for many and varied reasons are paying little attention to this advice.

Further Reading:

EU Plans for Post-2012 Policy
UK Investigation of Post-2012 Policy
UK Investigation into Avoiding Dangerous Climate Change
European Research on Post-2012 ETS
ETS Blogs and Websites
ETS Research and Reports

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